Financial Planning: Process and Rules - Code of Ethics and Professional Responsibility
I.PREAMBLE AND APPLICABILITY
The Code of Ethics and Professional Responsibility (Code of Ethics) has been adopted by Certified Financial Planner Board of Standards Inc. (CFP Board) to provide principles and rules to all persons whom it has recognized and certified to use the CFP®, CERTIFIED FINANCIAL PLANNER™ and certification marks (collectively "the marks"). CFP Board determines who is certified, and thus authorized, to use the marks. Implicit in the acceptance of this authorization is an obligation not only to comply with the mandates and requirements of all applicable laws and regulations, but also to take responsibility to act in an ethical and professionally responsible manner in all professional services and activities.
For purposes of this Code of Ethics, a person recognized and certified by CFP Board to use the marks is called a CFP Board designee. This Code of Ethics applies to CFP Board designees actively involved in the practice of personal financial planning, in other areas of financial services, in industry, in related professions, in government, in education or in any other professional activity in which the marks are used in the performance of professional responsibilities. This Code of Ethics also applies to candidates for the CFP® certification who are registered as such with CFP Board. For purposes of this Code of Ethics, the term CFP Board designee shall be deemed to include current certificants, candidates and individuals who have been certified in the past and retain the right to reinstate their CFP certification without passing the current CFP® Certification Examination.
II.COMPOSITION AND SCOPE
The Code of Ethics consists of two parts: Part I - Principles and Part II - Rules. The Principles are statements expressing in general terms the ethical and professional ideals that CFP Board designees are expected to display in their professional activities. As such, the Principles are aspirational in character, but are intended to provide a source of guidance for CFP Board designees. The comments following each Principle further explain the meaning of the Principle. The Rules in Part II provide practical guidelines derived from the tenets embodied in the Principles. As such, the Rules describe the standards of ethical and professionally responsible conduct expected of CFP Board designees in particular situations. This Code of Ethics does not undertake to define standards of professional conduct of CFP Board designees for purposes of civil liability.
Due to the nature of a CFP Board designee's particular field of endeavor, certain Rules may not be applicable to that CFP Board designee's activities. For example, a CFP Board designee who is engaged solely in the sale of securities as a registered representative is not subject to the written disclosure requirements of Rule 402 (applicable to CFP Board designees engaged in personal financial planning) although he or she may have disclosure responsibilities under Rule 401. A CFP Board designee is obligated to determine what responsibilities he or she has in each professional relationship including, for example, duties that arise in particular circumstances from a position of trust or confidence that a CFP Board designee may have. The CFP Board designee is obligated to meet those responsibilities.
The Code of Ethics is structured so that the presentation of the Rules parallels the presentation of the Principles. For example, the Rules which relate to Principle 1 - Integrity are numbered in the 100 to 199 series, while those Rules relating to Principle 2 - Objectivity are numbered in the 200 to 299 series.
CFP Board requires adherence to this Code of Ethics by all CFP Board designees. Compliance with the Code of Ethics, individually and by the profession as a whole, depends on each CFP Board designee's knowledge of and voluntary compliance with the Principles and applicable Rules, on the influence of fellow professionals and public opinion, and on disciplinary proceedings, when necessary, involving CFP Board designees who fail to comply with the applicable provisions of the Code of Ethics.