Use the CFP Code of Ethics as a guide to identify, discuss, and explain where and when Jillian Whitmore has properly followed the Financial Planning Standards Council (FPSC) Code of Ethics

Jillian Whitmore, Financial Planner

Jillian Whitmore has been working for Topline Planning for just over 11 months. After graduating from university with a Bachelor of Commerce degree, she went to work for a major financial institution as a personal banker. She was encouraged to complete her CFP designation. She did so, but found that her employer was not ready to promote her into a position where she could fully utilize the accreditation. After a few months, Jillian began looking for employment elsewhere.

She received two offers of employmentone as a personal banker at a competitor bank, and the other at Topline. Though Topline offered a smaller salary than the personal banker position, Jillian decided to accept the Topline job because it offered unlimited variable pay (commissions). At the end of her first year, Jillian's pay would be 100% commission, which she felt would allow her to capitalize on her skills and motivated work habits.

Now, after almost 12 months with Topline, Jillian is preparing to meet her manager to discuss her first year's performance and review her sales results. While her job was not in jeopardy, she felt that it would be nice if her sales results where a bit better. She was almost at her yearly target; going over this target would result in a higher commission rate for the next year as well as a $10,000 bonus. That bonus would go a long way to making a down payment on her dream home. But, Jillian's real estate plans would have to wait, as her clients have arrived to see her.

Beth and John Hubbard

Jillian's first appointment of the day is with Beth and John Hubbard. Denise Hubbard, Jillian's best friend, suggested to her parents that they have Jillian take care of their finances. Denise noted that they could surely trust Jillian with their money. Beth and John moved all their retirement funds over to Topline for Jillian to manage; in fact, they were Jillian's first clients. Most of the Hubbard's funds were in low-risk investments such as GICs, Canada Savings Bonds, and money market mutual funds, with a small percentage in blue chip Canadian equities. All equities paid dividends. John still kept his CN shares as he liked to stay invested with his old employer.

There was a note in the file regarding the Canada Savings Bonds, $55,000 in total. Jillian would have liked to redeem the bonds and move the money into mutual funds. This would mean she'd get a yearly commission from them, and the move would go a long way to helping with her sales targets.

The main reason for today's appointment is to conduct a yearly review of the Hubbard's financial and personal situation. Both Beth and John are retired and collecting pensions; Beth from the school board and John from CN Rail.

Jillian invited the Hubbards into her office, asked them to be seated, and provided coffee. She then asked them if they had any questions or comments before she began the review. Beth noted that they didn't seem to be making as much money as they had last year. Jillian explained that interest and inflation rates were still trending down which meant that interest-earning investments were not paying a high rate. She quickly noted Beth's concern in her records. Jillian suggested that they could move some of their funds into other mutual funds which would likely provide higher returns. Beth said that she still did not quite understand how mutual funds worked and would need more time to think about Jillian's suggestion. Jillian made a note to email Beth some information regarding mutual funds.

The review was very friendly and Jillian noted in her records that the couple's financial, personal, and health situations had not changed since last year. Unfortunately for Jillian, there would be no new sales from the Hubbard's account, something her manager was sure to notice. However, she did not feel it was appropriate to pressure the Beth and John. After all, she had known them since she was in elementary school. She also knew their risk tolerance was quite low.

As they were about to finish with the yearly review, John asked how Denise was doing with her savings plan. He noted that when he asked her about it the other week Denise seemed defensive. Jillian politely stated that even though Denise was their daughter, she could not comment on financial affairs without her written permission, just as she could not tell anyone else, including Denise, about Beth and John's financial position. Jillian noted that John appeared "a little distraught" so she suggested she could phone Denise and have a quick chat with her. Beth said that that would be nice. After giving each one a hug, she escorted them to the door. Returning to her office she quickly sent an email off to Denise and made a note in Denise's file regarding a review of her savings plan.

Kathy and Rick Allen

The meeting with the Hubbards had taken longer than Jillian had allotted and now her next clients were waiting for her. Kathy and Rick Allen had been in twice over the past month to go over their finances. Both Kathy and Rick worked, and while Rick had a pension plan with his employer, Kathy did not. Jillian remembered that they both had investments with (at least) two other financial institutions but they kept forgetting to provide her with the details.

Jillian knew from previous appointments that Rick always wanted to control the meeting. She still hadn't updated their files from their last session and had to admit that she only remembered part of it. Rick had wanted to buy a new boat but Kathy said she didn't want to store it during the winter. They never seemed to be able to concentrate on their financial planning issues.

Apparently, this visit also brought with it a new argument. Rick was mad at Kathy for buying a new stove with store financing and kept bringing it up. However, Kathy only talked about RRSPs.

Kathy wanted to start an RRSP plan and at one meeting (Jillian recalled that it might have been the first one) Kathy noted that her friend's husband put money into her RRSP so Rick should do the same. Today, Jillian was surprised when Kathy handed Rick a cheque for $20,000, made out to Topline "In Trust," and told Rick to sign it. Kathy wanted this to be put into the RRSP. Rick scribbled his signature and grumbled about whose account the stove payment would come out of.

Jillian only wanted to get the meeting over as she found their bickering most distasteful. She quickly filled out the RRSP account forms. As she was doing so she glanced at the hot sheet on her desk. A new mutual fund company was offering a promotion which paid an extra 2% commission on their up-front fees and paid out an extra bonus if the funds were kept on deposit for one full year. Jillian put the $20,000 into this fund, printed the forms and got the required signatures. She quickly escorted the Allens to the office door and promised to call them in a few months.

To Conclude

It was lunch time so Jillian picked up her coat and purse and went to find her lunch partner. She would put the files away when she got back. At least her manager would be happy about the RRSP and she could sure use that bonus.

Help identify which principle(s) Jillian has adhered to or ignored/violated.

Help suggest corrective action required