General Principles Ch 2 Flashcards
When providing financial advice to a client, a CFP professional is always required to act as a _________.
Fiduciary
A __________________ honors the interest of the client above all and owes certain duties to the client (loyalty, care, follow client instructions).
Fiduciary
The CFP professional must make clear to the client any requested professional service(s) that the CFP Professional and/or the firm _______________ provide.
Will not
The CFP professional must disclose relevant conflicts of interest and obtain the consent of the client ________ providing any financial advice to which such conflicts of interest could apply. The consent of the client is not required to be in _______ form.
before / written
The ______________ is general regarded as a particular type of financial advisor, who works with individuals and businesses to create, implement, and monitor a plan to meet long-term financial goals.
Financial planner
_____________ describes a professional who helps individuals and businesses manage money. May be stockbrokers, insurance agents, money managers, estate planners, bankers, and more.
Financial advisor
The client must be informed as to how the CFP professional, the firm, and any related party will be ____________________ for providing the product and service.
compensated
A ___________ planner or firm may not receive sales-related compensation in any manner.
“Fee-Only”
_____________ compensation indicates that the planner or the planning firm are compensated thru both commissions and fees.
“Fee-Based”
Examples of _______________________ compensation
Commissions
12 b-1 fees
Trailing commissions
Transaction Fees
Sales-Related
Examples include:
Soft dollars (research information)
Reasonable fees for custodial administrative services
Non-monetary benefits
Certain advisory fees
Non-sales related compensation
Describes a person, business or trust who would receive sales-related compensation that could benefit the CFP professional or the CFP professional’s firm either directly or indirectly.
Related Party
Under no circumstances may a CFP professional _________ a client’s money or property with the financial assets of the CFP professional or those of the firm.
commingle
