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Question: Discuss about the Ethics in Financial Planning. Answer: Financial planning pertaining to a person is a process which determines various ways through which an individual can meet life goals by properly managing his or her financial resources. This definition has been put forth in the work of Rattiner (2009). It typically comprises six elements viz. establishing and defining the client-partner relationship; collecting data of clients which would include goals, analyzing and evaluating the financial position of the client; recommending a suitable plan to the client as per the needs and financial position of the client; implementing the financial planning recommendations, and monitoring the financial planning recommendations (Rattiner, 2009). A financial planner or a financial planning manager, to be a true professional, needs to have a strong ethical way of doing the things. Ethics is defined in different ways but it has got two main types of definitions based upon two rival philosophical doctrines- one is objectivism or realism, and idealis m or Interpretivism (Subba Rao Roy Chowdhury, 2013). Objectivism or realism believes in the existence of an external world governed by objective laws, and is accessible to human knowledge; idealism or Interpretivism is based upon the non-existence of any real world outside independent of human consciousness. This view has been expressed in the work of Subba Rao, and Roy Chowdhury (2013). Ethics enables a person in the workplace to adhere to the set of laws, and acts of that particular organization. A financial planner while dealing with a client should put the interest of his or her client first, and then think about his or her own target. The financial planning manager, to be a true professional, needs to develop moral sensitivity to know when they are facing a situation with an ethical component, moral imagination to help provide effective means to a resolution of the ethical situation, and moral judgment to enable him to evaluate various means to such resolution (Duska, 2017). Ethics has a direct association with the social welfare. It has been observed on many an occasion that people want to keep their financial status secret. A person when visits a financial planner or vice-versa takes it into account that the financial planner would keep their personal financial matters confidential. This has been stated in the work of Duska (2017). The ethics comes into the picture for a financial planner as it is an obligation on his or her part, not to disclose any confidential client information without the specific consent of the client (Duska, 2017). A financial planner must have sufficient information about the financial a ffairs of the client to offer an effective service but in most of the instances the clients deny such information fearing that the financial planner may not be able to keep the pertinent information secret. Often it has been seen that the financial advisor discloses the secret information which is nothing but the breach of ethics. On the flip side, there is a scenario when a planner needs to disclose certain conditions of the client during the time of underwriting which is often not done for the planners own benefits. This is a case of ethical breach and the concerned client faces the problems while settling the claims. A code of ethics has been an integral part of many organizations. The leadership of fledgling financial planning movement considered the fact that proper standards need to be enforced rather than lip, voluntary services (Brandon Welch, 2009). The major development that took place in the history of financial planning was the creation of CFP (Certified financial planner) Boards board of practice standards, charged with putting teeth into the professional code of ethics which came into the existence earlier. This has been mentioned in the work of Brandon, and Welch (2009). The breach of ethics on the part of financial planning manager has resulted in many financial planning scandals. The new requirements have come after series of financial planning scandals. The new requirements intend to transform advice into a profession by introducing codes of ethical conduct, and educational tools (Patten, 2017). It has been mandated for those Advisors who are already practicing till January 1, 2021 to pass a competency or registration exam and until January 2024 to obtain a relevant degree, or degree equivalent (Patten, 2017). Financial planners need to know the fact that selling planning outfits is often a long lasting affair and would sometimes take even five years to complete (Patten, 2017). DeArmond Durband (no date) emphasized that the client management qualities are the most important aspect in the process of financial planning. DeArmond Durband (no date) also mentioned that often, financial planners undermine the variable keeping the client informed and feels that placing the interests of the client before that of the planner is the most important client management quality. Interestingly it has been observed that money spent on sales technique and marketing were the least important contributors to success. Before the financial planning came into existence, the focus of financial advice was on investment advice as the traditional providers of financial services like bankers used to market their own banking products rather than identifying the needs of the clients (Brimble Murphy, 2012). The focus of the modern day financial planners has widened compared to the traditional providers. Clients are increasingly looking forward to them for general wealth creation advice, retirement planning, superannuation, taxation, investment, and debt and risk management advice (Brimble Murphy, 2012). Thus, it is important for them to be morally responsible towards their clients. An ethical breach can prove to be detrimental for the clients especially those who are retiring. The rationale for choosing this topic lies in the fact that there have been many incidences of corporate and financial scandals in Australia pertaining to the sale of financial products by financial planning managers which resulted in a loss of more than $500 million dollars of the investors (Smith, 2009). Many big names in the forms of WestPoint Group of companies, the Storms financial group, and many others came into the limelight. The saddest part was that most of the losses were incurred by the retiree investors who lost a majority of their savings. This view has been expressed by Smith (2009). All these happen for varied reasons; one of them is not adhering to ethics by the financial planner. There are reasons for that too. Financial planners have to deal with a range of ethical dilemmas on a daily basis which arises due to the involvement of multiple stakeholders, interests, and val ues in conflict (Smith, 2009, cited in Smith, Armstrong Francis, 2007). A high level of ethical reasoning is necessary for the financial planners to meet the professional obligations of the clients. Smith (2010) put forth that there are three ethical criteria viz. egoism, malevolence, and principle. On the part of an individual three traits are linked with egoism, malevolence, and personal morality simultaneously in the forms of self interest, friendship, and personal morality. An organizations ethical climate is important in determining the beliefs of the employees or financial planners in terms of the composition of ethical behavior; issues regarding decision making, and criteria and priorities to measure and resolve the issues (Smith, 2010, cited in Martin Cullen, 2006 Cullen, Parboteeah and Victor, 2003). A persons financial capacity gets diminished with the age. A proper financial management is required to solve such issues (Teale, 2015). If a breach occurs in this type of case for the personal benefit of the planner, a tremendous loss is incurred by the concerned aged person morally, financially, and psychologically. Thus, an adherence to the ethical code of conduct is a must. List of Papers and/ Publications:- Brandon, E, D, Jr., Welch, H, O., 2009. The History of Financial Planning: The Transformation of Financial Services. New Jersey: John Wiley Sons, Inc. Brimble, M., Murphy, B., 2012. Past, Present, and Future: The Role of Tertiary Education in Supporting the Development of the Financial Planning Profession. Journal of Business Ethics Education, 9, pp. 105-124. DeArmond, D., Durband, D. [no date]. Financial planner behavior impact on success in financial planning. Journal of behavior studies in business, pp. 1-11. Duska, R, F., 2007. Contemporary Reflections on Business Ethics. Dordrecht: Springer Teale, J., 2015. Challenges facing financial planners advising ageing clients with diminished financial capacity. Financial planning research journal, 1(1), pp. 7-18. Patten, S., 2017. Financial advisers need to shape up or ship out. Financial Review [Online]. Available at: https://www.afr.com/business/banking-and-finance/financial-services/financial-advisers-need-to-shape-up-or-ship-out-20170824-gy3e97 [Accessed: 18 September 2018] Rattiner, J, H., 2009. Financial Planning Answer Book. Chicago: CCH a Wolters Kluwer business. Smith, J., 2009. Professionalism and Ethics in Financial Planning. Victoria University, Melbourne, Victoria, Australia. Smith, J., 2010. Ethics and Financial Advice: The Final Frontier. Victoria University, Melbourne, Victoria, Australia. Subba Rao, G, Roy Chowdhury, P, N, 2013. Ethics, Integrity, and Aptitude. New Delhi: Access Publishing India Pvt. Ltd. For a financial planner it is important to get into a valid contract, and make a will. This may reduce the chances of any serious breach of ethical code of conduct. There should be an ethical leadership scale which would take into account various factors like rewarding people of integrity, strong code of conduct governing the license of the planner, i.e. an ethical breach may lead to cancellation of his or her license, etc and assign a score. It is very important on the part of financial planner to apply their moral code, personal values, and experience to resolve ethical issues; maintains adequate flexibility; apply relevant law or any professional code of ethics, and understanding that corporate culture may have on ethical behavior and decision making.