CODE OF ETHICS Show
� The CFP Board adopted a code of ethics for their certificants and registrants to follow.� While many states also have ethic continuing education requirements, only a course that meets the Board�s standards will be accepted by the Certified Financial Planner Board of Standards.� Therefore, it is important that each individual be sure the course they complete meets the requirements in order to obtain credit towards renewing their financial planning designation.� The Principles established by the Board are general statements expressing the ethical and professional ideals certificants and registrants are expected to display in their professional activities.� Certificants and registrants are responsible for following the rules of conduct and general ethical standards when dealing with the public, their clients, colleagues and employers. � Certainly each consumer expects his or her financial advisor to be ethical and certainly each certificant and registrant wants to be perceived as ethical.� Although mistakes can be made, when each person follows requirements, significant mistakes are much less likely to happen. � All individuals who have financial dealings with the public (not just certificants and registrants) are required to meet a high standard of fiduciary responsibility.� Consumers must depend on those with more knowledge than themselves to do what is right.� Financial planners hold their client�s financial futures in their hands; even an honest mistake can be financially devastating. �The unfortunate fact is that such mistakes may not be discovered until many years later when it is too late to correct them. Certified Financial Planner (CFP) Designation � CFP� stands for Certified Financial Planner�.� The CFP� designation is provided through the Certified Financial Planner Board of Standards, Inc.� The designation may not be used by any person who has not met the standards of the Board. � The CFP� Board was established in 1985 to benefit the public by establishing and enforcing education, examination, experience, and ethical requirements.� One of the CFP� education requirements includes a minimum of two credit hours in CFP approved ethics.� Any person who has been certified to use the marks of CFP Board must comply with all mandates and requirements of the organization, including obtaining the appropriate ethics course.� Of course the individual must also comply with all laws and regulations of the industry and the state where licensed. Practice Standards � The Practice Standardsdescribe the best practices of financial planning professionals providing professional services related to the six elements of the financial planning process.[1] �They relate to the elements of the financial planning process and are followed by an explanation of the Standard and its relationship to the Code of Ethics and Rules of Conduct. Disciplinary Rules � The Disciplinary Rulesdescribe the procedures followed by CFP Board in enforcing the Rules of Conduct. �They provide a fair process regarding which certificants are given notice of potential violations and an opportunity to be heard by a panel of other professionals. Terminology �CFP Board� means the Certified Financial Planner� Board of Standards, Inc. �Candidate for CFP� certification� means a person who has applied to CFP Board to take the CFP� Certification Examination, but who has not yet met all of CFP Board�s certification requirements. �Certificant� means a person who is currently certified by the CFP Board. �Certificant�s Employer� means any person or entity that employs a certificant or registrant to provide services to a third party on behalf of the employer, including certificants and registrants who are retained as independent contractors or agents. �Client� means a person or entity who engages a certificant and for whom professional services are rendered. �Where the services of the certificant are provided to an entity (corporation, trust, partnership, estate, etc.), the client is the entity acting through its legally authorized representative. �Commission� means the compensation generated from a transaction involving a product or service and received by an agent or broker, usually calculated as a percentage on the amount of his or her sales or purchase transactions. �This includes 12(b)1 fees, trailing commissions, surrender charges and contingent deferred sales charges. �Compensation� is any non-trivial economic benefit, whether monetary or non-monetary, that a certificant or related party receives or is entitled to receive for providing professional activities. A �conflict of interest� exists when a certificant�s financial, business, property and/or personal interests, relationships or circumstances reasonably may impair his/her ability to offer objective advice, recommendations or services. �Fee-only� means a type of payment.� A certificant may describe his or her practice as �fee-only� if, and only if, all of the certificant�s compensation from all of his or her client work comes exclusively from the clients in the form of fixed, flat, hourly, percentage or performance-based fees. �Fiduciary� is a person who acts in utmost good faith and in a manner he or she reasonably believes to be in the best interest of the client. A �financial planning engagement� exists when a certificant performs any type of mutually agreed upon financial planning service for a client. A �financial planning practitioner� is a person who provides financial planning services to clients. �Personal financial planning� or �financial planning� means the process of determining whether and how an individual can meet life goals through the proper management of financial resources. Financial planning integrates the financial planning process with the financial planning subject areas. In determining whether the certificant is providing financial planning or material elements of financial planning, factors that may be considered include, but are not limited to:
� Financial planning may occur even if the material elements are not provided to a client simultaneously, are delivered over a period of time, or are delivered as distinct subject areas. It is not necessary to provide a written financial plan to engage in financial planning. �Personal financial planning process� or �financial planning process� denotes the process which typically includes, but is not limited to, some or all of these six steps:
�Personal financial planning subject areas� or �financial planning subject areas� denotes the basic subject fields covered in the financial planning process which typically include, but are not limited to:
�Registrant� means individuals that are not currently certified but have been certified by CFP Board in the past and have an entitlement, direct or indirect, to potentially use the CFP� marks. This includes individuals who have relinquished their certification and who are eligible for reinstatement without being required to pass the current CFP� Certification Examination. �The Standards of Professional Conduct applies to registrants when the conduct at issue occurred while the registrant was certified; CFP Board has jurisdiction to investigate such conduct. Code of Ethics and Professional Responsibility[2] � The CFP Board adopted the Code of Ethics to establish the highest principles and standards.� These are general statements expressing ethical and professional ideals, which certificants and registrants are expected to display in their professional activities.� They provide a source of guidance for certificants and registrants. �The Principles form the basis of CFP Board�s Rules of Conduct, Practice Standards and Disciplinary Rules, and these documents together reflect CFP Board�s recognition of certificants� and registrants� responsibilities to the public, clients, colleagues and employers. Principles Principle 1 - Provide professional services with integrity � Webster�s dictionary defines �integrity� as �fidelity to moral principles; hones, soundness; completeness.�� Integrity demands honesty and candor and full disclosure of all pertinent facts.� The person�s honesty must be put above personal gain or advantage. � Integrity demands honesty, candor, and complete disclosure at all times.� Allowances can be made for differences of opinion, but there is never room for deceit or subordination of ethical principles.� � Clients must be able to trust their financial advisors; trust can only exist when honesty is a primary focus. Principle 2 � Provide professional services objectively � Objectivity requires intellectual honesty and impartiality. �In any financial service that is performed certificants must protect the integrity of their work, maintain objectivity and avoid subordination of their judgment.� This is not always easy, but it is essential. Principle 3 � Competence, maintaining necessary knowledge and skills � Competence means attaining and maintaining an adequate level of knowledge and skill, applying both when providing services to clients. �Competence includes the wisdom to recognize personal limitations in schooling or experience. �It might mean referring clients to other professionals when that is appropriate or acquiring additional schooling to meet specific needs.� Professionals, such as CFP� certificants and registrants, understand the need to continually acquire education when making a continued commitment to professional improvement.� Products and product use may experience change; only through a commitment to education may the professional stay abreast of changes. Principle 4 � Fairness in all professional relationships; disclosure of conflicts of interest � An individual cannot be fair unless he or she is impartial.� He or she must disclose any conflict of interest that might exist since that can impact the advisor�s partiality.� We all want to be treated fairly and our clients deserve this from us.� We must set aside our own feelings, prejudices or desires so that our client�s wishes may be made the priority. Principle 5 � Confidentiality: Protect the confidentiality of all client information � Confidentiality is often required by law, but certainly it is required of all professionals regardless of whether or not the law dictates it.� Confidentiality means ensuring that information is accessible only to those authorized to have access. �A relationship of trust and confidence only exists when the client knows his or her information is safe from others. Principle 6 � Professionalism: demonstrating exemplary professional conduct � Professionalism includes, among other things, behaving with dignity and courtesy with clients, their families and beneficiaries, fellow professionals, and really all that we come in contact with.� It is not possible to be professional unless we treat all people equally.� Certificants must cooperate with other certificants to enhance and maintain the public image the Marks deserve and improve the quality of service it must be known by. � True professionalism shows outside the office as well.� The professional treats others well whether they are in a suit and tie or blue jeans.� Their professionalism carries over into all aspects of their life. Principle 7 � Diligence: Provide professional services diligently � Diligence is the performance of services in a reasonably prompt and thorough manner.� This includes the proper planning for, and supervision of, the professional services provided.� Diligence is the constant persistent attention to one�s professional duties.� It is completing the claim applicants on time, returning telephone calls promptly, and doing what is required to perform our jobs in a courteous manner, without resentment for the time spent in non-commissionable duties. � Insurance agents often think of due diligence in relation to selecting strong financial companies to represent.� This is an aspect of due diligence, but diligence really includes all aspects of the sales process.� It is necessary to research the financial strength of the companies we represent since so many types of products do not yield results for many years; we want the insurer to be strong years later when we begin to use the financial products for income (annuities for example). Rules of Conduct � Principles guide us through our daily lives; Rules of Conduct establish the high standards expected of certificants and describe the level of professionalism required.� Rules of Conduct are binding on all certificates, regardless of their title, position, type of employment or method of compensation. �They govern all those who have the right to use the CFP� marks.� Using the marks is a privilege and must be continually earned. � The Rules of Conductestablish the high standards expected of certificants and describe the level of professionalism required of them.� They are binding on all certificants, regardless of their title, position, type of employment or method of compensation.� These rules apply even if the individual is not using the CFP� marks in their current employment position. � Any person who has been certified to use the marks of CFP� by the CFP Board is obligated to comply with all mandates and requirements of the organization.� He or she is also obligated to comply with all laws and regulations of the industry and the state where they are licensed.� Certified Financial Planner� certificants are expected to perform their job in an ethical and professional manner promoting respect for the industry. � There are many activities available to a certificant; he or she may perform all, some or none of the typical services provided by financial planning professionals. �Some Rules may not apply to some types of activity so when considering the Rules of Conduct,the certificant must determine whether or not a specific Rule is applicable. �Certificants will be considered in compliance when the certificant demonstrates that his or her employer completed the required action. � If the Rules of Conduct are violated, the certificant or registrant may be subject to discipline. �Because the CFP Board is a certifying and standards setting body, discipline extends to the rights of registrants and certificants to use the CFP� marks; the Rules are not designed to be a basis for legal liability to any third party. � Every professional has what is known as a �standard of care.�� This means the professional is expected to know the applicable standard of care owed to his or her client.� A claim based on liability imposed by law develops as the result of the invasion of the rights of others.� A legal right is more than a mere moral obligation of one person to another since it has the law to back it up and enforce the right. � The financial planning industry is unique in that individuals filling this role come from a variety of industries, such as accountants, stockbrokers, personal bankers and, of course, insurance agents.� Insurance agents sometimes promote themselves as financial planners without a lot to back up that claim.� If the individual does not have education or experience he or she is placing him or herself in a precarious financial position.� Negligence is the broadest field of exposure for an insurance agent. � Those who work in the financial planning field must be ethical for a personal reason: lawsuits.� Past lawsuits have established a standard of care for investment advisors and financial planners that state an individual proclaiming themselves to be financial planners are then �presumed� to have sufficient training or experience.� If he or she does not, their legal liability greatly increases because they falsely indicated by their expressed title that such ability did in fact exist. Defining the Relationship with a Prospective Client or Existing Client � Satisfied clients are necessary to a long career in the insurance or financial planning field.� Continued business and referred business are both dependent upon the client�s contentment with their insurance and financial planning professional. � The certificant and his or her client must agree upon the services that will be provided by the certificant.� If the certificant�s services include financial planning or material elements of financial planning, prior to entering into an agreement, the certificant must provide written information or discuss with his or her prospective or existing client the following:
� If the certificant presents the information in writing, he or she must encourage the prospective or existing client to review the information and offer to answer any questions he or she has.� Clients must understand the information and all parties must know the goals in order to have a satisfying financial relationship. � If the services include financial planning or material elements of financial planning, the certificant or his or her employer will enter into a written agreement governing the financial planning services.� This is typically referred to simply as the �Agreement.� �This Agreement should specify certain things, including:
� The Agreement may consist of multiple written documents or a single document. �Written documents should include all elements above and used in compliance with any state or federal laws that apply, as well as rules or regulations of any applicable self-regulatory organization, such as the Securities and Exchange Commission. �At all times the certificant must place the interest of the client ahead of his or her own. �When the certificant provides financial planning or material elements of financial planning, the certificant owes his or her client the duty of care of a fiduciary as defined by CFP Board. Information Disclosure � When financial issues are involved it is very important to apply full disclosure.� If the advisor fears the consumer does not fully understand the elements of any financial transaction he or she has a duty to restate the information in terms the lay person can fully understand.� A certificant may not communicate, directly or indirectly, any false or misleading information related in any way to the certificant�s professional qualifications or services. �For example, the certificant�s business card should not indicate qualifications that are not completely accurate.� A certificant should never mislead any party regarding the potential benefits of the certificant�s services that will or could be available. �Certainly full disclosure at all times is necessary.� Never should a certificant fail to disclose all pertinent information; he or she must not omit facts that could allow the client to assume something that is not actually true. � When products are introduced there should be no false or misleading information regarding the use or benefit of the product or the product�s benefits.� Never should certificants allow their clients to assume anything that is not actually true. � To prevent misinformation or wrongly assumed facts, the following should be disclosed:
� If any changes occur that affect the information provided above, such changes should be relayed to the client in a timely manner. Client Information and Property � Just as we would not want someone to disclose our personal information without our permission, neither do our clients want their personal information disclosed.� Certificants must treat client information as confidential except as required by law; as necessitated by obligations to a certificant�s employer or partners; as required to defend against charges of wrongdoing; in connection with a civil dispute; or as needed to perform a necessary service (to open an account, for example). � In this age of technology information is often stolen by others.� Whether it is due to a stolen laptop or an office break-in, information theft has become a major illegal business.� Some situations appear unavoidable, while others could have been prevented.� Obviously a laptop computer containing client information should never be left in an unattended automobile, for example.� Certificants must take reasonable and prudent steps to protect the security of information and property, including the security of stored information, whether that happens to be at their office or in their computer.� While we cannot totally prevent all illegal activity, we can take steps to secure our offices and computers with such things as security systems, safes, and computer passwords. � Certificants and agents must obtain certain client information in order to properly perform their jobs.� In some cases, information and proof of client identity must be gathered to satisfy government entities, such as the information required by anti-terrorist legislation.� This would certainly include annuity applications as well as many life insurance products.� If a certificant cannot obtain the necessary information because his or her client refuses to supply it, he or she must inform the client of any and all material deficiencies.� The Certificant cannot force the client to provide the information but he or she can alert them to potential problems that might be the result of insufficient information. � A certificant must clearly identify any assets, if applicable, that he or she will take custody of in the course of performing their job, exercise investment discretion on the client�s behalf, or exercise asset supervision.� A certificant must further identify and keep complete records of all funds or other property of a client in the custody, or under the discretionary authority, of the certificant. � While it might seem obvious to most, certificants may not, under any circumstances, borrow money from their clients.� There are a couple of exceptions.� If the client is also a relative, then the borrowing has more to do with being related than with being the financial advisor.� Additionally, if the client is a business institution, such as a bank, the business of lending money does mean their advisor cannot also be their client.� The act of lending and the borrowing money in this case would be unrelated to the professional services performed by the certificant. � Just as a certificant should not borrow from his or her clients, neither should the certificant lend clients money.� Again, the exceptions would be a relative, in which case the act of lending money has more to do with being related than with being a financial advisor.� If the certificant works at a bank or other business institution, then it is permissible to lend money to clients in the course of conducting normal business.� As before, lending the client money would not be linked to also being their advisor if the business that employed the certificant involved lending money as a normal business activity. � A certificant may not commingle a client�s property with the property of the certificant or the certificant�s employer, unless the commingling is permitted by law or is explicitly authorized and defined in a written agreement between the parties.� It is always important to keep complete and up-to-date records when commingling is permitted so that there is no misunderstanding about where the money is located and how it is being used.� The certificant must have both explicit written authorization to commingle from each client involved and sufficient record-keeping to track each client�s assets accurately. � A certificant must return a client�s property upon request as soon as practicable or consistent with a time frame specified in an agreement with the client. Obligations to Clients ��All individuals working in financial fields have obligations to their clients.� For example, certificants must treat all clients fairly and provide professional services with integrity and objectivity.� Certificants must offer advice only in those areas in which he or she is competent to do so.� Furthermore, he or she must maintain competence in all areas in which the certificant continues to engage in business activities.� Certificants must be in compliance with any applicable regulatory requirements governing professional services provided to their clients. ��Certificants must exercise reasonable and prudent professional judgment when providing professional services.� Certificants must make and/or implement only recommendations that are suitable for the client.� Many states have instituted �suitability requirements� for many types of financial products.� Agents and financial planners must follow those state mandated suitability requirements when gathering information and performing other financial tasks. � Certificants must provide reasonable and prudent professional supervision or direction to any subordinate or third party to whom the certificant assigns responsibility for any client services.� Certificants must advise their current clients of any certification suspension or revocation he or she receives from the CFP Board. Obligations to Employers � Certificants that are employees or agents must perform professional services with dedication to the lawful objectives of the employer/principal and in accordance with CFP Board�s Code of Ethics.� A certificant who is an employee/agent shall advise his or her current employer/principal of any certification suspension or revocation he or she receives from CFP Board. Obligations to CFP Board ��A certificant must abide by the terms of all agreements with the CFP Board, including, but not limited to, using the CFP� marks properly and cooperating fully with CFP Board�s trademark and professional review operations and requirements.� A certificant must meet all CFP Board requirements, including continuing education requirements, to retain the right to use the CFP� marks. � Certificants must notify the CFP Board of changes to contact information, including, but not limited to, e-mail address, telephone number(s) and physical address, within forty five (45) days.� Certificants must notify the CFP Board in writing of any conviction of a crime, except misdemeanor traffic offenses or traffic ordinance violations unless the offense involved the use of alcohol or drugs, or of any professional suspension or bar within ten (10) calendar days after the date on which he or she is notified of the conviction, suspension or bar. ��A certificant may not engage in conduct that reflects adversely on his or her integrity or fitness as a certificant, upon the CFP� marks, or upon the profession. Financial Planning Practice Standards � Financial Planning Practice Standards have been developed and promulgated by the Certified Financial Planner Board of Standards Inc. (CFP Board) for the ultimate benefit of consumers who receive financial planning services. These Practice Standards are intended to:
History of Practice Standards � The CFP Board is a professional certification and standards-setting organization founded in 1985 to benefit the public by establishing and enforcing education, examination, experience, and ethics requirements for CFP� professionals. �Through its certification process, CFP Board established fundamental criteria necessary for competency in the financial planning profession. � In 1995, the CFP Board established its Board of Practice Standards, composed exclusively of CFP� practitioners, to draft standards of practice for financial planning. �The Board of Practice Standards drafted and revised the standards considering input from CFP� certificants, consumers, regulators and other organizations. CFP Board adopted the revised standards. Description of Practice Standards � A Practice Standard establishes the level of professional practice that is expected of certificants engaged in financial planning.� The Practice Standards apply to certificants when performing the tasks of financial planning regardless of the person�s title, job position, type of employment, or method of compensation. �Compliance with the Practice Standards is mandatory for certificants whose services include financial planning or material elements of financial planning, but all financial planning professionals are encouraged to use the Practice Standards when performing financial planning tasks or activities addressed by a Practice Standard.� Designed to provide certificants with a framework for financial planning, they are similar to the Rules of Conduct, butare not designed to be a basis for legal liability to any third party. Format of Practice Standards � Each Practice Standard is a statement regarding one of the steps of the financial planning process. It is followed by an explanation of the Standard, its relationship to the Code of Ethics and Rules of Conduct, and its expected impact on the public, the profession, and the practitioner.� We have not included the expected impact in this text; to read that information go online to the CFP website. � The Explanation accompanying each Practice Standard explains and illustrates the meaning and purpose of the Practice Standard. �The text of each Practice Standard is authoritative and directive. The related Explanation is a guide to interpretation and application of the Practice Standard based, where indicated, on a standard of reasonableness, a recurring theme throughout the Practice Standards. � The Explanation is not intended to establish a professional standard or duty beyond what is contained in the Practice Standard itself. Compliance with Practice Standards � The practice of financial planning consistent with these Practice Standards is required for certificants who are financial planning practitioners. � The Practice Standards are used by CFP Board�s Disciplinary and Ethics Commission and Appeals Committee in evaluating the certificant�s conduct to determine if any provision of the Standards of Professional Conduct have been violated, based on the Disciplinary Rules established by CFP Board. Establishing and Defining the Relationship with the Client � It is important that the client understands what he or she can expect to receive from the financial planner.� The financial planning practitioner and the client are wise to mutually define the scope of the engagement before any financial planning service is provided. � The process of �mutually-defining� is essential in determining what activities may be necessary to proceed with the engagement.� This process is accomplished in financial planning engagements by:
� The services provided may include one or more financial planning subject areas. �It is acceptable to mutually define engagements in which the scope is limited to specific activities. �When both the client and the planner understand what each expects of the other, the relationship will be successful. Mutually defining the expected services establishes realistic expectations for both the client and the practitioner. � This Practice Standard does not require the scope of the engagement to be in writing, although many financial planners prefer to do so.� A written agreement allows each party to remind themselves of expectations as well as responsibilities of each party.� As the relationship proceeds, the scope may change by mutual agreement.� Having a written agreement sometimes makes change easier because it provides a starting point.� This Practice Standard is not considered alone, but in conjunction with all other Practice Standards. � When there is a written agreement, several things might be covered.� Compensation is certainly an area where a written agreement may be beneficial, since it avoids future misunderstandings.� This might especially be true if the planner is not working only as an advisor, but also as an agent selling products for which he or she earns a commission. � If the services include financial planning or material elements of financial planning, the certificant or their employer will want a written agreement governing the financial planning services.� This is typically referred to simply as the �Agreement.�� Usually it states the parties involved and the duration of the services.� At the end of the duration, the agreement may be renewed if each party has additional goals they wish to meet.� Some agreements are used to comply with state or federal laws; when this is the case, they are often mandatory. � Of course the certificant must at all times place the interest of the client ahead of his or her own interests.� The certificant owes his or her client the duty of care of a fiduciary, as defined by the CFP Board. Gathering Client Data � It would be impossible to recommend a product as �suitable� without first obtaining specific client information.� The process of gathering client data is, therefore, essential to the financial planning process.� The financial planning practitioner and the client must mutually define the client�s personal and financial goals, needs, and priorities that are relevant to the scope of the engagement before any recommendation is made or implemented. � Simply asking a client to provide his or her goals may not be sufficient. �The practitioner will need to explore the client�s values, attitudes, expectations, and time horizons as they affect the client�s goals, needs and priorities. �Some goals may prove unrealistic; some goals may need to be further defined.� The process of �mutually-defining� is essential in determining what activities may be necessary to proceed with the client engagement. �Personal values and attitudes shape the client�s goals and objectives and the priority placed on them. �Goals and objectives must be consistent with the client�s values and attitudes in order for the client to make the commitment necessary to accomplish them. � Goals and objectives provide focus, purpose, vision and direction for the financial planning process. �It is important to determine clear and measurable objectives that are relevant to the scope of the engagement. �The role of the practitioner is to facilitate the goal-setting process for clarification of the client�s goals and objectives. � It is always important to obtain sufficient quantitative information about the client.� Otherwise it might not be possible to make a recommendation that truly meets the client�s personal situation.� It is not possible to make sound judgments based on partial or incomplete information. � It is never easy to point out a client�s unrealistic goals but it is often necessary to do so.� Otherwise the client may blame the financial planner when the unrealistic goal cannot be met. Prior to making recommendations to the client and depending on the scope of the engagement, the financial planning practitioner shall determine what quantitative information and documents are sufficient and relevant. � The practitioner must obtain sufficient and relevant quantitative information and documents pertaining to the client�s financial resources, obligations and personal situation. This information may be obtained directly from the client or other sources such as interviews, questionnaires, client records and documents. � The practitioner must sufficiently communicate the importance of financial completeness and accuracy when gathering information.� He or she must further stress that incomplete or inaccurate information will impact conclusions and recommendations. � If the practitioner is unable to obtain sufficient and relevant quantitative information and documents to form a basis for recommendations, the practitioner shall either:
� The practitioner must stress any limitations on the scope of the engagement, as well as the fact that this limitation could affect the conclusions and recommendations he or she makes. Information Disclosed to Clients � Never should a certificant provide any false information to their clients or prospective clients, whether directly or indirectly.� Certificants should never allow their clients to assume they have more knowledge, experience, or education than actually exists.� This includes misleading any parties about the potential benefits of the certificant�s services.� Full disclosure is always necessary.� Full disclosure means providing all relevant facts necessary to make a fully informed financial decision. � Full disclosure requires:
� Any changes that occur should be promptly communicated to the client if the change affects them in any way. Analyzing and Evaluating the Client�s Financial Status Analyzing and Evaluating the Client�s Information ��A financial planning practitioner will analyze the client�s information to gain an understanding of his or her financial situation and then evaluate to what extent the client�s goals, needs, and priorities can be met by the client�s resources and current course of action. � Prior to making recommendations to a client, it is necessary for the financial planning practitioner to assess the client�s financial situation and determine the likelihood of reaching the stated objectives by continuing present activities.� The practitioner will utilize client-specified, mutually-agreed-upon, and/or other reasonable assumptions. Both personal and economic assumptions must be considered in this step of the process. These assumptions may include, but are not limited to, the following:
� Analysis and evaluation are critical to the financial planning process. �These activities form the foundation for determining strengths and weaknesses of the client�s financial situation and current course of action. �These activities may also identify other issues that should be addressed. �As a result, it may be appropriate to amend the scope of the engagement or obtain additional information. Developing and Presenting the Financial Planning Recommendations Preface to the 400 Series � The 400 Series, �Developing and Presenting the Financial Planning Recommendations,� represents the very heart of financial planning. � It is at this point that the financial planning practitioner, using both science and art, formulates the recommendations designed to achieve the client�s goals, needs and priorities. �Experienced financial planning practitioners may view this process as one action or task. �However, it actually is a series of distinct but interrelated tasks. � These three Practice Standards emphasize the distinction among the several tasks which are part of this process. �These Practice Standards can be described as: � What is possible? � What is recommended? and � How is it presented? � The first two Practice Standards involve the creative thought, the analysis, and the professional judgment of the practitioner, which are often performed outside the presence of the client. �First, the practitioner identifies and considers the various alternatives, including continuing the present course of action (Practice Standard 400-1). �Second, the practitioner develops the recommendation(s) from among the selected alternatives (Practice Standard 400-2). �Once the practitioner has determined what to recommend, the final task is to communicate the recommendation(s) to the client (Practice Standard 400-3). � The three Practice Standards that comprise the 400 series should not be considered alone, but in conjunction with all other Practice Standards. 400-1: Identifying and Evaluating Financial Planning Alternatives The financial planning practitioner shall consider sufficient and relevant alternatives to the client�s current course of action in an effort to reasonably meet the client�s goals, needs and priorities. � After analyzing the client�s current situation and prior to developing and presenting the recommendations, the financial planning practitioner must identify various possibilities. �The practitioner will evaluate the effectiveness of each possible action in reasonably meeting the client�s goals, needs and priorities. � This evaluation may involve, but is not limited to, considering multiple assumptions, conducting research or consulting with other professionals. �This process may result in a single alternative, multiple alternatives or no alternative to the client�s current course of action. � In considering alternative actions, the practitioner must be able to recognize and, as appropriate, take into account his or her legal or regulatory limitations and level of competency in properly addressing each of the client�s financial planning issues. � More than one alternative may reasonably meet the client�s goals, needs and priorities. �Alternatives identified by the practitioner may differ from those of other practitioners or advisers, illustrating the subjective nature of exercising professional judgment. 400-2: Developing the Financial Planning Recommendations � The financial planning practitioner shall develop the recommendation(s) based on the selected alternative(s) and the current course of action in an effort to reasonably meet the client�s goals, needs and priorities. � After identifying and evaluating the alternatives and the client�s current course of action, the practitioner must develop recommendations reasonably expected to meet the client�s goals, needs and priorities. �A recommendation may be an independent action or a combination of actions which may need to be implemented collectively. � The recommendations shall be consistent with and will be directly affected by the following:
� A recommendation may be to continue the current course of action. �If a change is recommended, it may be specific and/or detailed or provide a general direction. �In some instances, it may be necessary for the practitioner to recommend that the client modify a goal. � The recommendations developed by the practitioner may differ from those of other practitioners or advisers, yet each may reasonably meet the client�s goals, needs and priorities. 400-3: Presenting the Financial Planning Recommendations � The financial planning practitioner shall communicate the recommendations in a manner and to an extent reasonably necessary to assist the client in making an informed decision. � When presenting a recommendation, the practitioner must make a reasonable effort to assist the client in understanding the client�s current situation, the recommendation itself, and its impact on the ability to meet the client�s goals, needs and priorities. �In doing so, the practitioner shall avoid presenting the practitioner�s opinion as fact. � The practitioner must communicate the factors critical to the client�s understanding of the recommendations. � These factors may include but are not limited to material:
� The practitioner should indicate that even though the recommendations may meet the client�s goals, needs and priorities, changes in personal and economic conditions could alter the intended outcome. Changes may include, but are not limited to: legislative, family status, career, investment performance and/or health. � If there are conflicts of interest that have not been previously disclosed, such conflicts and how they may impact the recommendations should be addressed at this time. � Presenting recommendations provides the practitioner an opportunity to further assess whether the recommendations meet client expectations, whether the client is willing to act on the recommendations and whether modifications are necessary. Implementing the Financial Planning Recommendations 500-1: Agreeing on Implementation Responsibilities � The financial planning practitioner and the client shall mutually agree on the implementation responsibilities consistent with the scope of the engagement. � The client is responsible for accepting or rejecting recommendations and for retaining and/or delegating implementation responsibilities. �The financial planning practitioner and the client shall mutually agree on the services, if any, to be provided by the practitioner. �The scope of the engagement, as originally defined, may need to be modified. � The practitioner�s responsibilities may include, but are not limited to the following:
� If there are conflicts of interest, sources of compensation or material relationships with other professionals or advisers that have not been previously disclosed, these need to be disclosed prior to implementation of the financial planner�s recommendations. � When referring clients to other professionals or advisers, the financial planning practitioner must indicate the basis on which he or she believes the other professional or adviser may be qualified. � If the practitioner is engaged by the client to provide only implementation activities, the scope of the engagement will be mutually defined in accordance with Practice Standard 100-1. �This scope may include such matters as the extent to which the practitioner will rely on information, analysis or recommendations provided by others. 500-2: Selecting Products and Services for Implementation � The financial planning practitioner shall select appropriate products and services that are consistent with the client�s goals, needs and priorities. � The financial planning practitioner must investigate products or services that reasonably address the client�s needs.� The products or services selected to implement the recommendations must be suitable to the client�s financial situation and consistent with the client�s goals, needs and priorities. � The financial planning practitioner will use his or her professional judgment in selecting the products and services that are in the client�s interest. �Professional judgment incorporates both qualitative and quantitative information. � Products and services selected by the practitioner may differ from those of other practitioners or advisers. �More than one product or service may exist that can reasonably meet the client�s goals, needs and priorities.� The practitioner must make all disclosures required by applicable regulations. Monitoring 600-1: Defining Monitoring Responsibilities � The financial planning practitioner and client shall mutually define monitoring responsibilities. � The purpose of this Practice Standard is to clarify the role, if any, of the practitioner in the monitoring process. �By clarifying this responsibility, the client�s expectations are more likely to be in alignment with the level of monitoring services which the practitioner intends to provide. If engaged for monitoring services, the practitioner must make a reasonable effort to define and communicate to the client those monitoring activities the practitioner is able and willing to provide. By explaining what is to be monitored, the frequency of monitoring and the communication method, the client is more likely to understand the monitoring service to be provided by the practitioner. � The monitoring process may reveal the need to reinitiate steps of the financial planning process. The current scope of the engagement may need to be modified. Disciplinary Rules and Procedures Introduction � Certified Financial Planner Board of Standards Inc. (CFP Board) has adopted a Code of Ethics and Professional Responsibility (Code of Ethics), Rules of Conduct and Financial Planning Practice Standards (Practice Standards), which establish the expected level of professional conduct and practice for certificants and registrants. The Code of Ethics, Rules of Conduct and Practice Standards may be amended from time to time, with revisions submitted to the public for comment before final adoption by CFP Board. �To promote and maintain the integrity of its, CFP� and CERTIFIED FINANCIAL PLANNER� certification marks for the benefit of the clients and potential clients of certificants and registrants, CFP Board has the ability to enforce the provisions of the Rules of Conduct and Practice Standards. Adherence to the Rules of Conduct and compliance with the Practice Standards by certificants and registrants is required, with the potential for CFP Board sanctions against those who violate the regulations proscribed in these documents. CFP Board will follow the disciplinary rules and procedures set forth below when enforcing the Rules of Conduct and Practice Standards. Disciplinary and Ethics Commission 2.1 Function and Jurisdiction of the Disciplinary and Ethics Commission � CFP Board�s Disciplinary and Ethics Commission (referred to herein as the �Commission�), formed pursuant to and governed by the bylaws of CFP Board, is charged with the duty of reviewing and taking appropriate action with respect to alleged violations of the Rules of Conduct and alleged non-compliance with the Practice Standards as promulgated by CFP Board and shall have original jurisdiction over all such disciplinary matters. 2.2 Powers and Duties of the Commission � The Commission shall be required to:
2.3 Powers and Duties of the CEO of CFP Board � The CEO shall be required to:
2.4 Hearing Panel � The Hearing Panel consists of three persons, two of whom must be CFP� certificants. �A Hearing Panel is comprised of two Commission members and one volunteer, unless circumstances make it impractical. One member of each Hearing Panel shall serve as Chair of that hearing. The Hearing Panel Chair must be a Commission member. The Chair rules on all motions, objections and other matters presented at or prior to a hearing. 2.5 Disqualification � Commission members shall refrain from participating in any proceeding in which they, a member of their immediate family or a member of their firm have any interest or where such participation otherwise would involve a conflict of interest or the appearance of impropriety. 2.6 CFP Board Counsel and CFP Board Advisory Counsel, and the Duties thereof:
2.7 Venue � Unless otherwise approved by the Board of Directors, CFP Board�s headquarters will serve as a central office for the filing of requests for:
Grounds for Discipline � Misconduct by a certificant or registrant, individually or in concert with others, including the following acts or omissions, constitute grounds for discipline, whether or not the act or omission occurred in the course of a client relationship:
� The enumeration of the foregoing acts and omissions constituting grounds for discipline is not exclusive and other acts or omissions amounting to unprofessional conduct may constitute grounds for discipline. Forms of Discipline � In cases where no grounds for discipline have been established, the Commission may dismiss the matter as either without merit or with a cautionary letter. In all cases, the Commission has the right to require certificants and registrants to complete additional continuing education or other remedial work. �Such continuing education or remedial work may be ordered instead of, or in addition to, any discipline listed below. Where grounds for discipline have been established, any of the following forms of discipline may be imposed in these cases where grounds for discipline have been established. 4.1 Private Censure � The Commission may order private censure of certificants or registrants which shall be an unpublished written reproach mailed by the Commission to a censured certificant or registrant. 4.2 Public Letter of Admonition � The Commission may order that a Letter of Admonition be issued against a certificant or registrant, which shall be a publishable written reproach of the certificant�s or registrant�s behavior. It shall be standard procedure to publish the Letter of Admonition in a press release or in such other form of publicity selected by the Commission. In some cases when the Commission determines that there are mitigating circumstances, it may decide to withhold public notification. 4.3 Suspension � The Commission may order suspension for a specified period of time, not to exceed five (5) years, for those individuals it deems can be rehabilitated. In the event of a suspension, it shall be standard procedure to publish the fact of the suspension together with identification of certificants or registrants in a press release, or in such other form of publicity as is selected by the Commission. In some cases when the Commission determines that there are extreme mitigating circumstances it may decide to withhold public notification. Certificants or registrants receiving a suspension may qualify for reinstatement to use the marks as provided in Article 15. 4.4 Revocation � The Commission may order permanent revocation of a certificant�s or registrant�s right to use the marks. In the event of a permanent revocation it shall be standard procedure to publish the fact of the revocation together with identification of the certificant or registrant in a press release or in such other form of publicity as is selected by the Commission. In some cases when the Commission determines that there are extreme mitigating circumstances it may decide to withhold public notification. Revocation shall be permanent. 4.5 Forms of Discipline Concerning Candidates � Under certain circumstances and consistent with CFP Board�s Candidate Fitness Standards, the Commission may take action in matters involving the conduct of candidates for CFP� certification. Action that may be taken in these cases, where grounds have been established, correspond in character and degree to the four forms of discipline described in Articles 4.1 through 4.4 above, and are correspondingly as follows:
� In the event of either a suspension or a denial of certification, the fact of such suspension or denial shall be publishable at the discretion of the Committee. �A candidate for the CFP� certification who has been the subject of an order to suspend certification may seek to reapply for certification according to the same procedures in Article 15.2. Such candidates, in addition, shall meet the requirements of original certification. Interim Suspension Status � Interim suspension is the temporary suspension by the Commission of a certificant�s or registrant�s right to use the marks for a definite or indefinite period of time, while proceedings conducted pursuant to these Procedures are pending against the certificant or registrant. Imposition of an interim suspension shall not preclude the imposition of any other form of discipline entered by the Commission in final resolution of the disciplinary proceeding. 5.1 Issuance of a Show Cause Order � Although a certificant�s and registrant�s right to use the marks shall not ordinarily be suspended during the pendency of such proceedings, when it appears that a certificant or registrant has been convicted of a serious crime as defined in Article 12.5, or has been the subject of a professional suspension as defined in Article 12.6, or has converted property or funds, has engaged in conduct which poses an immediate threat to the public, or has engaged in conduct the gravity of which impinges upon the stature and reputation of the marks, CFP Board Counsel may issue an Order to Show Cause why the certificant�s or registrant�s right to use the marks should not be suspended during the pendency of the proceedings. 5.2 Service � CFP Board shall serve the Order to Show Cause upon the certificant or registrant either by personal service or by certified mail, return receipt requested, mailed to the last known address of the certificant or registrant, as provided in Article 17.2. 5.3 Response � All responses to Orders to Show Cause shall be in writing and shall be submitted within twenty (20) calendar days from the date of service of the Order to Show Cause upon the certificant or registrant. The certificant or registrant shall, in the response, either request or waive the right to participate in the Show Cause Hearing. 5.4 Failure to Respond to the Order to Show Cause � If the certificant or registrant fails to file a Response within the period provided in Article 5.3, that certificant or registrant shall be deemed to have waived the right to respond and the allegations set forth in the Order to Show Cause shall be deemed admitted and an interim suspension will automatically be issued. 5.5 Show Cause Hearing and Settlement Procedures � Upon receiving the certificant�s or registrant�s response as provided in Article 5.3, a hearing shall be scheduled before no less than a quorum of the Commission. If so requested, the certificant or registrant shall have the opportunity to participate at such hearing presenting arguments and evidence on his/her behalf. All evidence presented must be submitted to CFP Board staff not less than twenty (20) days prior to the scheduled hearing. Any evidence not so submitted may only be admitted by motion at the hearing. � The certificant may propose an Offer of Settlement, consistent with the provisions of Article 13 of these Procedures, in lieu of a show cause hearing. 5.6 Interim Suspension � An interim suspension will be issued when the Commission determines that the certificant or registrant has failed to provide evidence which establishes, by a preponderance of the evidence, that the certificant or registrant does not pose an immediate threat to the public and that the gravity of the nature of the certificant�s or registrant�s conduct does not impinge upon the stature and reputation of the marks. The fact that a convicted or suspended certificant or registrant is seeking appellate review of the conviction or suspension shall not limit the power of the Commission to impose an interim suspension. 5.7 Automatic Reinstatement upon Reversal of Conviction or Suspension � A certificant or registrant subject to a suspension under this Article must have the suspension vacated immediately upon filing with the Commission a certificate demonstrating that the underlying criminal conviction or professional suspension has been reversed; provided, however, the reinstatement upon such reversal shall have no effect on any proceeding conducted pursuant to these Procedures then pending against a certificant or registrant. 5.8 Publication � It shall be standard procedure to publish the fact of an interim suspension together with identification of the certificant or registrant in a press release. Investigation 6.1 Commencement � Proceedings involving potential ethics violations shall be commenced upon a written request for investigation made by any person who shall be directed to the Commission or commenced at the behest of CFP Board Counsel. Proceedings involving Practice Standards nonconformance shall be commenced upon a written request for investigation made by any person(s) who have a contractual relationship with the certificant or registrant whose practices are being called into question or by a CFP� certificant, or at the behest of CFP Board Counsel. � In either situation, the Commission may, in making a determination of whether to proceed, make such inquiry regarding the underlying facts as they deem appropriate. 6.2 Procedures for Investigation � Upon receipt of a request for investigation containing allegations which, if true, could give rise to a violation of the Rules of Conduct, or upon the acquisition by CFP Board Counsel of information which, if true, could give rise to a violation of the Rules of Conduct, the certificant or registrant in question shall be given written notice by CFP Board Counsel that the certificant or registrant is under investigation and of the general nature of the allegations asserted against the certificant or registrant. The certificant or registrant shall have thirty (30) calendar days from the date of notice of the investigation to file a written response to the allegations with the Commission.
6.3 Probable Cause Determination Procedures � CFP Board Counsel will determine if there is probable cause to believe grounds for discipline exists and will; (1) dismiss the allegations as not warranting further investigation at this time; (2) dismiss the allegations with a letter of caution recommending remedial action and/or entering other appropriate orders; or (3) begin preparation and processing of a Complaint against the certificant or registrant in accordance with Article 7. For matters that are dismissed, CFP Board Counsel may reserve the right to reopen the investigation in the future if appropriate. 6.4 Disposition � CFP Board Counsel shall conduct CFP Board�s investigation as expeditiously as reasonably practicable. Complaint � Answer - Default 7.1 Complaint � An original Complaint shall be prepared by CFP Board staff and forwarded to the certificant or registrant. Copies of the Complaint shall be included with the materials provided to the Hearing Panel in advance of the hearing. � The Complaint shall reasonably set forth the grounds for discipline with which the certificant or registrant is charged and the conduct or omission which gave rise to those charges. 7.2 Service of the Complaint � CFP Board staff shall promptly serve the Complaint upon the certificant or registrant either by personal service or by certified mail, return receipt requested, mailed to the last known address of the certificant or registrant or as provided in Article 17.2. 7.3 Answer � All Answers to Complaints must be in writing. The Answer must be submitted within twenty (20) calendar days from the date of service of the Complaint on the certificant or registrant. �The certificant or registrant will file an original of such Answer with CFP Board. �A copy of the Answer will be included with the materials provided to the Hearing Panel in advance of the hearing. In the Answer, the certificant or registrant shall respond to every material allegation contained in the Complaint. �In addition, the certificant or registrant must set forth in the Answer any defenses or mitigating circumstances. 7.4 Default and Orders of Revocation and Denial � If the certificant or registrant fails to file an Answer within the period provided by Article 7.4, such certificant or registrant shall be deemed to be in default, and the allegations set forth in the Complaint shall be deemed admitted.� In such circumstance, CFP Board Counsel shall serve upon the certificant or registrant, consistent with Article 7.3, an Order of Revocation or, in cases involving a candidate for certification, an Order of Denial. Such orders shall state clearly and with reasonable particularity the grounds for the revocation or denial of the certificant�s or registrant�s right to use the marks. These Orders are subject to the certificant�s or registrant�s right of appeal as outlined in Article 11. 7.5 Requests for Appearance � Upon the filing of an Answer, the certificant or registrant may request an appearance at the hearing before the Hearing Panel, at which the certificant or registrant may present arguments, witnesses and evidence on his/her behalf. Discovery and Evidence 8.1 Discovery � Discovery of a disciplinary case may be obtained only after a Complaint has been issued against a certificant or registrant. A certificant or registrant may obtain copies of all documents in the certificant�s or registrant�s disciplinary file which are not privileged and which are relevant to the subject matter in the pending action before the Hearing Panel. Requests for copies of CFP Board documents must be made to CFP Board Counsel in writing. � Release of information contained in a certificant�s or registrant�s disciplinary file is premised on the understanding that materials will be used only for purposes directly connected to the pending CFP Board action. 8.2 Documents � Documents submitted by certificants or registrants to the Commission for consideration in resolution of the issues raised during an investigation shall be limited to 100 pages. No evidence may be accepted less than thirty (30) days prior to the scheduled hearing, except by motion at the hearing. � Should a certificant or registrant deem it necessary to exceed the 100 page limit, the certificant or registrant shall be required to submit a written memorandum that outlines clearly and with reasonable particularity how each and every document submitted by the certificant or registrant or on his or her behalf relates to the allegations contained in the CFP Board Complaint. After reviewing such outline, the Commission shall determine which documents will be permitted. 8.3 Witnesses � Witnesses, if any, must be identified to CFP Board no later than forty-five (45) days prior to the scheduled hearing.� When witnesses are identified, the certificant or registrant must also state the nature and extent of the witnesses� testimony, as well as whether the witnesses will appear in person or via telephone. 8.4 Administrative Dismissal � If, upon receipt of a certificant�s or registrant�s Answer to the Complaint, new information becomes available that may warrant a dismissal of the case prior to review by a Hearing Panel, the Director of the Professional Review Department and the Chair of the Commission shall review all relevant materials and make such determination at that time. Hearings 9.1 Notice � Not less than thirty (30) calendar days before the date set for the hearing of a Complaint, notice of such hearing shall be given as provided in Article 17.2 to the certificant or registrant, or to the certificant�s or registrant�s counsel. The notice shall designate the date and place of the hearing and shall also advise the certificant or registrant that he/she is entitled to be represented by counsel at the hearing, to cross-examine witnesses and to present evidence on his/her behalf. 9.2 Designation of a Hearing Panel � All hearings on Complaints seeking disciplinary action against a certificant or registrant shall be conducted by the Hearing Panel. 9.3 Procedure and Proof � Hearings shall be conducted in conformity with such rules of procedure and evidence as established by the Hearing Panel. It shall not be necessary that rules of procedure and evidence applicable in a court of law are followed in any hearing, but the Hearing Panel may be guided by such rules to the extent it believes it is appropriate. Proof of misconduct shall be established by a preponderance of the evidence. A certificant or registrant may not be required to testify or to produce records over the objection of the certificant or registrant if to do so would be in violation of the certificant�s or registrant�s constitutional privilege against self-incrimination in a court of law. In the course of the proceedings, the Chair of the Hearing Panel shall have the power to require the administration of oath and affirmations. A complete record must be made of all testimony taken at hearings before the Hearing Panel. Report, Findings of Fact, and Recommendations 10.1 Hearing Panel � At the conclusion of the hearing, the Hearing Panel will record its findings of fact and recommendations and submit the findings and recommendations to the Commission for its consideration. �In making its recommendation, the Hearing Panel may take into consideration the certificant�s or registrant�s prior disciplinary record, if any. 10.2 Report of the Hearing Panel � The Hearing Panel shall report its findings and recommendations to the Commission. In this report, the Hearing Panel shall: (1) determine that the Complaint is not proved or that the facts as established do not warrant the imposition of discipline and recommend the Complaint be dismissed, either as without merit or with caution; or (2) refer the matter to the Commission with the recommendation that discipline by the Commission is appropriate. � The recommendation of the Hearing Panel shall state specifically the form of discipline the Hearing Panel deems appropriate. �The Hearing Panel may also recommend that the Commission enter other appropriate orders. 10.3 Power of the Commission � The Commission reserves the authority to review any determination made by the Hearing Panel in the course of a disciplinary or Practice Standards proceeding and to enter any order with respect thereto including an order directing that further proceedings be conducted as provided by these Procedures. The Commission shall review the report of the Hearing Panel and may either approve the report or modify it. The Commission must accept the Hearing Panel�s findings of fact, unless, on the basis of its own review of the record, it determines that such findings are clearly erroneous. The Commission may modify the Hearing Panel�s recommendation without reviewing the record and must state the reasons for the modification. Appeals � All appeals from orders of the Commission must be submitted to CFP Board�s Appeals Committee in accordance with the Rules and Procedures of the Appeals Committee. �If an order of the Commission is not appealed within thirty (30) calendar days after notice of the order is sent to the certificant or registrant, such order will become final. Conviction of a Crime or Professional Suspension 12.1 Proof of Conviction or Professional Suspension � Except as otherwise provided in these Procedures, a certificate from the clerk of any court of criminal jurisdiction indicating that a certificant or registrant has been convicted of a crime in that court or a letter or other writing from a governmental or industry self-regulatory authority to the effect that a certificant or registrant has been the subject of an order of professional suspension (as hereinafter defined) by such authority, will conclusively establish the existence of such conviction or such professional suspension for purposes of disciplinary proceedings and shall be conclusive proof of the commission of that crime or of the basis for such suspension, by the certificant or registrant. 12.2 Duty to Report Criminal Conviction or Professional Suspension � Every certificant or registrant, upon being convicted of a crime, except misdemeanor traffic offenses or traffic ordinance violations unless such offense involves the use of alcohol or drugs, or upon being the subject of professional suspension, shall notify CFP Board in writing of such conviction or suspension within ten (10) calendar days after the date on which the certificant or registrant is notified of the conviction or suspension. 12.3 Commencement of Disciplinary Proceedings Upon Notice of Conviction or Professional Suspension � Upon receiving notice that a certificant or registrant has been convicted of a crime (other than a serious crime) the CFP Board Counsel will commence an investigation. �If the conviction is for a serious crime or if a certificant or registrant is the subject of a professional suspension, CFP Board shall obtain the record of conviction or proof of suspension and file a Complaint against the certificant or registrant as provided in Article 7. If the certificant�s or registrant�s criminal conviction or professional suspension is either proved or admitted as provided herein, the certificant or registrant shall have the right to be heard by the Hearing Panel only on matters of rebuttal of any evidence presented by CFP Board Counsel other than proof of the conviction or suspension. 12.4 Conviction of Serious Crime or Professional Suspension - Immediate Suspension � Upon receiving notification of a certificant�s or registrant�s criminal conviction or professional suspension, CFP Board Counsel may, at its discretion, issue a notice to the convicted or suspended certificant or registrant directing that the certificant or registrant show cause why his/her right to use the marks should not be immediately suspended pursuant to Article 5. 12.5 Serious Crime Defined � The term serious crime as used in these rules shall include: (1) any felony; (2) any lesser crime, a necessary element of which as determined by its statutory or common law definition involves misrepresentation, fraud, extortion, misappropriation or theft; and/or (3) an attempt or conspiracy to commit such crime, or solicitation of another to commit such crime. 12.6 Definition of a Professional Suspension � A professional suspension as used herein shall include the suspension or bar as a disciplinary measure by any governmental or industry self-regulatory authority of a license as a registered securities representative, broker/dealer, insurance or real estate salesperson or broker, insurance broker, attorney, accountant, investment adviser or financial planner. Settlement Procedures � A certificant, registrant or CFP Board Counsel may propose an Offer of Settlement in lieu of a disciplinary hearing pursuant to these Procedures. �Submitting an Offer of Settlement will stay all proceedings conducted pursuant to these Procedures. 13.1 Offer of Settlement � Offers of Settlement may be made where the nature of the proceeding, and the interests of the public and CFP Board permit. �The Offer of Settlement must be in writing and must be submitted to CFP Board staff at least 30 days prior to the certificant�s or registrant�s scheduled disciplinary hearing. A Hearing Panel will consider the Offer and take one of the actions described in Articles 13.2 and 13.3. �The Hearing Panel will consider only one Offer of Settlement during the course of a disciplinary proceeding. �The Offer must be made in conformity with the provisions of this Article and should not be made frivolously or propose an action inconsistent with the seriousness of the violations alleged in the proceedings. �CFP Board Counsel may negotiate a proposed Offer of Settlement with the certificant or registrant and endorse the Offer of Settlement to the Hearing Panel. Only the Commission shall have final decision-making authority to accept or reject an Offer of Settlement. � Every Offer of Settlement must contain and describe in reasonable detail:
13.2 Acceptance of Offer � If an Offer of Settlement is accepted by a Hearing Panel, the decision of the Hearing Panel will be reviewed by the Commission. The Commission�s decision to affirm the decision of the Hearing Panel to accept the Offer of Settlement shall conclude the proceeding as of the date the Offer of Settlement is accepted. If the Offer of Settlement includes a penalty of revocation or suspension, the revocation or suspension shall become effective immediately upon acceptance by the Hearing Panel and affirmation by the Commission. 13.3 Rejection of Offer; Counter Offer � If the Offer of Settlement is rejected by a Hearing Panel, the Offer of Settlement shall be deemed void and the matters raised in the Complaint will be set for hearing at the next meeting of the Commission. The certificant or registrant shall not be prejudiced by the prior Offer of Settlement, and it shall not be given consideration in the determination of the issues involved in the pending or any other proceeding. � If the Hearing Panel deems it appropriate, it may make a Counter Settlement Offer to the certificant or registrant modifying the proposed findings of fact, violations and/or discipline. �If the Counter Settlement Offer is rejected by the certificant or registrant, the Offer of Settlement and Counter Settlement Offer shall be deemed void and the matters raised in the Complaint will be set for hearing at the next meeting of the Commission. �The certificant or registrant may not be prejudiced by the prior Offer of Settlement or the Counter Settlement Offer, and neither shall be given consideration in the determination of the issues involved in the pending or any other proceeding. 13.4 Publication � In the event proceedings pursuant to Article 13 result in a permanent revocation, or suspension, or otherwise result in a termination of the right to use the marks, it shall be standard procedure to publish such fact together with identification of the certificant or registrant in a press release, or in such other form of publicity as is selected by the Commission. Required Action after Revocation or Suspension � After the entry of an order of revocation or suspension is final, the certificant or registrant shall promptly terminate any use of the marks and in particular shall not use them in any advertising, announcement, letterhead or business card. Reinstatement after Discipline 15.1 Reinstatement after Revocation � Revocation shall be permanent, and there shall be no opportunity for reinstatement. 15.2 Reinstatement after Suspension � Unless otherwise provided by the Commission in its order of suspension, a certificant or registrant who has been suspended for a period of one (1) year or less shall be automatically reinstated upon the expiration of the period of suspension, provided the certificant or registrant files with CFP Board within thirty (30) calendar days of the expiration of the period of suspension an affidavit stating that the suspended certificant or registrant has fully complied with the order of suspension and with all applicable provisions of these Procedures, unless such condition is waived by the Commission in its discretion. �A certificant or registrant who has been suspended for a period longer than one (1) year must petition the Commission for a reinstatement hearing within six months of the end of his/her suspension, or failure to do so will result in administrative relinquishment. Before any reinstatement hearing will be scheduled, the certificant or registrant must meet all administrative requirements for recertification, pay the reinstatement hearing costs and provide evidence, if necessary, that all prior hearing costs have been paid. At the reinstatement hearing, the certificant or registrant must prove by clear and convincing evidence that the certificant or registrant has been rehabilitated, has complied with all applicable disciplinary orders and provisions of these Procedures, and that the certificant or registrant is fit to use the marks. 15.3 Investigation � Immediately upon receipt of a petition for reinstatement, CFP Board Counsel will initiate an investigation. The petitioner shall cooperate in any such investigation, and CFP Board Counsel shall submit a report of the investigation to the Commission which shall report on the petitioner�s past disciplinary record and any recommendation regarding reinstatement. 15.4 Successive Petitions � If an individual is denied reinstatement, he/she must wait two (2) years to again petition for reinstatement. The second petition must be received by CFP Board within six (6) months of the expiration of the two (2) year period, and failure to submit a second petition within this time period will result in the individual�s right to use the marks being administratively relinquished. If the second petition is denied, the individual�s right to use the marks shall be administratively relinquished. 15.5 Reinstatement Fee � Petitioners for reinstatement will be assessed the costs of the reinstatement proceeding. Confidentiality of Proceedings 16.1 Confidentiality � Except as otherwise provided in these Procedures, all proceedings conducted pursuant to these Procedures will be confidential and the records of the Commission, Hearing Panel, CFP Board Counsel and CFP Board staff shall remain confidential and shall not be made public. 16.2 Exceptions to Confidentiality � The pendency, subject matter and status of proceedings conducted pursuant to these Procedures may be disclosed if (1) the proceeding is predicated on criminal conviction or professional suspension as defined herein; or (2) the certificant or registrant has waived confidentiality; or (3) such disclosure is required by legal process of a court of law or other governmental body or agency having appropriate jurisdiction; or (4) in proceedings involving a consumer, CFP Board staff contacts the consumer and/or the certificant�s or registrant�s current and/or former employer to request documents relevant to the proceeding. General Provisions 17.1 Quorum � A majority of members of the Commission shall be present in order to constitute a quorum of such Commission, and the approval of a majority of the quorum shall be the action of such Commission. 17.2 Notice and Service � Except as may otherwise be provided in these Procedures, notice shall be in writing and the giving of notice and/or service shall be sufficient when made either personally or by certified mail or overnight mail sent to the last known address of the certificant or registrant according to the records of CFP Board. 17.3 Costs � In all disciplinary cases wherein a hearing is convened, the Commission will assess against the certificant or registrant the costs of the proceedings. In addition, a certificant or registrant who desires an appearance, whether telephonically or in person, or who submits an Offer of Settlement pursuant to Article 13, will be required to submit hearing costs not less than thirty (30) days prior to the date of the scheduled hearing. In the event that the hearing results in a dismissal without merit, the hearing costs shall be refunded to the certificant or registrant. � Hearing costs will not be refunded if the hearing results in any action other than a dismissal without merit. �A certificant or registrant who petitions for reinstatement from a suspension or revocation or who petitions for appeal must bear the costs of that proceeding. Financial hardship ��In the event a certificant or registrant is unable to pay the required hearing costs due to financial hardship, the certificant or registrant may submit a written statement explaining his or her financial situation and request a deferral, reduction or waiver of the hearing costs. Upon receipt and review of such request, CFP Board Counsel shall have the discretion to defer, reduce or waive the required hearing costs. All written requests for a reduction or waiver of hearing costs due to financial hardship must be submitted at least forty-five (45) days prior to the date of the scheduled hearing. 17.4 Electronic Signature � Some documents that require a handwritten signature may be submitted electronically through CFP Board�s closed Web site. Any document received by CFP Board through this process shall constitute conclusive proof that:
Anonymous Case Histories � Anonymous case histories are available upon request to CFP Board. Candidate Fitness Standards � CFP Board has established specific character and fitness standards for candidates for certification to ensure an individual�s conduct does not reflect adversely upon the profession or the CFP� certification marks. �CFP Board determined that such standards would also benefit individuals who are interested in attaining CFP� certification, as many candidates have indicated that if they had known that their prior conduct would bar or delay their certification, they would not have sat for the CFP� Certification Examination. � These standards became effective January 1, 2007. � The following conduct is unacceptable and will always bar an individual from becoming certified:
� The following conduct is presumed to be unacceptable and will bar an individual from becoming certified unless the individual petitions the Disciplinary and Ethics Commission for reconsideration:
� Other matters that very rarely result in the delay or denial of certification will continue to be reviewed by staff and the Disciplinary and Ethics Commission under the current procedures, after the candidate has successfully completed the education, examination and experience requirements for certification. These include customer complaints, arbitrations and other civil proceedings, felony convictions for non-violent crimes that occurred more than five years ago, misdemeanor convictions, and employer reviews and terminations. CFP Board will continue to require candidates for CFP� certification to disclose certain matters on the ethics portion, i.e., the Declaration Page, of the Initial Certification Application. Petitions for Reconsideration � Individuals who have a transgression that falls under the �presumption� list must petition the Disciplinary and Ethics Commission for reconsideration and a determination whether their conduct will bar certification. The basic process for these reviews will be:
� The Disciplinary and Ethics Commission may make one of the following decisions regarding a petition for reconsideration: � Grant the petition after determining the conduct does not reflect adversely on the individual�s fitness as a candidate for CFP� certification, or upon the profession or the CFP� certification marks, and certification should be permitted; or � Deny the petition after determining the conduct does reflect adversely on the individual�s fitness as a candidate for CFP� certification, or upon the profession or the CFP� certification marks, and certification should be barred. � The Disciplinary and Ethics Commission�s decision regarding a petition for reconsideration is final and may not be appealed, unless the relevant professional revocation or suspension is vacated or the relevant felony conviction is overturned, at which time the individual may submit a new petition. Rev. 2010/01 1425 K Street, NW, Suite 500, Washington, DC 20005 Telephone: 800-487-1497 FAX: 202-379-2299 Email: Website: www.CFP.net Learn more about CFP Board�s Standards of Professional Conduct at: www.CFP.net/standards United Insurance Educators, Inc. www.uiece.com Email: (253) 846-1155 What exists when a CFP professional performs any type of mutually agreed upon financial planning service for a client?a “financial planning engagement” exists when a certificant performs any type of mutually agreed upon financial planning service for a client.
Which principle in the CFP Board's code of ethics requires disclosing conflicts of interest?Principle 4 – Fairness: Be fair and reasonable in all professional relationships. Disclose conflicts of interest. Principle 5 – Confidentiality: Protect the confidentiality of all client information.
What are the seven CFP Board principles?The CFP Board also enforces and governs the code of ethics and conduct throughout the financial planning industry. There are seven major principles each financial planner must follow: integrity, objectivity, competence, fairness, confidentiality, professionalism, and diligence.
Which activity that takes place during the financial planning process is generally the most demanding?Determining the client's financial status is the most demanding part of the financial planning process.
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Which of the following are Integration factors that show that a Financial Planning Engagement exists
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