Understand Professional Limitations and Refer to Professional Advisors
The implementation and monitoring of a financial plan and investment policy statement requires competency for all services provided. A financial advisor is required to attain certain levels of knowledge and skill in many areas for which a client has need of financial advice. The financial advisor’s ability to apply the knowledge and skills required to meet a client’s financial planning needs might be beyond their level of expertise. Competency requires an understanding of the limitations of their knowledge to recognize when it is appropriate to consult with other professionals or when it is appropriate to refer clients to other professionals. A financial advisor must possess the requisite professional skills and level of competency to evaluate what financial planning services they can provide and which services they should ethically refer to other specialized advisor to meet any client’s advisory needs under the scope of the engagement, including:
- Budgeting;
- Insurance Planning and Risk Management;
- Employee Benefits Planning;
- Tax Planning;
- Investment Management;
- Retirement Planning; and
- Estate and Eldercare Planning.
The referral to a tax, legal or other specialized advisor to your client to implement some portion of the financial plan or investment policy statement is an ethical responsibility. It protects all parties and helps ensure a successful outcome to achieving your stated financial goals and objectives.
