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Flashcards in Standards and Ethics Deck (21)
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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


When is commingling client funds ok?

When they are commingled with other clients funds (mutual funds)


If client doesn't provide enough info what do I do first?

I need to inform the client what is missing.

If they don't care, then I limit the relationship.


CFP Board Forms of Disipine

- Private Written Censure
- Public Letter of Admonition
- Suspension of marks (max 5 years)
- Revocation of marks (permanent)


CARES ACT: Retirement Liquidity

- RMD requirement suspended. If taken already, can replace
- 10% early withdraw penalty for 401k and IRA waived if taken for COVID reasons
- Mandatory 20% income tax withholding waived
- Temporary expansion of retirement loan limitations
- Extended deadline for IRA Plan contributions from 4/15 to 7/15


CARES ACT: Tax Relief

- Adds a new "above the line" charitable contribution deduction of up to $300 for people who do not itemize
- Tax filing deadline extended from 4/15 to 7/15


CARES ACT: Business Relief

- Small businesses can apply for additional loans and have debt relief helping them pay SBA loans
- Provided a tax credit for 50% wages paid by certain employers
- Delay of payroll tax payment
- Expansion of NOL's
- Increasing the business interest expense deduction
- Charitable deduction increased from 10% to 25%