The Rules of Conduct establish the high standards expected of certificants and describe the level of professionalism required of certificants. The Rules of Conduct are binding on all certificants, regardless of their title, position, type of employment or method of compensation, and they govern all those who have the right to use the CFP® marks, whether or not those marks are actually used. The universe of activities engaged in by a certificant is diverse, and a certificant may perform all, some or none of the typical services provided by financial planning professionals. Some Rules may not be applicable to a certificant's specific activity. As a result, when considering the Rules of Conduct, the certificant must determine whether a specific Rule is applicable to those services. A certificant will be deemed to be in compliance with these Rules if that certificant can demonstrate that his or her employer completed the required action.
Violations of the Rules of Conduct may subject a certificant or Professional Eligible for Reinstatement to discipline. Because CFP Board is a certifying and standards-setting body for those individuals who have met and continue to meet CFP Board's initial and ongoing certification requirements, discipline extends to the rights of Professional Eligible for Reinstatement and certificants to use the CFP® marks. Thus, the Rules are not designed to be a basis for legal liability to any third party.
- Defining the Relationship with the Prospective Client or Client
- Information Disclosed to Prospective Clients and Clients
- Prospective Client and Client Information and Property
- Obligations to Prospective Clients and Clients
- Obligations to Employers
- Obligations to CFP Board
1. Defining the Relationship with the Prospective Client or Client
1.1 The certificant and the prospective client or client shall mutually agree upon the services to be provided by the certificant.
1.2 If the certificant’s services include financial planning or material elements of financial planning, prior to entering into an agreement, the certificant shall provide written information or discuss with the prospective client or client the following:
- The obligations and responsibilities of each party under the agreement with respect to:
- Defining goals, needs and objectives,
- Gathering and providing appropriate data,
- Examining the result of the current course of action without changes,
- The formulation of any recommended actions,
- Implementation responsibilities, and
- Monitoring responsibilities.
- Compensation that any party to the agreement or any legal affiliate to a party to the agreement will or could receive under the terms of the agreement; and factors or terms that determine costs, how decisions benefit the certificant and the relative benefit to the certificant.
- Terms under which the agreement permits the certificant to offer proprietary products.
- Terms under which the certificant will use other entities to meet any of the agreement’s obligations.
If the certificant provides the above information in writing, the certificant shall encourage the prospective client or client to review the information and offer to answer any questions that the prospective client or client may have.
1.3 If the services include financial planning or material elements of financial planning, the certificant or the certificant’s employer shall enter into a written agreement governing the financial planning services (“Agreement”). The Agreement shall specify:
The Agreement may consist of multiple written documents. Written documentation that includes the items above and is used by a certificant or certificant’s employer in compliance with state or federal law, or the rules or regulations of any applicable self-regulatory organization, such as the Securities and Exchange Commission’s Form ADV or other disclosure documents, shall satisfy the requirements of this Rule.
- The parties to the Agreement,
- The date of the Agreement and its duration,
- How and on what terms each party can terminate the Agreement, and
- The services to be provided as part of the Agreement.
1.4 A certificant shall at all times place the interest of the client ahead of his or her own. When the certificant provides financial planning or material elements of financial planning, the certificant owes to the client the duty of care of a fiduciary as defined by CFP Board.
2. Information Disclosed To Prospective Clients and Clients
2.1 A certificant shall not communicate, directly or indirectly, to clients or prospective clients any false or misleading information directly or indirectly related to the certificant’s professional qualifications or services. A certificant shall not mislead any parties about the potential benefits of the certificant’s service. A certificant shall not fail to disclose or otherwise omit facts where that disclosure is necessary to avoid misleading clients.
A certificant shall disclose to a prospective client or client the following information:
- An accurate and understandable description of the compensation arrangements being offered. This description must include:
- Information related to costs and compensation to the certificant and/or the certificant’s employer, and
- Terms under which the certificant and/or the certificant’s employer may receive any other sources of compensation, and if so, what the sources of these payments are and on what they are based.
- A general summary of likely conflicts of interest between the client and the certificant, the certificant’s employer or any affiliates or third parties, including, but not limited to, information about any familial, contractual or agency relationship of the certificant or the certificant’s employer that has a potential to materially affect the relationship.
- Any information about the certificant or the certificant’s employer that could reasonably be expected to materially affect the client’s decision to engage the certificant that the client might reasonably want to know in establishing the scope and nature of the relationship, including but not limited to information about the certificant’s areas of expertise.
- Contact information for the certificant and, if applicable, the certificant’s employer.
- If the services include financial planning or material elements of financial planning, these disclosures must be in writing. The written disclosures may consist of multiple written documents. Written disclosures used by a certificant or certificant’s employer that includes the items listed above, and are used in compliance with state or federal laws, or the rules or requirements of any applicable self-regulatory organization, such as the Securities and Exchange Commission’s Form ADV or other disclosure documents, shall satisfy the requirements of this Rule.
The certificant shall timely disclose to the client any material changes to the above information.
3. Prospective Client and Client Information and Property
3.1 A certificant shall treat information as confidential except as required in response to proper legal process; as necessitated by obligations to a certificant’s employer or partners; as required to defend against charges of wrongdoing; in connection with a civil dispute; or as needed to perform the services.
3.2 A certificant shall take prudent steps to protect the security of information and property, including the security of stored information, whether physically or electronically, that is within the certificant’s control.
3.3 A certificant shall obtain the information necessary to fulfill his or her obligations. If a certificant cannot obtain the necessary information, the certificant shall inform the prospective client or client of any and all material deficiencies.
3.4 A certificant shall clearly identify the assets, if any, over which the certificant will take custody, exercise investment discretion, or exercise supervision.
3.5 A certificant shall identify and keep complete records of all funds or other property of a client in the custody, or under the discretionary authority, of the certificant.
3.6 A certificant shall not borrow money from a client. Exceptions to this Rule include:
- The client is a member of the certificant’s immediate family, or
- The client is an institution in the business of lending money and the borrowing is unrelated to the professional services performed by the certificant.
3.7 A certificant shall not lend money to a client. Exceptions to this Rule include:
- The client is a member of the certificant’s immediate family, or
- The certificant is an employee of an institution in the business of lending money and the money lent is that of the institution, not the certificant.
3.8 A certificant shall not commingle a client’s property with the property of the certificant or the certificant’s employer, unless the commingling is permitted by law or is explicitly authorized and defined in a written agreement between the parties.
3.9 A certificant shall not commingle a client’s property with other clients’ property unless the commingling is permitted by law or the certificant has both explicit written authorization to do so from each client involved and sufficient record-keeping to track each client’s assets accurately.
3.10 A certificant shall return a client’s property to the client upon request as soon as practicable or consistent with a time frame specified in an agreement with the client.
4 . Obligations to Prospective Clients and Clients
4.1 A certificant shall treat prospective clients and clients fairly and provide professional services with integrity and objectivity.
4.2 A certificant shall offer advice only in those areas in which he or she is competent to do so and shall maintain competence in all areas in which he or she is engaged to provide professional services.
4.3 A certificant shall be in compliance with applicable regulatory requirements governing professional services provided to the client.
4.4 A certificant shall exercise reasonable and prudent professional judgment in providing professional services to clients.
4.5 In addition to the requirements of Rule 1.4, a certificant shall make and/or implement only recommendations that are suitable for the client.
4.6 A certificant shall provide reasonable and prudent professional supervision or direction to any subordinate or third party to whom the certificant assigns responsibility for any client services.
4.7 A certificant shall advise his or her current clients of any certification suspension or revocation he or she receives from CFP Board.
5. Obligations To Employers
5.1 A certificant who is an employee/agent shall perform professional services with dedication to the lawful objectives of the employer/principal and in accordance with CFP Board’s Code of Ethics.
5.2 A certificant who is an employee/agent shall advise his or her current employer/principal of any certification suspension or revocation he or she receives from CFP Board.
6. Obligations To CFP Board
6.1 A certificant shall abide by the terms of all agreements with CFP Board, including, but not limited to, using the CFP® marks properly and cooperating fully with CFP Board’s trademark and professional review operations and requirements.
6.2 A certificant shall meet all CFP Board requirements, including continuing education requirements, to retain the right to use the CFP® marks.
6.3 A certificant shall notify CFP Board of changes to contact information, including, but not limited to, e-mail address, telephone number(s) and physical address, within forty five (45) days.
6.4 A certificant shall notify CFP Board in writing of any conviction of a crime, except misdemeanor traffic offenses or traffic ordinance violations unless such offense involves the use of alcohol or drugs, or of any professional suspension or bar within ten (10) calendar days after the date on which the certificant is notified of the conviction, suspension or bar.
6.5 A certificant shall not engage in conduct which reflects adversely on his or her integrity or fitness as a certificant, upon the CFP® marks, or upon the profession.