Gen Pr: Cfp Board Flashcards
Fitness standards
For those wanting to become certified
Conduct deemed unacceptable
Will always bar!!
Unacceptable. Will always bar
-revocation of a financial license
-felony **murder or rape
-felony fraud, theft,** other financial crimes
-felony tax fraud or other financial crimes
-ANY other felonies within the last 5 years
Fitness standards
Other adverse conduct
This is for those who want to become certified
-Arbitration or other civil proceeding
-Customer complaints
Misdemeanors - relevant
-Employer investigations and termination
Fitness standards
Conduct deemed presumptive bar
-2 or more personal or business bankruptcies
-suspension of financial license
-revocation or suspension of non-financial license
-felony non violent w/i last 5
- PERJURY (?w/i last 5 years)
- violent felony more than 5 years , other than murder or rape
Duties, in general
To Clients
To Firms & Subordinates
To CFP board
Duties at all times
integrity
competence
diligence
sound & obj prof judgment
professionalism
comply with law
confidentiality and privacy
communicating with client, representing compensation method, selecting using , rec technology
refrain from borrowing or lending money AND comingling financial assets
Duties to clients: FA
At all times PLUS
FIDUCIARY
Disclose and manage CONFLICTS of INTEREST
Provide INFORMATION to a client
Duties when recommending, engaging and working with ADDITIONAL persons
Duties to clients: FP
AAT + FA plus
practice standards (UIADPIM)
Information to client in WRITING
Duties to Firms & Subordinates
reasonable care when SUPERVISING
comply with LAWFUL objectives of FIRM
Provide notice of PUBLIC DISCIPLINE
Duties to CFP Board
refrain from ADVERSE CONDUCT
Reporting
Provide NARRATIVE STMNT
Cooperation
Compliance with Terms & Conditions of CERTIFICATION and TM license
Fiduciary Duty: in general
name the 3
Duty of Loyalty
Duty of Care
Duty to follow client instructions
Duty of Loyalty
-interests of client > cfp or firm
-avoid CONFLICTS of interest OR fully DISCLOSE and manage and obtain client CONSENT (oral or written)
-act w/o regard to interests of self, firm or any other ind or entity
Duty of Care
act with the
care, skill, prudence & diligence that a prudent fin prof would exercise in light of client’s
goals, risk tol, obj & fin and pers circumstances
Duty to Follow Client instructions
Must COMPLY with the TERMS of the client engagement AND follow all directions of the client that are reasonable and lawful
What is Financial advice
reasonably viewed as a RECOMMENDATION that the client take or refrain from taking a particular course of action with respect to…
see board but generally fin matters
What is NOT financial advice
a communication that would not be viewed as a mere RECOMMENDATION such as
-response to directed order
- mktg materials
-general financial education and communications
the more individually tailored the more likely it is viewed as financial advice
Financial planning
a COLLABORATIVE process
did you agree to or actually provide FP?
Does the FA require integration of relevant elements (see sep card)
does the client have reasonable basis to believe that you provided FP
Financial planning integration considerations
Integration factors
-number of relevant elements
- portion and amount of fin assets
- length of time affected
-effect on client’s overall exposure to risk if implemented
-barriers to modifying actions taken to implement the FP
What if client does not agree to FP
- not enter into
- limit scope and describe what you will not be performing
-provide req services after informing how FP will benefit ..
-terminate the engagement
Step 1 Practice standards
Understanding the clients pers & Financial
Obtain qualitative and quantitave (also in step 7)
When to document
significance of information
need to preseve in writing
obligation to act in best interest
firms policies & procedures
How to document
Options do include
CRM software
handwritten note
emails
Duty to provide information - FA
PRIVACY in writing
rest oral or written
material conflicts of interest
services and products
how compensated
public discipline & bankruptcy
referral comp arrangements
other material info
Duty to provide info - FP
Material conflicts of interest can be oral but written preferred
MUST be in writing:
P - PRIVACY policy
P - Products and services
P How the client pays
C How you, firm, related parties compensation
PDB public disciple & bankruptcy
T terms of engagement (imp, monitor, updated required unless explicitly excluded)
Other material info
Terms of engagement
Must include
IMPLEMENTING, MONITORING, and UPDATING unless explicitly excluded (like @ Highland)
