Fiduciary

Question 1

This standard of care sets a minimum threshold that all financial planners must meet.

Answer 1

Suitability Standard

Question 2

A _______________________ is someone who has the duty to act in the best interest or benefit of another person or entity.

Answer 2

Fiduciary

Question 3

When will a financial planner who is generally paid by commission be considered a fiduciary under ERISA rules?

Answer 3

Under ERISA definitions, a financial planner who provides guidance on qualified retirement plan assets will generally be considered a fiduciary, even in cases where they would otherwise be paid a commission or be limited by their firm to the sale of certain products and/or services.

Question 4

Under ERISA definitions, a financial planner who provides guidance on qualified retirement plan assets will generally be considered a ___________________, even in cases where they would otherwise be paid a commission or be limited by their firm to the sale of certain products and/or services.

Answer 4

Fiduciary

Question 5

What is a method of conflict resolution that involves a voluntary attempt to resolve an issue?

Answer 5

Mediation

Question 6

“Someone who must act prudently and must diversify [the plan’s] investments in order to minimize the risk of large losses … In addition, they must avoid conflicts of interest” is a:

Answer 6

Fiduciary

Question 7

Employees of brokerage firms generally follow this standard of care when working with clients.

Answer 7

Suitability Standard

Question 8

List those who are considered fiduciaries within the financial planning profession.

Answer 8

All the following are considered fiduciaries:
A registered investment adviser
An agent who holds a power of attorney
A legal guardian
A trustee of a trust
An executor of an estate
A personal representative of an estate

Question 9

What is the primary way in which financial advisers and clients handle disputes?

Answer 9

Arbitration

Question 10

This federal Act states that a fiduciary trustee has the legal obligation to invest and manage trust assets as a prudent person would, taking into account, among other factors, general economic conditions, risk, and liquidity requirements in an attempt to create a portfolio or investment strategy with objectives suited to the trust.

Answer 10

The Uniform Prudent Investor Act (also known as the Prudent Person Rule)