Financial Planning Confidentiality Agreement

The most important part of a partnership, especially a partnership related to your finances, is clarity and transparency. If you look carefully at the consulting contract, you will have a better understanding of the details of the agreement and what you can expect from your advisor. But even with strict rules of confidentiality, what happens to the counselor who breaks these rules, what are the penalties? If the company requires consultants to sign a confidentiality agreement as part of their employment contract and they violate that agreement, the employer may eventually sue them or issue an order of omission. Tom Geraghty, a partner at Stonegate Wealth Management, an independent consultant in Cary, N.C., is both CPA and CFP and says he is subject to several levels of privacy. “I act in the best interests of my clients and everything is transparent,” he says. When planning the estate, he sends a memo to the client`s lawyer so that he is subject to the additional data protection level of the lawyer/client privilege. He says he had to be particularly attentive to confidentiality when he was a forensic accountant and divorce mediator. The degree of privacy you can expect from your individual advisor depends on that consultant`s business and may be related, to some extent, to the behavioral norm of the consultant`s business. Two different standards govern the practices and behaviour of consultants.

Brokerage firms that follow a “fitness standard” and have fewer constraints on how they sell investments to their clients compared to independent advisory firms that do not sell investments but offer advice for a fee and are held to a higher “fiduciary standard”. The fiduciary standard is a higher bar, as it requires these consultants to act in the best interests of their clients, which provides a stricter ethical framework. Yet, there is nothing specific or binding on the confidentiality of consultants and clients. Unlike lawyers, financial advisors do not have legal privilege. This means that what is discussed between a lawyer and his client can be private. Imagine you`ve just finished a meeting with a financial advisor you want to hire. You`ve shared your most intimate financial details with this advisor, including how much you earn, how much you owe on your mortgage, and all the details about your upcoming divorce agreement.