CFP Technology & Digital Applications 4

Question 1

A CFP practice wants to implement a CRM system. Which feature is MOST critical for regulatory compliance?

Accepted Answer

Detailed audit trail logging of all client communications and data changes

Answer

Regulators require advisers to maintain records of client communications and data modifications, making an immutable audit trail the most compliance-critical CRM feature.

Question 2

What is the primary purpose of a client portal in a digital financial planning practice?

Accepted Answer

To provide clients secure, 24/7 access to their financial documents, account data, and plan updates

Answer

A client portal centralizes secure document exchange and plan visibility, enhancing transparency and client engagement without replacing the advisory relationship.

Question 3

Which regulatory body issued guidance specifically addressing investment adviser use of social media for client communications?

Accepted Answer

The SEC, through no-action letters and guidance on electronic recordkeeping

Answer

The SEC has issued guidance and no-action letters clarifying how investment advisers must archive and supervise social media communications to meet recordkeeping rules.

Question 4

A CFP discovers that a client's employer 401(k) platform offers a brokerage window. What technology risk should the advisor highlight?

Accepted Answer

Clients may access complex products without adequate guidance, increasing the risk of unsuitable investments

Answer

Brokerage windows open the full market to retirement plan participants, but without professional guidance they may select high-risk or complex products ill-suited to their goals.

Question 5

What does 'data portability' mean in the context of a client leaving one financial planning firm for another?

Accepted Answer

The client has the right to obtain their personal financial data in a usable electronic format to transfer to a new adviser

Answer

Data portability means clients can request their financial data in a machine-readable format, facilitating smooth transitions between advisers and platforms.

CFP - Certified Financial Planner Practice Test

CFP - Certified Financial Planner Practice Test

CFP Technology & Digital Applications 4