FPSB issues new financial planning standards to reflect changing client needs

The Financial Planning Standards Board (FPSB) has released updated global financial planning standards that reflect the changing needs and expectations of consumers, as well as the evolution in the practice of financial planning by professionals.

The updated global financial planning standards feature a new knowledge domain on the psychology of financial planning, technical content on crypto finance and evolving investment strategies, greater emphasis on human skills associated with financial planning, and a set of practice guidelines to show practical application of the standards in a client setting.

Commenting on the changes, the chief executive officer of the standards-setting body for the global financial planning profession, Dante De Gori, said: “FPSB is committed to upholding worldwide professional standards in financial planning by continually reviewing and updating its global standards to reflect evolving client needs”.

“Global standards support increased consumer protection when accessing financial planners who have committed to rigorous standards of competency and ethics; help practitioners distinguish themselves within the financial planning community; and instil confidence of the benefits of financial planning among consumers and regulators.”

According to the FPSB, the updated standards were informed by its research on the current and future practice of financial planning, with the input of more than 16,000 Certified Financial Planners (CFP) worldwide.

The FPSB noted a growing trend in the sophistication and significance of collaboration between financial planners and their clients, highlighting the need for financial planners to improve their client relationship skills, such as coaching and effective communication.

“With evolving client demographics, changing economic, political and regulatory environments and innovation such as fintech, we’re seeing a shift in client expectations and how financial planners work with clients,” said Mr De Gori.

“As consumer needs and expectations evolve, applying consistent global standards improves the quality of financial planning advice, benefits consumers and financial planning professionals, and strengthens the financial planning profession.”

FPSB’s affiliate organisations, which include the Financial Planning Association of Australia, are expected to adopt the standards for use in their respective territories by 1 January 2025.

Earlier this year, the FPSB reported that the number of CFP professionals in Australia fell by 356 in 2022, bringing their total number to 4,610.