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Professional Standards & Competencies Flashcards

7 cards from real CFP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Professional Standards & Competencies flashcards as text

  1. A CFP® professional is asked to provide a second opinion on a financial plan prepared by a competitor. What is the MOST appropriate approach?

    Answer: Agree to provide the opinion and, if material deficiencies are found, ensure the client understands them clearly

    Providing a second opinion is a legitimate service; the CFP® professional must be objective and clearly communicate any material deficiencies found in the existing plan.

  2. CFP Board's experience requirement for initial certification can be met through:

    Answer: Either 6,000 hours of professional experience through the Standard Pathway or 4,000 hours through the Apprenticeship Pathway

    CFP Board offers two pathways: the Standard Pathway (6,000 hours of professional experience) or the Apprenticeship Pathway (4,000 hours under direct supervision of a CFP® professional).

  3. A CFP® professional who also holds a securities license receives both a planning fee and a commission on an implemented product recommendation. This is:

    Answer: Permissible if the compensation arrangement is fully disclosed to the client and the advice remains in the client's best interest

    Dual compensation (fees and commissions) is permissible under CFP Board's Standards provided all compensation is fully disclosed and the advice remains in the client's best interest.

  4. Which of the following activities counts as a 'material element of financial planning' triggering CFP Board's Standards?

    Answer: Helping a specific client develop a tax strategy that integrates with their retirement and estate goals

    Providing integrated, individualized advice that addresses multiple planning areas for a specific client constitutes a material element of financial planning and triggers CFP Board's Standards.

  5. CFP Board's Fitness Standards include which of the following as a basis for permanent bar from CFP® certification?

    Answer: Felony conviction for theft, embezzlement, or other financial crimes

    Felony convictions for theft, embezzlement, fraud, or other financial crimes are listed among the grounds for permanent bar from CFP® certification under CFP Board's Fitness Standards.

  6. The 'diligence' principle in CFP Board's Code of Ethics requires a CFP® professional to:

    Answer: Provide professional services in a prompt, thorough, and careful manner

    Diligence requires that CFP® professionals provide their services in a timely, thorough, and careful manner, ensuring client matters receive appropriate attention and follow-through.

  7. A CFP® professional's client dies. The professional's obligation regarding the deceased client's records is to:

    Answer: Retain client records for the period required by applicable law and regulatory requirements

    CFP® professionals must retain client records for the time period specified by applicable federal and state laws and any regulatory requirements, even after a client's death.