Module 1 (2) CFP Board's Fitness, Standards, and Code of Ethics

Question 1

When did the CFP Boards fitness standards become effective?

Answer 1

January 1, 2007

Question 2

When were the fitness standards added to and what was added (generally)?

Answer 2

2012 with regard to the presumptive versus outright unacceptability.

Question 3

What conduct is unacceptable and will always bar an individual from becoming certified?

Answer 3

1. Felony conviction for theft, embezzlement, or other financially based crimes
2. Feleony conviction for tax fraud or other tax related crimes.
3. Revocation of a financial professional license, unless the revocation is administrative in nature (not renewing license)
4. Felony conviction of any degree of murder or rape
5. Felony conviction for any violent crime within the last 5 years.

Question 4

What is the list of transgressions that will be presumed to be unacceptable, bar certification, unless the disciplinary and ethics commission reconsiders and makes a different determination after a review?

Answer 4

1. Two or more personal or business bankruptcies
2. Revocation or suspension of a non financial professional license (real estate, attorney) unless administrative nature
3. Suspension of a financial professional license, unless administrative in nature
4. Felony conviction for nonviolent crimes (including perjury) within the last 5 years
5. Felony conviction for a violent crime other than murder or rape that occurred more than 5 years ago.

Question 5

If the CFP has committed one of the 5 transgressions that are presumed unacceptable, what must the CFP do?

Answer 5

Must petition the Commission for a reconsideration and a determination whether the conduct will bar certification.

Question 6

Can the Commissions decision in regards to a petition be appealed (in regards to transgressions presumed unacceptable)?

Answer 6

yes, it may be appealed to the appeals committee of the board of directors, in accordance with article 11 of the disciplinary rules and procedures.

Question 7

How quickly must one notify the CFP board of any act of omission that violates the provisions of the Rules of Conduct or Practice Standards?

Answer 7

As soon as possible. If that didn’t happen, at the very least, prior to the certificates next CFP certification registration.

Question 8

For how long will a bankruptcy be listed on the CFP’s public profile?

Answer 8

It will be listed for 10 years from the date reported by CFP or discovered by the CFP board.

Question 9

Around what 7 principles is the code of ethics based?

Answer 9

1. Diligence
2. Objectivity
3. Integrity
4. Competence
5. Confidentiality
6. Fairness
7. Professionalism

Question 10

Explain the first principle of the code of ethics: Diligence

Answer 10

To provide professional services diligently.

Diligence is the provision of services in a reasonably prompt and thorough manner, including the proper planning for, and supervision of, the rendering of professional services.

Question 11

Explain the second principle of the code of ethics: Objectivity

Answer 11

Provide professional services objectively.

Objectivity requires intellectual honesty and impartiality.
The CFP should protect the integrity of their work, maintain objectivity and avoid subordination of their judgement.

Question 12

Explain the third principle of the code of ethics: Integrity

Answer 12

Provide professional services with Integrity.

Integrity demands honesty and condor which must not be subordinated to personal gain or advantage.

Question 13

Explain the fourth principle of the code of ethics: Competence

Answer 13

Maintain the knowledge and skill necessary to provide professional services competently.

Competence means attaining and maintaining an adequate level of knowledge and skill, and application of that knowledge in providing services to a client.

Competence also includes the wisdom to recognize the limitations of the knowledge and know when consultation with other professionals is appropriate or referral to another professional is necessary.

Question 14

Explain the fifth principle of the code of ethics: Confidentiality

Answer 14

Protect the confidentiality all client information.

This means ensuring that information is accessibility only to those authorized to have access.

Question 15

Explain the sixth principle of the code of ethics: Fairness

Answer 15

Be fair and reasonable in all professional relationships. Disclose conflicts of interest.

Fairness requires impartiality, intellectual honesty and disclosure of material conflicts of interest.

this involves a subordination of one’s own feelings, prejudices, and desires so as to achieve a proper balance of conflicting interests.

Question 16

Explain the seventh principle of the code of ethics: Professionalism

Answer 16

Act in a manner that demonstrates exemplary professional conduct.

This requires behaving with dignity and courtesy to clients, fellow professionals, and other business-related activities.