Professional Conduct & Regulation Flashcards
When must the fiduciary standard (A1) be followed?
- 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
How must you convey to a client 1) how they pay, 2) terms of engagement, 3) material conflicts of interest, 4) services and products?
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
What are the 3 components of standard A1 fiduciary duty?
“Liverpool Football Club”
Duty of
- Loyalty
- (to) Follow client distributions
- Care
When are changes needed to Form ADV?
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
When must a CFP professional disclose confidential client data?
- ordinary business purposes
- compliance with federal, state, or local law
- compliance with a civil investigation BUT ONLY WITH A VALID SUBPOENA
Do investment advisor must be sponsored by broker/dealers prior to registering, and does registering with the SEC imply competency?
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
What does passing the Series 6 entitle you to solicit?
You may solicit
- mutual funds (open end funds)
- initial offering of closed end funds
- variable annuities
- variable life insurance
- UIT’s
What are the CFP Boards CE requirements?
28 hours of general CE’s + 2 hours of CFP Board approved ethics CE’s
When does the CFP Boards Code of Ethics & Standards say a CFP professional must act as a fiduciary?
When providing financial advice
What describes the “Duty of Care”?
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…”
When can a CFP pro represent that they’re fee ONLY?
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
When must a CFP pro report a tax lien has been filed against them?
Provide written notice to the CFP board within 30 days of receiving notice of the lien
What best describes a CFP pro’s obligation when identifying and selecting goals for a financial planning client?
A CFP pro must help the client identify goals and then help the client select and prioritize goals
When must you report public disciplinary (investigation/bankruptcy) history to the board and to clients?
30 days to report to the CFP board
90 days to report to clients
What is a relevant misdemeanor?
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