AFC Financial Counseling Principles & Ethics 5 — Questions and Answers
Question 1: A financial counselor receives a subpoena for a client's records. What should the counselor do first?
- Immediately send the requested records to the court
- Consult with legal counsel before releasing any records (Correct answer)
- Notify the client and destroy the records
- Refuse the subpoena on confidentiality grounds alone
Correct answer: Consult with legal counsel before releasing any records
A subpoena is a legal order that may compel disclosure, so consulting legal counsel first ensures proper compliance while protecting both counselor and client.
Question 2: Which situation would ethically require a financial counselor to break client confidentiality without consent?
- A client admits to overspending their budget
- A client reveals plans to defraud their employer (Correct answer)
- A client discloses past bankruptcy filings
- A client expresses frustration with their spouse
Correct answer: A client reveals plans to defraud their employer
Planned fraud that could harm third parties may create a duty to warn or report, overriding standard confidentiality protections.
Question 3: What does 'informed consent' require a financial counselor to explain before beginning services?
- Only the counselor's fee structure
- The counseling process, limits of confidentiality, counselor credentials, and client rights (Correct answer)
- Only the expected number of sessions
- A guarantee of financial outcomes
Correct answer: The counseling process, limits of confidentiality, counselor credentials, and client rights
Informed consent is a comprehensive disclosure that ensures clients understand what counseling involves, its limitations, and their rights before agreeing to participate.
Question 4: How should an AFC counselor handle a situation where their personal religious beliefs conflict with a client's financial goals (e.g., the client wants to use credit cards)?
- Refuse to work with clients who use credit
- Share their beliefs and allow the client to decide
- Set aside personal beliefs and provide objective, client-centered counseling (Correct answer)
- Lecture the client about responsible alternatives
Correct answer: Set aside personal beliefs and provide objective, client-centered counseling
Professional objectivity requires counselors to separate personal values from client service and provide non-judgmental, client-centered guidance.
Question 5: An AFC counselor is approached by a mortgage company offering payment for client referrals. What is the ethical response?
- Accept if the referral fee is disclosed to clients (Correct answer)
- Accept only if the mortgage company is reputable
- Decline, as undisclosed referral fees violate fee transparency standards
- Accept if the payment is below a certain threshold
Correct answer: Accept if the referral fee is disclosed to clients
Referral arrangements are only ethically permissible when they are fully disclosed to clients so they can make informed decisions about whether to follow the referral.
Question 6: A client who was previously counseled contacts their former AFC for personal advice at a social event. What ethical boundary applies?
- Former clients have no protected relationship, so advice is fine
- Post-termination relationships require the same care as active counseling relationships (Correct answer)
- Brief social advice is always appropriate after termination
- Only financial advice is restricted; personal advice is allowed
Correct answer: Post-termination relationships require the same care as active counseling relationships
Professional boundaries and confidentiality obligations extend beyond formal termination of the counseling relationship.
Question 7: When a financial counselor documents client sessions, what is the primary ethical reason for maintaining accurate records?
- To meet tax documentation requirements
- To support continuity of care, accountability, and client protection (Correct answer)
- To create billable evidence for fee disputes
- To comply with marketing research requirements
Correct answer: To support continuity of care, accountability, and client protection
Accurate documentation serves the client's best interest by ensuring consistent, accountable service and providing a record that protects both client and counselor.
AFC Financial Counseling Principles & Ethics 5
A financial counselor receives a subpoena for a client's records.
What should the counselor do first?