Professional Conduct & Regulation

Question 1

When must the fiduciary standard (A1) be followed?

Answer 1

• when providing financial advice
• when offering financial advice that doesn’t require financial planning
• when providing financial planning

*Standard A1 must be upheld when financial advice/planning is occurring, not during all times

Question 2

How must you convey to a client 1) how they pay, 2) terms of engagement, 3) material conflicts of interest, 4) services and products?

Answer 2

The following MUST be disclosed to the client IN WRITING

• terms of engagement
• how the client pays
• services and products

The following may be disclosed EITHER IN WRITING OR VERBALLY
- material conflicts of interest

Question 3

What are the 3 components of standard A1 fiduciary duty?

Answer 3

“Liverpool Football Club”

Duty of

• Loyalty
• (to) Follow client distributions
• Care

Question 4

When are changes needed to Form ADV?

Answer 4

Schedule 1 of Form ADV must be filed with the SEC each year and filed no later than 90 days after the end of the advisors fiscal year

Question 5

When must a CFP professional disclose confidential client data?

Answer 5

• ordinary business purposes
• compliance with federal, state, or local law
• compliance with a civil investigation BUT ONLY WITH A VALID SUBPOENA

Question 6

Do investment advisor must be sponsored by broker/dealers prior to registering, and does registering with the SEC imply competency?

Answer 6

Registered Reps, not investment advisors, must be sponsored by B/D’s prior to registration

Registration as an investment advisor doesn’t not imply competency

Question 7

What does passing the Series 6 entitle you to solicit?

Answer 7

You may solicit

• mutual funds (open end funds)
• initial offering of closed end funds
• variable annuities
• variable life insurance
• UIT’s

Question 8

What are the CFP Boards CE requirements?

Answer 8

28 hours of general CE’s + 2 hours of CFP Board approved ethics CE’s

Question 9

When does the CFP Boards Code of Ethics & Standards say a CFP professional must act as a fiduciary?

Answer 9

When providing financial advice

Question 10

What describes the “Duty of Care”?

Answer 10

Acting with the care, skull, prudence, and diligence that a prudent professional would exercise in light of the clients goals, risk tolerance, objectives, and financial and personal circumstances

The “Duty of Care” starts with “acting with CARE…”

Question 11

When can a CFP pro represent that they’re fee ONLY?

Answer 11

When the CFP pro and their firm receives no sales related compensation AND related parties receive no sales related compensation in connection with any services the CFP pro provides

Question 12

When must a CFP pro report a tax lien has been filed against them?

Answer 12

Provide written notice to the CFP board within 30 days of receiving notice of the lien

Question 13

What best describes a CFP pro’s obligation when identifying and selecting goals for a financial planning client?

Answer 13

A CFP pro must help the client identify goals and then help the client select and prioritize goals

Question 14

When must you report public disciplinary (investigation/bankruptcy) history to the board and to clients?

Answer 14

30 days to report to the CFP board

90 days to report to clients

Question 15

What is a relevant misdemeanor?

Answer 15

A criminal offense that is NOT a felony for conduct involving

• fraud, theft
• misrepresentation
• other dishonest conduct
• crimes of moral turpitude
• violence
• a SECOND (or more) alcohol and/or drug related offense