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ChFC HS 300: Financial Planning: Process and Environment > Ch.3 - Ethics, Professionalism, and Practice Standards > Flashcards

Ch.3 - Ethics, Professionalism, and Practice Standards Flashcards

1
Q

The number one influence on an executives ethical decision making is their…

A

personal code of ethics

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2
Q

Ethics represents the underlining aspect of trust between an advisor and…

A

client

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3
Q

What holds businesses, the economy, and society together?

A

Ethics

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4
Q

Laws are written based on what a government considers ___________________ of conduct.

A

minimum standards

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5
Q

In order to be ethical an individual must follow the…

A

law

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6
Q

True or false. Legal problems are relatively clear cut and are more easily defined then ethical problems.

A

True

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7
Q

Laws can be written to address certain aspects of __________, such as stealing.

A

morality

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8
Q

What are used as benchmarks to measure the conduct of an advisor?

A

Ethical codes

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9
Q

Holder of an American College designation is subject to the…

A

professional pledge and 8 cannons.

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10
Q

The American College professional pledge requires the holder of the designation to render services to others which, under the same circumstances, they would apply to…

A

themselves.

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11
Q

If you violate the American College pledge what are the consequences?

A

Temporary or permanent suspension

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12
Q

What are the eight canons of the American college code of ethics?
(HOPDECKS)

A
  1. Honor and dignity
  2. Obey laws
  3. Publicize achievements
  4. Don’t dishonor the American College
  5. Encourage/help other professionals
  6. Continuing education
  7. Keep a record
  8. Support institutions
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13
Q

If you violate the CFP Board’s Professional Standards code of ethics, what could be the consequence?

A

You can lose your certification

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14
Q

If someone violates the CFP Board’s code of ethics can you take them to court and sue them?

A

No.

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15
Q

Who does the CFP Board’s code of ethics apply to?

A

Current CFP professionals and candidates for the certification

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16
Q

What are the CFP 7 Code of Ethics Principles?

ICOCFPD

A

7 Code of Ethics Principles

  1. Integrity
  2. Competence
  3. Objectivity
  4. Confidentiality
  5. Fairness
  6. Professionalism
  7. Diligence
17
Q

CFP Professional standards are established in their…

A

Rules of Conduct

18
Q

For CFP professionals, what are the 6 Rules of Conduct?

DDCOOO

A
  1. Defining the relationship with the prospect/client
  2. Disclosure to prospect/client
  3. Confidentiality of prospect/client information/property
  4. Obligations to prospect/client
  5. Obligations to employers
  6. Obligations to CFP Board
19
Q

CFP Board has Practice Standards that are organized on the financial planning domains and are intended to do what three things?
(EAE)

A
  1. Establish norms
  2. Advance professionalism
  3. Enhance value
20
Q

Does the CFP Board’s Practice Standards have a step-by-step procedure for providing services?

A

No

21
Q

Name the six parts of the Practice Standards created by the CFP Board.

A

100–1: (scope) defining the scope of engagement
200–1: (goals) determine clients financial goals, needs, and priorities
200–2: (data) get quantitative info
300–1: (analyze) analyze clients information
400–1: (recommendations) come up with financial alternatives
400–2: (plan) put together the recommended financial plan
400–3: (discuss) Present recommendations
500–1: (agree) agreed on the plan
500–2: (implement) select the products to be implemented
600–1: (monitor) monitor the plan

22
Q

Advisors should be encouraging the clients to purchase products, they should not…

A

pressure the clients into buying products.

23
Q

What is a major component of the financial planning process?

A

client-focused selling

24
Q

A professional should have 4 characteristics. What are they?

CASE

A
  1. Code of Ethics
  2. Altruistic or unselfish
  3. Specialized knowledge
  4. Entry requirements
25
Q

Historically, courts held professionals to a higher standard than…

A

non-professionals.

26
Q

The fiduciary standard of professional behavior places an expectation that professionals…

A

put the clients best interest above anything else and know the law.

27
Q

What are the 9 hallmarks of professional behavior for a financial advisor?
(SKLARHEEM)

A 
Service
Know risk tolerance
Listening
Answering questions
Refer to experts
Handle matters appropriately
Education background 
Educate the client
Maintain knowledgebase
28
Q

7 themes for adviser code of ethics

A 
Best interest
Conduct themselves fairly, objectively, and honestly
Protect confidentiality
Disclose sufficient information
Continue education
Elevate the profession
Comply with laws

ChFC HS 300: Financial Planning: Process and Environment (12 decks)

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