Code of Ethics & Standards

Code of Ethics

A CFP® Professional must

• act with integrity, competence, diligence

• act in clients best interest

• exercise due care

• avoid or disclose & manage conflicts of interest

• act in a manner that positively reflects on the financial planning profession

Financial Advice

a recommendation that the client can take or refrain from taking a particular course of action

Integrity

tell the truth even when its not in our best interest

Competence

relevant knowledge and skill to apply that knowledge

if not competent they must

• gain competence

• get assistance of a competent professional

• limit or eliminate the engagement

• refer to the client to a competent professional

Diligence

respond in a timely manner, usually 24 business hours

Disclose & Manage conflicts of interest

When conflict arises CFP Professional must:

1. disclose the conflict

2. obtain the clients informed consent

3. manage conflict in clients favor

Disclosure may be orally or written

1. if orally, must document

2. CFP board suggest written

Standards of Conflict

1. duties owed to clients

2. fin planning and application of the practice standards for fin planning process

3. practice standards for fin planning process

4. duties owed to firms and subordinates

5. duties owed to CFP board

6. prohibition

Sound & Objective Judgement

may NOT accept gift, gratuity, entertainment, non-cash

Confidentiality and Privacy

• keep client info. confidential except:

  • for ordinary business purposes

  • for legal & enforcement purposes

• DO NOT use any public info. about a client for personal benefit

• DO take responsible steps to protect the security of non-public personal info.

Borrowing or Lending Money

may not directly or indirectly borrow money from or lend to a client unless:

• they are family member

• lender is a business org.

What is Not Financial Advice?

• marketing materials

• general financial education

• general financial communication

No Client Agreement to Engage for planning

if professional gives advise and client doesn’t agree you must:

• NOT enter into engagement

• limit scope of engagement

• provide the requested services after education the client the benefits of financial planning

• terminate agreement

Duties Owed to CFP board

conduct includes

• felony or relevant misdemeanor conviction

• fraud, theft, misrepresentation of other dishonest conduct

• personal or business bankruptcy

• fed tax lien (possess property until obligations are met) on property owned by CFP® Professional

• non-fed tax lien, judgement lien, or civil judgement

report

• written notice with 30 calendar days

cooperation

only report 2nd DUI

Forms of Sanction

• Private Censure (criticize)

• Public Censure

• Suspension (temporary removal of marks after final decision)

• Revocation

• Interim Suspension (temporary suspension while investigation is still going)

Fitness Standards

Always Bar

• conduct unacceptable

Presumptive Bar

• renders applicant currently ineligible

Other Adverse Conduct

• requires a petition for fitness