LO 1.2.2: Identify the responsibilities of a financial planner, the client, and professionals on a client’s advisor team

Question 1

How must the arrangement of calling upon services of other professionals always be enacted

Answer 1

best position the client for success / achieve their goals.

Ensure client is receiving best possible advice and best possible service from the advising team.

Question 2

What guidelines do the Code and Standards provide the CFP certificant regarding competence (Standard A.3)

Answer 2

professional obligation to offer advice only in those areas in which one is competent AND maintain a professional level of expertise in all areas one is engaged to provide professional services.

Question 3

When the CFP pro is not sufficiently competent in an area to provide professional services, what must they do

Answer 3

• 1. gain competence
• 2. obtain the assistance of a competent professional
• 3. limit or terminate the engagement, and/or
• 4. refer the client to a competent professional.

Question 4

What are the planner’s responsibilities when recommending another professional (Standard A.13)

Answer 4

• have a reasonable basis for rec/eng based on other pro’s reputation, experience, and qualifications, and
• disclose any arrangement if someone other than client is compensating CFP pro, the firm, or related party for rec/eng.

Question 5

What must the planner take reasonable steps to do when engaging w/another professional

Answer 5

protect the client’s interests.

Question 6

What are the planner’s responsibilities when working with another person on the client’s behalf

Answer 6

communicate the services each will provide and responsibilities AND inform client in timely manner if other professional did not perform services.

Question 7

What is required when conflict of interest exists between planner and member of advisory team (whether offering Financial Advice or engaged in Financial Planning relationship)

Answer 7

disclose conflicts of interest, verbally or in writing, then responsibly manage to uphold fiduciary duties.

Question 8

What is the responsibility of the CFP pro in disclosing and managing conflicts of interest (Standard A.5)

Answer 8

Standards of Conduct, Standard A.5, Disclose and Manage Conflicts of Interest:

• Avoid or fully disclose by providing sufficiently specific facts
• Obtain informed consent
• Manage the conflict of interest.

Question 9

What is the client responsible for providing in a financial planning arrangement

Answer 9

(financial planning) client is responsible for providing:

• 1. documentation/relevant info that the financial planner needs to prepare the plan in timely manner.
• 2. any feedback that facilitates the financial planning process.

Question 10

What is the financial planner responsible for providing in a financial planning arrangement

Answer 10

(financial planning) financial planner is responsible for:

• 1. making recommendations based on client’s goals and objectives
• 2. after receipt of relevant info from the client, finalizing recommendations and completing the financial plan.

Question 11

What is the financial planner responsible for after acceptance of recommendations by the client

Answer 11

• Implementation responsibilities must be determined- can involve delegation of responsibilities.

Question 12

What does the Code and Standards Section A.10.b.ii state

Answer 12

Code and Standards Section A.10.b.ii states the financial planner is responsible for implementing the client’s Financial Planning recommendation(s) unless specifically excluded from scope of engagement.

Question 13

What if implementation responsibilities are not specifically stated

Answer 13

client and planner may collaborate to determine whether implementation responsibilities are retained by the planner and/or delegated to client or a team of specialists.

Question 14

What must the CFP pro uphold in situations where Financial Advice is provided and/or throughout Financial Planning engagements

Answer 14

fiduciary duty.