Implementing the Financial Planning Recommendation(s):
500-1: Agreeing on Implementation Responsibilities
The financial planning practitioner and the client shall mutually agree
on the implementation responsibilities consistent with the scope of
the engagement.
Explanation of this Practice Standard
The client is responsible for accepting or rejecting recommendations
and for retaining and/or delegating implementation responsibilities.
The financial planning practitioner and the client shall mutually
agree on the services, if any, to be provided by the practitioner.
The scope of the engagement, as originally defined, may need to be modified.
The practitioner's responsibilities may include,
but are not limited to the following:
- Identifying activities necessary for implementation;
- Determining division of activities between the practitioner and the client;
- Referring to other professionals;
- Coordinating with other professionals;
- Sharing of information as authorized; and
- Selecting and securing products and/or services.
If there are conflicts of interest, sources of
compensation or material relationships with other professionals
or advisers that have not been previously disclosed, such
conflicts, sources or relationships shall be disclosed at
this time.
When referring the client to other professionals
or advisers, the financial planning practitioner shall
indicate the basis on which the practitioner believes
the other professional or adviser may be qualified.
If the practitioner is engaged by the client
to provide only implementation activities, the scope of
the engagement shall be mutually defined, orally or in
writing, in accordance with Practice Standard 100-1.
This scope may include such matters as the extent to
which the practitioner will rely on information, analysis
or recommendations provided by others.
Effective Date
January 1, 2002.
Relationship of this Practice Standard to CFP Board's Code of Ethics and Rules of Conduct
This Practice Standard relates to CFP Board's Code of Ethics and Rules of Conduct through Principle 3 - Competence, Principle 4 - Fairness, Principle 6 - Professionalism, Principle 7 - Diligence and Rule 1.2, 2.2, 4.1, and 4.4.
500-2: Selecting Products and Services for Implementation
The financial planning practitioner shall select appropriate products
and services that are consistent with the client's goals, needs and
priorities.
Explanation of this Practice Standard
The financial planning practitioner shall investigate products
or services that reasonably address the client's needs. The
products or services selected to implement the recommendation(s)
must be suitable to the client's financial situation and consistent
with the client's goals, needs and priorities.
The financial planning practitioner uses professional
judgment in selecting the products and services that are in the
client's interest. Professional judgment incorporates both
qualitative and quantitative information.
Products and services selected by the practitioner
may differ from those of other practitioners or advisers.
More than one product or service may exist that
can reasonably meet the client's goals, needs and priorities.
The practitioner shall make all disclosures
required by applicable regulations.
Effective Date
January 1, 2002.
Relationship of this Practice Standard to CFP Board's Code of Ethics and Rules of Conduct
This Practice Standard relates to CFP Board's Code of Ethics and Rules of Conduct through Principle 2 - Objectivity,
Principle 4 - Fairness,
Principle 6 - Professionalism, Principle 7 -
Diligence and Rules 1.2, 1.4, 2.2, 4.1, 4.4 and 4.5.
Anticipated Impact of these Practice Standards
Upon the Public
The public is served when the appropriate products and services
are used to implement recommendations; thus increasing the
likelihood that the client's goals will be achieved.
Upon the Financial Planning Profession
Over time, implementing recommendations using appropriate
products and services for the client increases the credibility
of the profession in the eyes of the public.
Upon the Financial Planning Practitioner
It is for the long-term benefit of the practitioner to put
the interest of the client before that of others in the
selection of products and services.
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