CFP Professional Standards & Competencies 4

Question 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?

Accepted Answer

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

Answer

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.

Question 2

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

Accepted Answer

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

Answer

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).

Question 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:

Accepted Answer

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

Answer

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.

Question 4

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

Accepted Answer

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

Answer

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.

Question 5

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

Accepted Answer

Felony conviction for theft, embezzlement, or other financial crimes

Answer

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.

CFP - Certified Financial Planner Practice Test

CFP - Certified Financial Planner Practice Test

CFP Professional Standards & Competencies 4