Professional Conduct & Regulation Flashcards

1
Q

When must the fiduciary standard (A1) be followed?

A
  • 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

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2
Q

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

A

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

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3
Q

What are the 3 components of standard A1 fiduciary duty?

A

“Liverpool Football Club”

Duty of

  • Loyalty
  • (to) Follow client distributions
  • Care
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4
Q

When are changes needed to Form ADV?

A

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

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5
Q

When must a CFP professional disclose confidential client data?

A
  • ordinary business purposes
  • compliance with federal, state, or local law
  • compliance with a civil investigation BUT ONLY WITH A VALID SUBPOENA
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6
Q

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

A

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

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7
Q

What does passing the Series 6 entitle you to solicit?

A

You may solicit

  • mutual funds (open end funds)
  • initial offering of closed end funds
  • variable annuities
  • variable life insurance
  • UIT’s
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8
Q

What are the CFP Boards CE requirements?

A

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

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9
Q

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

A

When providing financial advice

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10
Q

What describes the “Duty of Care”?

A

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…”

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11
Q

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

A

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

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12
Q

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

A

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

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13
Q

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

A

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

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14
Q

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

A

30 days to report to the CFP board

90 days to report to clients

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15
Q

What is a relevant misdemeanor?

A

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
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