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CFP Exam > CFP - Ethics > Flashcards

CFP - Ethics Flashcards

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1
Q

A CFP must disclose updates to public disciplinary history or bankruptcy information must be disclosed to the Client within how many days?

A

90 days

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2
Q

Direct fee charged to client or related to financial assets is called?

A

Fee-only

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3
Q

Commissions, fees, or compensation received as a result of selling or recommending a financial asset is called?

A

Sales Related Compensation

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4
Q

A combination of FEE-ONLY & SALES RELATED COMPENSATION is called?

A

Fee-Based

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5
Q

____ is a collaborative process that helps maximize a Client’s potential for meeting life goals through Financial Advice that integrate relevant elements of the Client’s personal and financial circumstances

A

Financial Planning

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6
Q

Which is more important? Qualitative or Quantitative client information

A

BOTH are EQUALLY important

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7
Q

If the CFP(R) professional does not state monitoring responsibilities, what is the assumption?

A

Assumption is that the CFP is doing the monitoring

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8
Q

What happens if the client provides incomplete information?

A

Either limit the Scope of the Engagement OR terminate the engagement

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9
Q

Uber Is A Drunk Person’s Immediate Motor vehicle

A

Understand
Identify
Analyze
Develop
Present
Implement
Monitor

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10
Q

Obligations to notify employer of suspension from use of CFP trademark?

A

Prompt notification.

Not required to submit additional information beyond notice of suspension.

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11
Q

Do driving offenses, tickets and misdemeanors that do not involve alcohol or drugs count as relevant misdemeanors?

A

NO

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12
Q

A CFP(R) professional must provide written notice to CFP Board within ___ days after felony or relevant misdemeanor or regulatory action/investigation OR Finding in a Regulatory action OR civil judgment or Fraud/Theft OR professional license revoked OR been terminated due to dishonesty OR personal/business bankruptcy OR tax lien

A

30 days (includes weekends & holidays)

Professional should report both the initial charge/investigation AND the outcome

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13
Q

CFP Board defines a felony as

A

One year or more in jail or over a $1,000 fine

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14
Q

Can you use the CFP(R) mark while completing education?

A

NO

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15
Q

Can you use the CFP(R) mark while completing experience/exam?

A

NO, use “Candidate for CFP(R) Certification”

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16
Q

Acceptable use of logo?

A

CFP(R)

CERTIFIED FINANCAL PLANNING (TM)

17
Q

How often must compensation be disclosed?

A

Ongoing, as necessitated by services and products provided

18
Q

Interim Suspension Order regarding use of CFP(R) designation? Any appeals? How long does CFP have to respond?

A

Lasts for 45 days, NO appeals, must respond within 14 days

19
Q

How long does one have to respond to notice of investigation?

A

30 days

20
Q

How long does Revocation of use of CFP(R) mark last?

A

PERMANENT

21
Q

How long do you have to notify CFP Board of a change of mailing address?

A

30 days

22
Q

How long does suspension last?

A

90 days to 5 years

23
Q

One bankruptcy

A

CFP Board within 30 days
Clients within 90 days

Accept a public censure OR pay a hearing fee

24
Q

“ALWAYS” bar list

A

-Felony
-Theft, embezzlement, tax fraud or other financial/tax crimes
-Felony conviction of any degree of murder or rape (no time limit)
-Violent crime within the past 5 years
-Revocation of a financial professional license
-Broker/dealer, insurance, accountant, financial planner

25
Q

“PRESUMED” bar list

A

-2 or more personal or business bankruptcies
1st: CFP Board must be told within 30 days, Clients must be told within 90 days
-Any bankruptcy will be disclosed publicly by CFP Board for 10 years

-Felony conviction of:
Violent crimes other than murder or rape that occurred more than 5 years ago
-Nonviolent crimes within the last 5 years (perjury)
-Revocation of a NON-financial professional license
-Suspension of a financial professional license

26
Q

Elements of the CODE OF ETHICS

A
  1. Act with honesty, integrity, competence, and diligence
  2. Act in the client’s best interest
  3. Exercise due care
  4. Avoid OR disclose and manage conflicts of interest
  5. Maintain the confidentiality and protect the privacy of client information
  6. Act in a manner that reflects positively on the financial planning profession and CFP certification.
27
Q

When is a CFP(R) professional required to act as a fiduciary?

A

At all times

28
Q

When is a CFP professional held to the CFP Board Code of Ethics?

A

When recommending Financial Assets AND when practicing Financial Planning

29
Q

What is the Fiduciary Duty?

A

Loyalty, Care, Follow Client Instructions

30
Q

Methods of compensation must always be in ___-

A

writing

31
Q

Standards of Conduct - Fiduciary Duty - Duty of CARE

A

Care, skill, prudence, and diligence

32
Q

Who regulates form ADV?

A

SEC

33
Q

Hourly Fees
Flat Fees
Subscription Fees
AUM fees
Custodial platform fees
Salary or bonus NOT related to sales goals
Travel to custodian Fees

A

Fee-only compensation

CFP Exam (23 decks)

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