we 3.0 Introduction a Wealth management in Islam is a form of Ibadah to achieve al-Falah or success in this worldly life and the hereafter. Unlike conventional financial planning where the planning horizon ceases at the time of death, the Islamic financial planning horizon is extended not only to this world but also to the hereafter. In Islam, accumulating wealth is not in itself sinful as long as it is done through halal means. Islam emphasizes that its followers should possess certain qualities by which they are able to administer their wealth efficiently. ‘The Shariah leaves no ambiguity on how wealth should be managed. These qualities should be maintained regardless of whether a person is managing his own wealth or when he is planning for others. Adhering to good ethics and moral behavior helps shape professionalism in financial Planning. When one plans for oneself, one should observe ethical behaviour. It is even more so when one is planning for others. In other words, apart from knowing how to become a successful financial planner, keeping to ethics is the indispensable ingredient success in financial planning. thas been proven that knowledge alone is insufficient if it is not put into practice. We may find, for instance, a financial planner being sued for breaching the trust given or indulging in other unethical practice. |tis equally important to stress that bad altitude may have a great impact on a financial planner’s performance as it may result in the client rejecting the planner’s service. A good planner should constantly strive to better himself and maintain his impeccability throughout his career. Since the incidence of breach of ethics in the financial services industry is widespread, a financial planner should be very sound in his knowledge of any conduct or practice that could be interpreted as Unethical. In other words, he should be aware of what is ethically permissible. Otherwise, his actions may be considered unethical although they may be ‘lawful’ according to the law of the land and not be indictable in the absence of any admissible evidence. This chapter will discuss the characteristics of a financial planner from the Shariah perspective so as to give a clearer picture to those involved in this industry. The discussion will centre on ethics and its relationship to legal obligation. It will also provide the reader with a series of professional code of ethics and the practice of the various professional bodies in Malaysia and their conformity with the Shariah standard of ethics. de 3.4 The Concept of Ethics in Islam It is undeniable that the teaching of Islam is concemed with ethics. This is evident from the Prophet's (pbuh) tradition as he was reported to have said, “! was sent to perfect good conduct’. In many Quranic verses we can find a similar meaning encouraging us to be ethical and to follow {good conduct. The most fundamental characteristics of a Muslim are piety and humility. A Muslim must be humble with God and with other people: “And turn not your face away from people (with pride), nor walkin Insolence through the earth. Verily, God likes not each arrogant boaster. And be moderate (or show no insolence) in your walking, and lower your voice. Verily, the harshest of all voices is the voice (braying) of the ass.” (Luqman, 3 :18-19). Muslims must, be. in. cc trols of thot passions and desires. A Muslim should not be va or attached tothe ephdmmarelsteasurce of this world. While most people allow the material world to fil their hearts, Muslims should keep God in teir hearts and the material word in their hand. Instead of being attached to the car andthe job and the diploma and the bank account, all these things became tools to make us better people. “The Day whereon neither wealth nor sons will avail, but only he (will prosper) that brings to God a sound heart.” (Al-Shara: 26:88-89) God sums up righteousness in verse 177 of Surat Al Bagarah: “It is not righteousness that you turn your faces towards East or West; but it is righteousness (the quality of ) the one who believes in God and the Last Day and the Angels, and the Book, and the Messengers; who spends of his wealth, in spite of love for it, to the kinsfolk, to the orphans, to the needy, to the wayfarer, to those who ask and for the freeing of slaves; and who is steadfast in prayers, and gives Zakah (Alms); and those who fulfil their covenants which they made; and who are patient and perseverant in poverty and ailment and throughout all periods of fighting. Such are the People of truth, the pious.” (Al-Baqara: 2: 177). This verse teaches us that righteousness and piety is based before all else on a true and sincere faith. The key to virtue and good conduct is a strong relation with God, who sees all, at all times and everywhere. He knows the secrets of the hearts and the intentions behind all actions. Therefore, a Muslim must be moral in all circumstances; God is aware of each one when no one else is. If we deceive everyone, we cannot deceive Him. We can flee from anyone, but not from Him. The love and continuous awareness of God and the Day of Judgment enables man to be moral in conduct and sincere in intentions, with devotion and dedication: “Indeed, the most honorable among you in the sight of God is the most pious.” (Al-Hujraat 49.13) Then come deeds of charity to others, especially giving things we love. This, ike acts of worship, prayers and Zakah (mandatory alms), is an integral part of worship. A righteous person must be reliable and trustworthy. Patience is often hardest and most beautiful when it's against one’s own desires or anger: “And march forth toward forgiveness from your Lord, and for Paradise as wide as are the heavens and the earth, prepared for the pious. Those who spend (in the way of God) in prosperity and in adversity, who repress anger, and who pardon people; verily, God loves the doers of the good deeds.” (ALImran, 3:133) Morality in Islam addresses every aspect of a Muslim's life, from greetings to international relations. It is universal in its scope and in its applicability. Morality reigns in selfish desires, vanity and bad habits. Muslims must not only be virtuous, but they must also enjoin virtue. They must not only refrain from evil and vice, but they must also forbid them. In other words, they ‘must not only be morally healthy, but they must also contribute to the moral health of society as a whole. “You are the best of the nations raised up for (the benefit of) men; you enjoin what is right ‘and forbid the wrong and believe in God; and if the followers of the Book had believed it would have been better for them; of them (some) are believers and most of them are transgressors.” (Al-Imran, 3:110) What is ‘ethics’? It refers to a set of moral principles that distinguishes what is right from wrong, Within the Shariah perspective, the term which is most closely related to ethics in the Quran is Khuluq. The concepts of goodness (khayn), righteousness (bir), justice (‘adl) and piety (taqwa) mentioned in the Quran have a close relationship with ethics. 3.1.4 Ethics in financial planning Generally speaking, financial planners are supposed to observe good conduct in carrying out their duties. The following are some of the qualities or characteristics a planner should be equipped with in the course of becoming a good Shariah financial planner.W's a) Trustworthiness (a/-Amanah) ren The very purpose of the creation of mankind is to fulfill amanah entrusted upon th There are many Quranic verses that explained the importance of this concept; jem by Allah. "We offered the trust onto the heavens and the earth and the hill, but they shrank from bearing it and were afraid of i. And man assumed it. Lo! He hath proved a tyrant and a fool” (Al-Ahzab 33: 72) Amanah means that a financial planner should ingrain in himself that what_he is doing Is considered as amanah and needs to be delivered in the best possible form. It does not mean, ,, however, that no monetary element should be involved when carrying out his duties. Otherwise, «no one will take on the responsibilty of such a job on the pretext that itis not lawful to charge the clients. From the Shariah point of view, becoming a financial planner falls under the scope of collective obligation’ (fardhu kifayah) which means, “if no Muslim is involved in this work all communities are to blame" b) Righteousness and making one's work perfect A financial plagner should not only limit himself to performing his professional duties, rather he should also strivé to achieve excellence in his work by carrying out duties assigned to him in the best manner. To achieve this, a planner should equip himself with the necessary knowledge and ication. In this regard the Prophet (Pbuh) said “Allah, the Exalted is Good and He accepts “only what is good’, narrated by Abu Hurayrah. Ws ¢) Sincerity This means a financial planner should seek to obey Allah in performing his work. Being sincere, he can avoid influences or pressures and apply himself to his work as a religious commitment as well as a professional duty. However, it does not mean thal a planner is prohibited from taking monetary benefit in performing his work as long as it is lawful and according to Shariah principles. Hence, apart from getting worldly benefits and material gains, a planner becomes "worthy of reward from Allah the Almighty. 4) Allah-fearing conduct in everything : This is the belief that Allah is observing the acts of his servants. Taking this into consideration in desisting from what Allah does not please. This implies that a planner should act in an Allah- fearing manner irespectve of what is being practiced by the people around him. n other words, self-monitoring stemming from intrinsic rriotives may not be effective unless itis tied to both faith ~and feeling that one is being observed by Allah from whom nothing is concealed. As Allah says, “For verily He knows what is secret and what is yet more hidden’, (Taha 20:7). e) Accountability before Allah * A planner should be aware that he will be accountable to Allah on the day of judgment. As such, he should take precaution not to get involved in activities that may incur punishment, Allah says in Al Zalzalah (99: 6,7,8), “Then shall anyone who has done an atom's weight of good, see it. ‘And anyone who has done and atom’s weight of evil shall see it” In another verse Allah says, “All sufficient is Allah in taking account’, (An-Nisa’ 4:6). Therefore, a planner should know that he is accountable before Allah, his dient and society. He should also hold himself to self-accountabilty in all his acts,Caliph Umar said, "Hold yourself to account before you are held to account, for itis easier for you fo account and measure your deeds before they are measured for you.” Self-accountabilty would have no meaning if itis not linked to faith and belief in the hereafter, and accountability is for one's deeds, reward and punishment f) Fulfilling promises In dealing with clients, a planner will inevitably have to be skilful in meeting the client's needs. Promises would have been given in order to attract more people to use his service. However, there might be cases where a planner is not able to keep his promise resulting in his image being tamished; especially, when the promises are broken, intentionally. In fact, the Shariah is very much against not keeping one’s promises and regards it as a sign of hypocrisy. Conversely, the Quran praises those who observe and fulfill their promises and considers such quality as that of a prophet. Therefore, a planner should not make promises to his client which he may not be able to fulfil purely to seek material reward. In short, ethical behavior takes priority over material gains. Allah says in Al-Maidah on the obligation of Muslims to futfil obligations and promises, * ye who believe, full all obligations” (Al-Maidah 5:1) 3.1.2 Ethics: Legal versus moral obligation The previously mentioned qualities of a financial planner are mostly self-motivated and driven by the awareness to be an impeccable planner. To have feelings of guilt in the event of not discharging his duties properly, shows that a planner has reached an ethical level that is enough to safeguard him from further wrongdoings such as, overcharging, taking bribes or practicing favoritism. However, there are instances and circumstances in which self-awareness alone is not sufficient to stop unethical practices. In these cases imposing punishment can be perceived as a deterrence to eliminate or at least to reduce malpractices by the planrers. Clients or parties involved can take their dissatisfaction to court in the case of unethical practices, provided that the complaints are substantial. 3.1.3 Ethics and the Economy Ethics is important for two reasons. Firstly, it defines the rules of acceptable behaviour by which a person should follow in the course of living with others. Hence, ethics set the standards for behaviour in society, without which the society will break down. Being unethical is not acceptable because this will violate the rights and expectations of others in a very fundamental way. In general, people are always fighting for their rights, and in doing so they should understand that rights come together with duties. In other words, although a person is free to exercise his rights, itis his duty to ensure that his rights should not be at the expense of others. Secondly, ethics is what holds the whole business community together. A lack of ethics will lead to moral problems and it can even bring a strong government to its knees, In the financial sector, for instance, we have witnessed numerous crises where investors have withdrawn their funds } ftom countries or regions that they have lost their confidence or trust in 3.2 Professional Responsibilities in Financial Planning A financial planner guides an individual to make his/her major financial decisions. He helps the individual understand the consequences of each of his/her financial decision. This function is partof function and duties of every pers ef lfare to“others. It is part of the FY person that seeks be “ a a: fenefit and welfare Iti Allah SWT says: ‘And ie ee be [arising] from you a nation inviting to [all that is] good, enjoining what is right bidding what is wrong, and those will be the successful.” (Al-Imran 3:104) a 7 sone planner helps an individual assess his/her financial assets, determine his/her financial goals and consider his/her economic resources to make investment decisions. The responsiblities of a financial planner include setting financial goats with the client, gathering the client's financial information, analyzing the information and designing a financial plan for the client. It is a financial planner's duty to implement the planned financial strategies and monitor the client's financial decisions. The above task of the financial planner is driven by the Shariah value and ethics such honesty, transparency and truthfulness to comply with the hadith reported by the Prophet that promote honesty and amanah without any cheating or misconduct There is a Hadith reported that the Prophet (Pbuh) said “Truthfulness leads to righteousness, and righteousness leads to Paradise. A man continued to tell the truth will he becomes a truthful person. Falsehood leads to al-fujur (.¢., wickedness, evil-doing), and al-fujur (wickedness) leads to the (Hell) Fire, and a man may continue to tell lies till he is written before Allah, a liar’ In regard to honesty, the Prophet (pbuh) said: “The merchants will be raised on the Day of Resurrection as evil-doers, except those who fear Allah, are honest and speak truth.” ‘A financial planner helps the client in risk management by assisting him/her in choosing suitable insurance schemes. He helps plan for the client's future by providing well-suited investment options. A financial planner helps the client ensure financial independence upon retirement by helping him/her with choosing the proper retirement investment plan. A financial planner will ‘advise the client on how to reduce his/her tax liabilities and enhance cash flow. A financial planner also deals with the conservation and distribution ofthe clients financial assets when making decision in the area of making decision, this is part of consultation especially ata .h, and it has been spelled out clearly in the Quran part has been emphasized by Sharial Allah (swt) says: 1d and established prayer and whose affair is “And those who have responded to their lor {determined by] consultation among themselves, and fom what We have provided them, they spend,” (Al-Shura 42:38) different aspects of the financial picture n. Some financial planners deal with the lize in fields like risk management or n, a financial planner studies the ides a suitable financial solutio .ce, while others special In terms of job descriptio of his/her client and provi various facets of personal finan retirement planning.‘The job of a financial planner can be described by means of a 6-step process given by the ISO. The frst step is of setting financial goals with the client. The second step includes the gathering of relevant financial information from the client. The third step is analyzing the gathered information. The fourth is the creation of a financial plan. The last two steps include tasks such as implementing the plan's strategies and monitoring the implementation ofthe plan. (v Yas Code of Ethics for Financial Planners 3.3.1 RFP Code of Ethics, Professional Obligations and Practice Standards The RFP Code of Ethics, Professional Obligations and Practice Standards (hereafter called the “Code) has been embraced by the MFPC to furnish principles, standards and rules to all persons whom it has approved to use any of its professional designations; prior and subsequent designations devised by the CCB. The CCB will recommend to the MFPC National Council to determine who is recognized and approved to use any of the RFP designations, Implicit to receiving this approval is a commitment on the part of the RFP Designee not only to comply with the decrees and requirements of all relevant laws and regulations in Malaysia, but also to take responsibilty to act in an ethical and professionally responsible way in all services and activities in the course of conducting his or her business. The RFP Code of Ethics, Professional Obligations and Practice Standards embody the following ‘two components: 1. The Code of Ethics (COE) The COE provides a reference point for guiding designees on how to behave ethically in the conduct of their business. The CUE must be read in conjunction with the RFP Practice Standards, 2. The RFP Practice Standards (RPS) The RPS is intended to provide detailed benchmarks as to the level of professional practice and ‘competence that is expected of a RFP Designee. The RPS must be read in conjunction with the COE and GPP. The Code of Ethics (COE) a) Integrity : REP Dosignees shall always actin the best interests of the client, the public generally, and shall ty ional engagements. act with the utmost degree of integrity in all prof Interpretive Notes: REP Designees are responsible for behaving in a way that is appropriate professionally when serving their cients, the public at large and the MFPC. As guardians of public tust and confidence, RFP Designees are required to use the uppermost degree of impartiality, integrity, and transparency in all professional dealings. b) Transparency ee Designees shal stay transparent and objective in all dealings, and shall explain clearly to clients the rationales where objectivity is compromised due to practical reasons. = of yt aiInterpretive Notes: , ‘An RFP Designee should uphold objectivity, honesty and shall disclose all conflicts of interest in the client-planner relationship. In instances where commitments to employers or principals make objectivity difficult, the RFP Designee is required to make known this to the client. In the course of performing his professional responsibilities the RFP Designee shall make known to the client whether he/she is independent, representing a principal(s) or employer ¢) Putting Client's Interests First RFP Designees shall put the clients interests above their own interests at all times. Interpretive Notes: The RFP Designee is required to place the client's interest above his own in all professional engagement with clients. The RFP Designee agrees to accept the responsibility that in situations Where due to prejudicial influences or conflicts of interests that may affect objective judgment, he shall declare such influences or conflicts to clients and take actions that are appropriate in protecting the clients’ interests. d) Making the Code of Ethics Available to Clients AFP Designees shall, upon request, provide a copy of this Code of Ethics and shall explain to clients the meaning of its provisions. : Interpretive Notes: ‘A RFP Designee should make available to the client a copy of the COE and is able to explain how the COE function in the professional relationship and what his/her role and obligations are with respect to the client, his/her principal and the MFPC. e) Continuing Professional Development RFP Designees shall continue to develop themselves professionally and maintain relevancy and ‘competence at a level required to serve clients professionally. Interpretive Notes: RFP Designee shall continuously acquire maintain and use the standards of knowledge and due care relevant to his/her role as a financial planning professional and to meet guidelines and rules set by the Authorities and relevant self-regulatoty organizations. ) Confidentiality RFP Designees shall keep all client information confidential according to guidelines, practice standards and laws set by the relevant authorities (e.g. SC, BNM) and Self-Regulatory Organizations (e.g. LIAM, MFPC, NAMLIFA, etc) Interpretive Notes: A RFP Designee shall request all relevant records and documentation as is necessary to satisfy the requirements of the client and the RFP Designee shall respect confidentiality of all information obtained in the performance of hishher professional services unless otherwise required or permitted by law or in the course of a civil dispute. g) Professionalism RFP Designees shall act with professionalism and shall act in a manner that brings honour and dignity to the profession.Interpretive Notes: A RFP Designee shall behave in an honest and courteous manner towards all persons in business relationships and shall enhance the standing of the profession in the community in which he/she serves. h) Diligence RFP Designees shall be diligent in discharging responsibilities to clients and the public and shall render such services promptly, carefully, and thoroughly Interpretive Notes: The RFP Designee is expected to diligently pian and supervise any professional activity for which he/she is responsible in an adequate and comprehensive manner. i) Professional Undertakings RFP. Designees shall _only undertake tasks for which they have the proper experience, knowledge, skills, competence and authorization. Interpretive Notes: ARFP Designee shall only undertake business related to his business within the limits of his/her Competence and authorization. RFP Designees must recognize circumstances where knowledge and competence are not sufficient for the task and inform the client of such deficiencies, and where appropriate, recommend to the client professionals who are qualified to complete the task i) Charges, Fees and Costs RFP Designees shall declare all charges, fees and cost arrangements with clients prior to entering into a contract of engagement Interpretive Notes: A RFP Designee shall make known to the client and explain to him the basis of charges, fees and or other remuneration related to services performed on behalf of the client. ‘The RFP Practice Standards (RPS) Preamble . The RFP Practice Standards (RPS) is an evolving set of specific professional benchmarks and Principles introduced by CCB of the MFPC that are intended to help RFP Designees understand the level of competence and acceptable professional behaviour expected of them in various situations and in dealings with clients and associates. Where there are no clearly defined benchmarks or principles listed in the RPS to measure performance or to guide behaviour n'a Paricular situation or dealing, the designees are to refer to the General Practice Principles for general guidance. |t should be noted that these practice standards and meant to be bases for legal liability to be used against practice standards and principles. Notwithstanding, provide a basis for the Disciplinary Officer of the Et take disciplinary action against the designee who h: profession. Principles provided in the RPS are not @ designee who is in violation of these these practice standards and principles do thies and Compliance Board of the MPC to 's brought bad practices and disrepute to theThe RFP Practice Standards (RPS) deals with the job aspects of finaricial planning and the financial planner. The design of the standards is guided by researches and job analyses made over the years by professional bodies and discussions with financial planning professionals. The RPS provides guidance and benchmarks to financial planning practitioners on how they should perform their job to meet internationally accepted practice standards and to meet clients’ expectations. Purpose of the RPS The RFP Practice Standards (RPS) determines the quantity of professional practice that is expected of a RFP Designee who practices financial planning, regardless of his/her job status or work title. All RFP designees are expected to conform to the RPS. ‘Financial Planning’ Defined Under the RPS The RPS defines financial planning or personal financial planning as “a process or methodology of assisting clients in determining their financial goals, objectives and priorities and the resources to meet them in an optimal and practical manner.” From the definition, it may be deduced that financial planning is a process of doing things and not a product. The ‘Financial Planning Process’ Under the RPS ‘The RPS has adopted the established six-step financial planning process fashionable within the financial planning circle. The RPS considers the role of defining and redefining of the client- planner relationship as a continuous part of the engagement with the client, which starts from the pre-planning, planning, to the monitoring period. Since, it is an on-going activity that last throughout the relationship after the initial engagement and is interwoven into the fabric of every of the six-step financial planning process, the RPS does not list it as one of the six-step process. Instead, separate guidelines are provided under the RPS recommendations to define the activity Notwithstanding the above, the RPS does recognize and support any financial planning process that matches its adopted model in serving clients’ needs at the professional level. Purpose and Format The RFP Practice Standards (RPS) are representéd by a series of RPS Codes, which are ‘Defining Statements’ associated with the continuing professional relationship of the planner with the client and the process of dealings associated with financial planning. To ensure clarity to the purpose and meaning of the statements made, an Interpretive Note is Provided to support each Defining Statement. In addition, the intended outcomes for the client, public and the financial planning practitioner of each category of defining statements where the elements are carried out accordingly, are stated to give an indication of their benefits. 3.4 Dealing with Clients’ Complaints The Ethics and Compliance Board (hereinafter referred to as “the ECB") is responsible for the enforcement of the RFP Code of Ethics, Professional Obligations and Practice Standards (hereinafter referred to as the “Code") which Code was developed by the Certification and CPD Board (hereinafter referred to as “CCB") of the MFPC and approved by the National Council of the MFPC.‘The ECB is also responsible for dealing with complaints made against Members including setting the guidelines within which disciplinary proceedings against Members are to be conducted. The National Council ts empowered to take such disciplinary action against any Member, Pursuant to inter-alia any regulations made by the National Council from time to time. Accordingly:~ (1) Guidelines have been set by the ECB, which guidelines have been approved by the National Council of the MFPC; (2) Regulations have been established by the National Council incorporating the above guidelines, which regulations will be known as the MFPC Disciplinary Proceedings Regulations. 3.4.1 Investigation Committee ‘An Investigation Committee (IC) shall be formed comprising of at least one (1) member of the ECB and not more than three (3) members of the ECB (‘the IC") whose function shall be to investigate any complaint conceming a Registered Financial Planner ("RFP") and make the determination set out in Regulation 3.4.3 (f) below; ‘* Subject to sub-regulation (a) above, the composition of the IC including the Chairman of the IC, shall be determined by the Chairman of the ECB. If the IC comprises only one (1) ‘member of the ECB, references in these Regulations to the Chairman of the IC shall be deemed to refer to such single member of tho IC; * the term of any member of the IC shall be for a period of two(2) years subject to the Power of the Chairman of the ECB to: extend the term for further periods) of two (2) years each; or remove or release any member of the IC, in such circumstances as the Chairman of the ECB deems fit. 3.4.2: Complaints (a) Any complaint concerning a RFP designee shall be in writing and shall be made or referred to the ECB; (b) Any member of the National Council of the MFPC shall be entitled to refer to the ECB of any alleged breach of the Code that comes to his notice or that is brought to hs attention, ‘The ECB shall then liaise with any or all relevant persons in order that a complaint complying with the requirements of sub-regulation (c) below is made to the ECB. The member of the National Council who has so referred any such alleged breach of the Code shall not participate in the disciplinary proceedings against the RFP designee concerned; (c) A complaint shall contain/be accompanied by the following: i. ‘The full name, Identity Card/Passport No. and address of the complainant; ii, ‘The facts of the complaint;li. Copies of any document that the complainant proposes to rely on in support of his ‘complaint; and The signature of the complainant. 3.4.3 Investigation (@) A written complaint in compliance with Regulation 2(c) above shall be forwarded by the ECB to the IC within fourteen (14) days of the receipt of the written complaint; (b) The IC shall commence its investigation into the complaint and report its findings to the ECB as expeditiously as may be reasonably expected of it but not later than two (2) ‘months after the receipt of the written complaint by the IC or within such further period as the Chairman of the ECB may in writing specify upon an application made by the IC for an extension; (c) For the purposes of any investigation, the IC may: i, require the RFP designee concemed to produce for the inspection by the IC of any document which may relate to or be connected with the subject matter of the investigation and may require the RFP designee involved to give information in relation to any such document; ji, Require the RFP designee concerned to give all information which may relate to or be connected with the subject matter of the investigation. (d) The IC shall refer to the National Council the RFP designee concerned who without iawful excuse refuses or fails to comply with either of the requirements in sub-regulation (c) above whereupon the National Council shall be entitled to: i. suspend the membership of the RFP designee concerned with the MFPC for such period as the National Council deems fit; ii. notify all Members of the MFPC and all relevant regulatory authorities of such suspension. Any such reference to the National Council and/or suspension by the National Council shall not affect the investigation by the IC which shall continue. Any such reference to the National Council and/or suspension by the National Council shall not affect the investigation by the IC which shall continue. (e) ia complainant may at any time, by letter addressed to the ECB, withdraw his ‘complaint; ji, notwithstanding the withdrawal of a complaint, the IC may nevertheless proceed with its function as set out in sub-regulation (f) below if the circumstances so warrant or may refer the matter to the Disciplinary Committee with a recommendation that the complaint be considered closed; () The IC shall determine if a formal investigation is necessary by the Disciplinary Committee. In the event the IC determines: i. that a formal investigation is necessary, then the matter be referred to Disciplinary Committee constituted in the manner as referred hereinbelow;li, that no proper cause for complaint exists ‘oF no cause of sufficient gravity exist, the matter shall be referred to the Disciplinary Committee with a recommendation that the complaint be considered closed. (9) Before the IC considers the complaint, the IC shall cause to be posted by prepaid egistered post or delivered to the RFP designee concerned at his last known address according to the records of the MFPC: \. copy of the written complaint and all accompanying documents (if any); and "notice inviting the RFP designee concerned within fourteen (14) days of the notice or such further period as allowed by the IC, to give to the IC any written explanation he may wish to offer to the IC on the complaint. {h) The IC shall allow the time specified in the notice referred to in sub-regulation (g) above fo elapse and shall give due consideration to any written explanation made by the RFP designee concerned; (The IC shall meet at such place and on such date and at such time as the Chairman of the IC shall determine from time to time in order to consider the complaint and to fulfill ts functions in sub-regulation (f) above; (The IC shall prepare a report stating its findings and the determination as reached by it The report of the IC (together with copies of the complaint, letter of explanation (if any) by the RFP designee concerned and any and all correspondence between the IG and the complainant and/or the RFP designee concerned) shall be forwarded to the Disciplinary Committee. 3.4.4 Disciplinary Committee (a) A Disciplinary Committee (hereinafter referred to as “DC”) shall be appointed as Tequired by the National Council and shall comprise of three (3) members selected from the Members of the National Council or such other persons or representatives as the National Council may be authorized to appoint. (b) the function of the DC shall be to conduct an investigation into any complaints received and to impose disciplinary actions on RFP designees found to be in breach of the MFPC COE. (c) the DC shall elect its own Chairman. (d) the term of each member of the DC shall be for a period of two (2) years subject to the power of the National Council to:- ())_extend the term for further period(s) of two (2) years each; (ji) remove or release any member of the DC, in such circumstances as the National Council deems3.4.5. Investigation d (a) Subject to the provision of para 1 (e) above, any written complaint shall be Ce : by the ECB to the DC within fourteen (14) days of receipt of the written complain! investigation; (b) before the DC considers the complaint, the DC shall cause to be posted by ip registered post or delivered to the RFP designee concerned at his last kno address according to the records of the MFPC. (i) a copy of the written complaint and all accompanying documents (if any); and (ii) notice inviting the RFP designee concerned within fourteen (14) days of the notice or such further period as allowed by the DC, to give to the DC any written explanation he may wish to offer to the IC on the complaint. (c) the DC shall allow the time specified in the notice referred to in sub-regulation (b) above to elapse and shall give due consideration to any written explanation made by the RFP designee concerned. (d) thereafter, the DC shall commence its investigation into the complaint and for the purposes of any investigation, the DC may: (require the RFP designee concemed to produce for the inspection by the DC, any document which may relate to or be connected with the subject matter of the investigation and may require the RFP designee involved to give information in relation to any such document; (ii) require the RFP designee concemed to give all information which may relate to or be connected with the subject matter of the investigation. (@) where the DC finds that no proper cause for the complaint exists or no cause of sufficient gravity exists the DC shall proceed to close the complaint file and advise the ECB accordingly. In such case, the DC shall prepare a report stating its findings and the determination as reached by it. The report of the DC (together with copies of the complaint, letter of explanation (if any) by the RFP designee concerned and any and all correspondence between the DC and the complainant and/or the RFP designee concerned) shall be forwarded to the ECB; (e) where the DC finds that there may be a cause for complaint, the DC shall proceed to conduct a formal inquiry. In such case, the DC shall proceed with a fonral inquiry by meeting at such place and on such date and at such time ac 1e Chairman of the DC shall determine from time to time in orde i sec order to consider the (notice of the hearing of the DC shall be sent to the complainant Kc and to designee concerned by prepaid registered post or delivered to the teat adress of the complainant and the RFP designee concemed based on the records of the MFPC. The notice shall speci ir coe all specify the date, time and place of the(9) the DC may adjourn the hearing from time to time. No written notice of an adjournment is required to be given to any party when the adjournment is made in the presence of that party; (h) where on the date fixed for the hearing and investigation of the complaint, the complainant or the RFP designee concemed or both fail or fails to attend before the DC, the DC may, upon being satisfied that the notice of the hearing has been Posted or delivered to the person or persons concemed, proceed to hear and investigate the complaint in the absence of such Person or persons without further notice to such person or persons and make its determinations; (at any hearing before the DC:~ (i) require the RFP designee concerned to Produce for the inspection by the DC, any document which may relate to or be connected with the ‘subject matter of the investigation and may require the RFP designee involved to give information in relation to any such document; (ii) require the RFP designee concerned to give all information which may relate to or be connected with the subject matter of the investigation. () where the DC is not unanimous on any question or matter to be determined, the decision of the majority shall be deemed to be the decision of the DC; (k) 1 DC shall refer to the National Council, any RFP designee who without lawful excuse refuses or fails to comply with either of the requirements in sub- regulation (d) above whereupon the National Council shall be entitled to:- (i) suspend the membership of the RFP designee concerned with the MFPC for such period as the National Council deems fit; (ii) notify all Members of the MFPC and all relevant regulatory authorities of such suspension. Any such reference to the National Council and/or suspension by the National Council shall not affect the investigation by the DC which shall continue, ()) a complainant may at any time, by letter addressed to the ECB, withdraw his complaint. Notwithstanding the withdrawal of a complaint, the DC may nevertheless proceed with its function to conduct an investigation into the complaint made against, the complainant if the circumstances so warrant or may decide that the complaint be considered closed; (m)after hearing and investigating any matter forwarded to it, the DC shall in its report record its findings in relation to the facts of the case and according to those facts shall determine if the RFP designee concerned is in breach of the Code; {n) where the DC determines that the RFP designee concerned is not in breach of the Code, the matter shall then be considered closed; (0) where the DC determines that the RFP designee concerned is in breach of the Code, the DC shall then hear the plea in mitigation (if any) that the RFP designee concerned chooses to make. Thereafter or so soon thereafter as is possible, the DC may impose any one of the following disciplinary actions:~()_ reprimand the RFP designee concemed; (ii) impose such fine upon the RFP designee concerned as the DC deems appropriate to be paid to the MFPC within such time frame as determined by the DC provided that such fine does not exceed the sum of RM50,000.00. In the event such fine is not paid within such time frame, the RFP designee concerned shall be suspended from membership with the MFPC until such fine is paid; (ili) suspend the RFP designee concerned from membership with the MFPC for such Period as the DC deems appropriate in the circumstances; or (iv) order the removal of the name of the RFP designee concerned from the Register of Members. (p) a copy of the report of the DC together with the record of the proceedings, findings and decision of the DC shall be retained in the complaint file accordingly. (q) the complainant and the RFP designee concemed shall be notified of the findings of the DC and the disciplinary action imposed by the DC (if any) within fourteen (14) working days of the decision of the DC in relation to the same by a notice in writing issued by or ‘on behalf of the DC and sent by prepaid registered post or delivered to their respective last known addresses based on the records of the MFPC; (1) the DC may publish or cause the publication in any manner it shall deem appropriate, the name of the RFP designee concemed who has been subject to disciplinary action pursuant to these Regulation including the penalty imposed on him provided that such publication shall not be effected pending the disposal of an appeal made in accordance with Regulation 4 below. (s)_ the RFP designee concemed may apply for a stay of the disciplinary action as imposed by the DC provided that an appeal has been made by the RFP designee concerned in accordance with the requirements of Regulation 4(a) below. The application for stay shall be made to the Chairman of the ECB who shall also determine such application. 3.4.6 Appeal Committee ‘The RFP designee concerned may, within a, period of fourteen (14) days after been notified of the disciplinary action imposed by the DC/ECB, as the case may be, appeal to the Appeal Comniittee set up hereunder. The appeal shall be in writing anc addressed to the Chairman of the DC and shall:- (@) (i) state the intention of the RFP designee concerned to appeal against the decision of the DC/ECB, as the case may be and indicate whether the appeal is against the determination of breach of the Code and/or the disciplinary action imposed by the DCIECB, as the case may be; and (iy) be accompanied by payment in the sum of RM500.00 to offset the expenses incurred for the purposes of the appeal. This payment shall not be refundable. The Chairman of the ECB shall thereafter notify the National Council of such appeal. hat does not comply with the above requirements shall be deemed incomplete (b) an appeal t plete shall be made by the Chairman of ‘and any determination that the appeal is so incomthe ECB who shall inform the RFP designee concemed of such determination. The RFP designee shall be given 7 working days to comply with the above requirements failing ‘which the appeal shall not be considered; (c) the Appeal Committee (‘the AC’) shall be appointed by the National Council from time to {ime so as to hear any particular appeal as lodged. The AC shall comprise of:- (i) a practicing lawyer who is an Advocate & Solicitor of the High Court of Malaya; and (i) two (2) persons who are members of bodies (whether statutory, corporate or otherwise) which bodies are involved in or connected with financial planning and/or financial services; (d) the Chairman of the AC shall be as determined by the National Council; (€) the AC shall meet at such place and on such date and at such time as the Chairman of the AC shall determine from time to time; (f) the AC may confirm or reverse the determination made by andlor confirm, reverse or vary the disciplinary action imposed by the D (g) the AC shall, as soon as practicable after its constitution, give the RFP designee concerned an opportunity to make a written representation within such time as may be stipulated by the AC; (h) after receiving the written representations of the RFP designee concerned (if any), the ‘AC may invite the Chairman of the DC to give their respective written comments on the written representations of the RFP designee concerned, with such comments to be given within such time as may be stipulated by the AC; (i) The AC shall upon receiving the written comments of the Chairman of DC, give the RFP designee concemed an opportunity to give his written comments on the same within such time as may be stipulated by the AC; (After receiving the written representations of the RFP designee concemed, the written ‘comments of the Chairman of the DC and the written comments of the RFP designee concerned on the same, or in the event there isa failure to subrmit to the AC any or all of the written representations/comments referred to above, the AC may proceed to consider the appeal based on:- (i) the report of the DC together with the record of the proceedings before the DC: {ii)_ the determination of the DC; and (ii) the written representations and written comments referred to hereinabove and received by the AC. For the avoidance of doubt, there shall be no oral hearing before the AC.3.5 Conclusion This chapter has discussed the professional and ethics framework in financial planning. The scope has covered the concept of ethics in Islam that includes ethics in financial planning, ethics and the economy. Professional responsibilities in financial planning. Code of Ethics for Financial Planners that includes RFP Code of Ethics, Professional Obligations and Practice Standards. Dealing with Clients’ Complaints that include investigation committee, complaints, investigation, disciplinary committee, proceedings before the National Council of MFPC and appeal committee. this process to ensure faimess in making judgment. these various aspects have explained and discussed to provide a sound ground and platform for the financial planner with regards to ethics and professionalism,