Section 101 Unit 7

Question 1

Financial Planning Engagement

Answer 1

Exists whenever a certificate performs any type of mutually agreed upon financial planning service for a client.

Question 2

CFP Board requires CFP certificates to disclose

Answer 2

1. The obligation and responsibilities of each party to the agreement
2. Information regarding compensation that any party to the agreement or any legal affiliate to a party under the agreement will or could receive under the agreement.
3. Terms under which the agreement permits the certificate to offer proprietary products.
4. Terms under which the certificate will use other entities to meet any of the agreement’s obligations.

Question 3

What information and disclosers must be in writing?

Answer 3

1. The parties to the agreement
2. The date and duration of the agreement
3. How and on what terms each party can end the agreement
4. The services to be provided under the agreement.
5. A precise and understandable description of the compensation arrangements being offered.
6. A summary of likely conflicts of interest.
7. Information regarding the certificant’s area of expertise.
8. Contact information

Question 4

Fiduciary

Answer 4

IS someone who acts in utmost good faith, in a manner he or she belies to be in the best interest of the client.

Question 5

Certificant

Answer 5

An individual who is currently certified by CFP board

Question 6

Registrants

Answer 6

Include people who are not currently certified but have been certified in the past and are potentially entitled to use the CFP marks, such as people who have relinquished their certification and are eligible for reinstatement.

Question 7

Code of Ethics and Professional Responsibility

Answer 7

General statements expressing the ethical and professional ideals certificants are expected to display in their professional activities.

Question 8

Rules of Conduct

Answer 8

They are binding on all certificants, regardless of their title, position, type of employment, or method of compensation, and they govern anyone who has the right to use the CFP mark.

Question 9

Financial Planning Practice Standards

Answer 9

These establish the level of professional practice required of certificants engaged in financial planning.

Question 10

Disciplinary Rules and Procedures

Answer 10

These are the rules and procedures CFP Board follows when enforcing the Rules of Conduct and Practice Standards.

Question 11

Candiate Fitness Standards

Answer 11

Apply to candidates for certification and are designed to ensure that a candidate’s conduct does not adversely reflect on her fitness for certification or upon the profession or the CFP certification marks

Question 12

Principle 1: Integrity

Answer 12

Provide professional services with Integrity. Honesty and Candor

Question 13

Principle 2: Objectivity

Answer 13

Provide professional services objectively. Honesty and impartiality

Question 14

Principle 3: Competence

Answer 14

Maintain the knowledge and skill necessary to provide professional services competently. Attaining and maintaining an adequate level of knowledge and skill in providing services to clients.

Question 15

Principle 4:Fairness

Answer 15

Be fair and reasonable in all professional relationships. Disclose conflicts of interests.

Question 16

Principle 5: Confidentiality

Answer 16

Protect the confidentiality of all client information.

Question 17

Principle 6: Professionalism

Answer 17

Act in a manner that demonstrates exemplary professional conduct. Dignity and courtesy to clients.

Question 18

Principle 7: Diligence

Answer 18

Provide professional services diligently. Reasonably prompt and thorough manner.

Question 19

Disciplinary actions for violations

Answer 19

1. Private censure by letter or reprimand
2. Public letter of admonition
3. Suspension of the rights to use the CFP marks for specified period of time, not to exceed five years.
4. Permanent revocation of the rights to use the CFP marks.

Question 20

Advisory Opinions

Answer 20

Issued periodically. These opinions are offered as guidance to the CFP certificate to advise her with respect to how disciplinary and ethics commission is likely to rule if a particular issue is brought before it.