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Certified Financial Planner CFP®Terms > A.1 CFP Board’s Code of Ethics and Standards of Conduct > Flashcards

A.1 CFP Board’s Code of Ethics and Standards of Conduct Flashcards

Learners will be able to identify and explain key terms and phrases associated with principles and requirements outlined in the CFP Board’s Code of Ethics and Standards of Conduct.

1
Q

The obligation to act in the best interest of the client, putting their interests ahead of the advisor’s.

Client First Principle

A

Fiduciary Duty

A.1 CFP Board’s Code of Ethics and Standards of Conduct

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2
Q

Adhering to moral and ethical principles, being honest and transparent in all dealings.

Doing what’s right even when no one is watching.

A

Integrity

A.1 CFP Board’s Code of Ethics and Standards of Conduct

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3
Q

Providing advice and making decisions without bias or personal interest.

Remaining impartial

A

Objectivity

A.1 CFP Board’s Code of Ethics and Standards of Conduct

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4
Q

Possessing the necessary knowledge, skills, and expertise to provide effective financial advice.

Continuous learning is the key.

A

Competence

A.1 CFP Board’s Code of Ethics and Standards of Conduct

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5
Q

Treating all clients equally and impartially, without favoritism.

Just treatment for all

A

Fairness

A.1 CFP Board’s Code of Ethics and Standards of Conduct

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6
Q

Safeguarding client information and not disclosing it without proper authorization.

Privacy protection

A

Confidentiality

A.1 CFP Board’s Code of Ethics and Standards of Conduct

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7
Q

Conducting oneself in a manner consistent with ethical standards and industry norms.

Upholding high standards of behavior.

A

Professionalism

A.1 CFP Board’s Code of Ethics and Standards of Conduct

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8
Q

Performing thorough research and analysis to ensure accurate advice and recommendations.

Attention to detail and thoroughness.

A

Diligence

A.1 CFP Board’s Code of Ethics and Standards of Conduct

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9
Q

Exercising caution and good judgment in decision-making.

Acting with wisdom and discretion.

A

Prudence

A.1 CFP Board’s Code of Ethics and Standards of Conduct

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10
Q

Situations where a financial advisor’s personal interests may conflict with those of the client.

Potential for divided loyalties.

A

Conflict of Interest

A.1 CFP Board’s Code of Ethics and Standards of Conduct

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11
Q

Providing full and transparent information to clients about relevant matters, including potential conflicts of interest.

Openness and transparency are key.

A

Disclosure

A.1 CFP Board’s Code of Ethics and Standards of Conduct

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12
Q

Recommending products or services that align with the client’s financial goals, risk tolerance, and financial situation.

Tailoring recommendations to fit the client’s needs.

A

Suitability

A.1 CFP Board’s Code of Ethics and Standards of Conduct

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13
Q

Placing the client’s interests and needs at the center of all decision-making and actions.

Client-focused approach.

A

Client-Centric

A.1 CFP Board’s Code of Ethics and Standards of Conduct

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14
Q

Exercising the necessary caution and attention to ensure that all recommendations and actions are appropriate and well-considered.

Taking prudent steps to avoid errors or negligence.

A

Due Care

A.1 CFP Board’s Code of Ethics and Standards of Conduct

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15
Q

Providing false or misleading information to clients.

* False portrayal or deception.*

A

Misrepresentation

A.1 CFP Board’s Code of Ethics and Standards of Conduct

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16
Q

Failure to disclose relevant information to clients.

Failure to disclose relevant information to clients.

A

Omission

A.1 CFP Board’s Code of Ethics and Standards of Conduct

17
Q

Compensation received by financial advisors for selling certain financial products.

Payment based on sales.

A

Commissions

A.1 CFP Board’s Code of Ethics and Standards of Conduct

18
Q

Different methods by which financial advisors are compensated, such as hourly fees, flat fees, or asset-based fees.

Various ways advisors get paid.

A

Fee Structures

A.1 CFP Board’s Code of Ethics and Standards of Conduct

19
Q

Obligation to inform clients about any conflicts of interest, fees, or other relevant information that may impact their decisions.

Transparency requirement.

A

Duty to Disclose

A.1 CFP Board’s Code of Ethics and Standards of Conduct

20
Q

Responsibility to educate clients about financial matters, risks, and potential outcomes.

Providing relevant information for informed decisions.

A

Duty to Inform

A.1 CFP Board’s Code of Ethics and Standards of Conduct

21
Q

Requirement to identify, address, and manage conflicts of interest in a manner that prioritizes the client’s interests.

Mitigating potential conflicts.

A

Duty to Manage Conflicts

A.1 CFP Board’s Code of Ethics and Standards of Conduct

Certified Financial Planner CFP®Terms (10 decks)

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