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							Chapter 23

    Ethical Responsibilities




             Chapter 23: Ethical
               Responsibilities
        Ethics, Law, and Codes of Ethics
          Ethics
          Law
          Code of Ethics




Chapter 23: Ethical
  Responsibilities             2001, Dalton Publications, LLC
        The CFP Board and the Ethics
        Code
          Certified Financial Planner Board of
           Professional Review (BOPR)
          Certified Financial Planner Board of
           Governors
          Principles
          Rules
          CFP designee
Chapter 23: Ethical
  Responsibilities                     2001, Dalton Publications, LLC
        Principle 1: Integrity
          Rule 101 of the Code prohibits the
           solicitation of clients through ―false or
           misleading communications or
           advertisements.‖
          Commingling of funds
          Fiduciary relationship


Chapter 23: Ethical
  Responsibilities                       2001, Dalton Publications, LLC
        Principle 2: Objectivity
          Rule 201 states as follows: ―A CFP
           Board designee shall exercise
           reasonable and prudent professional
           judgment in providing professional
           services.‖



Chapter 23: Ethical
  Responsibilities                    2001, Dalton Publications, LLC
        Principle 3: Competence
          Two areas of competence are knowledge and
           the application of that knowledge.
          Rule 301 states as follows: ―A CFP Board
           designee shall keep informed of
           developments in the field of financial planning
           and participate in continuing education
           throughout the designee’s professional career
           in order to improve professional competence
           in all areas in which the designee is
           engaged.‖
Chapter 23: Ethical
  Responsibilities                         2001, Dalton Publications, LLC
        Principle 4: Fairness
          The Code provides that a CFP Board
           designee ―shall perform professional
           services in a manner that is fair and
           reasonable to clients, principals,
           partners, and employers and shall
           disclose conflict(s) of interest(s) in
           providing such services.‖

Chapter 23: Ethical
  Responsibilities                      2001, Dalton Publications, LLC
        Principle 5: Confidentiality
          Rule 501 provides that a CFP Board
           designee is prohibited from revealing
           ―or use for his or her own benefit—
           without the client’s consent, any
           personally identifiable information
           relating to the client relationship or the
           affairs of the client, except and to the
           extend disclosure or use is reasonably
           necessary.‖
Chapter 23: Ethical
  Responsibilities                       2001, Dalton Publications, LLC
        Principle 6: Professionalism
          ―A CFP Board designee’s conduct in all
           matters shall reflect credit upon the
           profession.‖

          CFP Board designees must ―use the
           marks in compliance with the rules and
           regulations of the CFP Board.‖

Chapter 23: Ethical
  Responsibilities                    2001, Dalton Publications, LLC
        Principle 7: Diligence
          ―A CFP Board designee shall act
           diligently in providing professional
           services.‖

          Under Rule 701, a CFP Board designee
           ―shall provide services diligently.‖


Chapter 23: Ethical
  Responsibilities                       2001, Dalton Publications, LLC
        Disciplinary Rules and
        Procedures
          ―The Procedures‖ are the rules and
           regulations for disciplinary proceedings
           against CFP Board designees.
          A standard of proof, or ―burden of
           proof,‖ is the requirement of proving
           facts to a certain degree of probability.


Chapter 23: Ethical
  Responsibilities                      2001, Dalton Publications, LLC
        Burdens of Proof
          Preponderance of the evidence
          Clear and convincing evidence
          Evidence beyond a reasonable doubt




Chapter 23: Ethical
  Responsibilities                  2001, Dalton Publications, LLC
        Grounds and Forms of Discipline
   Grounds for discipline--any act which violates the Code,
    fails to comply with the Practice Standards, violates any
    criminal laws, whether the CFP Board designee is
    convicted or acquitted, is the proper basis for professional
    suspension, violates these Procedures or an order of
    discipline
   Failure to respond to a request of the CFP Board without
    good cause, or obstruction of the CFP Board or staff in the
    performance of their duties
   Any false or misleading statement made to the CFP Board
   Other acts amounting to unprofessional conduct

Chapter 23: Ethical
  Responsibilities                             2001, Dalton Publications, LLC
        Grounds and Forms of Discipline
        (cont’d)



          Forms of Discipline
                  Private censure
                  Public letter of admonition
                  Suspension
                  Revocation




Chapter 23: Ethical
  Responsibilities                                2001, Dalton Publications, LLC
        The Practice Standards
          The 100 Series – establishing and
           defining the relationship with the client.
          The 200 Series – gathering client data.
          The 300 Series – analyzing and
           evaluating the client’s financial status.
          The 400 Series – developing and
           presenting the financial planning
           recommendations.
Chapter 23: Ethical
  Responsibilities                      2001, Dalton Publications, LLC