AFP 10- Professional Conduct, Compliance, and Practice Management

Question 1

What are the 3 components and 4 requirements for the KYC rule

AFP 10

Answer 1

3 KYC Rules

1. Identity and Creditworthiness
   - 1. Learn essential facts related to all clients, account opened
2. Business Conduct
   - 2. Ensure that every order accepted is within the bounds of good business practice
3. Suitability
   - 3. Every order is accepted for a client is suitable
   - 4. Exercise due diligence to ensure all trades are suitable

Question 2

What are the 5 CRM triggering events

AFP 10

Answer 2

1. A trade is accepted
2. A recommendation is made to a client
3. Securities are transferred or deposited into an account
4. Change in account manager
5. Material change to the KYC information occurs

Question 3

What is a “Structured Conversation”

AFP 10

Answer 3

1. Setting the stage and building rapport
   - wealth is only 1 topic
2. Conduct emotional discovery
   - replace financial terminology with a conversation about life
3. Bridging to financial discovery
   - accumulation–>protection–>conversion–>transfer

Question 4

What are the Types of Ethical Dilemmas

AFP 10

Answer 4

Integrity Dilemmas: honesty and or integrity clash with keeping a commitment

Societal Dilemmas: the rights/values of an individual clash with the rights/values of a group

Goal- Based Dilemmas: when the immediate needs of goals conflict with the future long term goals

Fairness Dilemmas: Fairness conflicts with compassion

Question 5

What is the privacy commissioner empowered to do

AFP 10

Answer 5

• Receive complaints,
• Conduct investigations
• Attempt to resolve complaints
• Audit the personal information management practices of an organization