CFP® Certificants in the News
True or False?
What does CFP Board have to say and where do they say it? We look to Standard of Conduct 5.a for those answers.
“When providing Financial Advice, a CFP® professional must make full [emphasis added] disclosure of all Material [emphasis added] Conflicts of Interest with the CFP® professional’s Client that could affect the professional relationship.
- This obligation requires the CFP® professional to provide the Client with sufficiently specific facts so that a reasonable Client would be able to understand the CFP® professional’s Material Conflicts of Interest and the business practices that give rise to the conflicts and give informed consent to such conflicts or reject them.
- A sincere belief by a CFP® professional with a Material Conflict of Interest that he or she is acting in the best interests of the Client is insufficient [emphasis added] to excuse failure to make full disclosure.”
The following case study brings the intensity of the disclosure requirements into sharper focus:
The preceding case study is a powerful insight into CFP Board’s conflict of interest disclosures. The savvy CFP Board examinee should err on the side caution; when in doubt, it’s probably material. If it’s material, it must either be avoided or fully disclosed by the certificant, agreed to by the client, and managed on an ongoing basis by the participant.
Stay tuned next month as we continue unpacking the Code and Standards.