Standards and Ethics Flashcards
Duties at all times
- integrity (honesty and candor)
- competence (skill or refer)
- diligence (timely manner)
- objective judgement (no gifts or other comp)
- professionalism (dignity, courtesy, respect)
- comply with laws
- confidentiality and privacy
- communicating with client
- representing compensation
- using technology
- no commingling or borrowing or lending
Duties at all times and when giving financial advice
(all duties at all times)
- fiduciary
- disclose and manage conflicts of interest
- provide info to client
- recommending, engaging, and working with other persons
Duties at all times and when giving financial advice and doing financial planning
(all duties at all times and giving advice)
- standards of financial planning process
- information to client in writing
What is and is not financial advice
What is: communication that would be viewed as a recommendation regarding:
- financial planning, asset management, referrals, discretionary authority
What is not: no recommendations. only responses to direct orders. general education and marketing
1) Understanding Client Situation
- obtain qualitative and quantitative information
- analyze information
- address incomplete information
2) Identify and Select Goals
- identify potential goals:
> discuss your assessment with clients
> develop reasonable assumptions
> discuss and apply assumptions with client - select and prioritize goals:
> note the impact of selecting a goal on other goals
> discuss all goals with client
3) Analyze Current Course and Potential Courses
- analyze current course:
> go over pros and cons of client situation
> see if current course will max goal potential - analyze potential courses
4) Develop Plan and Recommendations
- what will maximize goal achievement potential? for each recommendation, consider:
> assumptions and estimates
> basis for recommendation (how this will help)
> timing and priority of recommendation
> whether the recommendation is independent
5) Presenting Plan and Recommendations
- Present:
> recommendations
> assumptions and estimates
> basis for the recommendation (how it will help)
> timing and priority
> whether recommendation is independent
6) Implement
- address implementation responsibilities
> who does what and how - analyze and select products and services
> consider basis for each selection (does it help) - analyze and select actions
> consider and communicate basis of each action
7) Monitor and Update Client
- establish monitoring responsibilities > who is responsible for watching what > they need to tell me about changes > I need to tell them about changes - monitor progress - make sure to have current information - update goals and recommendations as needed
If a client has an issue w/ a CFP, they should contact
CFP Board
this depends on the wording on question but the board generally wants to know and investigate
Registering as an Investment Advisor Individually is not required if…
I register as an Investment Advisor Associate/Representative though a brokerage firm
Disclosing Gifts
in-cash referral fees should be disclosed to the client.
“de minimus” gifts like a fruit basket do not.
Where should a disgruntled client go first?
The compliance department of the BD in question
