CH3: Ethics, Professionalism and Practice Standards

Question 1

Altruism

Answer 1

Characteristic that facilitated adherence to the code of either.
The unselfish regard for the welfare of others

Question 2

What are the 7 Principles of the Code of Ethics

Answer 2

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

Question 3

What are the characteristics that define a processional

Answer 3

1. Specified knowledge
2. Altruism
3. Code of ethics
4. Threshold entrance requirement

Question 4

What is the intended outcome of the CFP board of Financial Planning standards

Answer 4

Assure practice of financial planning is based on established norms of practice
advance professionalism
Enhance the value of the financial planning process

Question 5

What are the three types of structured communication

Answer 5

Interviewing
Counseling
Advising

Question 6

What are the 4 social styles

Answer 6

• Driver: forceful and direct
• Expressive: outgoing/enthusiastic
• Amiable: Easy-going, dependent
• Analytical: logical/quite

Question 7

Sources of client resistant behavior

Answer 7

death/sickness
marital tensions
midlife-crisis
failure to attain expected degree of professional success

Question 8

What are the attributes of an effective adviser:

Answer 8

Unconditional positive regard
accurate empathy
genuineness
self-awareness

Question 9

Types of understanding responses

Answer 9

summarization
clarifying
restatement of content

Question 10

Identify/Explain the 8 financial planning domains

Answer 10

1. Establish the adviser/client relationship:
2. Determine goals and gather data.
3. Analyze/evaluate data:
4. Develop recommendations
5. Communicate recommendations
   6 Implement plan
6. Monitor Plan
7. Practice within professional and regulatory standards

Question 11

Single purpose approach

Answer 11

Selling one product to a client that solves a particular problem

Question 12

Multi-purpose approach

Answer 12

solving multiple financial problems with financial products/services used to implement the recommendation of the adviser

Question 13

Comprehensive approach

Answer 13

considers all of a clients financial needs/objectives by developing a plan according to the financial planning process approved by the client

Question 14

What should be included in a comprehensive financial plant?

Answer 14

Financial planning principles
insurance planning/risk management
employee benefits planning
investment planning
income tax planning
retirement planning
estate planning

Question 15

What is mean by the life-cycle financial planning

Answer 15

Financial planning is a process that should be ongoing throughout a clients financial life.

Question 16

Financial Planing pyramid

Answer 16

1. Risk management. Protects against financial uncertainties
2. Building wealth: accumulation of goals
3. Distribute wealth: management of retirement assets

Question 17

What are the 3 obstacles preventing Americans form gaining control of their financial destinies

Answer 17

• natural tendency to procrastinate
• tendency to live beyond means
• lack of financial knowledge