CE Offering Presented by Brett R. Danko, CFP®, CRPC®

CFP BOARD STANDARDS OF PROFESSIONAL CONDUCT ETHICS CE PRESENTATION

CE Offering Presented by

Brett R. Danko, CFP®, CRPC®

Today’s Schedule10:00 – 10:05 a.m. - Welcome/Overview10:05 – 10:10 a.m. – Review of Learning Objectives10:10 – 10:25 a.m. – Overview of Financial Planning (definition, material

elements and process, subject areas)10:25 – 10:30 a.m. - Review of Updated Fitness Standards for Candidates

and Registrants10:30 – 10:35 a.m. – Use of Marks / Terminology10:35 – 10:45 a.m. – Review of Code of Ethics and Professional

Responsibility/Rules of Conduct10:45 – 10:50 a.m. – Required Elements of a Written Agreement10:50 – 10:55 a.m. – Disclosure Requirements10:55 – 11:00 a.m. – Elements and Applications of the Fiduciary Standard11:00 – 11:10 a.m. – Break11:10 – 11:35 a.m. – Detailed Review of Financial Planning Process and

Related Practice Standards Including Detailed Focus on Standards 200-1 and 200-2

11:35 – 12:00 p.m. – Discussion of Anonymous Case Histories12:00 p.m. – Questions/Wrap -up

Overview

This 2 hour program satisfies CFP Board requirements for mandatory Ethics Continuing Education.

Following successful completion of the program, Brett Danko, LLC will report your course completion information to CFP Board.

Please be sure you sign in and sign out.

Please be sure all of your contact information, CFP Certificant number and Last 4 digits of your SSN are listed correctly on your participant form.

Please complete a course evaluation form before you leave today.

Overview Certified Financial Planner Board of Standards, Inc. (CFP Board) is a

regulatory organization founded in 1985 to benefit the public by establishing and enforcing education, examination experience and ethics requirements for CFP® certificants.^

CFP Board has exclusive authority to determine who may use the CFP® , CERTIFIED FINANCIAL PLANNERTM and certification marks (the CFP ® marks) in the United States.^

CFP Board conditions the permissions it grants individuals to use these marks on their agreement to abide by certain terms and conditions specified by CFP Board.^

Today’s seminar will provide an overview of the Standards of Professional Conduct including the Code of Ethics and Professional Responsibility, an in depth discussion of one of CFP Board’s practice standards and discussion of CFP Board-released Anonymous Case Histories.

^Source – CFP Board website

Learning Objectives

Upon completion of this program participants will be able to:

1. Demonstrate an understanding of, and be able to define financial planning, the financial planning process and financial planning subject areas.

2. Describe the material elements of financial planning.

3. Determine if a CFP® professional is providing financial planning or material elements of financial planning.

4. Demonstrate an understanding of the required elements of a written agreement when financial planning services are provided.

5. Articulate disclosure requirements and apply disclosure requirements to their practices.

6. Define and outline elements of the fiduciary standard and know when it applies.

7. Demonstrate an understanding of the Standards of Professional Conduct including the Code of Ethics and Professional Responsibility and Candidate Fitness Standards

Financial Planning

Also referred to as personal financial planning

The process of determining whether and how an individual can meet life goals through the proper management of financial resources

Financial planning is an integrated process focused on certain subject areas and material elementsCFP Board's Code of Ethics and Professional Responsibility, Rules of Conduct, Financial Planning Practice Standards, Fitness Standards for Candidates and Registrants

and Anonymous Case Histories are the property of CFP Board and may not be resold, republished or copied without the prior consent of CFP Board. Copyright© 2012 Certified Financial Planner Board of Standards, Inc. All rights reserved. Reproduced with permission.

How do we know when a certificant is providing the Material Elements of Financial Planning?

Factors to consider: What is the client’s understanding and intent

in engaging the certificant?

To what degree are multiple financial planning subject areas involved?

How comprehensive is the data gathering?

What is the breadth and depth of the recommendations?

CFP Board's Code of Ethics and Professional Responsibility, Rules of Conduct, Financial Planning Practice Standards, Fitness Standards for Candidates and Registrants and Anonymous Case Histories are the property of CFP Board and may not be resold, republished or copied without the prior consent of CFP Board. Copyright© 2012

Certified Financial Planner Board of Standards, Inc. All rights reserved. Reproduced with permission.

An Overview of the Financial Planning Process

This process typically includes, but is not limited to, some or all of the following six steps:

1. Establishing and defining the client-planner relationship.

2. Gathering client data including goals

3. Analyzing and evaluating the client’s current financial status

4. Developing and presenting recommendations and/or alternatives

5. Implementing the recommendations

6. Monitoring the recommendationsCFP Board's Code of Ethics and Professional Responsibility, Rules of Conduct, Financial Planning Practice Standards, Fitness Standards for Candidates and Registrants and Anonymous Case Histories are the property of CFP Board and may not be resold, republished or copied without the prior consent of CFP Board. Copyright© 2012 Certified

Financial Planner Board of Standards, Inc. All rights reserved. Reproduced with permission.

Financial Planning Subject Areas

The following basic subjects are typically included in the financialplanning process:

Financial statement preparation and analysis (including cash flow analysis/planning and budgeting)

Insurance planning and risk management

Employee benefits planning

Investment planning

Income tax planning

Retirement planning

Estate planningCFP Board's Code of Ethics and Professional Responsibility, Rules of Conduct, Financial Planning Practice Standards, Fitness Standards for Candidates and Registrants and Anonymous Case Histories are the property of CFP Board and may not be resold, republished or copied without the prior consent of CFP Board. Copyright© 2012

Certified Financial Planner Board of Standards, Inc. All rights reserved. Reproduced with permission.

Updated Fitness Standards for Candidates and Registrants

Established by CFP Board to ensure that a candidate’s prior conduct would not reflect poorly on the profession or the CFP® marks.

Additionally, serves as notice to individuals interested in pursuing CFP® certification that certain conduct may prevent them from attaining the certification or may require individual petition and review by the Disciplinary and Ethics Commission

CFP Board's Code of Ethics and Professional Responsibility, Rules of Conduct, Financial Planning Practice Standards, Fitness Standards for Candidates and Registrants and Anonymous Case Histories are the property of CFP Board and may not be resold, republished or copied without the prior consent of CFP Board. Copyright© 2012 Certified


Updated Fitness Standards for Candidates and Registrants

Conduct Deemed Unacceptable

Conduct Deemed a Presumptive Bar

Petitioning the Disciplinary and Ethics Commission. Results in one of the following outcomes: Grant Deny – but may re-apply Deny



Guide to Use of the CFP® Certification Marks

Please refer to the “Guide” in your handouts for a discussion of CFP Board’s guidelines

1. Rules for Proper Usage of the CFP® Mark2. Rules for Proper Usage of the CERTIFIED FINANCIAL

PLANNERTM Mark3. Rules for Proper Usage of the Mark4. Using CFP Board’s Tagline

When in doubt – check with CFP Board’s trademark department [email protected]



Terminology

CFP Board Candidate for CFP

Certification Certificant Certificant’s Employer Client Commission Compensation Conflict of interest Fee-Only Fiduciary

Financial planning engagement

Financial planning practitioner

Personal financial planning or financial planning

Personal financial planning process or financial planning process

Personal financial planning subject areas or financial planning subject areas

Registrant



Code of Ethics and Professional Responsibility

Purpose – to establish the highest principles and standards.

Expresses the ethical and professional ideals certificants and registrants are expected to display in their professional activities.

Seven Principles form the basis of the Rules of Conduct



Rules of Conduct

Binding on all certificants regardless of title, type of employment, position or method of compensation.

Govern all those who have the right to use the CFP® marks , whether or not the marks are actually used.

Due to the wide variety of services performed by certificants, some of the rules may not be applicable. It is incumbent upon the certificant to be knowledgeable about and adherent to the rules that apply to the services they provide.CFP Board's Code of Ethics and Professional Responsibility, Rules of Conduct, Financial Planning Practice Standards, Fitness Standards for Candidates and Registrants and

Anonymous Case Histories are the property of CFP Board and may not be resold, republished or copied without the prior consent of CFP Board. Copyright© 2012 Certified Financial Planner Board of Standards, Inc. All rights reserved. Reproduced with permission.

Rules of Conduct

1. Defining the Relationship with the Prospective Client or Client

2. Information Disclosed To Prospective Clients and Clients

3. Prospective Client and Client Information and Property

4. Obligations to Prospective Clients and Clients

5. Obligations to Employers

6. Obligations to CFP Board



Required Elements of a Written Agreement

The parties to the Agreement

The date of the Agreement and its duration

How and on what terms each party can terminate the Agreement

The services to be provided as part of the Agreement



Disclosure Requirements

What must be disclosed to clients?

An accurate and understandable description of the compensation arrangements offered.

A general summary of the likely conflicts of interest between the client and the certificant, the certificant’s employer and affiliates or third parties.

Any information about the certificant or the certificant’s employer that could reasonably be expected to materially affect the client’s decision to engage the certificant.

Contact information for the certifiant (and their employer, if applicable)

Disclosures must be in writing if financial planning services or material elements of financial planning are to be provided.



Elements and Applications of the Fiduciary Standard

Fiduciary – One who acts in utmost good faith, in a manner he or she reasonably believes to be in the best interest of the client



Principles

Principle 1 – Integrity Principle 2 – Objectivity Principle 3 – Competence Principle 4 – Fairness Principle 5 – Confidentiality Principle 6 – Professionalism Principle 7 - Diligence



Overview of Financial Planning Process and Related Practice Standards

Financial Planning Process Related Practice Standard1. Establishing and defining a relationship with the client

100-1 Defining the Scope of the Engagement

2. Gathering client data

200-1 Determining a Client’s Personal and Financial Goals, Needs and Priorities

200-2 Obtaining Quantitative Information and Documents

3. Analyzing and evaluating the client’s financial status

300-1 Analyzing and Evaluating the Client’s Information

4. Developing and presenting financial planning recommendations

400-1 Identifying and Evaluating Financial Planning Alternatives

400-2 Developing the Financial Planning Recommendations

400-3 Presenting the Financial Planning Recommendations

5. Implementing the financial planning recommendations

500-1 Agreeing on Implementation Responsibilities

500-2 Selecting Products

6. Monitoring 600-1 Defining Monitoring Responsibilities



Focus on Practice Standards

200 Series – Gathering Client Data

200-1 – Determining a Client’s Personal and Financial Goals, Needs and Priorities

200-2 Obtaining Quantitative Information and Documents



Anonymous Case Histories

Review of Select Case Histories (see Handout)

Questions / Wrap-up

CE Offering Presented by Brett R. Danko, CFP®, CRPC®

Documents

Transcript of CE Offering Presented by Brett R. Danko, CFP®, CRPC®