Professional Conduct & Regulation Flashcards
How often does a financial plan need to be monitored and updated?
As mutually agreed upon with the client (another good answer is as needed)
When is a CFP giving advice?
Advice = specific recommendations to a client
When providing financial planning you are always giving advice
Financial Planning = integrating multiple practice standards to meet clients life goals (assets, time, lock-ups, amount of portfolio)
CFP Continuing Education Requirements
30 hours of CE every 2 years
2 hours of Ethics
Section A of the Code of Standards
- Fiduciary Duty: applies anytime financial advice/financial planning is given
- Honesty & Candor
- Competence
- Diligence
- Disclose & Manage Conflicts of Interest
- Sound & Objective Professional Judgement
- Professionalism- treat others with respect
- Comply With Law
- Confidentiality & Privacy: must obtain permission for releasing information (watch out for interns)
- Provide Information to Client
- Duties For Communication
- Duties when Reflecting Fee Policy
- Duties when Recommending Additional Persons
- Duties when Using and Selecting Technology
- Refrain from Borrowing Money
What Need to be Provided in Writing
Material Conflicts of Interest can always be provided verbally
Financial Advice = everything except privacy policy (must be in writing) can be provided orally
Financial Planning = everything except material conflicts need to be provided in writing
CFP Fee Policy
Fee Only: asset based fee, flat dollar fee, etc. (no additional compensation to related parties either)
Fee Based: everything that is not fee only (watch out for related parties)
Exception to Clients CFP’s Can Borrow Money From?
Immediate family that is a client or a client that is in the business of lending money
punishment could be public censure
Use of CFP Marks
CFP(r)
CERTIFIED FINANCIAL PLANER^TM
Registered Investment Advisor / Firm
do not include in web address or email
Approved CFP Nouns
Professional, Practitioner, Certificant, Certification, Mark, Exam, Candidate
What is the Maximum Suspension?
5 Years
Is Revocation Permanent?
Yes
Can a Check be Made Payable to an Advisor?
No; can be made payable to the institution such as an investment firm (Vanguard) not financial planning firm
How Long Do You Have to Appeal Suspension?
30 days; after that it becomes final
When to Notify the CFP Board of Felony/Misdemeanor?
30 days
All felony’s or misdemeanors except for:
- Traffice Violations
- First Alcohol/Drug Charge
How Long to Respond to Complaint?
30 Days
