Kyle Richardson, CFP®
Certified Financial PlannerTM
A CFP® professional has fiduciary duties and must uphold the following standards of conduct:
1. Act with honesty, integrity, competence, and diligence
2. Act in the client’s best interests
3. Exercise due care
4. Avoid or disclose and manage conflict of interest
5. Maintain the confidentiality and protect the privacy of client information
6. Act in a manner the reflects positively on the financial planning profession and CFP certification.
FIDUCIARY DUTIES - AS OUTLINED BY THE CFP BOARD:
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 following duties must be fulfilled:
Duty of Loyalty: Place the interests of the client above the interests of the CFP® professional and the CFP® professional’s firm; 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 act without regard to the financial or other interests of the CFP® professional, the CFP® professional’s firm, or any 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.
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.
Duty to Follow Client Instructions: A CFP® professional must comply with all objectives, policies, restrictions, and other terms of the engagement and all reasonable and lawful directions of the client.
Display of Integrity: A CFP® professional must perform Professional Services with integrity. Integrity demands honesty and candor, which may not be subordinated to personal gain or advantage. Allowance may be made for innocent error and legitimate differences of opinion, but integrity cannot co-exist with deceit or subordination of principle. A CFP® professional may not, directly or indirectly, in the conduct of Professional Services:
- Employ any device, scheme, or artifice to defraud.
- Make any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading.
- Engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person.
Display of Competence: A CFP® professional must provide professional services with competence, which means with relevant knowledge and skill to apply that knowledge. When the CFP® professional is not sufficiently competent in a particular area to provide the professional services required under the engagement, the CFP® professional must gain competence, obtain the assistance of a competent professional, limit or terminate the engagement, and/or refer the client to a competent professional. The CFP® professional shall describe to the client any requested professional services that the CFP® professional will not be providing.
Display of Diligence: A CFP® professional must provide professional services, including responding to reasonable client inquiries in a timely and thorough manner.
Disclose and Manage Conflicts of Interest: When providing financial advice, a CFP® professional must make full disclosure of all material conflicts of interest with the CFP® professional’s client that could affect the professional relationship. This obligation requires the CFP® professional to provide the client with sufficiently specific facts so that a reasonable client would be able to understand the CFP® professional’s material conflicts of interest and the business practices that give rise to the conflicts and give informed consent to such conflicts or reject them. A sincere belief by a CFP® professional with a material conflict of interest that he or she is acting in the best interests of the client is insufficient to excuse failure to make full disclosure.
A CFP® professional must make full disclosure and obtain the consent of the client before providing any financial advice regarding which the CFP® professional has a material conflict of interest. In determining whether the disclosure about a material conflict of Interest provided to the client was sufficient 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 affect 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.
Evidence of oral disclosure of a conflict will be given such weight as CFP Board in its judgment deems appropriate. Written consent to a conflict is not required.
Manage Conflicts: A CFP® professional must 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.
Act With Sound and Objectional Professional Judgment: A CFP® professional must exercise professional judgment on behalf of the client that is not subordinated to the interest of the CFP® professional or others. A CFP® professional may not solicit or accept any gift, gratuity, entertainment, non-cash compensation, or other consideration that reasonably could be expected to compromise the CFP® professional’s objectivity.
Act With Professionalism: A CFP® professional must treat clients, prospective clients, fellow professionals, and others with dignity, courtesy, and respect.
Comply With The Law: A CFP® professional must comply with the laws, rules, and regulations governing professional services. A CFP® professional may not intentionally or recklessly participate or assist in another person’s violation of these standards or the laws, rules, or regulations governing professional services.
For more information regarding the CFP Board’s Standard of Conduct
relating to ethical practices, click the button below: