CIC Professional Qualifications and Integrity 2 — Questions and Answers
Question 1: A CIC candidate discovers that a colleague submitted falsified continuing education credits. What is the candidate's primary obligation under professional integrity standards?
- Ignore it to avoid workplace conflict
- Report the violation to the appropriate credentialing authority (Correct answer)
- Confront the colleague privately and take no further action
- Resign from the firm to avoid association
Correct answer: Report the violation to the appropriate credentialing authority
CIC holders are obligated to report known violations of professional standards to protect the integrity of the designation.
Question 2: Which of the following best describes the 'fit and proper' requirement for CIC designation holders?
- Passing a physical fitness assessment annually
- Demonstrating ongoing financial soundness, competence, and ethical conduct (Correct answer)
- Maintaining a net worth above a specified threshold
- Holding a minimum of five years of investment experience at all times
Correct answer: Demonstrating ongoing financial soundness, competence, and ethical conduct
The 'fit and proper' standard encompasses financial soundness, professional competence, and ethical behavior throughout a credential holder's career.
Question 3: A CIC holder is asked to provide a client reference letter for a colleague seeking a new position. The CIC holder knows the colleague had a past client complaint that was resolved. What should the holder do?
- Decline to write the letter rather than provide a misleading endorsement (Correct answer)
- Write a fully positive letter omitting the complaint since it was resolved
- Contact the prospective employer anonymously with the complaint details
- Write the letter but include only vague praise to avoid liability
Correct answer: Decline to write the letter rather than provide a misleading endorsement
If the CIC holder cannot provide a complete and honest reference, declining is the appropriate ethical choice.
Question 4: Under CIC standards, how should a designee handle a situation where firm policy conflicts with the CIC Code of Ethics?
- Always follow firm policy because it is legally binding
- Follow the CIC Code of Ethics, which sets the higher standard (Correct answer)
- Seek a compromise that partially satisfies both requirements
- Resign immediately from the firm
Correct answer: Follow the CIC Code of Ethics, which sets the higher standard
When firm policy falls below the CIC Code of Ethics, the designee must adhere to the higher ethical standard.
Question 5: Which action would most likely result in revocation of the CIC designation?
- Filing a personal bankruptcy due to medical bills
- Changing employers without notifying the credentialing body within 30 days
- Conviction for securities fraud (Correct answer)
- Failing to update a client's risk profile for two years
Correct answer: Conviction for securities fraud
A conviction for securities fraud directly undermines professional integrity and is grounds for permanent revocation of the CIC designation.
Question 6: A CIC designee uses a social media post to claim expertise in derivatives trading that they do not actually possess. This primarily violates which professional standard?
- Continuing education requirements
- Misrepresentation and honesty standards (Correct answer)
- Client confidentiality rules
- Recordkeeping obligations
Correct answer: Misrepresentation and honesty standards
Claiming expertise one does not possess constitutes misrepresentation, a core violation of professional honesty and integrity standards.
Question 7: What is the purpose of a CIC designee disclosing potential conflicts of interest to clients?
- To satisfy a regulatory filing requirement only
- To enable clients to make informed decisions with full knowledge of the advisor's interests (Correct answer)
- To protect the advisor from malpractice lawsuits
- To comply with firm marketing guidelines
Correct answer: To enable clients to make informed decisions with full knowledge of the advisor's interests
Conflict-of-interest disclosure empowers clients to evaluate advice objectively and preserves the trust fundamental to the advisory relationship.
CIC Professional Qualifications and Integrity 2
A CIC candidate discovers that a colleague submitted falsified continuing education credits.
What is the candidate's primary obligation under professional integrity standards?