Fundamentals & Insurance - Ethics, Law & Code of Ethics

Question 1

What is the CFP Code of Ethics?

Answer 1

Question 2

What is Fiduciary Duty?

Answer 2

Question 3

What are the Duties Owed to Clients?

Answer 3

Question 4

What are the Duties Owed to Firms or Subordinates?

Answer 4

Question 5

What are Duties Owed to the CFP Board?

Answer 5

Question 6

What is a felony?

Answer 6

A felony offense, or for jurisdictions that do not differentiate between a felony and a misdemeanor, an offense punishable by a sentence of at least one-year imprisonment or a fine of at least $1,000.

Question 7

What is a relevant misdemeanor?

Answer 7

A non-felony criminal offense for conduct involving fraud, theft, misrepresentation, other dishonest conduct, crimes of moral turpitude, violence, or a second (or more) alcohol and/or drug-related offense.

** Driving offenses, tickets and misdemeanors that do not involve alcohol or drugs ARE NOT considered relevant misdemeanors.
** 1st alcohol or drug misdemeanor is not relevant.
** Tax and financial misdemeanors are almost always relevant.

Question 8

Minor Rule Violation

Answer 8

sanction imposed consists of a fine of $2,500 or less and if the sanctioned person does not contest the fine

Question 9

What is Financial Advice?

Answer 9

Question 10

What is Not Financial Advice?

Answer 10

Question 11

7 Steps of the Financial Planning Process

Answer 11

Question 12

Financial Advice vs. Financial Planning

Answer 12

Question 13

CFP Board Reporting 1

Answer 13

30 days includes weekends and holidays

Exceptions: Arbitration compensation of $5,000 or less and violations settled for $15,000 or less

Question 14

CFP Board Reporting 2

Answer 14

Question 15

CFP market 6 approved nouns

Answer 15

professional, practitioner, mark, certificant, certification, or exam

Question 16

CFP Board Reporting response times and consequences

Answer 16

Question 17

Candidate Fitness Standards ALWAYS Deemed Unacceptable

Answer 17

• Felony conviction for theft, embezzlement or other financially based crimes
• Felony conviction for tax fraud or other tax-related crimes
• Revocation of a financial professional (registered securities rep, B/D, insurance, accountant, investment advisor, financial planner) license, unless revocation is administrative in nature
• Felony conviction for any degree of murder or rape
• Felony conviction for any other violent crime within the last 5 years

Question 18

Candidate Fitness Standards PRESUMED Unacceptable

Answer 18

• Two or more personal or business bankruptcies
• Revocation or suspension of a non financial professional (RE, attorney) license, unless the revocation is administrative in nature
• Suspension of a financial professional license, unless the suspension is administrative in nature
• Felony conviction for nonviolent crimes (including perjury) within the last 5 years
• Felony conviction for violent crimes other than murder or rape that occurred more than 5 years ago