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Setting An International Standard For Financial Planning  

Yet, internationally, the term “Financial Planner” is the more prestigious designation. So, is there a way to salvage this title in Singapore?

Fortunately, there is, but it depends entirely on consumers, not the authorities. How? By choosing those who are certified ISO fit.

Hence, in today post, I shall discuss about the latest ISO 22222:2005 to educate you, the consumers, about the ISO 22222:2005 so that you know who to choose when choosing a “Financial Planner”.

International Standard ISO 22222:2005

Introduction

The International Standard ISO 22222:2005 on Personal Financial Planning and encourages the implementation and adoption of this standard by the financial services industry.

Overview of ISO 22222

This International Standard has been drawn up with the objective of achieving and promoting a globally accepted benchmark for individuals, who provide the professional service of personal financial planning.

ISO 22222:2005 defines the personal financial planning process and specifies the ethical behaviour, competence and experience required of a professional personal financial planner.

Benefits of ISO 22222

· Enables the expansion of financial planning services to overseas markets with the use of common standards.

· Inspires greater consumer confidence as standards for competent and ethical services are clearly spelt out.

· Helps to ensure consistent delivery of service and addresses possible confusion and misunderstanding in the planner and client relationship.

· Provides a standardised, common and well-defined financial planning process within and across countries.

Who Should Get Themselves Certified?

· Financial advisers
· Financial planners
· Wealth managers
· Insurance advisers
· Private bankers
· Relationship managers
· Stockbrokers
· Investment advisers
· Compliance officers
· Training managers
· Lawyers

Singapore is the first country to adopt an international standard aimed at raising the level of professionalism and service standards among financial planners. Called the International Standard for Personal Financial Planning, or ISO 22222:2005, it seeks to promote a globally accepted benchmark for the large ranks of professionals who provide financial planning for individuals, such as independent financial advisers, insurance agents, stockbrokers, private bankers, wealth managers and lawyers.

Published in December 2005, ISO 22222 helps to address the problems confronting investors the world over – who can they trust to plan their retirement or invest their savings? With the vast choice of investment schemes available, how should they compare the different schemes on offer?

According to SPRING Singapore, ISO22222 addresses “immediate industry issues of poor service delivery, incomplete disclosure and unprofessional personal financial planning practices. It defines the personal financial planning process and specifies the ethical behaviour, competences and experience required of personal financial planners.”

Six Steps to Better Financial Planning

Developed by the ISO Technical Committee(TC), ISO/TC 222, which drew experts from a variety of legal, economic and cultural backgrounds from more than 17 countries, including Singapore, the ISO 22222 involves six steps:

1. Establishing and defining the client and personal financial planner relationship.

2. Gathering client data and determining goals and expectations.

3. Analysing and evaluating the client’s financial status.

4. Developing and presenting the financial plan.

5. Implementing the financial planning recommendations.

6. Monitoring the financial plan and the financial planning relationship.

At the heart of ISO 22222:2005 is a framework that applies to all aspects of the personal financial planner’s ethical behaviour, and requires compliance with applicable rules and regulations. It gives the requirements for competence performance and competence assessment methods, and obliges the financial planner to demonstrate continued competency by following the necessary training programmes and maintaining records of these.

The standard additionally specifies the requirements, content and length of experience a personal financial planner must have and is applicable to all personal financial planners regardless of their employment status.

Strong Industry Backing for Standard

Nine associations and organisations signed a Memorandum of Understanding (MOU) on 1December 2006 to promote the adoption and implementation of ISO 22222. The nine signatories comprise members from the Association of Banks Singapore, Association
of Financial Advisors Singapore, Financial Services Managers Association, Insurance and Financial Practitioners Association of Singapore, Life Insurance Association of Singapore, Singapore College of Insurance, Singapore Insurance Brokers’ Association,
Society of Financial Services Professionals, Singapore and Consumers Association of Singapore. National standards body SPRING Singapore supports this initiative.

The landmark MOU paves the way for industry players to:

• Adopt the international standard so that companies and individuals in the industry can benchmark themselves against global best practice standards.

• Standardise the process of providing personal financial planning services and the requirements relating to education, examination, experience and ethical conduct standards.

• Increase the awareness and promote the adoption of ISO 22222.

“The industry has long recognised the benefits of benchmarking personal financial planning to international standards,” said Ms Karine Kam, Co-Chair, National Technical Committee on Financial Planning and Executive Director of the Singapore College of Insurance. “Such standards, by and large, employ the best-in-breed thinking, techniques and processes that help to upgrade the professional competence of financial planners. As an industry-appointed certification body, the Singapore College of Insurance is pleased to take on this role for the continued advancement of the industry and the welfare of the public.”

Consumers who require financial planning services will benefit from this. Said the Consumers Association of Singapore’s Executive Director Seah Seng Choon, “The ISO 22222 benchmark ensures a level of ethical behaviour in the financial planning industry. This will boost consumer confidence in the long run and is beneficial to both consumers and the industry.”

For professionals who are interested in getting themselves certified, they can go to Singapore College of Insurance (SCI) to find out more about the certification process.

http://www.scicollege.org.sg/

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Credit Plus Health's Team

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