Fundamentals Chapter 16 (Ethics) Flashcards
- Act with honesty, integrity, competence, and diligence.
- Act in the client’s best interests.
- Exercise due care.
- Avoid or disclose and manage conflicts of interest.
- 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.
Code of Ethics
What is organized into six overriding principles that espouse general statements regarding ethical and
professional ideals that CFP® professionals are expected to enact into their professional activities.
Code of Ethics
What establish expected high standards and also describe the level of professionalism required.
Standards of Conduct
A. Duties Owed to Clients
B. Financial Planning and Application of the Practice Standards for the Financial Planning Process
C. Practice Standards for the Financial Planning Process
D. Duties Owed to Firms and Subordinates
E. Duties Owed to CFP Board
F. Prohibition on Circumvention
Standards of Conduct
- Fiduciary Duty
- Integrity
- Competence
- Diligence
- Disclose and manage
- Sound and Objective Professional Judgement
- Professionalism
- Comply with the Law
- Confidentiality and Privacy
- Provide Information to a Client
- Duties when Communicating with a client
- Duties when Representing Compensation Method
- Duties When Recommending, Engaging, and Working with Additional Persons
- Duties when Selecting, Using and Recommending Technology
- Refrain from Borrowing or Lending Money and Commingling Financial Assets
A. Duties Owed to Clients
- Financial Planning Definition
- Examples of Relevant Elements of the Client’s Personal and Financial Circumstances
- Application of Practice Standards
- Integration Factors
- CFP Board Evaluation
B. Financial Planning and Application of the Practice Standards for the Financial Planning Process
What sought to establish the level of professional practice expected of those engaged in financial planning.
Practice Standards
T/F?
Practice Standards are mandatory when the CFP® professional provides financial planning (actual or based on client’s perception) or financial advice that requires integration of relevant elements of the client’s personal or financial circumstances in order to act in the client’s best interest, as discussed previously.
True
- Understanding the Client’s Personal and Financial Circumstances
- Identifying and Selecting Goals
- Analyzing the Client’s Current Course of Action and Potential Alternative Course(s) of Action
- Developing the Financial Planning Recommendation(s)
- Presenting the Financial Planning Recommendation(s)
- Implementing the Financial Planning Recommendation(s)
- Monitoring Progress and Updating
C. Practice Standards for the Financial Planning Process
- Use Reasonable Care When Supervising
- Comply with Lawful Objectives of CFP® Professional’s Firm
- Provide Notice of Public Discipline
D. Duties Owed to Firms and Subordinates
CFP® professionals may not engage in conduct that reflects adversely on their integrity or fitness as a CFP® professional, upon the CFP® marks, or upon the profession.
1. Definitions:
Felony
Relevant Misdemeanor
Regulatory Investigation
Regulatory Action
Civil Action
Finding
Minor Rule Violation (>$2,500)
2. Refrain from Adverse Conduct
3. Reporting
4. Provide Narrative Statement
5. Cooperation
6. Compliance with Terms and Conditions of Certification and License
E. Duties Owed to CFP Board
- Always use capital letters. * Never use periods.
- Always use the ® symbol.
- Always use with one of CFP Board’s approved nouns (“certificant,” “professional,” “practitioner,” “certification,” “mark” or “exam”) unless directly following the name of the individual certified by CFP Board.
- Always associate with the individual(s) certified by CFP Board.
- The CFP® mark must not be used as a parenthetical abbreviation for the CERTIFIED FINANCIAL PLANNERtm mark, and vice versa.
- Certificants are strictly prohibited from using the CFP® mark and CERTIFIED FINANCIAL PLANNERtm in domain names/URLs and email addresses
CFP® Mark
- Always use capital letters or small cap font.
- Always use the TM symbol.
- Always use with one of CFP Board’s approved nouns (“certificant,” “professional,” “practitioner,” “certification,” “mark” or “exam”) unless directly following the name of the individual certified by CFP Board.
- Always associate with the individual(s) certified by CFP Boa
CERTIFIED FINANCIAL PLANNER^tm
- Always reproduce the plaque design from original artwork (available on CFP Board’s website).
- Never alter or modify the plaque design.
- Always associate with the individual(s) certified by CFP Board.
- Maintain a minimum size of 0.5 inches in print or 50 px on screen.
- Always maintain clear space around the mark to maintain legibility.
CFP Plaque
T/F?
CFP® professionals are required to complete 30 credit hours of continuing education accepted by CFP Board every two years. Of the 30 hours, two hours must be by completion of a CFP Board-approved Ethics course.
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