FREQUENTLY
ASKED QUESTIONS
CODE OF ETHICS AND
STANDARDS OF CONDUCT
UPDATED JUNE 2023 WITH A NEW FAQ (PAGE 9)
A. DUTIES OWED TO CLIENTS ..................................................................................................................................................................1
1. Fiduciary Duty ........................................................................................................................................................................................1
2. Integrity .......................................................................................................................................................................................................
3. Competence .............................................................................................................................................................................................
4. Diligence .....................................................................................................................................................................................................
5. Disclose and Manage Conflicts of Interest ................................................................................................................................3
6. Sound and Objective Professional Judgment ...........................................................................................................................
7. Professionalism ........................................................................................................................................................................................
8. Comply with the Law ............................................................................................................................................................................
9. Confidentiality and Privacy ................................................................................................................................................................
10. Provide Information to a Client ..................................................................................................................................................... 4
11. Duties When Communicating with a Client................................................................................................................................
12. Duties When Representing Compensation Method .............................................................................................................8
13. Duties When Recommending, Engaging, and Working with Additional Persons ................................................10
14. Duties When Selecting, Using, and Recommending Technology ....................................................................................
15. Refrain from Borrowing or Lending Money and Commingling Financial Assets ......................................................
B. FINANCIAL PLANNING AND APPLICATION OF THE PRACTICE STANDARDS FOR THE FINANCIAL
PLANNING PROCESS ............................................................................................................................................................................. 10
1. Financial Planning Definition ......................................................................................................................................................... 10
2. Examples of Relevant Elements of the Client’s Personal and Financial Circumstances ........................................
3. Application of Practice Standards ............................................................................................................................................... 11
4. Integration Factors ............................................................................................................................................................................ 13
5. CFP Board Evaluation ..........................................................................................................................................................................
6. No Client Agreement to Engage for Financial Planning ................................................................................................... 13
C. PRACTICE STANDARDS FOR THE FINANCIAL PLANNING PROCESS .........................................................................14
1. Understanding the Client’s Personal and Financial Circumstances ................................................................................
2. Identifying and Selecting Goals .......................................................................................................................................................
3. Analyzing the Client’s Current Course of Action and Potential Alternative Course(s) of Action ......................
4. Developing the Financial Planning Recommendation(s) .....................................................................................................
5. Presenting the Financial Planning Recommendation(s) .......................................................................................................
6. Implementing the Financial Planning Recommendation(s) ................................................................................................
7. Monitoring Progress and Updating ................................................................................................................................................
D. DUTIES OWED TO FIRMS AND SUBORDINATES ........................................................................................................................
1. Use Reasonable Care When Supervising ....................................................................................................................................
2. Comply with Lawful Objectives of CFP® Professional’s Firm .............................................................................................
3. Provide Notice of Public Discipline.................................................................................................................................................
E. DUTIES OWED TO CFP BOARD ........................................................................................................................................................16
1. Definitions ..................................................................................................................................................................................................
2. Refrain from Adverse Conduct ....................................................................................................................................................16
3. Reporting ............................................................................................................................................................................................... 17
4. Provide Narrative Statement .............................................................................................................................................................
5. Cooperation ..............................................................................................................................................................................................
6. Compliance with Terms and Conditions of Certification and Trademark License ....................................................
F. PROHIBITION ON CIRCUMVENTION .................................................................................................................................................
G. MISCELLANEOUS ....................................................................................................................................................................................18
INDEX TO FAQS
This index identifies the page location of answers to the Frequently Asked Questions (FAQs) for each section
of CFP Board’s Code of Ethics and Standards of Conduct. If there is no page number provided, then CFP Board
has not released an FAQ related to that section. CFP Board has collected the FAQs that concern miscellaneous
subjects at the end of the document.
1
FREQUENTLY ASKED QUESTIONS
CFP Board provides answers to the following Frequently Asked Questions (FAQs) concerning CFP Board’s
Code of Ethics and Standards of Conduct (the “Code and Standards”). CFP Board may provide answers to
additional FAQs on a periodic basis.
A. DUTIES OWED TO CLIENTS
A.1 FIDUCIARY DUTY
Question A.1.1: The Financial Planning Practice Standards that apply through September 30, 2019
requires a CFP® professional to act as a fiduciary when providing Financial Planning or material
elements of Financial Planning. The new Code and Standards requires a CFP® professional to act as
a fiduciary when providing Financial Advice to a Client. What is the dierence between Financial
Planning and Financial Advice? (Standards A.1., B.4., and C., and Glossary.)
Answer A.1.1: Financial Advice has a much broader scope than Financial Planning. The new Code and Standards
states that a CFP® professional provides Financial Planning “through” Financial Advice. While Financial Planning
requires Financial Advice, not all Financial Advice requires Financial Planning.
The new Code and Standards sets forth separate definitions for Financial Advice and Financial Planning. The
Glossary defines Financial Advice as:
A. A communication that, based on its content, context, and presentation, would reasonably be viewed as a
recommendation that the Client take or refrain from taking a particular course of action with respect to:
1. The development or implementation of a financial plan;
2. The value of or the advisability of investing in, purchasing, holding, gifting, or selling Financial Assets;
3. Investment policies or strategies, portfolio composition, the management of Financial Assets, or other
financial matters;
4. The selection and retention of other persons to provide financial or Professional Services to the Client;
or
B. The exercise of discretionary authority over the Financial Assets of a Client.
The determination of whether Financial Advice has been provided is an objective rather than subjective
inquiry. The more individually tailored the communication is to the Client, the more likely the communication
will be viewed as Financial Advice. The provision of services or the furnishing or making available of
marketing materials, general financial education materials, or general financial communications that a
reasonable person would not view as Financial Advice, does not constitute Financial Advice.
The new Code and Standards defines Financial Planning in the Glossary as follows:
Financial Planning is a collaborative process that helps maximize a Client’s potential for meeting life
goals through Financial Advice that integrates relevant elements of the Client’s personal and financial
circumstances.
The new Code and Standards also identifies factors (See Standard B.4.) that CFP Board will weigh in
determining whether a CFP® professional providing Financial Advice is required to provide Financial Planning,
and thus is required to comply with the Practice Standards. These integration factors are discussed in another
FAQ. Where application of those factors to a particular situation leads to the conclusion that Financial Planning
is not required, the new Code and Standards does not require a CFP® professional to comply with the Practice
Standards. (See Standard C.) In that circumstance, the CFP® professional remains obligated to act as a fiduciary
when providing Financial Advice to a Client. (See Standard A.1.) As noted above, since Financial Planning
requires Financial Advice, a CFP® professional also must act as a fiduciary at all times when providing Financial
Planning to a Client.
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Question A.1.2: What does CFP Board’s fiduciary duty require? (Standard A.1.)
Answer A.1.2: The new Code and Standards sets forth an objective standard requiring a CFP® professional
providing Financial Advice to act in the best interests of the Client. In order to act in the best interests of the
Client, a CFP® professional must fulfill a Duty of Loyalty, a Duty of Care, and a Duty to Follow Client Instructions.
Standard A.1 of the new Code and Standards defines each of these duties using language that was drawn from
the common law of fiduciaries.
The Duty of Loyalty requires a CFP® professional to:
i. Place the interests of the Client above the interests of the CFP® professional and the CFP®
Professional’s Firm;
ii. Avoid Conflicts of Interest, or fully disclose Material Conflicts of Interest to the Client, obtain the
Client’s informed consent, and properly manage the conflict; and
iii. Act without regard to the financial or other interests of the CFP® professional, the CFP® Professional’s
Firm, or any other individual or entity other than the Client, which means that a CFP® professional
acting under a Conflict of Interest continues to have a duty to act in the best interests of the Client
and place the Client’s interests above the CFP® professional’s.
Disclosure of Material Conflicts of Interest by itself is not sucient to fulfill the Duty of Loyalty.
The Duty of Care requires a CFP® professional to act with the care, skill, prudence and diligence that a prudent
professional would exercise in light of the Client’s goals, risk tolerance, objectives, and financial and personal
circumstances.
The Duty to Follow Client Instructions requires a CFP® professional to comply with all objectives, policies,
restrictions, and other terms of the Engagement and all reasonable and lawful directions of the Client.
Question A.1.3: A CFP® professional must act as a fiduciary when providing Financial Advice to a
Client. Will a CFP® professional have a fiduciary duty when she:
1) Makes a passing statement about a financial issue to someone she just met at a cocktail party; or
2) Provides general advice to a relative who asks her for her general opinion, for example,
about a particular company or about the benefits of opening a 529 college savings plan for a
newborn child?
(Standard A.1. and Glossary.)
Answer A.1.3: No. The new Code and Standards requires a CFP® professional to act as a fiduciary when
providing “Financial Advice to a Client.” (See Standard A.1.) The Glossary defines a “Client” as any person to
whom the CFP® professional “provides or agrees to provide Professional Services pursuant to an Engagement.”
An “Engagement” is an “oral or written agreement, arrangement or understanding.” Therefore, unless there is
an agreement, arrangement or understanding that the CFP® professional will be providing professional services,
the person receiving the information is not a “Client,” and the CFP® professional does not have a fiduciary duty
to that person.
In addition, the Glossary defines “Financial Advice” as “a communication that, based on its content, context,
and presentation, would reasonably be viewed as a recommendation that the Client take or refrain from taking
a particular course of action.” In the scenarios outlined in this question, it would be unreasonable for the CFP®
professional, the cocktail party guest, or the relative to assume that they have established a client relationship,
or that the information was a purposefully directed recommendation to take a specific action.
Furthermore, the definition of Financial Advice indicates that the “more individually tailored the
communication” is to the information recipient, the “more likely the communication will be viewed as Financial
Advice.” A CFP® professional’s general opinions about a particular company or the benefits of opening a 529
college savings plan would not be viewed as being tailored to the specific needs of that particular information
recipient, and thus, would not constitute Financial Advice.
Finally, CFP Board applies an objective standard, not a subjective standard, to determine whether a particular
communication constitutes Financial Advice. Therefore, in determining whether a CFP® professional has
a fiduciary duty, CFP Board will consider whether “a reasonable CFP® professional” would conclude that
the communication constituted Financial Advice, and will not defer to the opinion of either that particular
information recipient or the CFP® professional who made that communication.
3
Question A.1.4: Does the Fiduciary Duty in the Code and Standards apply to a one-time
recommendation (either a brokerage or insurance recommendation)?
Answer A.1.4: Yes. When a CFP® professional provides Financial Advice to a Client, the CFP® professional is
required to act as a fiduciary regardless of whether the advice is one time or ongoing. A CFP® professional
who provides a one-time recommendation and has no ongoing duty to monitor or provide other Financial
Advice concerning the recommendation does not have an ongoing Fiduciary Duty with respect to that
recommendation. A CFP® professional who provides ongoing Financial Advice is subject to an ongoing
Fiduciary Duty. The Fiduciary Duty in the Code and Standards provides that a CFP® professional must act as a
fiduciary, and therefore, act in the best interests of the Client, at all times when providing Financial Advice to
a Client. Financial Advice includes, among other things, a communication that, based on its content, context,
and presentation, would reasonably be viewed as a recommendation that the Client take or refrain from taking
action with respect to the value of or advisability of investing in, purchasing, holding, gifting, or selling assets.
A.5 DISCLOSE AND MANAGE CONFLICTS OF INTEREST
Question A.5.1: Whenever a CFP® professional is providing Financial Advice to a Client, CFP Board’s
Code and Standards requires “full disclosure of all Material Conflicts of Interest.” What does this
entail, and in what format does the CFP® professional need to convey that disclosure to the Client?
(Standard A.5.)
Answer A.5.1: CFP Board’s Duty to Disclose and Manage Conflicts of Interest, which is set forth in Standard A.5
of the new Standards of Conduct requires a CFP® professional to fully disclose all Material Conflicts of Interest
that could aect the professional relationship and provide suciently specific facts so that a reasonable Client
would be able to understand the Material Conflicts of Interest and the business practices that give rise to the
conflicts and give informed consent to such conflicts or reject them. As indicated in the Glossary, a “Conflict of
Interest” arises when:
1. A CFP® professional’s interests (including the interests of the CFP® Professional’s Firm) are adverse to the
CFP® professional’s duties to a Client; or
2. A CFP® professional has duties to one Client that are adverse to another Client.
A Conflict of Interest becomes “Material” when a “reasonable Client or prospective Client would consider the
information” about the conflict to be “important in making a decision” about the engagement with the CFP®
professional, such as whether to retain, or continue to retain, a CFP® professional or whether to implement a
recommendation.
In determining whether the disclosure about a Material Conflict of Interest provided to the Client was sucient
to infer that a Client has consented to a Material Conflict of Interest:
CFP Board will evaluate whether a reasonable Client receiving the disclosure would have understood the
conflict and how it could aect the advice the Client will receive from the CFP® professional. The greater the
potential harm the conflict presents to the Client, and the more significantly a business practice that gives
rise to the conflict departs from commonly accepted practices among CFP® professionals, the less likely it
is that CFP Board will infer informed consent absent clear evidence of informed consent. Ambiguity in the
disclosure provided to the Client will be interpreted in favor of the Client.
Whether a Client has provided informed consent depends on the facts and circumstances and may be inferred
when not explicit. For example, silence after disclosure may constitute informed consent if the disclosure
contains suciently specific facts that are understandable to a reasonable Client, but may not constitute
informed consent if that is not the case. CFP Board intends for its “informed consent” standard to be
interpreted in a manner that is consistent with interpretations of the Investment Advisers Act of 1940. A CFP®
professional may refer to regulatory guidance and case law interpretations to gain a deeper understanding of
“informed consent.”
CFP Board recognizes that, in some circumstances, there are logistical challenges to providing written
disclosure of Material Conflicts of Interest. Therefore, the standard does not require either the CFP®
professional’s disclosure or the Client’s consent to be in writing. However, the standard also makes clear
that evidence of oral disclosure of a conflict will be given such weight as CFP Board in its judgment deems
appropriate.
4
In view of the fact-intensive nature of an inquiry into whether a CFP® professional orally disclosed a conflict,
and whether a Client provided informed consent, a CFP® professional operating under a Material Conflict of
Interest may want to consider, among other things, (a) avoiding business practices that create Material Conflicts
of Interest that are dicult to manage, (b) describing all Material Conflicts of Interest to a Client clearly and in a
manner that will allow the Client to understand the conflict, and (c) obtaining written consent to those Conflicts
of Interest that a reasonable CFP® professional would consider adverse to the Client’s interests.
A CFP® professional acting under a Conflict of Interest continues to have a duty to act in the best interests of
the Client and place the Client’s interests above the interests of the CFP® professional.
Disclosure of Material Conflicts of Interest does not eliminate the Duty of Loyalty or the Duty of Care.
A.10 PROVIDE INFORMATION TO A CLIENT
Question A.10.1: What are a CFP® professional’s disclosure requirements under the new Code and
Standards?
Answer A.10.1: A CFP® professional has a Duty to Provide Information to a Client. Whether the information may
be provided orally or must be provided in writing depends upon whether the Financial Advice that the CFP®
professional is providing requires Financial Planning.
There are eight categories of information that a CFP® professional is required to provide to a Client when
providing Financial Advice. There is an additional category of information that a CFP® professional must
provide to a Client when providing or required to provide Financial Planning in accordance with the Practice
Standards. (Standard A.10.) The requirement to provide information to a Client set forth in CFP Board’s Code
and Standards is in addition to any requirements that apply under applicable law, rule, or regulation and the
CFP® Professional’s Firm’s policies and procedures.
When Providing Financial Advice: When providing Financial Advice, a CFP® professional is required to provide
the following information to the Client:
1. A description of the services and products to be provided;
2. How the Client pays for the products and services, and a description of the additional types of costs that
the Client may incur, including product management fees, surrender charges, and sales loads;
3. How the CFP® professional, the CFP® Professional’s Firm, and any Related Party are compensated for
providing the products and services;
4. The existence of any public discipline or bankruptcy, and the location(s), if any, of the webpages of all
relevant public websites of any governmental authority, self-regulatory organization, or professional
organization that sets forth the CFP® professional’s public disciplinary history or any personal bankruptcy
or business bankruptcy where the CFP® professional was a Control Person;
5. Full disclosure of all Material Conflicts of Interest with the CFP® professional’s Client that could aect
the professional relationship (a CFP® professional also must obtain the Client’s informed consent and
adopt and follow business practices reasonably designed to prevent Material Conflicts of Interest from
compromising the CFP® professional’s ability to act in the Client’s best interests);
6. Written notice of policies regarding the protection, handling, and sharing of a client’s non-public personal
information (Privacy Policies);
7. Any arrangement by which someone who is not the Client will compensate or provide some other
material economic benefit to the CFP® professional, the CFP® Professional’s Firm, or a Related Party
for engaging or recommending the selection or retention of additional persons to provide financial or
Professional Services for a Client; and
8. Any other information about the CFP® professional or the CFP® Professional’s Firm that is Material to a
Client’s decision to engage or continue to engage the CFP® professional or the CFP® Professional’s Firm.
When Providing Financial Planning: When providing or required to provide Financial Planning in accordance
with the Practice Standards, in addition to the information described above, a CFP® professional must
provide to the Client the terms of the Engagement between the Client and the CFP® professional or
the CFP® Professional’s Firm. The terms of the Engagement include the Scope of Engagement and any
limitations, the period(s) during which the services will be provided, and the Client’s responsibilities. (Note
that a CFP® professional is responsible for implementing, monitoring, and updating the Financial Planning
recommendation(s) unless specifically excluded from the Scope of Engagement.)
5
Orally or in Writing? The chart set forth below summarizes the categories of information that a CFP®
professional must provide a Client, and whether a CFP® professional must provide the information orally or in
writing:
Material Conflicts of Interest
Financial Planning
Material Conflicts of Interest
Provide Orally
or in Writing
Terms of Engagement
(Implementing, Monitoring, and
Updating Is Required Unless
Explicitly Excluded)
Referral Compensation
Arrangements
Privacy Policy
Other Material Information
Services and Products
How you, your Firm,
and Related Parties
are Compensated
How the Client Pays
Public Discipline and
Bankruptcy
Provide in One or More
Written Documents
Financial Advice
Other Material Information
Services and Products
How you, your Firm,
and Related Parties are
Compensated
Referral Compensation
Arrangements
How the Client Pays
Public Discipline and
Bankruptcy
Provide Orally
or in Writing
Privacy Policy
Provide in One or More
Written Documents
A CFP® professional must document that the information has been provided to the Client. CFP Board does not
require any particular form of documentation. For example, a CFP® professional may document the information
in a CRM or by maintaining a copy of an email sent to the Client. A CFP® professional also has an ongoing
obligation to provide the Client with any information that is a Material change or update. Material changes and
updates to public disciplinary history or bankruptcy information must be disclosed to the Client within 90 days,
together with the location(s) of any relevant webpages. (Standard A.10.c.)
Question A.10.2: Does a CFP® professional investment adviser representative satisfy the Duty to
Provide Information to a Client (Standard A.10.) when the CFP® professional provides a Client with
the U.S. Securities and Exchange Commission’s Form ADV Brochure and Brochure Supplement?
Answer A.10.2: Maybe. A CFP® professional investment adviser representative who provides a Form ADV
Brochure and Brochure Supplement that contains only the information that the Brochures require would
not fully satisfy the Duty to Provide Information to a Client. However, a CFP® professional investment adviser
representative may satisfy the Duty to Provide Information to a Client by providing a Client a Form ADV
Brochure and Brochure Supplement (including Form CRS) that contains all the information that the standard
requires.
Question A.10.3: Will a CFP® professional providing investment advisory services satisfy the
Updating Information component of the Duty to Provide Information to a Client, set forth in
Standard A.10. of the Code and Standards, when the CFP® Professional’s Firm follows the SEC’s rules
for providing and updating the Brochure Supplement?
Answer A.10.3: Maybe. A CFP® professional investment adviser representative who provides a Form ADV
Brochure and Brochure Supplement that contains only the information that the Brochures require would not
fully satisfy the Updating Information component of the Duty to Provide Information to a Client. However, a
CFP® professional will satisfy the Duty to Provide Information to a Client by delivering to a Client a Brochure
(and/or Brochure Supplement) that contains all the required information listed in Standard A.10. To satisfy
the Updating Information requirement, a CFP® professional must provide to the Client any information that
is a Material change or update to the information that the Code and Standards requires a CFP® professional
to provide to the Client. Between annual updating amendments to Form ADV, the SEC requires disclosure of
Material changes to such information to Clients even if those changes do not trigger delivery of an interim
amendment.
6
However, Material changes and updates to public disciplinary history or bankruptcy information, which a CFP®
professional must provide to the Client under the Code and Standards, but which Form ADV does not require
to be disclosed, must be provided within ninety (90) days of the public discipline or bankruptcy, together with
the location(s) of relevant webpages.
Question A.10.4: What information must CFP® professionals provide to existing and new clients now
that the new Code and Standards became eective on October 1, 2019?
Answer A.10.4: A CFP® professional is required to satisfy the Duty to Provide Information to a Client set
forth in Standard A.10. of the new Code of Ethics and Standards of Conduct. As part of the transition to the
new Code and Standards, CFP Board is taking into consideration the fact that CFP® professionals already
have provided information to existing Clients that is similar to the information that is required under the new
Code and Standards. Therefore, a CFP® professional will not be required to make new disclosures to current
Clients to the extent the CFP® professional has made all required disclosures under the previous Standards of
Professional Conduct and there are no material changes or updates to the information required to be provided
to the Clients. However, material changes and updates to disciplinary history or bankruptcy information must
be disclosed to existing Clients within 90 days, together with the location(s) of the relevant webpages. With
respect to new clients, the CFP® professional must provide the information identified in Standard A.10. of the
new Code and Standards prior to or at the time of the Engagement.
Question A.10.5: The Code and Standards requires a CFP® professional to provide information
to a Client, prior to or at the time of the Engagement, as set forth in Standard A.10. May a CFP®
professional provide that information by email and by posting the information on the CFP®
Professional’s Firm’s website?
Answer A.10.5: Maybe. Where the Client has indicated a preference for a particular form of delivery, the CFP
professional must provide the information using the form of delivery the Client has requested. Where the
client has not indicated a preference and if the Client has an email address that the CFP® Professional uses to
communicate with the Client, then the CFP® professional may deliver the information to the Client using that
email address. However, a Client must explicitly consent to the email delivery of personal financial data. A CFP®
professional also should review the CFP® Professional’s Firm’s policies and procedures, which may address the
delivery of information to a Client by email.
If the CFP® professional communicates with the Client by email, then a CFP® professional may satisfy the
delivery requirement by electronically delivering to a Client an email that contains a location to the webpage
link or URL to the information that has been posted on a website. The email must describe the information the
Client may obtain by clicking on the link.
On the other hand, simply posting the information on a website, without taking these additional steps to direct
the client to the information, would not satisfy the requirement that information be “provided to” a Client.
A CFP® professional who uses email delivery also must have reason to believe that information was successfully
delivered to the Client.
The Duty to Provide Information to a Client requires a CFP® professional to document that the information
was provided to the Client. For example, a CFP® professional may document the information in a CRM or by
maintaining a copy of an email sent to the Client.
Question A.10.6: The Paycheck Protection Program (“PPP”) established by the U.S. Small Business
Administration (“SBA”) allows eligible individuals and small businesses to obtain loans that can
be used during the Covid-19 crisis. A PPP loan is eligible for forgiveness, provided the terms of the
loan forgiveness are satisfied. If a CFP® professional or an entity over which the CFP® professional
is a Control Person obtains a PPP loan and the loan or part of the loan is forgiven, will the CFP®
professional be required to notify Clients about the loan or loan forgiveness under the Code and
Standards?
Answer A.10.6: CFP Board’s Duty to Provide Information to a Client is set forth in Standard A.10. of the Code
and Standards. Standard A.10.a. requires CFP® professionals to provide certain information to a Client, prior to
or at the time of the Engagement, when providing or agreeing to provide Financial Advice, and to document
that the information has been provided to the Client. Among the information required to be provided pursuant
to Standard A.10.a. is any “information about the CFP® professional or the CFP® Professional’s Firm that is
Material to a Client’s decision to engage or continue to engage the CFP® professional or the CFP® Professional’s
Firm.” See Standard A.10.a.viii.
7
With respect to investment adviser firms and their reporting obligations regarding PPP loans under the
Investment Advisers Act of 1940, the sta of the U.S. Securities and Exchange (“SEC”) stated:
As a fiduciary under federal law, you must make full and fair disclosure to your clients of all material facts
relating to the advisory relationship. If the circumstances leading you to seek a PPP loan or other type
of financial assistance constitute material facts relating to your advisory relationship with clients, it is the
sta’s view that your firm should provide disclosure of, for example, the nature, amounts and eects of
such assistance. If, for instance, you require such assistance to pay the salaries of your employees who
are primarily responsible for performing advisory functions for your clients, it is the sta’s view that you
would need to disclose this fact. In addition, if your firm is experiencing conditions that are reasonably likely
to impair its ability to meet contractual commitments to its clients, you may be required to disclose this
financial condition in response to Item 18 (Financial Information) of Part 2A of Form ADV (brochure), or as
part of Part 2A, Appendix 1 of Form ADV (wrap fee program brochure).
See Question II.4., (Posted April 27, 2020), SEC, Division of Investment Management Coronavirus (COVID-19)
Response FAQs, available at t sec.gov/investment/covid-19-response-faq (emphasis added).
Whether a CFP® professional is required to provide information about a PPP loan or loan forgiveness to Clients
under the Code and Standards depends on the facts and circumstances. If information about a PPP loan or
loan forgiveness would be Material to a Client’s decision to engage or continue to engage the CFP® professional
or the CFP® Professional’s Firm, it must be provided to the Client, prior to or at the time of the Engagement,
pursuant to Standard A.10.a.viii.
CFP Board also reminds CFP® professionals that proceeds of PPP loans should only be used for the limited
purposes enumerated by the SBA.
Question A.10.7: A CFP® Professional’s Firm has an Engagement with a Client. A CFP® professional
is providing Financial Planning to the Client as part of a team. The CFP® professional reasonably
believes that the Client is not aware that the CFP® professional is participating in the development
of Financial Planning in support of the Engagement. Must the CFP® professional satisfy the Duty to
Provide Information to a Client (Standard A.10 of the Code and Standards)?
Answer A.10.7: No. Standard A.10 sets for the Duty to Provide Information to a Client When Providing Financial
Advice and When Providing Financial Planning. A CFP® Professional’s Firm may have an Engagement with
a Client to provide Financial Advice or Financial Planning. In this circumstance, the Client’s communications
with the CFP® Professionals Firm were solely with other financial professionals. The CFP® professional may
reasonably believe that the Client is not aware that the CFP® professional is participating in the development
of Financial Planning in support of the Engagement. In that circumstance, the CFP® professional is not required
to satisfy the Duty to Provide Information to a Client (Standard A.10 of the Code and Standards). The CFP®
professional continues to be subject to the other Duties to Clients set forth in the Code and Standards,
including the Fiduciary Duty.
Question A.10.8: A CFP® Professional’s Firm has an Engagement with a Client to provide Financial
Advice. Other financial professionals at the CFP® Professional’s Firm are developing the Financial
Advice. The CFP® professional is supporting the Client relationship but not providing Financial
Advice or Financial Planning. Must the CFP® professional satisfy the Duty to Provide Information to a
Client (Standard A.10 of the Code and Standards)?
Answer A.10.8: No. Standard A.10 sets for the Duty to Provide Information to a Client When Providing Financial
Advice and When Providing Financial Planning. If a CFP® professional is supporting the Client relationship but
is not participating in the development of any part of the Financial Advice or Financial Planning, then the CFP®
professional is not providing Financial Advice or Financial Planning and therefore is not required to satisfy the
Duty to Provide Information to a Client (Standard A.10 of the Code and Standards). This type of support may
arise, for example, when a CFP® professional is providing marketing materials or general financial education to
the Client that does not constitute Financial Advice or Financial Planning.
8
A.12 DUTIES WHEN REPRESENTING COMPENSATION METHOD
Question A.12.1: What is a CFP® professional’s duty under the new Code and Standards when
representing compensation method? (Standard A.12.)
Answer A.12.1: When a CFP® professional provides Financial Advice, the CFP® professional must inform the
client how the CFP® professional, the CFP® Professional’s Firm, and any Related Party are compensated
for providing the products and services. A CFP® professional also must not make false or misleading
representations regarding the method of compensation of the CFP® professional or the CFP® Professional’s
Firm. Standard A.12 of the new Code and Standards addresses two specific compensation representations
(fee-only and fee-based), defines important terms, provides a safe harbor for related parties, and sets forth a
standard that applies to misrepresentations by a CFP® Professional’s Firm.
Question A.12.2: How does CFP Board define Fee-only? (Standard A.12.a.)
Answer A.12.2: The standard with respect to when a CFP® professional may use the term fee-only remains
largely the same. The standard defines the term fee-only by exclusion, and identifies individuals and entities
whose compensation should be considered in determining whether fee-only is an appropriate compensation
representation. A CFP® professional may describe his or her or the CFP® Professional’s Firm’s compensation
method as fee-only only where: (a) the CFP® professional and the CFP® Professional’s Firm receive no Sales-
Related Compensation; and (b) Related Parties receive no Sales-Related Compensation in connection with any
Professional Services the CFP® professional or the CFP® Professional’s Firm provides to Clients. “Sales-Related
Compensation” and “Related Parties” are defined terms that are discussed in other FAQs. CFP Board replaced
the term “commissions” with Sales-Related Compensation because there are some fees that, like commissions,
provide an incentive for the purchase or sale of Financial Assets (such as 12b-1 fees).
Question A.12.3: How does CFP Board address “Fee-Based” in the Code and Standards? (Standard
A.12.a.)
Answer A.12.3: The new Code and Standards sets a new standard for the use of fee-based – a term that is
equivalent to “fee and commission,” but is often confused with fee-only. The standard provides that a CFP®
professional who represents his or her compensation method as fee-based must not use the term in a manner
that suggests the CFP® professional or the CFP® Professional’s Firm is fee-only. Moreover, a CFP® professional
using fee-based must clearly state either that the CFP® professional earns both fees and commissions, or is not
fee-only. This standard also applies to other similar terms that, like fee-based, may be confused with a fee-only
compensation method.
Question A.12.4: Who does CFP Board consider to be a Related Party? (Standard A.12.c.)
Answer A.12.4: CFP Board has defined the previously undefined term “Related Party” as including anyone
whose receipt of Sales-Related Compensation reasonably would be viewed as directly or indirectly benefiting
the CFP® professional or the CFP® Professional’s Firm. CFP Board will presume that family members and
controlled business entities are Related Parties, but a CFP® professional may show otherwise. Sales-Related
Compensation received by a Related Party only is relevant for purposes of fee-only if the compensation is
received “in connection with any Professional Services the CFP® professional or CFP® Professional’s Firm
provides to Clients.” This connection exists when the compensation results, directly or indirectly, from Client
transactions referred (or facilitated) by the CFP® professional or the CFP® Professional’s Firm. For example, if
a CFP® professional’s father is a broker who receives Sales-Related Compensation, but there is no connection
between the father’s business and the CFP® professional’s business, the father’s Sales-Related Compensation
is not being received “in connection with” the CFP® professional’s Professional Services. In this circumstance,
the father’s Sales-Related Compensation would not prevent the CFP® professional from having a fee-only
compensation method.
CFP Board also has a standard for using the term “fee-based.” A CFP® professional’s duty when using the term
“fee-based” is discussed in another FAQ.
Question A.12.5: What is Sales-Related Compensation? (Standard A.12.b.)
Answer A.12.5: Sales-Related Compensation is more than a de minimis economic benefit, including any bonus
or portion of compensation, resulting from a Client purchasing or selling Financial Assets. To account for
compensation that is based on a Client’s decision to hold an asset, such as an incentive to advise a Client to
annuitize a pension rather than take a lump sum, the Sales-Related Compensation definition also includes
compensation resulting from a Client “holding” Financial Assets for purposes other than receiving Financial
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Advice. Sales-Related Compensation also includes compensation for the referral of a Client to any person or
entity other than the CFP® Professional’s Firm, as the referral constitutes a Professional Service provided to a
Client. The standard sets forth common examples of Sales-Related Compensation, and explicitly excludes five
types of compensation from the definition.
Question A.12.6: When does the Safe Harbor for Related Party compensation apply and what does it
require? (Standard A.12.e.)
Answer A.12.6: The new Code and Standards includes a Related Party compensation “safe harbor” for a CFP®
professional who adopts and implements policies and procedures (including through a CFP® Professional’s
Firm) reasonably designed to prevent recommendations that a Client purchase Financial Assets from or
through, or refer any Clients to, a Related Party.
Question A.12.7: How does the Code and Standards address misrepresentation of compensation
method by a CFP® Professional’s Firm? (Standard A.12.f.)
Answer A.12.7: Standard 12.f provides a standard for when the CFP® Professional’s Firm makes compensation
representations that are inconsistent with CFP Board’s Code and Standards. If the CFP® professional Controls
the firm, the CFP® professional must not allow the firm to make a representation of compensation method that
would be false or misleading if made by the CFP® professional. For example, when a CFP® professional is the
sole owner of a firm that refers to its compensation method as fee-only, but the CFP® professional personally
sells insurance and securities in exchange for Sales-Related Compensation, the Code and Standards would not
permit the CFP® professional to allow the CFP® Professional’s Firm, which the CFP® professional Controls, to use
fee-only because the CFP® professional earns Sales-Related Compensation.
If the CFP® professional does not Control the firm, the CFP® professional does not have an obligation to
prevent the firm from making a false or misleading misrepresentation of compensation method. Instead, the
CFP® professional must correct any misrepresentation of compensation method by accurately representing
the CFP® professional’s compensation method to the CFP® professional’s Clients. For example, assume a CFP®
professional is an employee at a corporation that refers to its compensation method as fee-only even though
the CFP® professional and others in the corporation refer commission-earning insurance business to a Related
Party. In this instance, the CFP® professional could not use the term fee-only. Therefore, the CFP® professional
must inform Clients that his or her compensation method is fee and commission.
Question A.12.8: When will CFP Board not consider trailing commissions to be Sales-Related
Compensation? (Standard A.12.a.iii.)
Answer A.12.8: Standard A.12 of the Code and Standards provides that a CFP® professional may not make false
or misleading representations regarding the CFP® professional’s or the CFP® Professional’s Firm’s method(s) of
compensation. A CFP® professional may represent his or her or the CFP® Professional’s Firm’s compensation
method as “fee-only” only if:
1. The CFP® professional and the CFP® Professional’s Firm receive no Sales-Related Compensation; and
2. Related Parties receive no Sales-Related Compensation in connection with any Professional Services the
CFP® professional or CFP® Professional’s Firm provides to Clients.
Sales-Related Compensation is more than a de minimis economic benefit resulting from, among other things,
a Client purchasing or selling Financial Assets. Trailing commissions are Sales-Related Compensation that
would prevent a CFP® professional from representing his or her or the CFP® Professional’s Firm’s compensation
method as “fee-only.”
However, there is a limited circumstances where CFP Board would find that a CFP® professional who refers to
his or her or the CFP® Professional’s Firm’s compensation method as fee-only is not in violation of Standard
A.12. notwithstanding the receipt of trailing commission. More specifically, if there is no other Sales-Related
Compensation, and the CFP® professional:
a. Requests a transfer or assignment of the Financial Assets paying trailing commission to a person or
entity that is not a Related Party;
b. Contacts the entities paying the trailing commission that may not be so transferred and requests that
these entities discontinue paying any trailing commission; and
c. Donates any and all remaining trailing commission to one or more 501(c)(3) organizations.
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In that circumstance, CFP Board would find that a CFP® professional who refers to his or her or the CFP®
Professional’s Firm’s compensation method as fee-only is not making a false or misleading representation about
compensation method.
A.13 DUTIES WHEN RECOMMENDING, ENGAGING, AND WORKING WITH ADDITIONAL PERSONS
Question A.13.1: What does the Code and Standards require of a CFP® professional who recommends
the selection of additional persons to provide financial or Professional Services for a Client?
Answer A.13.1: The Fiduciary Duty in the Code and Standards provides that at all times when providing
Financial Advice to a Client, a CFP® professional must act as a fiduciary, and therefore, act in the best interests
of the Client. A recommendation that a Client select and retain another financial or Professional Services
provider for a Client, such as an accountant or attorney, is Financial Advice. To fulfill that Fiduciary Duty, the
Duties When Recommending, Engaging, and Working with Additional persons, set forth in Standard A.13.a.i.
of the Code and Standards, requires a CFP® professional to have a reasonable basis for the recommendation
based on the person’s reputation, experience, and qualifications.
A CFP® professional may obtain such a reasonable basis through appropriate due diligence to support
the recommendation. The necessary amount of research and analysis will depend upon the facts and
circumstances. A CFP® professional’s reliance upon a personal relationship with the other financial or
Professional Services provider, by itself, ordinarily would be insucient justification for the recommendation.
Some of the information that a CFP® professional may consider reviewing when conducting due diligence
includes information about the individual that is contained in FINRA’s BrokerCheck, the Investment Adviser
Public Disclosure database, CFP.net/verify, CPAverify.org, and a Google search result. A CFP® professional also
may rely upon the CFP® Professional’s Firm’s recommendation if the CFP® professional has a reasonable basis
to believe that the firm developed the recommendation after conducting appropriate due diligence.
B. FINANCIAL PLANNING AND APPLICATION OF THE PRACTICE STANDARS FOR THE
FINNAICAL PLANNING PROCESS
B.1 FINANCIAL PLANNING DEFINITION
Question B1.1: How does CFP Board define Financial Planning? (Standard B.1. and Glossary.)
Answer B.1.1: In the new Code and Standards, CFP Board incorporates a shorter Financial Planning definition
that is more user-friendly, without sacrificing clarity. The revised Financial Planning definition, which is set forth
in both the Glossary and Standard B.1 of the new Standards of Conduct, consists of 30 carefully chosen words:
Financial Planning is a collaborative process that helps maximize a Client’s potential for meeting life goals
through Financial Advice that integrates relevant elements of the Client’s personal and financial circumstances.
To best understand this new definition, it is helpful to consider each element in succession:
• “Financial Planning is a collaborative process”: CFP Board is committed to the fundamental principle that
Financial Planning is a “process,” not a document or product. The Practice Standards provide the roadmap.
(See Standard C.) Collaboration between the CFP® professional and the Client, and potentially others, is
critical to the process.
• “That helps maximize a Client’s potential”: The goal of Financial Planning is to help maximize the Client’s
potential. In developing the definition, CFP Board carefully considered a long list of alternatives to
“maximize,” including achieve, advance, enhance, foster, further, improve, increase, optimize, realize, and
support. CFP Board determined that “maximize” is the word that best fits the definition because the
goal of a CFP® professional providing Financial Planning is to make the most out of the Client’s potential.
Maximize is qualified by “helps” and modifies the Client’s “potential,” but does not guarantee any specific
financial performance.
• “For meeting life goals”: The purpose of Financial Planning is to develop and meet goals. The goal is to
obtain what the Client wants in life. Financial goals are one means to that end, not the end itself. Therefore,
defining the goals as “financial goals” would be too narrow.
• “Through Financial Advice”: Financial Advice is the financial planner’s tool. While a financial planner is
focused on life goals, the advice that a financial planner provides is Financial Advice.
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• “That integrates relevant elements of the Client’s personal and financial circumstances”: “Integration”
is essential to Financial Planning. The process requires integration of relevant elements of the Client’s
personal and/or financial circumstances. A financial planner examines a Client’s circumstances and
evaluates how one element of the Client’s life may aect other elements. Relevant elements of a Client’s
personal and financial circumstances vary from Client to Client, and may include the Client’s need for
or desire to: develop goals, manage assets and liabilities, manage cash flow, identify and manage risks,
identify and manage the financial eect of health considerations, provide for educational needs, achieve
financial security, preserve or increase wealth, identify tax considerations, prepare for retirement, pursue
philanthropic interests, and address estate and legacy matters.
B.3 APPLICATION OF PRACTICE STANDARDS
Question B.3.1: When must a CFP® professional comply with the Practice Standards for the Financial
Planning Process? (Standard B.3.)
Answer B.3.1: The Standards of Professional Conduct that will remain in eect through September 30, 2019
requires a CFP® professional to comply with the Financial Planning process when providing Financial Planning
or material elements of Financial Planning. The new Code and Standards eliminates the concept of “material
elements of Financial Planning.” Instead, the new Code and Standards specifies – in Standard B.3 – three
circumstances in which a CFP® professional must comply with the Practice Standards:
1. When the CFP® professional agrees to provide or provides Financial Planning. This occurs when a CFP®
professional and a Client explicitly agree that the CFP® professional will provide, or the CFP® professional
actually provides, Financial Planning. An example of this is when a CFP® professional has provided to the
Client, in writing, the terms of the Engagement for Financial Planning as required by Standard A.10.b.ii.
2. When the CFP® professional agrees to provide or provides Financial Advice that requires integration of
relevant elements of the Client’s personal and/or financial circumstances in order to act in the Client’s
best interests. This occurs when a CFP® professional provides Financial Advice to a Client, but there is
no explicit agreement or understanding between the CFP® professional and Client to provide Financial
Planning. Rather, the nature of the Financial Advice requires the CFP® professional to provide Financial
Planning to meet his or her fiduciary obligations. While this circumstance is similar to the historical
concept of “material elements of financial planning” this standard examines the potential eect of the
Financial Advice on the Client rather than the types of services the CFP® professional provides to the
Client. Another FAQ discusses the factors that CFP Board will examine to determine whether integration
is required.
3. When the Client has a reasonable basis to believe the CFP® professional will provide or has provided
Financial Planning. While the current Practice Standards examine the Client’s subjective understanding
and intent in engaging the CFP® professional as one relevant factor in determining whether Financial
Planning is required, the new Code and Standards provides an objective standard that, if satisfied, is
sucient to require Financial Planning. Whether the CFP® professional has held out to the Client that he
or she provides Financial Planning is one of the relevant factors to be considered in assessing whether
the Client’s belief is reasonable.
Question B.3.2: How does a CFP® professional determine whether the Financial Advice the CFP®
professional has agreed to provide or provided to a Client is “Financial Advice that Requires
Financial Planning” (i.e., Financial Advice that requires integration of relevant elements of the
Client’s personal and/ or financial circumstances in order to act in the Client’s best interests)?
Answer B.3.2: There are three circumstances when a CFP® professional must provide Financial Planning, and
therefore must comply with the Practice Standards for the Seven-Step Financial Planning Process (Standard B.3.):
1) The CFP® professional agrees to provide or provides Financial Planning;
2) The CFP® professional agrees to provide or provides Financial Advice that requires integration of relevant
elements of the Client’s personal and/ or financial circumstances in order to act in the Client’s best
interests (“Financial Advice that Requires Financial Planning”); or
3) The Client has a reasonable basis to believe the CFP® professional will provide or has provided Financial
Planning.
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The Integration Factors: This FAQ focuses on the second of these three circumstances: whether the CFP®
professional has provided Financial Advice that Requires Financial Planning. CFP Board has established five
specific “Integration Factors” that CFP Board will weigh in making that determination:
a. The number of relevant elements of the Client’s personal and financial circumstances that the
Financial Advice may aect;
b. The portion and amount of the Client’s Financial Assets that the Financial Advice may aect;
c. The length of time the Client’s personal and financial circumstances may be aected by the Financial
Advice;
d. The eect on the Client’s overall exposure to risk if the Client implements the Financial Advice; and
e. The barriers to modifying the actions taken to implement the Financial Advice.
Additional Duties When Financial Planning is Required: If, based on the Integration Factors, the CFP®
professional is providing Financial Advice that requires Financial Planning, then the CFP® professional must
comply with the Practice Standards for the Seven-Step Financial Planning Process. As set forth in Standard C.,
the Practice Standards for the Financial Planning Process are as follows:
Step 1: Understanding the Client’s Personal and Financial Circumstances
Step 2: Identifying and Selecting Goals
Step 3: Analyzing the Client’s Current Course of Action and Potential Alternative Course(s) of Action
Step 4: Developing the Financial Planning Recommendation(s)
Step 5: Presenting the Financial Planning Recommendation(s)
Step 6: Implementing the Financial Planning Recommendation(s)
Step 7: Monitoring Progress and Updating
In complying with the Practice Standards, a CFP® professional must act prudently in documenting information,
as the facts and circumstances require, taking into account the significance of the information, the need
to preserve the information in writing, the obligation to act in the Client’s best interests, and the CFP®
Professional’s Firm’s policies and procedures.
If a CFP® professional is required to provide Financial Planning, then under the Duty to Provide Information to
a Client (Standard A.10.), most of the information that the CFP® professional may have provided to the Client
orally (or in writing) when providing Financial Advice now must be delivered to the Client in writing, in one or
more written documents. In addition, the CFP® professional also must provide to the Client, in writing, the terms
of the Engagement between the Client and the CFP® professional or the CFP® Professional’s Firm, including
the Scope of Engagement and any limitations, the period(s) during which the services will be provided, and
the Client’s responsibilities. The CFP® professional also is responsible for Implementing the Financial Planning
Recommendations (Step 6 of the Financial Planning Process) and Monitoring Progress and Updating (Step 7 of
the Financial Planning Process) unless specifically excluded from the Scope of the Engagement.
Question B.3.3: Is a CFP® Professional Required to Provide Financial Planning in Every Client
Engagement? (Standard B.3.)
Answer B.3.3: No. The Code of Ethics and Standards of Conduct (Standard B.1-6 and Glossary) expressly
recognizes that a CFP® professional may provide:
a. Information that does not constitute Financial Advice (the provision of services or the furnishing or
making available of marketing materials, general financial education materials, or general financial
communications that a reasonable CFP® professional would not view as Financial Advice),
b. Financial Advice (a communication that, based on its content, context, and presentation, would
reasonably be viewed as a recommendation that the Client take or refrain from taking a particular course
of action) that does not require Financial Planning, and
c. Financial Advice that requires Financial Planning (Financial Advice that requires integration of relevant
elements of the Client’s personal and/ or financial circumstances to act in the Client’s best interests).
Thus, CFP Board recognizes that a CFP® professional is not required to provide Financial Planning in every
Client Engagement.
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B.4 INTEGRATION FACTORS
Question B.4.1: Will a CFP® professional who has collected the information required under the
Financial Industry Regulatory Authority’s (“FINRA”) Know Your Customer Rule be deemed to have
engaged in Financial Planning? (Standard B.4.)
Answer B.4.1: No. FINRA’s Know Your Customer Rule calls for collecting certain types of information about a
Client. Financial Planning is more than the collection of information. CFP Board’s new integration factors, which
are set forth in Standard B.4 of the new Standards of Conduct, set forth the circumstances in which a CFP®
professional must provide Financial Planning.
Question B.4.2: What factors will determine whether a CFP® professional is required to provide
Financial Planning when providing Financial Advice to a Client, as required under Standard B.3.a.ii?
(Standard B.4.)
Answer B.4.2: CFP Board will weigh the following five factors, which are set forth in Standard B.4.:
1. The number of relevant elements of the Client’s personal and financial circumstances that the Financial
Advice may aect. This factor requires a CFP® professional to review the Financial Advice the CFP®
professional will provide to the Client and determine how many of the Client’s needs or wants the
Financial Advice may aect. Financial Advice concerning one relevant element of the Client’s personal
and financial circumstances may (or may not) be sucient to require Financial Planning.
2. The portion and amount of the Client’s Financial Assets that the Financial Advice may aect. This factor
requires a CFP® professional to review the Financial Advice the CFP® professional will provide to the
Client and determine the portion and amount of the Client’s Financial Assets the Financial Advice may
aect. This factor focuses on both the portion and amount of Financial Assets. The eect on Financial
Assets is just one factor that CFP Board would weigh in conjunction with others.
3. The length of time the Client’s personal and financial circumstances may be aected by the Financial
Advice. This factor requires the CFP® professional to assess the length of time the Financial Advice may
aect the Client’s personal and financial circumstances.
4. The eect on the Client’s overall exposure to risk if the Client implements the Financial Advice. Relevant
risks include investment risk, interest rate risk, and inflation risk.
5. The barriers to modifying the actions taken to implement the Financial Advice. This factor requires the
CFP® professional to assess how dicult it would be for the Client to unwind or modify the action taken
to implement the Financial Advice.
Question B.4.3: Does CFP Board require a CFP® professional to address a certain number of
“relevant elements” of a Client’s personal and financial circumstances for the Engagement to be
considered Financial Planning? (Standard B.4.)
Answer B.4.3: No. CFP Board does not identify a minimum number of “relevant elements” for an Engagement
to be considered Financial Planning. While it is more likely that Financial Planning is required when several
of the relevant elements of the Client’s personal and financial circumstances are involved, in some cases a
Financial Planning Engagement may exist even when only one of the “relevant elements” is involved. The
“relevant elements” are identified in Standard B.2 of the new Code and Standards. CFP Board has developed a
five- factor test for determining whether Financial Planning is required, which is set forth in Standard B.4 of the
new Code and Standards and is addressed in another FAQ.
B.6 NO CLIENT AGREEMENT TO ENGAGE FOR FINANCIAL PLANNING
Question B.6.1: What is required of a CFP® professional when the Client does not agree to engage
the CFP® professional to provide Financial Planning even though the Financial Advice that the
Client has requested would require the CFP® professional to comply with the Practice Standards?
(Standard B.6.)
Answer B.6.1: CFP Board recognizes that a Client who does not want to engage a CFP® professional for
Financial Planning should be able to engage the CFP® professional to provide more limited services and the
Client should not be required to work with a non-CFP® professional. Therefore, when a CFP® professional
otherwise would be required to comply with the Practice Standards, but the Client does not agree to engage
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the CFP® professional for Financial Planning, the CFP® professional has four options. As set forth in Standard
B.6 of the new Code and Standards, the CFP® professional must either:
1. Not enter into the Engagement;
2. Limit the Scope of Engagement to services that do not require application of the Practice Standards, and
describe to the Client the services the Client requests that the CFP® professional will not be performing;
3. Provide the requested services after informing the Client how Financial Planning would benefit the Client
and how the decision not to engage the CFP® professional to provide Financial Planning may limit the
CFP® professional’s Financial Advice, in which case the CFP® professional is not required to comply with
the Practice Standards; or
4. Terminate the Engagement.
Not all options will apply under all circumstances. To illustrate these options, assume that a Client seeks
Financial Advice on three topics, and that, under the Code and Standards, a CFP® professional otherwise would
be required to provide Financial Planning to provide that Financial Advice. Assume further that the Client
declines to engage the CFP® professional for Financial Planning.
Under the first option, the CFP® professional may decide not to enter into the Engagement. Under the second
option, the CFP® professional may limit the Scope of the Engagement to one topic if that would not require
Financial Planning, and inform the Client that the CFP® professional will not be providing Financial Advice on
the other two topics.
Under the third option, if the CFP® professional informs the Client how Financial Planning would benefit the
Client and how the Client’s decision not to engage the CFP® professional to provide Financial Planning may
limit the CFP® professional’s Financial Advice, then the CFP® professional may provide Financial Advice on all
three topics without being required to comply with the Practice Standards. The CFP® professional continues to
be required to act as a fiduciary when providing that Financial Advice.
C. PRACTICE STANDARDS FOR THE FINANICAL PLANNING PROCESS
Question C.1: The new Code and Standards contains Practice Standards that provide for seven steps
in the Financial Planning process. Why and how have the Practice Standards changed? (Standard C.)
Answer C.1: The revised Practice Standards – which are set forth in Standard C of the new Code and Standards
– increases the number of steps in the Financial Planning process from six to seven. The new Code and
Standards provides a comprehensive update to the Practice Standards that reflects the delivery of Financial
Planning and provides detailed requirements for the Financial Planning process. This FAQ highlights the
following three structural changes, which also are set forth in the chart provided below:
1. CFP Board removed from the Practice Standards what had been the first step in the process – “Defining
the Scope of the Engagement.” That standard now is a “Duty to Provide Information to a Client” that
is addressed in Standard A.10. CFP Board made that change so that the Practice Standards would now
solely address the delivery of Financial Planning.
2. The revised Practice Standards divide and re-order what had been Step 2 of the Financial Planning
process into Steps 1 and 2 of the revised version: “Understanding the Client’s Personal and Financial
Circumstances” and “Identifying and Selecting Goals.” The new Code and Standards thus now requires
a CFP® professional to work with the Client to obtain information and analyze the Client’s personal
and financial circumstances before mutually defining the Client’s goals, and not after, as the current
Practice Standards require. This change recognizes that for a CFP® professional to collaborate eectively
with the Client to identify and then select goals, a CFP® professional first must understand the Client’s
circumstances.
3. The new Code and Standards divides and reorganizes into three steps what previously had been
Steps 3 and 4 under the existing Practice Standards. This process now requires a CFP® professional to
“Analyze the Client’s Current Course of Action and Potential Alternative Course(s) of Action” (Step 3),
“Develop the Financial Planning Recommendation(s)” (Step 4), and “Present the Financial Planning
Recommendation(s)” (Step 5).
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The chart below compares the existing and revised Practice Standards:
Existing Practice Standards Revised Practice Standards
1. Establishing and Defining the Relationship with the Client
• Defining the Scope of the Engagement
[Moved to section A.10 of the Standards of Conduct (the
Duty to “Provide Information to a Client”)]
2. Gathering Client Data
• Determining a Client’s Personal and Financial Goals,
Needs and Priorities
• Obtaining Quantitative Information and Documents
1. Understanding the Client’s Personal and Financial
Circumstances
• Obtaining Qualitative and Quantitative Information
• Analyzing Information
• Addressing Incomplete Information
2. Identifying and Selecting Goals
• Identifying Potential Goals
• Selecting and Prioritizing Goals
3. Analyzing and Evaluating the Client’s Financial Status
• Analyzing and Evaluating the Client’s Information
4. Developing and Presenting Financial Planning
Recommendations
• Identifying and Evaluating Financial Planning
Alternative(s)
3. Analyzing the Client’s Current Course of Action and
Potential Alternative Course(s) of Action
• Analyzing Current Course of Action
• Analyzing Potential Alternative Courses of Action
4. Developing and Presenting Financial Planning
Recommendations
• Developing the Financial Planning Recommendation(s)
4. Developing the Financial Planning Recommendation(s)
4. Developing and Presenting Financial Planning
Recommendations
• Presenting the Financial Planning Recommendation(s)
5. Presenting the Financial Planning Recommendation(s)
Existing Practice Standards Revised Practice Standards
5. Implementing the Financial Planning Recommendation(s)
• Agreeing on Implementation Responsibilities
• Selecting Products and Services for Implementation
6. Implementing the Financial Planning Recommendation(s)
• Addressing Implementation Responsibilities
• Identifying, Analyzing, and Selecting Actions, Products
and Services
• Recommending Actions, Products, and Services for
Implementation
• Selecting and Implementing Actions, Products, or
Services
6. Monitoring
• Defining Monitoring Responsibilities
7. Monitoring Progress and Updating
• Monitoring and Updating Responsibilities
• Monitoring the Client’s Progress
• Obtaining Current Qualitative and Quantitative
Information
• Updating Goals, Recommendations, or Implementation
Decisions
Question C.2: Does CFP Board require a CFP® professional to complete all seven steps of the
Financial Planning process? (Standards A.10 and C.)
Answer C.2: A CFP® professional who is providing Financial Planning must complete the first five steps of the
Financial Planning process that are set forth in Standard C. It is not necessary, however, for a CFP® professional
to complete the last two steps of the Financial Planning process if those steps are specifically excluded from
the Scope of Engagement. For example, some Clients may engage a CFP® professional to complete the
first five steps of the Financial Planning process and then work with another financial services provider to
implement or monitor those recommendations. However, Standard A.10 provides that a CFP® professional is
responsible for implementing, monitoring, and updating the Financial Planning Recommendation(s) unless
specifically excluded from the Scope of Engagement.
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Question C.3: The new Code and Standards requires a CFP® professional to document information
when complying with the Practice Standards. What is required? (Standard C.)
Answer C.3: The new Code and Standards sets forth, in Standard C, which contain the Practice Standards
for the financial planning process, a principles-based documentation requirement that applies when a CFP®
professional provides or is required to provide Financial Advice in accordance with the Practice Standards. A
CFP® professional may memorialize information in a method of the CFP® professional’s choosing. The CFP®
professional is not required to provide the information to the Client.
A CFP® professional must act prudently in documenting and retaining information, as the facts and
circumstances require, taking into the account the significance of the information, the need to preserve the
information in writing, the obligation to act in the Client’s best interests, and the CFP® Professional’s Firm’s
policies and procedures. A CFP® professional may consider documenting the following information in writing,
where relevant:
1. The qualitative and quantitative information the CFP® professional obtains from the Client;
2. The Client’s selected goals;
3. The CFP® professional’s analysis of the Client’s current course of action;
4. The CFP® professional’s analysis of potential alternative courses of action;
5. The assumptions and estimates used in developing the recommendations;
6. The recommendations the CFP® professional selects and the rationale for the recommendations;
7. The basis for the selection of actions, products, and services;
8. Actions the Client takes that deviate from the CFP® professional’s recommendations;
9. When engaged for monitoring, the CFP® professional’s analysis of the Client’s progress towards achieving
goals; and
10. When engaged for monitoring and updating, which actions, products, and services are and are not
subject to the CFP® professional’s monitoring responsibility, how and when the CFP® professional will
monitor the actions, products, and services, how the CFP® professional will be informed of any materials
changes in the Client’s qualitative and quantitative information, and how and when a CFP® professional
who is responsible for updating the Financial Planning recommendations will do so.
Documentation may be retained in, among other places, a client file, a Contact Management System file, a
paper file, or a digital vault.
E. DUTIES OWED TO CFP BOARD
E.2 REFRAIN FROM ADVERSE CONDUCT
Question E.2.1: How will CFP Board handle bankruptcies under the new Code and Standards?
(Standards E.2. and E.3.)
Answer E.2.1: The new Code and Standards continues to prohibit a CFP® professional from engaging in conduct
that reflects adversely on his or her integrity or fitness as a CFP® professional, upon the CFP® marks, or upon
the profession. Standard E.2 provides five examples of such conduct. For example, a personal bankruptcy or
business bankruptcy filing or adjudication where the CFP® professional was a Control Person of the business
may reflect adversely on the CFP® professional’s integrity or fitness unless the CFP® professional can rebut the
presumption that the bankruptcy demonstrates an inability to manage responsibly the CFP® professional’s or
the business’s financial aairs.
This presents a significant change to CFP Board’s procedures. Eective July 2012, CFP Board adopted
the Bankruptcy Disclosure Procedures, which provided that CFP Board sta would not investigate, and
CFP Board’s Disciplinary and Ethics Commission (“DEC”) would not adjudicate, a CFP® professional’s first
bankruptcy. Instead, CFP Board noted the bankruptcy filing on the CFP® professional’s public profile on CFP
Board’s websites and issued a news release identifying the CFP® professional as having filed for bankruptcy.
While this did not result in a formal disciplinary action, the eect was similar to a Public Letter of Admonition.
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The new Code and Standards recognizes that in certain limited circumstances, a bankruptcy does not
demonstrate a CFP® professional’s inability to manage his or her finances. Therefore, the new Code and
Standards restores the process that existed prior to July 2012 whereby a CFP® professional had the right to
demonstrate to the DEC that the bankruptcy was not the result of an inability to manage responsibly the CFP®
professional’s financial aairs. In those circumstances where the CFP® professional is able to make that showing,
the CFP® professional will not be subject to discipline and CFP Board will not issue a press release announcing
the bankruptcy. Regardless of the outcome of the disciplinary proceedings before the DEC, a CFP® professional
must provide to the Client the location of all relevant public websites of any authority that sets forth the CFP®
professional’s personal bankruptcy or business bankruptcy where the CFP® professional was a Control Person
of the business. Relevant public websites could include BrokerCheck, CFP Board’s website, and the federal
court website that contains the bankruptcy information.
As set forth in Standard E.3.l., a CFP® professional is now required to provide written notice to CFP Board within
30 calendar days of filing or being the subject of either a personal bankruptcy or a business bankruptcy where
the CFP® professional was a Control Person.
E.3 REPORTING
Question E.3.1: The new Code and Standards’ “Reporting” standard requires a CFP® professional
to notify CFP Board in writing within 30 calendar days of certain events. Does this reporting
requirement dier from CFP Board’s current reporting requirements? (Standard E.3.)
Answer E.3.1: Yes, the new Reporting standard expands the number and types of events that a CFP®
professional is required to disclose to CFP Board within 30 calendar days. The Standards of Professional
Conduct that will remain in eect through September 30, 2019 requires a CFP® professional to notify CFP Board
in writing, within 30 calendar days, only when the CFP® professional has been convicted of a crime (other than
a minor trac oense) or has been the subject of a professional disciplinary suspension, bar, or revocation
issued by a governmental agency, an industry self-regulatory organization, or a professional association. A CFP®
professional also is required, when renewing the CFP® professional’s certification every two years, to report a
wider range of potentially problematic conduct on the Ethics Profile Questionnaire.
The new Reporting standard, which is set forth in Standard E.3 of the new Code and Standards, requires a CFP®
professional to provide written notice to CFP Board within 30 calendar days after the CFP® professional or an
entity over which the CFP® professional is a Control Person has engaged in the potentially problematic conduct
that is listed in Standard E.3. Potentially problematic conduct includes conduct ranging from being charged
with, convicted of, or admitted to a program that defers or withholds the entry of a judgment or conviction for,
a Felony or Relevant Misdemeanor to having a professional license, certification, or membership suspended,
revoked, or materially restricted because of a violation of laws, rules or standards of conduct.
CFP Board’s new reporting requirement generally is based upon the reporting requirements set forth in
Form U4 (Uniform Application for Securities Industry Registration or Transfer) without fully adopting or
mirroring Form U4’s disclosure requirements. In fact, certain potentially problematic conduct may not need
to be disclosed on Form U4, but will need to be disclosed to CFP Board. Reporting of potentially problematic
conduct on Form U4 will not relieve CFP® professionals of their separate obligation to disclose conduct to CFP
Board. The reporting requirement enables CFP Board to receive information in a timely manner and eliminates
any confusion about the reporting timeline.
Question E.3.2: The Paycheck Protection Program (“PPP”) established by the U.S. Small Business
Administration (“SBA”) allows eligible individuals and small businesses to obtain loans that can
be used during the Covid-19 crisis. A PPP loan is eligible for forgiveness, provided the terms of the
loan forgiveness are satisfied. If a CFP® professional or an entity over which the CFP® professional
is a Control Person obtains a PPP loan and the loan or part of the loan is forgiven, will the CFP®
professional be required to report the loan or loan forgiveness to CFP Board?
Answer E.3.2: CFP Board’s Reporting standard, which is set forth in Standard E.3 of the Code and Standards,
requires a CFP® professional to provide written notice to CFP Board within 30 calendar days after the CFP®
professional or an entity over which the CFP® professional is a Control Person has engaged in certain conduct
that is listed in Standard E.3.
The Code and Standards do not specifically require CFP® professionals to report to CFP Board the receipt of a
PPP loan or loan forgiveness under the PPP. However, another reportable event, such as a bankruptcy, public
discipline, judgment lien, civil judgment, Regulatory Action, or Civil Action could occur in connection with the
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receipt of a PPP loan or loan forgiveness under the PPP. See Standard E.3. Similarly, receipt of a PPP loan or
loan forgiveness itself does not require an armative response to any question in CFP Board’s current Ethics
Declaration.
CFP Board also reminds CFP® professionals that proceeds of PPP loans should only be used for the limited
purposes enumerated by the SBA.
G. MISCELLANEOUS
Question G.1: Why did CFP Board revise its Standards?
Answer G.1: CFP Board periodically updates the Standards to keep current with changes in the field of financial
planning; to advance the profession; to maintain the value, integrity and relevance of the CFP® certification;
and to address new products, services, and technologies that eect the profession. CFP Board last updated its
Standards in 2007. The updates that become eective on October 1, 2019, include the introduction of the duty
to act as a fiduciary at all times when providing Financial Advice to a Client. These revisions are consistent with,
and central to, the purpose and mission of CFP Board.
Question G.2: What process did CFP Board follow in revising its Standards?
Answer G.2: In December 2015, CFP Board formed a Commission on Standards to review and recommend
to CFP Board’s Board of Directors proposed changes to the Terminology, Code of Ethics and Professional
Responsibility, Rules of Conduct, and Practice Standards sections of the Standards. Commission members
included CFP® professionals and others in the financial services industry who operated under diverse business
models, as well as prominent regulatory experts, a consumer advocate, and a representative of the public. CFP
Board gathered input from a wide variety of stakeholders by hosting 17 public forums in cities located across
the country, and by hosting meetings with the Financial Planning Association, the National Association of
Personal Financial Advisors, the Securities Industry and Financial Markets Association, the Financial Services
Institute, and CFP Board’s Business Model Council (which is comprised of firm representatives from a wide
range of business models). CFP Board also issued two drafts of the Code and Standards for public comment,
and considered more than 1,500 written comments and hundreds of oral comments from CFP® professionals,
firms, regulators, trade associations, consumer groups, and a broad array of additional stakeholders. After
following this deliberative, inclusive, and transparent process, CFP Board adopted the Code and Standards in
March 2018 and announced that it would become eective on October 1, 2019.
Question G.3: How has CFP Board changed the organizational structure of the Code and Standards?
Answer G.3: To make the Standards of Professional Conduct more user-friendly, the new Code and Standards
consolidates the Terminology, Code of Ethics and Professional Responsibility, Rules of Conduct, and Financial
Planning Practice Standards. In the Standards of Professional Conduct, each section had its own numbering
and organizational system, the Rules of Conduct and the Practice Standards had overlapping provisions, and
the Code of Ethics contained language explaining its principles. By consolidating these sections, CFP Board
eliminated redundancy, developed a unified structure, and presented content in a more ecient and eective
manner. Set forth below is a summary of the organizational structure of the new Code and Standards.
The new Code and Standards begins with a four-sentence Preamble that succinctly captures its purpose
and eect. A concise Code of Ethics then identifies principles that guide the behavior of CFP® professionals.
CFP Board elaborates on those principles in its Standards of Conduct, which is divided into the following six
sections:
A. Duties Owed to Clients
B. Financial Planning and Application of the Practice Standards for the Financial Planning Process
C. Practice Standards for the Financial Planning Process
D. Duties Owed to Firms and Subordinates
E. Duties Owed to CFP Board
F. Prohibition on Circumvention
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Section A of the Code and Standards delineates the following 15 duties that a CFP® professional owes to a Client:
• A.1 Fiduciary Duty
• A.2 Integrity
• A.3 Competence
• A.4 Diligence
• A.5 Disclose and Manage Conflicts of Interest
• A.6 Sound and Objective Professional Judgment
• A.7 Professionalism
• A.8 Comply with the Law
• A.9 Confidentiality and Privacy
• A.10 Provide Information to a Client
• A.11 Duties When Communicating with a Client
• A.12 Duties When Representing Compensation Method
• A.13 Duties When Recommending, Engaging, and Working with Additional Persons
• A.14 Duties When Selecting, Using, and Recommending Technology
• A.15 Refrain from Borrowing or Lending Money and Commingling Financial Assets
Section B of the Code and Standards addresses Financial Planning and Application of the Practice Standards
for the Financial Planning Process. This section sets forth CFP Board’s revised definition of Financial Planning,
the standard for when the Practice Standards apply, and the circumstance in which a CFP® professional must
demonstrate that compliance with the Practice Standards was not required. This section also includes a
standard that applies when a CFP® professional otherwise must comply with the Practice Standards, but the
Client does not agree to engage the CFP® professional for Financial Planning.
Section C contains CFP Board’s Practice Standards for the Financial Planning Process, which have been revised
to include seven steps:
1. Understanding the Client’s Personal and Financial Circumstances
2. Identifying and Selecting Goals
3. Analyzing the Client’s Current Course of Action and Potential Alternative Course(s) of Action
4. Developing the Financial Planning Recommendation(s)
5. Presenting the Financial Planning Recommendation(s)
6. Implementing the Financial Planning Recommendation(s)
7. Monitoring Progress and Updating
Section D of the Code and Standards sets forth the three Duties Owed to Firms and Subordinates:
1. Use Reasonable Care When Supervising
2. Comply with Lawful Objectives of CFP® Professional’s Firm
3. Provide Notice of Public Discipline
Among other changes in this section, the third standard includes a newly expanded requirement to advise the
CFP® Professional’s Firm, in writing, of any public discipline imposed by CFP Board.
Section E sets forth the Duties Owed to CFP Board. This section preserves the current prohibition against
engaging in conduct that reflects adversely on a CFP® professional’s integrity or fitness, upon the CFP® marks,
or upon the profession. CFP Board identifies five types of conduct that CFP Board’s Disciplinary and Ethics
Commission (DEC) has determined violate this standard. This section then delineates 14 reportable events for
which a CFP® professional must provide written notice to CFP Board within 30 calendar days. Section E also
requires a CFP® professional to provide CFP Board with a narrative statement describing the reportable matter.
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CFP Board’s list of reportable events is similar to, but not the same as, the events that must be reported to the
SEC and FINRA. Finally, a CFP® professional is required to cooperate with CFP Board and to comply with the
Terms and Conditions of Certification and Trademark License.
Section F contains a Prohibition on Circumvention, which provides that a CFP® professional may not do
indirectly, or through or by another person, any act or thing that the Code and Standards prohibits the CFP®
professional from doing directly.
The Code and Standards concludes with a Glossary, which contains definitions of fourteen terms that appear in
multiple sections of the document.
CFP Board has developed a Side-by-Side comparison document that compares the Standards of Professional
Conduct, which applies through September 30, 2019, to the Code and Standards, which applies beginning on
October 1, 2019.
Question G.4: How does the new Code and Standards relate to federal and state statutes, rules,
regulations and case law with respect to the obligations of a CFP® professional?
Answer G.4: The new Code and Standards requires a CFP® professional to comply with the laws, rules,
and regulations governing Professional Services, and prohibits a CFP® professional from intentionally or
recklessly participating or assisting in another person’s violations of the Code and Standards or the laws,
rules, or regulations governing Professional Services. (See Standard A.9.) However, CFP® certification
represents a commitment to a higher standard. While all practitioners must comply with the law, under certain
circumstances, the Code and Standards may contain requirements that are in addition to those contained in
existing laws or regulations. Therefore, compliance with the law does not always achieve compliance with CFP
Board’s Code and Standards.
Question G.5: Will CFP Board apply the new Code and Standards dierently for CFP® professionals
with dierent licenses, registrations, or roles (such as registered representatives, bankers,
investment adviser representatives, and insurance agents)?
Answer G.5: No. The new Code and Standards applies to all CFP® professionals equally.
Question G.6: Does the new Code and Standards apply to those who hold CFP® certification but who
do not display the CFP® marks or hold themselves out as financial planners?
Answer G.6: Yes. A CFP® professional is obligated to abide by CFP Board’s new Code and Standards,
irrespective of whether the CFP® marks appear on the CFP® professional’s business cards or stationery. Removal
of the CFP® marks from one’s business cards or stationery does not relieve a CFP® professional of the obligation
to follow the Code and Standards.
Question G.7: Are firms required to ensure that their employees and representatives who hold the
CFP® certification adhere to CFP Board’s ethical standards?
Answer G.7: No. CFP Board certifies individuals, not firms. As a condition of CFP® certification, CFP®
professionals are required to abide by CFP Board’s new Code and Standards.
Question G.8: What is the relationship between CFP Board, a CFP® Professional, a CFP®
Professional’s Firm, and a CFP® Professional’s Firm’s Clients?
Answer G.8: CFP Board is a 501(c)(3) organization whose mission is to benefit the public by granting the CFP®
certification and upholding it as the recognized standard of excellence for competent and ethical personal
financial planning. CFP Board issues the CFP® certification to individuals (“CFP® professional”) who satisfy CFP
Board’s certification requirements.
The Relationship Between CFP Board and a CFP® Professional: The relationship between CFP Board and
each CFP® professional is governed by the Terms and Conditions of Certification and Trademark License. In the
Terms and Conditions, CFP Board certifies a CFP® professional as having satisfied CFP Board’s requirements
for certification (“Certification”), grants a CFP® professional a Trademark License to use the Certification Marks,
and sets forth other provisions that govern the relationship between CFP Board and a CFP® professional,
including the requirement that each CFP® professional comply with CFP Board’s Code of Ethics and Standards
of Conduct, which has an eective date of October 1, 2019 and an enforcement date of June 30, 2020. The
Code and Standards reflects the commitment that a CFP® professional makes to CFP Board. Among other
things, the Code and Standards includes a Fiduciary Duty that requires a CFP® professional to act as a fiduciary,
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and therefore, act in the best interests of the Client, at all times when providing Financial Advice to a Client.
Therefore, a CFP® professional makes a commitment to CFP Board that, when providing Financial Advice to a
Client, the CFP® professional will provide Professional Services that satisfy the Fiduciary Duty.
The Relationship Between CFP Board and a CFP® Professional’s Firm: CFP® professionals often work at
financial services firms. CFP Board does not certify firms; therefore, the Code and Standards does not establish
requirements for firms. However, CFP Board does expect that a CFP® Professional’s Firm will support CFP®
certification and will allow a CFP® professional to comply with the Code and Standards.
The Relationship Between CFP Board and a CFP® Professional’s Firm’s Clients: A CFP® professional and the
CFP® Professional’s Firm also have relationships with Clients. As noted above, the Code and Standards reflects
the commitment that a CFP® professional makes to CFP Board. While a CFP® professional is required to comply
with the Code and Standards, including the Fiduciary Duty, a CFP® professional and the CFP® Professional’s
Firm are not required to incorporate the Fiduciary Duty into the Client Engagement or refer to the Fiduciary
Duty in Client communications. As was the case with the prior Standards of Professional Conduct, the Code and
Standards is not designed to be a basis for civil liability. Clients of a CFP® professional and other third parties
are not intended to be considered third-party beneficiaries of a CFP® professional’s agreement with CFP Board
to adhere to the Code and Standards. CFP Board enforces the Code and Standards through a peer-review
process set forth in CFP Board’s Procedural Rules that is credible to the public and fair to those whose conduct
CFP Board is evaluating. In the event CFP Board finds a violation of the Code and Standards and issues a public
sanction, CFP Board will publish the decision in a press release and on CFP Board’s website.
Question G.9: May a CFP® professional who is a registered representative of a broker dealer satisfy
CFP Board’s Fiduciary Duty?
Answer G.9: Yes. A CFP® professional may satisfy CFP Board’s Fiduciary Duty when working in any business
model, including when working as a registered representative of a broker dealer and earning Sales-Related
Compensation. In those business models where CFP Board’s Fiduciary Duty exceeds the legal and regulatory
requirements of that business model, a CFP® professional is required to satisfy CFP Board’s Fiduciary Duty, and
therefore, exceed the applicable legal and regulatory requirements.
Question G.10: Does the new Code and Standards increase civil liability for CFP® professionals?
Answer G.10: CFP Board developed the new Code and Standards to be an enforceable set of requirements that
CFP Board can apply to those who hold CFP® certification. It is not designed to be a basis for civil liability.
Clients of a CFP® professional and other third parties are not intended to be third-party beneficiaries of a CFP®
professional’s agreement with CFP Board to adhere to the Code and Standards.
CFP Board welcomes questions about the new Code and Standards and its application to specific situations. To
submit a question, please contact CFP Board at SRC@CFPBoard.org.
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