Fundamentals and Insurance Flashcards

1
Q

A CFP Professional Must:

A

Act with honesty, integrity, competence, and diligence

Act in the client’s best interests

Exercise due care

Maintain the confidentiality and protect the privacy of client information

Act in a manner that reflects positively on the financial planning profession and CFP certification

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2
Q

Key words relating to Fiduciary Duty

A

Duty of Loyalty, Duty of Care, Follow Instructions

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3
Q

Key words relating to Integrity

A

Honesty, Upstanding, Candor

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4
Q

Key words relating to Competence

A

Relevantly Apply Knowledge

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5
Q

Key words relating to Diligence

A

Timely, Thorough

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6
Q

Key words relating to Disclose and Manage Conflicts of Interest

A

Active Consent, Disclosure, Manage, Material Conflict, Ambiguity

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7
Q

Key words relating to Sound and Objective Professional Judgement

A

Exercise judgement, not subordinated

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8
Q

Key words relating to Professionalism

A

Dignity, Courtesy, and Respect

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9
Q

Key words relating to Comply with the Law

A

Laws, Rules, Regulations, Standards

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10
Q

Key words relating to Confidentiality and Privacy

A

Consent, Ordinary Business, Legal and Enforcement Purposes, Policies

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11
Q

Key words relating to Provide Information to a Client

A

Financial Advice, Financial Planning

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12
Q

Key words relating to Communicating with a Client

A

Reasonable, Expected to Understand, Avoid Complexity

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13
Q

Key words relating to Duties when Representing Compensation

A

Fee-Only, Fee-Based, Sales Related Compensation, Soft Dollars, Non-Monetary Benefits, Related Party

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14
Q

Key words relating to recommending, Engaging or Working with Additional Person

A

Reasonable Basis, Reputation, Experience, Qualifications, Disclosure, Reasonable Care

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15
Q

Key words relating to Selecting and Using Technology

A

Reasonable Care and Judgement, Level of Understanding

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16
Q

Key words relating to Refrain from Borrowing or Lending Money and Commingling

A

Commingle, Client Assets, Borrow, Lend

17
Q

What is Fiduciary Duty

A

At all times when providing Financial Advice to a Client, a CFP Professional must act as a fiduciary, and therefore act in the best interests of the Client

18
Q

What 3 duties does a CFP always have?

A

Duty of Loyalty
Duty of Care
Duty to Follow Client Instructions

19
Q

What is the obligation of integrity?

A

Obligation of Integrity requires a CFP professional to be honest and upstanding

20
Q

What must you do when you have a conflict of interest?

A

Disclose and manage

21
Q

What are the exceptions to the confidentiality and privacy policy?

A

Business or legal and enforcement purposes

22
Q

What are the 3 compensation models and which one does the CFP Board prefer?

A

Fee-Only
Fee-Based
Sales-Related Compensation

The CFP Board does not have a preferred compensation model.

23
Q

What is the definition of Financial Planning?

A

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

24
Q

When must a CFP follow practice standard?

A

When performing financial planning, financial advice that requires financial planning, or when the Client has a reasonable basis to believe the CFP professional will provide or has provided Financial Planning

25
What must you do if a Client does not agree to engage the CFP professional to provide financial planning?
Not enter into the engagement, limit, provide service after explaining how Financial Planning would benefit them, or terminate the engagement