A.2 CFP Board’s Procedural Rules Flashcards
How can a CFP professional report a violation of the CFP Board’s Code of Ethics and Standards of Conduct?A) By sending an email to the CFP Board’s Ethics HotlineB) By calling the CFP Board’s Ethics HotlineC) By submitting a written complaint to the CFP Board’s Professional Standards departmentD) All of the above
All of the aboveExplanation: A CFP professional can report a violation of the CFP Board’s Code of Ethics and Standards of Conduct through the Ethics Hotline by email or phone, or by submitting a written complaint to the Professional Standards department.
What is the maximum number of years that a CFP professional can remain inactive without losing their CFP certification?A) 2 yearsB) 3 yearsC) 5 yearsD) 7 years
5 yearsExplanation: A CFP professional can remain inactive for up to 5 years without losing their CFP certification. If they exceed this time period, they will need to complete the current education, examination, and experience requirements to regain their certification.
How long does a CFP professional have to respond to a CFP Board inquiry or complaint?A) 10 business daysB) 20 business daysC) 30 calendar daysD) 45 calendar days
20 business daysExplanation: A CFP professional has 20 business days to respond to a CFP Board inquiry or complaint, unless an extension is granted by the CFP Board.
What is the maximum amount of time that the CFP Board can take to investigate a complaint?A) 90 daysB) 180 daysC) 270 daysD) 365 days
180 daysExplanation: The CFP Board must complete an investigation within 180 days of receiving a complaint, unless the investigation involves complex issues that require more time.
What is the CFP Board’s policy on advertising for CFP professionals?A) Advertising must be approved by the CFP Board before it can be usedB) Advertising must comply with the CFP Board’s Advertising StandardsD) Advertising is not allowed for CFP professionalsD) Advertising is allowed, but only in certain circumstances
Advertising must comply with the CFP Board’s Advertising StandardsExplanation: CFP professionals are allowed to advertise, but their advertising must comply with the CFP Board’s Advertising Standards, which require accuracy and truthfulness in all advertising materials.
What happens if a CFP professional fails to pay their annual certification fee?A) Their certification is immediately revokedB) They are given a 30-day grace period to pay the feeC) They are given a 60-day grace period to pay the feeD) They are given a 90-day grace period to pay the fee
They are given a 90-day grace period to pay the feeExplanation: If a CFP professional fails to pay their annual certification fee, they are given a 90-day grace period to pay the fee. If the fee is not paid within this time period, their certification will be suspended.
What is the maximum amount of time that a CFP professional can take to complete their continuing education requirements?A) 90 daysB) 180 daysC) 1 yearD) 2 years
1 year
What is the procedure for a CFP professional to request a reconsideration of a disciplinary action taken by the CFP Board?A) The CFP professional must file a written request with the CFP Board’s Appeals Committee within 30 days of the disciplinary actionB) The CFP professional must file a written request with the CFP Board’s Disciplinary and Ethics Commission within 30 days of the disciplinary actionC) The CFP professional must file a written request with the CFP Board’s Professional Standards department within 30 days of the disciplinary actionD) The CFP professional is not allowed to request a reconsideration of a disciplinary action
The CFP professional must file a written request with the CFP Board’s Appeals Committee within 30 days of the disciplinary actionExplanation: A CFP professional who wishes to request a reconsideration of a disciplinary action taken by the CFP Board must file a written request with the Appeals Committee within 30 days of the disciplinary action.
What is the purpose of the CFP Board’s disciplinary process?A) To revoke the certification of CFP professionals who violate the Standards of Professional ConductB) To provide education and training to CFP professionals who violate the Standards of Professional ConductC) To impose fines on CFP professionals who violate the Standards of Professional ConductD) To increase public awareness of the CFP Board’s Standards of Professional Conduct
To revoke the certification of CFP professionals who violate the Standards of Professional Conduct
Case Study: The Case of Ms. Clara MeyersBackground:Ms. Clara Meyers is a Certified Financial Planner (CFP) with over 20 years of experience in the industry. She operates a solo practice and has built a strong reputation in her community. Over the years, she has managed to attract a sizeable clientele, many of whom are high-net-worth individuals.Situation:In early 2023, Ms. Meyers was approached by a new client, Mr. Samuel Green, who had recently received an inheritance of $2 million. Mr. Green was relatively inexperienced in financial matters and sought guidance on how to best invest and manage his newfound wealth.After an initial discussion, Ms. Meyers recommended a diversified portfolio. She also suggested investing a portion of the inheritance in a real estate development project which she believed had promising returns. Ms. Meyers failed to disclose, however, that her brother was one of the main developers of the project.A year later, the real estate project ran into unforeseen complications. The project faced legal challenges and subsequent delays, jeopardizing the investments. As the value of Mr. Green’s investment diminished, he began to research the project and discovered the connection between Ms. Meyers’s brother and the development.Mr. Green felt betrayed and filed a complaint against Ms. Meyers, accusing her of a conflict of interest.Question:If found guilty of violating the Standards of Professional Conduct, what might be a possible penalty for Ms. Meyers?A) Monetary fineB) A written warningC) Revocation of her CFP certificationD) An obligatory training session
Revocation of her CFP certificationExplanation: While the CFP Board could impose various penalties, one of the more severe consequences for severe violations is the revocation of the CFP certification.
