Professional Conduct and Fiduciary Responsibility Flashcards
7 Principles of the Code of Ethics and Professional Responsibility (CEPR)
- Integrity
- Objectivity
- Competence
- Fairness
- Confidentiality
- Professionalism
- Diligence
In order (to) care for clients, please do!
CEPR Rules 101, 102, 103
101 - Deals with honesty in marketing CFP services.
102 - Don’t lie, cheat, or steal.
103 - Responsibilities a CFP has to their clients.
CEPR Rules 201, 202, 301, 302
201 - Exercise reasonable and prudent judgement.
202 - Act in the interest of the client
301 - Continuing Education
302 - Advice only in areas where you’re qualified.
CEPR Rules 401, 402, 403, 404, 405
401 - Material Disclosures
402 - Written Disclosures
403 - Written risks of objectivity.
404 - Disclose New Conflicts of Interest
405 - Disclosure of Compensation
CEPR Rules 406, 407, 408, 409, 410
406 - Fair Compensation
407 - Client Recommendations
408 - Define Scope and Authority of CFP
409 - Uniform Adherence by all CFP
410 - Conform to Lawful Objectives of Employer
CEPR Rules 411, 412, 413, 414, 415, 416
411 - Inform Employer of Outside Affiliations
412 - Act in Good Faith with Partners
413 - Disclose Relevant Information to Partners
414 - Loyalty Clause
415 - Disclose Outside Compensation to Partners
416 - Fair and Reasonable Service to Clients
CEPR Rules 501, 502, 503
501 - Do Not Disclose Client Information
502 - Do Not Disclose Employer Information
503 - Adhere to Expectations of Confidentiality
CEPR Rules 601, 602, 603
601 - Use Marks in Compliance with Rules
602 - Show Respect to other CFPs
603 - Duty to Report Violations to CFP Board
CEPR Rules 604, 605, 606
604 - Duty to Report Violations to Other Regulatories
605 - Duty to Report Violations to Employer
606 - Duty to Not Commit Violations
CEPR Rules 607, 608, 609
607 - Do Not Embarrass the CFP Marks
608 - Duty to Report Firm’s Status to Clients
609 - Duty to Not Practice Other Professions for which a CFP isn’t Qualified
CEPR Rules 610, 611, 612
610 - Return Client Information ASAP
611 - No Reporting of Fake Violations for Spite
612 - Comply with Renewal Requirements
CEPR Rules 701, 702, 703, 704, 705
701 - Serve Diligently
702 - Gather All Necessary Information First
703 - Implement Suitable Recommendations
704 - Research Products
705 - Provide Proper Supervision
CFP Practice Standards
1 - Learn Clients Personal and Financial Situation
2 - Identify and Select Goals
3 - Analyze and Evaluate Current Financial Status
4 - Develop Recommendations
5 - Present Recommendations
6 - Implement Recommendations
7 - Monitor Recommendations
Written Disclosures
- Parties to the Agreement
- Date and Length of Engagement
- How to Terminate Engagement
- Services Provided
- Compensation
- Conflicts of Interest
- Contact Information
- Any Relevant Information for Choosing this CFP.
Verbal Disclosures
- Obligations of the planner to the client.
- Compensation
- Proprietary Products
- Other Ways to Fulfill Engagement
Reporting Requirements to CFP Board
45 Days - Changes in personal information.
30 Days - Crime or disciplinary actions.
30 Days - Changes to any matters of violation.
Board of Professional Review Panels
Inquiry Panel - Investigates Reports of Violations if within 20 days the designee files a written response.
Hearing Panel - Administrates Hearings of Violations if no response to allegations are received.
CFP Board Methods of Discipline
Private Censure - Letter in your file.
Letter of Public Admonition - Public Shaming
Suspension - Temporary ban on using CFP marks, not to exceed five years.
Revocation - Permanent ban on using CFP marks.
When must you act as a fiduciary?
When providing financial ADVICE. Advice begins in step 2, when you start learning the client’s goals.
Duty to Report IRT Other Professional Services
Must report becoming the subject of an investigation or regulatory action alleging failure to comply with the laws, rules, or regulations.
