CFP® Professionals’ Responsibilities When Working as Part of a Team

Many CFP® professionals work as part of a team of individuals who provide services to a Client. The team may consist of other financial professionals, attorneys or accountants, or other service providers, and the team may be housed within one firm or across several firms. Under CFP Board's Code of Ethics and Standards of Conduct (Code and Standards), a CFP® professional has specific duties that apply when working as part of a team.

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. The Fiduciary Duty includes the Duty of Loyalty, the Duty of Care, and the Duty to Follow Client Instructions. To fulfill the Duty of Care, a CFP® professional must 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.

When a CFP® professional is working as part of a team to provide Financial Advice to a Client, the Duty of Care requires the CFP® professional to communicate with the other members of the team about the scope of their respective services and the allocation of responsibility between them. This might be satisfied by a firm policy or protocol that identifies their respective responsibilities with respect to the services to be provided. For more on the duty to communicate team member responsibilities, read this case study or view this video case study.

When a CFP® professional is working with other individuals within a firm as part of a team that is providing services to a Client, the Fiduciary Duty requires the CFP® professional to take reasonable steps to ensure that the Client is receiving Financial Planning that is in the Client’s best interests. Situations may arise where a CFP® professional is asked to provide services or recommendations that rely on qualitative and quantitative information obtained by other individuals.

In situations where the CFP® professional believes the information received does not provide adequate basis for the requested services or recommendations, the CFP® professional first should determine whether the CFP® professional’s firm has policies and procedures that apply to the situation. In the absence of such policies and procedures, a CFP® professional should inform the other individual within the firm who is providing services to the Client that the CFP® professional believes that additional information may be needed for the CFP® professional to provide Financial Advice that is in the Client’s best interest and explain the basis for the CFP® professional’s belief. The CFP® professional should discuss with the other individual how the services may be provided in the best interests of the Client. For more on the fiduciary duty to obtain factual information when working on a team, read this case study or view this video case study.

When providing Financial Planning, a CFP® professional is required to follow the Practice Standards for the Financial Planning Process. The sixth step in the process is Implementing the Financial Planning Recommendations. The seventh step in the process is Monitoring Progress and Updating.

The Code and Standards does not include a duty to monitor or supervise another person within a firm who is providing Professional Services to a Client as part of a team. However, when a CFP® professional is working as part of a team within a firm to provide Professional Services to a Client and the CFP® professional has actual knowledge that another member of the team may have failed to provide the Professional Services that were assigned to that team member, the Fiduciary Duty requires the CFP® professional to take reasonable steps to help ensure that the Professional Services provided to the Client are in the Client’s best interests.

When a CFP® professional does not have responsibility for supervising the other team member, the CFP® professional should determine whether the CFP® Professional’s Firm has policies and procedures, such as an escalation path or a hotline that may be used to communicate with appropriate personnel about concerns related to the delivery of Professional Services, and then follow those policies and procedures. In the absence of such policies and procedures, a CFP® professional should:

• Inform the other team member that the CFP® professional believes that the Professional Services were not performed in the Client’s best interests,
• Explain the basis for the CFP® professional’s belief, and
• Request that the other team member either demonstrate that the Professional Services were provided in the Client’s best interests or take action to ensure that the Professional Services are provided in the best interests of the Client.

For more on the fiduciary duty to take reasonable steps when providing professional services as part of a team within a firm, read this case study or view this video case study.

The duty that arises when working as a team within a firm is related to the Duty When Working With Additional Persons that applies to persons outside the firm who are providing Professional Services to the Client. As set out in Standard A.13, when the CFP® professional is engaging or recommending the selection or retention of another financial or Professional Services provider, the CFP® professional must:

• Have a reasonable basis for the recommendation or Engagement based on the person’s reputation, experience and qualifications;
• Disclose to the Client, at the time of the recommendation or prior to the Engagement, 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 the recommendation or Engagement; and
• When engaging a person to provide services for a Client, exercise reasonable care to protect the Client’s interests.

When working with another financial or Professional Services provider on behalf of the Client, the CFP® professional must:

• Communicate with the other provider about the scope of their respective services and the allocation of responsibility between them; and
• Inform the Client in a timely manner if the CFP® professional has a reasonable belief that the other provider’s services were not performed in accordance with the scope of services to be provided and the allocation of responsibilities.

For more on a CFP® professional’s duty when working with additional persons, view this video.