FP 2 (1)- The Financial Planning Process

Question 1

What are the 8 CFP Code of Ethics

Answer 1

CFPs In Our Company Fulfill Clients Demands Professionally

1. Client First
2. Integrity
3. Objectivity
4. Competence
5. Fairness
6. Confidentiality
7. Diligence
8. Professionalism

Question 2

Describe the 4 Life Cycle Approaches

Answer 2

1. Accumulation
   - few assets and lots of debts
   - income low
   - long time horizon
   - growth oriented
2. Consolidation
   - income exceeds expenses
   - more fixed income
3. Financial Independence
   - income is based on investments and pensions
   - cant make up losses because not working
   - portfolio should be fixed income and blue chip stocks
4. Gifting
   - sharing the wealth with family
   - time horizon is based upon the family not themselves

Question 3

When would duty of care apply

Answer 3

when you go beyond just simply carrying out instructions but provide advice