Section 101 Unit 7 Flashcards Preview

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Flashcards in Section 101 Unit 7 Deck (20):

Financial Planning Engagement

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


CFP Board requires CFP certificates to disclose

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.


What information and disclosers must be in writing?

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



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



An individual who is currently certified by CFP board



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.


Code of Ethics and Professional Responsibility

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


Rules of Conduct

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.


Financial Planning Practice Standards

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


Disciplinary Rules and Procedures

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


Candiate Fitness Standards

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


Principle 1: Integrity

Provide professional services with Integrity. Honesty and Candor


Principle 2: Objectivity

Provide professional services objectively. Honesty and impartiality


Principle 3: Competence

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.


Principle 4:Fairness

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


Principle 5: Confidentiality

Protect the confidentiality of all client information.


Principle 6: Professionalism

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


Principle 7: Diligence

Provide professional services diligently. Reasonably prompt and thorough manner.


Disciplinary actions for violations

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.


Advisory Opinions

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.