As stated in Part I - Principles, the Principles apply to all CFP Board designees. However, 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. The universe of activities engaged in by a CFP Board designee is indeed diverse and a particular CFP Board designee may be performing all, some or none of the typical services provided by financial planning professionals. As a result, in considering the following Rules, a CFP Board designee must first recognize what specific services he or she is rendering and then determine whether or not a specific Rule is applicable to those services. To assist the CFP Board designee in making these determinations, the Standards of Professional Conduct includes a series of definitions of terminology (see page 2) used throughout the Code of Ethics. Based upon these definitions, a CFP Board designee should be able to determine which services he or she provides and, therefore, which Rules are applicable to those services.

Rules that Relate to the Principle of Integrity

Rule 2.1

A certificant shall not communicate, directly or indirectly, to clients or prospective clients any false or misleading information directly or indirectly related to the certificant’s professional qualifications or services. A certificant shall not mislead any parties about the potential benefits of the certificant’s service. A certificant shall not fail to disclose or otherwise omit facts where that disclosure is necessary to avoid misleading clients.

Rule 4.1

A certificant shall treat prospective clients and clients fairly and provide professional services with integrity and objectivity.

Rule 1.3

If the services include financial planning or material elements of the financial planning process, the certificant or the certificant’s employer shall enter into a written agreement governing the financial  lanning services (“Agreement”). The Agreement shall specify:

a. The parties to the Agreement,

b. The date of the Agreement and its duration,

c. How and on what terms each party can terminate the Agreement, and

d. The services to be provided as part of the Agreement.

The Agreement may consist of multiple written documents. Written documentation that includes the elements above and is used by a certificant or certificant’s employer in compliance with state and/or federal law, or the rules or regulations of any applicable self-regulatory organization, such as a Form ADV or other disclosure, shall satisfy the requirements of this Rule.

Rule 1.4

A certificant shall at all times place the interest of the client ahead of his or her own. When the certificant provides financial planning or material elements of the financial planning process, the certificant owes to the client the duty of care of a fiduciary as defined by CFP Board.

Rule 3.2

A certificant shall take prudent steps to protect the security of information and property, including the security of stored information, whether physically or electronically, that is within the certificant’s control.

Rule 3.4

A certificant shall clearly identify the assets, if any, over which the certificant will take custody, or exercise investment discretion, or exercise supervision.

Rule 3.5

A certificant shall 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.

Rule 3.8

A certificant shall 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.

Rule 3.9

A certificant shall not commingle a client’s property with other clients’ property unless the commingling is permitted by law or the certificant has both explicit written authorization to do so from each client involved and without sufficient record-keeping to track each client’s assets accurately.

 

 



 

 



Part 2 - Rules Relating to the Principle of Objectivity and Competence

Related Articles
  1. Financial Advisor

    The Basics Of CFP Designation Maintenance

    The workload doesn't end with your exam. Find out how to keep up your CFP credential.
  2. Financial Advisor

    Why Financial Advisors Need To Earn The CFP Mark

    The CFP designation is heavily favored by both the finanical and the mainstream media and offers a wealth of benefits for certificants.
  3. Financial Advisor

    Three Surefire Ways to Lose Your CFP Designation

    The CFP Board of Standards regularly disciplines advisors for sidestepping the rules. Here are three recent examples to learn from.
  4. Financial Advisor

    Hiring a Financial Advisor? Look for the CFP Label

    Don’t skimp on the CFP designation. Here's why those three letters show that someone is qualified in financial and investment planning.
  5. Financial Advisor

    The CFP Board: Its Role and Mission

    The Certified Financial Planner Board of Standards promotes standards and ethics in financial planning and enforces CFP certification requirements.
  6. Professionals

    Designations No Retirement Planner Should Be Without

    Advance your career and gain clientele by adding a few choice certifications.
  7. Financial Advisor

    How the CFP Board Will Help You Land a Job

    The CFP Board's new online career portal aims to bridge the gap between financial advisors and employers.
  8. Financial Advisor

    Manage Your Clients' Expectations

    You can't control how they react to the market, but you can help them understand the reality of the situation.
  9. Financial Advisor

    How Advisors Can Win with the New Fiduciary Rule

    Advisors would be wise to use the change in fiduciary rules to educate clients on the value of the advice they provide. Here are some tips.
  10. Financial Advisor

    Planners: New DoL Rule Won't Require Much Change

    Financial experts are all atwitter about what to expect with the DoL's new fiduciary bill. As of now, here's what planners can expect to see with the bill.
Trading Center