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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 prospective client asks a CFP® professional whether their planning recommendations are independent. The planner receives revenue-sharing payments from one fund family. The planner should:

    Answer: Disclose the revenue-sharing arrangement and explain how it may influence recommendations

    Revenue-sharing arrangements are a form of compensation that can create a conflict of interest and must be disclosed so the client can make an informed assessment of the planner's independence.

  2. CFP Board's continuing education requirement for active certificants is:

    Answer: 30 hours every two years, including 2 hours of CFP Board-approved ethics education

    CFP® certificants must complete 30 hours of CE every two-year reporting period, which must include at least 2 hours of CFP Board-approved ethics education.

  3. When a CFP® professional terminates a client relationship, which action is MOST consistent with CFP Board's Standards?

    Answer: Provide the client with reasonable notice, complete any urgent work in progress, and facilitate an orderly transition

    Upon terminating a relationship, the CFP® professional must provide reasonable notice, complete any urgent in-progress work, and support an orderly transition to protect the client's interests.

  4. A CFP® professional using the title 'Wealth Manager' in marketing materials is:

    Answer: Permitted to use the title provided it is not misleading and the CFP® marks are also displayed accurately

    CFP® certificants may use additional professional titles provided the titles are not misleading and do not imply credentials or qualifications the professional does not hold.

  5. The financial planning practice standard requiring the CFP® professional to 'select and present the financial planning recommendation(s)' includes which element?

    Answer: Presenting recommendation(s) in a manner the client can understand, with sufficient information to make an informed decision

    The presentation standard requires that recommendations be communicated clearly and completely, enabling the client to understand the basis for the advice and make an informed decision.

  6. A CFP® professional is asked to testify as an expert witness in a financial dispute. They may:

    Answer: Serve as an expert witness provided they are competent in the relevant area and remain objective

    Acting as an expert witness is a legitimate professional activity; the CFP® professional must be competent in the relevant subject matter and maintain objectivity regardless of which party retained them.

  7. Which of the following MOST accurately describes the relationship between CFP Board's Standards and applicable federal and state laws?

    Answer: CFP Board's Standards may impose higher obligations than law; when they conflict, the stricter standard generally applies

    CFP Board's Standards often impose obligations beyond what law requires; certificants must comply with both, and where they conflict, the higher standard (typically CFP Board's) governs.