Competition and Solicitation Methods
The advisor’s competition and solicitation methods must be fair and inspire trust and respect in the public.
In the scope of various solicitation, advertising, and representation activities, the advisor cannot:
- encourage a person in an insistent or repeated manner to use their professional services or purchase a product
- criticize, devalue, or discredit products and services offered by another advisor, firm, financial institution, or any other competitor
If the advisor would like to criticize a product or service after an exhaustive analysis, they must do so with objectivity, presenting the facts and figures that support it.
Although it’s normal to occasionally follow up with a client and resume a recommendation, for example to remind them of the deadlines to take advantage of a beneficial offer, the advisor must be careful in the way they approach this reminder. They must not make their client feel harassed. The advisor must always communicate with their client at appropriate times, respecting the boundaries agreed upon with them.
To achieve their objective of attracting new clients or selling products or services to their current clients, the advisor should emphasize their professionalism, their strengths, their experience, and the solutions they can offer to clients to respond to their needs, instead of criticizing a competitor. For example, the advisor can mention that they have multiple clients in a specific field, to emphasize their knowledge of the challenges for these clients.
This is a constructive way of approaching a potential client and highlighting one’s services.
The advisor must know that in the event of an error on their part that leads to a violation, they may be found at fault even without culpable, malicious, or malevolent intent.
Below are specific examples of situations that arose in the CSF’s disciplinary committee decisions in which the advisor used dishonest competition and solicitation methods:
- The advisor criticized another advisor, asserting that they didn’t have the right to sell the products of multiple insurance companies, that they had major legal issues, and that several of their clients were not satisfied with their services. (Decision CD00-0326)
- The advisor acted in an insistent, harassing, and arrogant manner toward her clients, who she had purchase insurance policies. (Decision CD00-0368)
- The advisor told their client that it was difficult to process a claim in disability insurance with a specific insurer, that she would never receive compensation from the insurer, that the insurer would dodge its responsibilities, and that all the information she disclosed could be detrimental for her file. (Decision CD00-0723)
When prospecting clients, the financial planner must avoid using methods that would emphasize a specific aspect of financial planning to unfairly attract the attention of a potential client.
Although a financial planning practice may focus on a single specific aspect of the client’s situation, it still requires collection and comprehensive study of information on this client. As a result, when the advisor prospects, they must consider the various aspects of financial planning in general.
Below is a specific example of a situation that arose in a CSF disciplinary committee decision in which the advisor didn’t use solicitation methods that inspired respect and trust:
- The advisor failed to use fair competition and solicitation methods by not providing complete and objective information to their clients that they required to understand and assess scholarships and by devaluing or discrediting the product provider and associated products. (Decision CD00-0902)