ETHICS IN ACTION 1 WELCOME Pre-approved by CFP Board for 2 ethics - - PDF document

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ETHICS IN ACTION 1 WELCOME Pre-approved by CFP Board for 2 ethics - - PDF document

Sep 13, 2023 24 likes •238 views

ETHICS IN ACTION 1 WELCOME Pre-approved by CFP Board for 2 ethics CE Filed electronically P-A-T Present Apply Test 2 DISCLAIMERS The opinions expressed are those of the presenter and do not necessarily represent

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SLIDE 1

ETHICS IN ACTION

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WELCOME

  • Pre-approved by CFP Board for

2 ethics CE

  • Filed electronically
  • P-A-T
  • Present
  • Apply
  • Test

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SLIDE 2

DISCLAIMERS

  • The opinions expressed are those of the presenter and

do not necessarily represent those of CFP Board

  • Case studies are fictitious and any resemblance to real

people or circumstances is purely coincidental.

  • Participation is required for continuing education credit to

be granted.

  • Complete copies of the Standards of Professional Conduct

are available for download at www.cfp.net

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LEARNING OBJECTIVES

  • 1. Understand financial

planning, the process & subject areas

  • 2. Describe the material

elements of financial planning

  • 3. Recognize financial planning

& material elements

  • 4. Understand the

required elements of an agreement

  • 5. Understand & apply

disclosure requirements

  • 6. Define and recognize

fiduciary duty

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SLIDE 3

LEARNING OBJECTIVE 1

Understand financial planning, the process & subject areas The Standards of Professional Conduct Code of Ethics and Principles Rules of Conduct Financial Planning Practice Standards Candidate Fitness Standards Disciplinary Rules and Procedures

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SIX STEP PROCESS

Financial planning begins when a certificant uses the six step process

Goal setting Data gathering Analyze Propose Implement Monitor

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SLIDE 4

SUBJECT AREAS

Investments Estate Planning Protection Tax Planning Cash Flow Retirement

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Financial Planning Defined

  • "Personal financial planning" or " financial planning" denotes the

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

  • resources. Financial planning integrates the financial planning

process with the financial planning subject areas.

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SLIDE 5

LEARNING OBJECTIVE 2

DESCRIBE THE MATERIAL ELEMENTS OF FINANCIAL PLANNING

  • Financial planning takes

many forms.

  • Sometimes financial

planning evolves over time.

  • It is important to know

when you are providing financial planning. Personalized Financial Plan

Retirement Planning Asset Allocation Cash Flow Protection Planning Education Funding Estate Planning Net Worth Major Purchases

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MATERIAL ELEMENTS

  • What are the client's

expectations?

  • What are the client's

intentions?

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SLIDE 6

MATERIAL ELEMENTS

  • Are multiple subject areas involved?
  • Is this less transactional and more analytical?

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MATERIAL ELEMENTS

  • How comprehensive is the

data-gathering?

  • Does it go beyond what

is required to complete the task?

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SLIDE 7

MATERIAL ELEMENTS

  • How broad are the

recommendations?

  • Do they expand the

advice into other subject areas too specifically?

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LEARNING OBJECTIVE 3

Recognize financial planning & material elements

  • If you are performing

any of the material elements, it is likely that CFP Board will consider it financial planning.

Personalized Financial Plan

Retirement Planning Asset Allocation Cash Flow Protection Planning Education Funding Estate Planning Net Worth Major Purchases

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SLIDE 8

LEARNING OBJECTIVE 3

Recognize financial planning & material elements

  • Financial planning

integrates multiple subject areas using the financial planning process

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IS THIS FINANCIAL PLANNING?

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SLIDE 9

IS THIS FINANCIAL PLANNING?

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ACTIVITY ONE

Put the steps in the right order A. Monitor B. Analyze C. Recommend D. Gather Data E. Implement F. Goal Setting

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SLIDE 10

IS THIS FINANCIAL PLANNING?

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IS THIS FINANCIAL PLANNING?

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SLIDE 11

ROUND 1 QUIZ BOWL

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LEARNING OBJECTIVE 4

Understand the required elements of an agreement

  • Rule 1.3 describes

requirements

  • Must be written
  • May consist of more than
  • ne document

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SLIDE 12

LEARNING OBJECTIVE 4

Understand the required elements of an agreement

  • Parties
  • Date and duration
  • How each party can

terminate

  • Services to be provided

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LEARNING OBJECTIVE 4

Understand the required elements of an agreement

Rule 1.2 adds 2 additional requirements

  • If proprietary products

are allowed

  • Identification of any 3rd

parties performing duties

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SLIDE 13

IS THIS A VALID AGREEMENT?

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IS THIS A VALID AGREEMENT?

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SLIDE 14

IS THIS A VALID AGREEMENT?

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LEARNING OBJECTIVE 5

Understand & apply disclosure requirements

CFP Board requires:

  • Written disclosures of compensation and conflicts of

interest.

  • Including 3rd parties
  • Employer
  • Family

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SLIDE 15

ACTIVITY TWO

As a fiduciary which do you need to disclose?:

12(b)1 fees Actual $$$ from implementation Trails Factors affecting payout Referral arrangements Relationship with parent company Subsidiaries Performance bonuses Limitations Date of birth Cost to produce plan Other business activities

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LEARNING OBJECTIVE 5

Understand & apply disclosure requirements Rule 2.2 b

  • Every client must be made aware of likely conflicts of interest
  • Financial planning clients receive written disclosure, too.

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SLIDE 16

LEARNING OBJECTIVE 5

Understand & apply disclosure requirements

Company Policy Interests of Friends Personal Gain Client Values Personal Values Client Costs Company Profits Conflict

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LEARNING OBJECTIVE 6

Define and recognize fiduciary duty

Rule 1.4 A certificant shall at all times place the interest of the client ahead of his

  • r her own. When the certificant

provides financial planning or material elements of financial planning, the certificant owes to the client the duty

  • f care of a fiduciary as defined by

CFP Board.

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SLIDE 17

LEARNING OBJECTIVE 6

Define and recognize fiduciary duty

Department

  • f

Labor CFP Board Common Law Investment Advisor’s Act Trust Law

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LEARNING OBJECTIVE 6

Define and recognize fiduciary duty CFP Board definition:

  • One who acts in utmost

good faith, in a manner he or she reasonably believes to be in the best interest of the client.

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SLIDE 18

LEARNING OBJECTIVE 6

Define and recognize fiduciary duty

  • Best depends on:
  • Applicable regulation
  • Business Model
  • Client circumstances
  • Timeframe
  • Risk tolerance
  • Income & Assets
  • Objective

Permitted by Regulator Offered by Business Model Best

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DOES THIS MEET A FIDUCIARY STANDARD?

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SLIDE 19

DOES THIS MEET A FIDUCIARY STANDARD?

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ROUND 2 CATEGORIES

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SLIDE 20

LEARNING OBJECTIVE 7

Understand Suitability for Seniors

Rule 1.4 A certificant shall at all times place the interest of the client ahead of his

  • r her own. When the certificant

provides financial planning or material elements of financial planning, the certificant owes to the client the duty

  • f care of a fiduciary as defined by

CFP Board.

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CONCLUSION

  • Understanding the Standards
  • f Professional Conduct is our
  • bligation
  • Good ethics is good business
  • Beware of surface level

interpretation

  • Send questions to

standards@cfp.net

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SLIDE 21

CONTACT INFO

dan@candura.net www.candura.net @CanduraGroup @Pennytree

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