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Financial Planning Practice Standards

Contents

Statement of Purpose for Financial Planning Practice Standards

History of Practice Standards

Description of Practice Standards

Format of Practice Standards

Compliance with Practice Standards

100 Series: Establishing and Defining the Relationship with the Client

100-1 Defining the Scope of the Engagement

200 Series: Gathering Client Data

200-1 Determining a Client's Personal and Financial Goals, Needs and Priorities

200-2 Obtaining Quantitative Information and Documents

300 Series: Analyzing and Evaluating the Client's Financial Status

300-1 Analyzing and Evaluating the Client's Information

400 Series: Developing and Presenting the Financial Planning Recommendation(s)

Preface to the 400 Series

400-1 Identifying and Evaluating Financial Planning Alternative(s)

400-2 Developing the Financial Planning Recommendation(s)

400-3 Presenting the Financial Planning Recommendation(s)

500 Series: Implementing the Financial Planning Recommendation(s)

500-1 Agreeing on Implementation Responsibilities

500-2 Selecting Products and Services for Implementation

600 Series: Monitoring

600-1 Defining Monitoring Responsibilities

Copyright © 1998-2002, Certified Financial Planner Board of Standards Inc. All rights reserved.

Statement of Purpose for Financial Planning Practice Standards

Financial Planning Practice Standards are developed and promulgated by Certified Financial Planner Board of Standards Inc. (CFP Board) for the ultimate benefit of consumers of financial planning services.

These Practice Standards are intended to:

1) Assure that the practice of financial planning by Certified Financial PlannerTM professionals is based on established norms of practice;

2) Advance professionalism in financial planning; and

3) Enhance the value of the financial planning process.

History of Practice Standards

CFP Board is a professional regulatory organization founded in 1985 to benefit the public by establishing and enforcing education, examination, experience and ethics requirements for CFP^® professionals. Through its certification process, CFP Board established fundamental criteria necessary for competency in the financial planning profession. Through its Code of Ethics and Professional Responsibility (Code of Ethics), CFP Board has identified the ethics standards to which financial planning professionals should adhere.

In 1995, CFP Board established its Board of Practice Standards composed exclusively of CFP practitioners, to draft standards of practice for financial planning. The Board of Practice Standards drafted and revised the standards considering input from CFP certificants, consumers, regulators and other organizations. CFP Board's Board of Governors adopted the revised standards.

Description of Practice Standards

A Practice Standard establishes the level of professional practice that is expected of CFP Board designees engaged in financial planning.

Practice Standards apply to CFP Board designees in performing the tasks of financial planning regardless of the person's title, job position, type of employment or method of compensation. Compliance with the Practice Standards is mandatory for CFP Board designees, but all financial planning professionals are encouraged to use the Practice Standards when performing financial planning tasks or activities addressed by a Practice Standard.

Conduct inconsistent with a Practice Standard in and of itself is neither intended to give rise to a cause of action nor to create any presumption that a legal duty has been breached. The Practice Standards are designed to provide CFP Board designees a framework for the professional practice of financial planning. They are not designed to be a basis for legal liability.

Practice Standards are not intended to prescribe the services to be provided or step-by-step procedures for providing any particular service. Such procedures may be provided in practice aids developed by various financial planning organizations and other sources.

Practice Standards were developed for selected financial planning activities identified in a financial planner job analysis first conducted by CFP Board in 1987, updated in 1994 by CTB/McGraw-Hill, an independent consulting firm, and again in 1999 by the Chauncey Group. The financial planning process is defined as follows:

Financial Planning Process	Related Practice Standard
1. Establishing and defining the relationship with a client	100-1 Defining the Scope of the Engagement
2. Gathering client data	200-1 Determining a Client's Personal and Financial Goals, Needs and Priorities
	200-2 Obtaining Quantitative Information and Documents
3. Analyzing and evaluating the client's financial status	300-1 Analyzing and Evaluating the Client's Information
4. Developing and presenting financial planning recommendations	400-1 Identifying and Evaluating Financial Planning Alternative(s)
	400-2 Developing the Financial Planning Recommendation(s)
	400-3 Presenting the Financial Planning Recommendation(s)
5. Implementing the financial planning recommendations	500-1 Agreeing on Implementation Responsibilities
	500-2 Selecting Products and Services for Implementation
6.Monitoring	600-1 Defining Monitoring Responsibilities

Format of Practice Standards

Each Practice Standard is a statement regarding an element of the financial planning process. It is followed by an explanation of the Standard, its relationship to the Code of Ethics, and its expected impact on the public, the profession and the practitioner.

The Explanation accompanying each Practice Standard explains and illustrates the meaning and purpose of the Practice Standard. The text of each Practice Standard is authoritative and directive. The related Explanation is a guide to interpretation and application of the Practice Standard based, where indicated, on a standard of reasonableness, a recurring theme throughout the Practice Standards. The Explanation is not intended to establish a professional standard or duty beyond what is contained in the Practice Standard itself.

Compliance with Practice Standards

The practice of financial planning consistent with these Practice Standards is required for CFP Board designees. Enforcement is based on the disciplinary rules and procedures established by CFP Board and administered by CFP Board's Board of Professional Review and Board of Appeals.

Practice Standards 100 Series

Establishing and Defining the Relationship with the Client

100-1: Defining the Scope of the Engagement

The financial planning practitioner and the client shall mutually define the scope of the engagement before any financial planning service is provided.

Explanation of this Practice Standard

Prior to providing any financial planning service, the financial planning practitioner and the client shall mutually define the scope of the engagement. The process of "mutually-defining" is essential in determining what activities may be necessary to proceed with the engagement.

This process is accomplished in financial planning engagements by:

• Identifying the service(s) to be provided;

• Disclosing the practitioner's material conflict(s) of interest;

• Disclosing the practitioner's compensation arrangement(s);

• Determining the client's and the practitioner's responsibilities;

• Establishing the duration of the engagement; and

• Providing any additional information necessary to define or limit the scope.

The scope of the engagement may include one or more financial planning subject areas. It is acceptable to mutually define engagements in which the scope is limited to specific activities. Mutually defining the scope of the engagement serves to establish realistic expectations for both the client and the practitioner.

This Practice Standard does not require the scope of the engagement to be in writing. However, as noted in the "Relationship" section, which follows, there may be certain disclosures that are required to be in writing.

As the relationship proceeds, the scope may change by mutual agreement.

This Practice Standard shall not be considered alone, but in conjunction with all other Practice Standards.

Effective Date
Original version, January 1, 1999. Updated version, January 1, 2002.

Relationship of this Practice Standard to CFP Board's Code of Ethics and Professional Responsibility

This Practice Standard relates to CFP Board's Code of Ethics and Professional Responsibility (Code of Ethics) through the Code of Ethics' Principle 4 - Fairness and Rules 402; and Principle 7 - Diligence and Rule 702.

Principle 4 states "A CFP Board designee shall perform professional services in a manner that is fair and reasonable to clients...."Although, as stated earlier, there is no requirement that the scope of the engagement be in writing, Rule 402 in the Code of Ethics requires a financial planning practitioner to make "timely written disclosure of all material information relative to the professional relationship. In all circumstances and prior to the engagement, a CFP Board designee shall, in writing: (a) Disclose conflict(s) of interest and sources of compensation; and (b) Inform the client or prospective client of his/her right to ask at any time for information about the compensation of the CFP Board designee."

Principle 7 states "A CFP Board designee shall act diligently in providing professional services." Rule 702 requires that financial planning practitioners enter into an engagement only after obtaining sufficient information to satisfy that "the relationship is warranted by the individual's needs and objectives; and the CFP Board designee has the ability to either provide requisite competent services or to involve other professionals who can provide such services."

Anticipated Impact of this Practice Standard
Upon the Public

The public is served when the relationship is based upon a mutual understanding of the engagement. Clarity of the scope of the engagement enhances the likelihood of achieving client expectations.

Upon the Financial Planning Profession

The profession benefits when clients are satisfied. This is more likely to take place when clients have expectations of the process, which are both realistic and clear, before services are provided.

Upon the Financial Planning Practitioner

A mutually defined scope of the engagement provides a framework for the financial planning process by focusing both the client and the practitioner on the agreed upon tasks. This enhances the potential for positive results.

Practice Standards 200 Series
Gathering Client Data
200-1: Determining a Client's Personal and Financial Goals, Needs and Priorities

The financial planning practitioner and the client shall mutually define the client's personal and financial goals, needs and priorities that are relevant to the scope of the engagement before any recommendation is made and/or implemented.

Explanation of this Practice Standard

Prior to making recommendations to the client, the financial planning practitioner and the client shall mutually define the client's personal and financial goals, needs and priorities. In order to arrive at such a definition, the practitioner will need to explore the client's values, attitudes, expectations, and time horizons as they affect the client's goals, needs and priorities. The process of "mutually-defining" is essential in determining what activities may be necessary to proceed with the client engagement. Personal values and attitudes shape the client's goals and objectives and the priority placed on them. Accordingly, these goals and objectives must be consistent with the client's values and attitudes in order for the client to make the commitment necessary to accomplish them.

Goals and objectives provide focus, purpose, vision and direction for the financial planning process. It is important to determine clear, and measurable objectives that are relevant to the scope of the engagement. The role of the practitioner is to facilitate the goal-setting process in order to clarify, with the client, goals and objectives. When appropriate, the practitioner shall try to assist clients in recognizing the implications of unrealistic goals and objectives.

This Practice Standard addresses only the tasks of determining the client's personal and financial goals, needs and priorities; assessing the client's values, attitudes and expectations; and determining the client's time horizons. These areas are subjective and the practitioner's interpretation is limited by what the client reveals.

This Practice Standard shall not be considered alone, but in conjunction with all other Practice Standards.

Effective Date
Original version, January 1, 1999. Updated version, January 1, 2002.

Relationship of this Practice Standard to CFP Board's Code of Ethics and Professional Responsibility

This Practice Standard relates to CFP Board's Code of Ethics and Professional Responsibility (Code of Ethics) through the Code of Ethics' Principle 7 - Diligence, and Rules 701 through 703. Rule 701 states that "A CFP Board designee shall provide services diligently." Rule 702 requires a financial planning practitioner to "enter into an engagement only after securing sufficient information to satisfy the CFP Board designee that ... the relationship is warranted by the individual's needs and objectives...." In addition, Rule 703 requires a financial planning practitioner to "make and/or implement only recommendations which are suitable for the client."

Anticipated Impact of this Practice Standard
Upon the Public

The public is served when the relationship is based upon mutually defined goals, needs and priorities. This Practice Standard reinforces the practice of putting the client's interests first which is intended to increase the likelihood of achieving the client's goals and objectives.

Upon the Financial Planning Profession

Compliance with this Practice Standard emphasizes to the public that the client's goals, needs and priorities are the focus of the financial planning process. This encourages the public to seek out the services of a financial planning practitioner who uses such an approach.

Upon the Financial Planning Practitioner

The client's goals, needs and priorities help determine the direction of the financial planning process. This focuses the practitioner on the specific tasks that need to be accomplished. Ultimately, this will facilitate the development of appropriate recommendations.

200-2: Obtaining Quantitative Information and Documents

The financial planning practitioner shall obtain sufficient quantitative information and documents about a client relevant to the scope of the engagement before any recommendation is made and/or implemented.

Explanation of this Practice Standard

Prior to making recommendations to the client and depending on the scope of the engagement, the financial planning practitioner shall determine what quantitative information and documents are sufficient and relevant.

The practitioner shall obtain sufficient and relevant quantitative information and documents pertaining to the client's financial resources, obligations and personal situation. This information may be obtained directly from the client or other sources such as interview(s), questionnaire(s), client records and documents.

The practitioner shall communicate to the client a reliance on the completeness and accuracy of the information provided and that incomplete or inaccurate information will impact conclusions and recommendations.

If the practitioner is unable to obtain sufficient and relevant quantitative information and documents to form a basis for recommendations, the practitioner shall either:

1. Restrict the scope of the engagement to those matters for which sufficient and relevant information is available; or

2. Terminate the engagement.

The practitioner shall communicate to the client any limitations on the scope of the engagement, as well as the fact that this limitation could affect the conclusions and recommendations.

This Practice Standard shall not be considered alone, but in conjunction with all other Practice Standards.

Effective Date
Original version, January 1, 1999. Updated version, January 1, 2002.

Relationship of this Practice Standard to CFP Board's Code of Ethics and Professional Responsibility

This Practice Standard relates to CFP Board's Code of Ethics and Professional Responsibility (Code of Ethics) through the Code of Ethics' Principle 7 - Diligence and Rules 701 through 703. Rule 701 states "A CFP Board designee shall provide services diligently." Rule 702 requires a financial planning practitioner to "enter into an engagement only after securing sufficient information to satisfy the CFP Board designee that ... the relationship is warranted by the individual's needs and objectives...." In addition, Rule 703 requires a financial planning practitioner to "make and/or implement only recommendations which are suitable for the client."

Anticipated Impact of this Practice Standard
Upon the Public

The public is served when financial planning recommendations are based upon sufficient and relevant quantitative information and documents. This Practice Standard is intended to increase the likelihood of achieving the client's goals and objectives.

Upon the Financial Planning Profession

The financial planning process requires that recommendations be made based on sufficient and relevant quantitative data. Therefore, compliance with this Practice Standard encourages the public to seek financial planning practitioners who use the financial planning process.

Upon the Financial Planning Practitioner

Sufficient and relevant quantitative information and documents provide the foundation for analysis. Ultimately, this will facilitate the development of appropriate recommendations.

Practice Standards 300 Series
Analyzing and Evaluating the Client's Financial Status
300-1: Analyzing and Evaluating the Client's Information

A financial planning practitioner shall analyze the information to gain an understanding of the client's financial situation and then evaluate to what extent the client's goals, needs and priorities can be met by the client's resources and current course of action.

Explanation of this Practice Standard

Prior to making recommendations to a client, it is necessary for the financial planning practitioner to assess the client's financial situation and to determine the likelihood of reaching the stated objectives by continuing present activities.

The practitioner will utilize client-specified, mutually agreed upon, and/or other reasonable assumptions. Both personal and economic assumptions must be considered in this step of the process. These assumptions may include, but are not limited to, the following:

• Personal assumptions, such as: retirement age(s), life expectancy(ies), income needs, risk factors, time horizon and special needs; and

• Economic assumptions, such as: inflation rates, tax rates and investment returns.

Analysis and evaluation are critical to the financial planning process. These activities form the foundation for determining strengths and weaknesses of the client's financial situation and current course of action. These activities may also identify other issues that should be addressed. As a result, it may be appropriate to amend the scope of the engagement and/or to obtain additional information.

Effective Date
Original version, January 1, 2000. Updated version, January 1, 2002.

Relationship of this Practice Standard to CFP Board's Code of Ethics and Professional Responsibility

This Practice Standard relates to CFP Board's Code of Ethics and Professional Responsibility (Code of Ethics) through the Code of Ethics' Principle 2 - Objectivity and Rules 201 and 202; Principle 3 - Competence and Rule 302, and Principle 7 - Diligence and Rule 701.

Principle 2 states "A CFP Board designee shall be objective in providing professional services to clients." Rule 201 states "A CFP Board designee shall exercise reasonable and prudent professional judgment in providing professional services" and Rule 202 states "A financial planning practitioner shall act in the interest of the client."

Principle 3 states "A CFP Board designee shall provide services to clients competently and maintain the necessary knowledge and skill to continue to do so in those areas in which the designee is engaged." Rule 302 states "A CFP Board designee shall offer advice only in those areas in which the CFP Board designee has competence. In areas where the CFP Board designee is not professionally competent, the CFP Board designee shall seek the counsel of qualified individuals and/or refer clients to such parties."

Under Principle 7, Rule 701 states "A CFP Board designee shall provide services diligently."

Anticipated Impact of this Practice Standard
Upon the Public

The public is served when objective analysis and evaluation by a financial planning practitioner results in the client's heightened awareness of specific financial planning issues. This Practice Standard is intended to increase the likelihood of achieving the client's goals and objectives.

Upon the Financial Planning Profession

Objective analysis and evaluation enhances the public's recognition of and appreciation for the financial planning process and increases the confidence in financial planning practitioners who provide this service.

Upon the Financial Planning Practitioner

Analysis and evaluation helps the practitioner establish the foundation from which recommendations can be made that are specific to the client's financial planning goals, needs and priorities.

Practice Standards 400 Series
Developing and Presenting the Financial Planning Recommendation(s)
Preface to the 400 Series

The 400 Series, "Developing and Presenting the Financial Planning Recommendation(s)," represents the very heart of the financial planning process. It is at this point that the financial planning practitioner, using both science and art, formulates the recommendations designed to achieve the client's goals, needs and priorities. Experienced financial planning practitioners may view this process as one action or task. However, in reality, it is a series of distinct but interrelated tasks.

These three Practice Standards emphasize the distinction among the several tasks which are part of this process. These Practice Standards can be described as, "What is Possible?," "What is Recommended?" and "How is it Presented?" The first two Practice Standards involve the creative thought, the analysis, and the professional judgment of the practitioner, which are often performed outside the presence of the client. First, the practitioner identifies and considers the various alternatives, including continuing the present course of action (Practice Standard 400-1). Second, the practitioner develops the recommendation(s) from among the selected alternatives (Practice Standard 400-2). Once the practitioner has determined what to recommend, the final task is to communicate the recommendation(s) to the client (Practice Standard 400-3).

The three Practice Standards that comprise the 400 series should not be considered alone, but in conjunction with all other Practice Standards.

400-1: Identifying and Evaluating Financial Planning Alternative(s)

The financial planning practitioner shall consider sufficient and relevant alternatives to the client's current course of action in an effort to reasonably meet the client's goals, needs and priorities.

Explanation of this Practice Standard

After analyzing the client's current situation (Practice Standard 300-1) and prior to developing and presenting the recommendation(s) (Practice Standards 400-2 and 400-3) the financial planning practitioner shall identify alternative actions. The practitioner shall evaluate the effectiveness of such actions in reasonably meeting the client's goals, needs and priorities.

This evaluation may involve, but is not limited to, considering multiple assumptions, conducting research or consulting with other professionals. This process may result in a single alternative, multiple alternatives or no alternative to the client's current course of action.

In considering alternative actions, the practitioner shall recognize and, as appropriate, take into account his or her legal and/or regulatory limitations and level of competency in properly addressing each of the client's financial planning issues.

More than one alternative may reasonably meet the client's goals, needs and priorities. Alternatives identified by the practitioner may differ from those of other practitioners or advisers, illustrating the subjective nature of exercising professional judgment.

Effective Date
Original version, January 1, 2001. Updated version, January 1, 2002.

Relationship of this Practice Standard to CFP Board's Code of Ethics and Professional Responsibility

This Practice Standard relates to CFP Board's Code of Ethics and Professional Responsibility (Code of Ethics) through the Code of Ethics' Principle 2 - Objectivity and Rules 201 and 202; Principle 3 - Competence and Rule 302; Principle 6 - Professionalism and Rule 609; and Principle 7 - Diligence and Rules 701 and 703.

Principle 2 states "A CFP Board designee shall be objective in providing professional services to clients." Rule 201 states "A CFP Board designee shall exercise reasonable and prudent professional judgment in providing professional services." Rule 202 states "A financial planning practitioner shall act in the interest of the client."

Principle 3 states "A CFP Board designee shall provide services to clients competently and maintain the necessary knowledge and skill to continue to do so in those areas in which the designee is engaged." Rule 302 states "A CFP Board designee shall offer advice only in those areas in which the CFP Board designee has competence. In areas where the CFP Board designee is not professionally competent, the CFP Board designee shall seek the counsel of qualified individuals and/or refer clients to such parties."

Principle 6 states "A CFP Board designee's conduct in all matters shall reflect credit upon the profession." Rule 609 states "A CFP Board designee shall not practice any other profession or offer to provide such services unless the CFP Board designee is qualified ... and is licensed as required by state law."

Principle 7 states "A CFP Board designee shall act diligently in providing professional services." Rule 701 states "A CFP Board designee shall provide services diligently." Rule 703 states "A financial planner practitioner shall make and/or implement only recommendations which are suitable for the client."

400-2: Developing the Financial Planning Recommendation(s)g the Financial Planning

The financial planning practitioner shall develop the recommendation(s) based on the selected alternative(s) and the current course of action in an effort to reasonably meet the client's goals, needs and priorities.

Explanation of this Practice Standard

After identifying and evaluating the alternative(s) and the client's current course of action, the practitioner shall develop the recommendation(s) expected to reasonably meet the client's goals, needs and priorities. A recommendation may be an independent action or a combination of actions which may need to be implemented collectively.

The recommendation(s) shall be consistent with and will be directly affected by the following:

• Mutually defined scope of the engagement;

• Mutually defined client goals, needs and priorities;

• Quantitative data provided by the client;

• Personal and economic assumptions;

• Practitioner's analysis and evaluation of client's current situation; and

• Alternative(s) selected by the practitioner.

A recommendation may be to continue the current course of action. If a change is recommended, it may be specific and/or detailed or provide a general direction. In some instances, it may be necessary for the practitioner to recommend that the client modify a goal.

The recommendations developed by the practitioner may differ from those of other practitioners or advisers, yet each may reasonably meet the client's goals, needs and priorities.

Effective Date
Original version, January 1, 2001. Updated version, January 1, 2002.

Relationship of this Practice Standard to CFP Board's Code of Ethics and Professional Responsibility

This Practice Standard relates to CFP Board's Code of Ethics and Professional Responsibility (Code of Ethics) through the Code of Ethics' Principle 2 - Objectivity and Rules 201 and 202; Principle 3 - Competence and Rule 302; Principle 6 - Professionalism and Rule 609; and Principle 7 - Diligence and Rules 701, 703 and 704.

Principle 2 states "A CFP Board designee shall be objective in providing professional services to clients." Rule 201 states "A CFP Board designee shall exercise reasonable and prudent professional judgment in providing professional services." Rule 202 states "A financial planning practitioner shall act in the interest of the client."

Principle 3 states "A CFP Board designee shall provide services to clients competently and maintain the necessary knowledge and skill to continue to do so in those areas in which the designee is engaged." Rule 302 states "A CFP Board designee shall offer advice only in those areas in which the CFP Board designee has competence. In areas where the CFP Board designee is not professionally competent, the CFP Board designee shall seek the counsel of qualified individuals and/or refer clients to such parties."

Principle 6 states "A CFP Board designee's conduct in all matters shall reflect credit upon the profession." Rule 609 states "A CFP Board designee shall not practice any other profession or offer to provide such services unless the CFP Board designee is qualified ... and is licensed as required by state law."

Principle 7 states "A CFP Board designee shall act diligently in providing professional services." Rule 701 states "A CFP Board designee shall provide services diligently." Rule 703 states "A financial planner practitioner shall make and/or implement only recommendations which are suitable for the client." Rule 704 states "... a CFP Board designee shall make a reasonable investigation regarding the financial products recommended to clients. Such an investigation may be made by the CFP Board designee or by others provided the CFP Board designee acts reasonably in relying upon such investigation."

400-3: Presenting the Financial Planning Recommendation(s)

The financial planning practitioner shall communicate the recommendation(s) in a manner and to an extent reasonably necessary to assist the client in making an informed decision.

Explanation of this Practice Standard

When presenting a recommendation, the practitioner shall make a reasonable effort to assist the client in understanding the client's current situation, the recommendation itself, and its impact on the ability to meet the client's goals, needs and priorities. In doing so, the practitioner shall avoid presenting the practitioner's opinion as fact.

The practitioner shall communicate the factors critical to the client's understanding of the recommendations. These factors may include but are not limited to material:

• Personal and economic assumptions;

• Interdependence of recommendations;

• Advantages and disadvantages;

• Risks; and/or

• Time sensitivity.

The practitioner should indicate that even though the recommendations may meet the client's goals, needs and priorities, changes in personal and economic conditions could alter the intended outcome. Changes may include, but are not limited to: legislative, family status, career, investment performance and/or health.

If there are conflicts of interest that have not been previously disclosed, such conflicts and how they may impact the recommendations should be addressed at this time.

Presenting recommendations provides the practitioner an opportunity to further assess whether the recommendations meet client expectations, whether the client is willing to act on the recommendations, and whether modifications are necessary.

Effective Date
Original version, January 1, 2001. Updated version, January 1, 2002.

Relationship of this Practice Standard to CFP Board's Code of Ethics and Professional Responsibility

This Practice Standard relates to CFP Board's Code of Ethics and Professional Responsibility (Code of Ethics) through the Code of Ethics' Principle 1 - Integrity and Rule 102; Principle 2 - Objectivity and Rule 201; and Principle 6 - Professionalism and Rule 607.

Principle 1 states "A CFP Board designee shall offer and provide professional services with integrity." Rule 102 states "... a CFP Board designee shall not ... knowingly make a false or misleading statement to a client...."

Principle 2 states "A CFP Board designee shall be objective in providing professional services to clients." Rule 201 states "A CFP Board designee shall exercise reasonable and prudent professional judgment in providing professional services."

Principle 6 states "A CFP Board designee's conduct in all matters shall reflect credit upon the profession." Rule 607 states "A CFP Board designee shall not engage in any conduct which reflects adversely on his or her integrity or fitness as a CFP Board designee...."

Anticipated Impact of these Practice Standards
Upon the Public

The public is served when strategies and objective recommendations are developed and are communicated clearly to specifically meet each client's individual financial planning goals, needs and priorities.

Upon the Financial Planning Profession

A commitment to a systematic process for the development and presentation of the financial planning recommendations advances the financial planning profession. Development of customized strategies and recommendations enhances the public's perception of the objectivity and value of the financial planning process. The public will seek out those professionals who embrace these Practice Standards.

Upon the Financial Planning Practitioner

Customizing strategies and recommendations forms a foundation to communicate meaningful and responsive solutions. This increases the likelihood that a client will accept the recommendations and act upon them. These actions will contribute to client satisfaction.

Practice Standards 500 Series
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 Professional Responsibility

This Practice Standard relates to CFP Board's Code of Ethics and Professional Responsibility (Code of Ethics) through the Code of Ethics' Principle 3 - Competence and Rule 302; Principle 4 - Fairness and Rules 402; Principle 6 - Professionalism and Rules 606 and 609; and Principle 7 - Diligence and Rule 701.

Principle 3 states "A CFP Board designee shall provide services to clients competently and maintain the necessary knowledge and skill to continue to do so in those areas in which the designee is engaged." Rule 302 states "A CFP Board designee shall offer advice only in those areas in which the CFP Board designee has competence. In areas where the CFP Board designee is not professionally competent, the CFP Board designee shall seek the counsel of qualified individuals and/or refer clients to such parties."

Principle 4 states "A CFP Board designee shall perform professional services in a manner that is fair and reasonable to clients ... and shall disclose conflict(s) of interest in providing such services." Rule 402 states "A CFP Board designee in a financial planning engagement shall make timely written disclosure of all material information relative to the professional relationship. In all circumstances and prior to the engagement, a CFP Board designee shall, in writing: (a) Disclose conflict(s) of interest and sources of compensation; and (b) Inform the client or prospective client of his/her right to ask at any time for information about the compensation of the CFP Board designee."

Principle 6 states "A CFP Board designee's conduct in all matters shall reflect credit upon the profession." Rule 606 states "... a CFP Board designee shall perform services in accordance with: (a) Applicable laws, rules, and regulations of governmental agencies and other applicable authorities...." Rule 609 states "A CFP Board designee shall not practice any other profession or offer to provide such services unless the CFP Board designee is qualified ... and is licensed as required by state law."

Under Principle 7, Rule 701 states "A CFP Board designee shall provide services diligently."

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 Professional Responsibility

This Practice Standard relates to CFP Board's Code of Ethics and Professional Responsibility (Code of Ethics) through the Code of Ethics' Principle 2 - Objectivity and Rule 202; Principle 4 - Fairness and Rules 402 and 409; Principle 6 - Professionalism and Rule 606; and Principle 7 - Diligence and Rules 701, 703 and 704.

Principle 2 states "A CFP Board designee shall be objective in providing professional services to clients." Rule 202 states "A financial planning practitioner shall act in the interest of the client."

Principle 4 states "A CFP Board designee shall perform professional services in a manner that is fair and reasonable to clients ... and shall disclose conflict(s) of interest in providing such services." Rule 402 states "A CFP Board designee in a financial planning engagement shall make timely written disclosure of all material information relative to the professional relationship. In all circumstances and prior to the engagement, a CFP Board designee shall, in writing: (a) Disclose conflict(s) of interest and sources of compensation; and (b) Inform the client or prospective client of his/her right to ask at any time for information about the compensation of the CFP Board designee." Rule 409 states "If a CFP Board designee enters into a personal business transaction with a client, separate from regular professional services provided to that client ... the CFP Board designee shall disclose, in writing, the risks of the transaction, conflict(s) of interest of the CFP Board designee, and other relevant information ... necessary to make the transaction fair to the client."

Principle 6 states "A CFP Board designee's conduct in all matters shall reflect credit upon the profession." Rule 606 states "In all professional activities a CFP Board designee shall perform services in accordance with: (a) Applicable laws, rules and regulations of govern-mental agencies and other applicable authorities; and (b) Applicable rules, regulations and other established policies of CFP Board."

Principle 7 states "A CFP Board designee shall act diligently in providing professional services." Rule 701 states "A CFP Board designee shall provide services diligently." Rule 703 states "A financial planning practitioner shall make and/or implement only recommendations which are suitable for the client." Rule 704 states "... a CFP Board designee shall make a reasonable investigation regarding the financial products recommended to clients."

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.

Practice Standards 600 Series
Monitoring
600-1: Defining Monitoring Responsibilities

The financial planning practitioner and client shall mutually define monitoring responsibilities.

Explanation of this Practice Standard

The purpose of this Practice Standard is to clarify the role, if any, of the practitioner in the monitoring process. By clarifying this responsibility, the client's expectations are more likely to be in alignment with the level of monitoring services which the practitioner intends to provide.

If engaged for monitoring services, the practitioner shall make a reasonable effort to define and communicate to the client those monitoring activities the practitioner is able and willing to provide. By explaining what is to be monitored, the frequency of monitoring and the communication method, the client is more likely to understand the monitoring service to be provided by the practitioner.

The monitoring process may reveal the need to reinitiate steps of the financial planning process. The current scope of the engagement may need to be modified.

Effective Date
January 1, 2002.

Relationship of this Practice Standard to CFP Board's Code of Ethics and Professional Responsibility

This Practice Standard relates to CFP Board's Code of Ethics and Professional Responsibility (Code of Ethics) through the Code of Ethics' Principle 7 - Diligence and Rule 702.

Principle 7 states "A CFP Board designee shall act diligently in providing professional services." Rule 702 requires that financial planning practitioners enter into an engagement only after obtaining sufficient information to satisfy that "the relationship is warranted by the individual's goals and objectives; and the CFP Board designee has the ability to either provide requisite competent services or to involve other professionals who can provide such services."

Anticipated Impact of this Practice Standard

Upon the Public

The public is served when the practitioner and client have similar perceptions and a mutual understanding about the responsibilities for monitoring the recommendation(s).

Upon the Financial Planning Profession

The profession benefits when clients are satisfied. Clients are more likely to be satisfied when expectations of the monitoring process are both realistic and clear. This Practice Standard promotes awareness that financial planning is a dynamic process rather than a single action.

Upon the Financial Planning Practitioner

A mutually defined agreement of the monitoring responsibilities increases the potential for client satisfaction and clarifies the practitioner's responsibilities.

Disciplinary Rules and Procedures

Contents

ARTICLE 1: Introduction

ARTICLE 2: Board of Professional Review

2.1 Function and Jurisdiction of the Board of Professional Review

2.2 Powers and Duties of the Board

2.3 Panels and Staff Counsel

2.3.1 Inquiry Panel

2.3.2 Hearing Panel

2.3.3 Disqualification

2.3.4 Staff Counsel

ARTICLE 3: Grounds for Discipline

ARTICLE 4: Forms of Discipline

4.1 Private Censure

4.2 Public Letter of Admonition

4.3 Suspension

4.4 Revocation

4.5 Forms of Discipline Concerning Candidates

ARTICLE 5: Interim Suspension Status

5.1 Issuance of a Show Cause Order

5.2 Service

5.3 Response

5.4 Failure to Respond to the Order to Show Cause

5.5 Show Cause Hearing

5.6 Interim Suspension

5.7 Automatic Reinstatement Upon Reversal of Conviction or Suspension

5.8 Publication

ARTICLE 6: Investigation

6.1 Commencement

6.2 Procedures for Investigation of a Grievance

6.3 Procedures Before the Inquiry Panel

6.4 Disposition

ARTICLE 7: Complaint - Answer - Default

7.1 Inquiry Panel Decision

7.2 Complaint

7.3 Service of the Complaint

7.4 Answer

7.5 Default and Orders of Revocation and Denial

7.6 Request for Appearance

ARTICLE 8: Discovery and Evidence

8.1 Discovery

8.2 Documents

8.3 Witnesses

ARTICLE 9: Hearings

9.1 Notice

9.2 Designation of a Hearing Panel

9.3 Procedure and Proof

ARTICLE 10: Report, Findings of Fact and Recommendation

10.1 Hearing Panel

10.2 Report of the Hearing Panel

10.3 Power of the Board

ARTICLE 11: Appeals

ARTICLE 12: Conviction of a Crime or Professional Suspension

12.1 Proof of Conviction or Professional Suspension

12.2 Duty to Report Criminal Conviction or Professional Suspension

12.3 Commencement of Disciplinary Proceedings

Upon Notice of Conviction or Professional Suspension

12.4 Conviction of Serious Crime or Professional Suspension

- Immediate Suspension

12.5 Serious Crime Defined

12.6 Definition of a Professional Suspension

ARTICLE 13: Settlement Procedure

13.1 Offer of Settlement

13.2 Acceptance of Offer

13.3 Rejection of Offer

13.4 Publication

ARTICLE 14: Required Action After Revocation or Suspension

ARTICLE 15: Reinstatement After Discipline

15.1 Reinstatement After Revocation

15.2 Reinstatement After Suspension

15.3 Investigation

15.4 Successive Petitions

15.5 Reinstatement Fee

ARTICLE 16: Confidentiality of Proceeding

16.1 Confidentiality

16.2 Exceptions to Confidentiality

ARTICLE 17: General Provisions

17.1 Quorum

17.2 Notice and Service

17.3 Costs

17.4 Electronic Signature

Anonymous Case Histories

Copyright © 1986-2003, Certified Financial Planner Board of Standards Inc. All rights reserved.

Disciplinary Rules and Procedures

Article 1: Introduction

Certified Financial Planner Board of Standards Inc. (CFP Board) has adopted a Code of Ethics and Professional Responsibility (Code of Ethics) and Financial Planning Practice Standards (Practice Standards) which establish the expected level of professional conduct and practice for CFP Board designees. The Code of Ethics and Practice Standards may be amended from time to time, with revisions submitted to the public for comment before final adoption by CFP Board. To promote and maintain the integrity of its , CFP^® and Certified Financial PlannerTM certification marks for the benefit of the clients and potential clients of CFP Board designees, CFP Board has the ability to enforce the provisions of the Code of Ethics and Practice Standards. Adherence to the Code of Ethics by CFP Board designees or to Practice Standards by CFP^® practitioners is required, with the potential for CFP Board sanctions against those who violate the regulations proscribed in these documents. CFP Board will follow the disciplinary rules and procedures set forth below when enforcing the Code of Ethics and Practice Standards.

Article 2: Board of Professional Review

2.1 Function and Jurisdiction of the Board of Professional Review

CFP Board's Board of Professional Review (referred to herein as the "Board"), formed pursuant to and governed by the bylaws of CFP Board, is charged with the duty of investigating, reviewing and taking appropriate action with respect to alleged violations of the Code of Ethics and alleged non-compliance with the Practice Standards as promulgated by CFP Board's Board of Governors and shall have original jurisdiction over all such disciplinary matters and procedures.

2.2 Powers and Duties of the Board

The Board shall be authorized and empowered to:

1. Enlist the assistance of CFP certificants to assist with investigations, or serve temporarily on a Hearing Panel;

2. Periodically report to CFP Board's Board of Governors on the operation of the Board;

3. Adopt amendments to these Disciplinary Rules and Procedures, subject to review and approval of CFP Board's Board of Governors; and

4. Adopt such other rules or procedures as may be necessary or appropriate to govern the internal operations of the Board.

2.3 Panels and Staff Counsel

With respect to each individual complaint, the Chair of the Board may, or may direct CFP Board Staff Counsel to, divide the Board into two panels consisting of an Inquiry Panel and a Hearing Panel and designate a Chair for each Panel. No member of an Inquiry Panel shall act as a member of the Hearing Panel on the same matter. In the event a matter is referred to the Inquiry Panel for inquiry, if subsequently referred for hearing, such matter shall be heard by the Hearing Panel unless otherwise exempted from such requirement by any other provision of these Rules.

2.3.1 Inquiry Panel

An Inquiry Panel shall, with appropriate assistance from those members of CFP Board staff who are charged with the principal responsibility of investigating and prosecuting alleged violations of the Code of Ethics (referred to herein as the "CFP Board Staff Counsel"), investigate any alleged grounds for discipline. Following an investigation, the Inquiry Panel shall proceed as provided in Article 6 of these Procedures. An Inquiry Panel shall consist of at least two persons. At least one member of every Inquiry Panel shall be a member of the Board and at least two members shall be CFP® certificants. One member of each Inquiry Panel shall serve as Chair of that inquiry.

2.3.2 Hearing Panel

The Hearing Panel may consist of members of the Board who have been designated Hearing Panel members, enlisted CFP certificants and up to one individual who is not a CFP certificant. A Panel shall consist of at least three persons. At least one member of every Hearing Panel shall be a member of the Board and at least two members of every Hearing Panel shall be CFP certificants. One member of each Hearing Panel shall serve as Chair of that hearing. The Chair shall rule on all motions, objections and other matters presented in the course of the hearing.

2.3.3 Disqualification

Board members shall refrain from participating in any proceeding in which they, a member of their immediate family or a member of their firm have any interest or where such participation otherwise would involve a conflict of interest or the appearance of impropriety.

2.3.4 Staff Counsel

CFP Board Staff Counsel may be either full- or part-time employees of CFP Board or may be non-employees who are attorneys, accountants, CFP certificants or consultants. It will be the duty of CFP Board and CFP Board Staff Counsel to maintain an office in the Denver metropolitan area (or such other location as approved by CFP Board's Board of Governors) to serve as a central office for the filing of requests for the investigation of CFP Board designee conduct, for the coordination of such investigations, for the administration of all disciplinary enforcement proceedings carried out pursuant to these Procedures, for the prosecution of charges of wrongdoing against CFP Board designees pursuant to these Procedures and for the performance of such other duties as are designated by the Board or the Chief Executive Officer of CFP Board. CFP Board Staff Counsel shall be under the day-to-day supervision of the Chief Executive Officer of CFP Board, but shall have ultimate responsibility to the Board.

Article 3: Grounds for Discipline

Misconduct by a CFP Board designee, individually or in concert with others, including the following acts or omissions, shall constitute grounds for discipline, whether or not the act or omission occurred in the course of a client relationship:

1. Any act or omission which violates the provisions of the Code of Ethics;

2. Any act or omission which fails to comply with the Practice Standards;

3. Any act or omission which violates the criminal laws of any State or of the United States or of any province, territory or jurisdiction of any other country, provided however, that conviction thereof in a criminal proceeding shall not be a prerequisite to the institution of disciplinary proceedings, and provided further, that acquittal in a criminal proceeding shall not bar a disciplinary action;

4. Any act which is the proper basis for professional suspension, as defined herein, provided professional suspension shall not be a prerequisite to the institution of disciplinary proceedings, and provided further, that dismissal of charges in a professional suspension proceeding shall not necessarily bar a disciplinary action;

5. Any act or omission which violates these Procedures or which violates an order of discipline;

6. Failure to respond to a request by the Board, without good cause shown, or obstruction of the Board, or any panel or board thereof, or CFP Board staff in the performance of its or their duties. Good cause includes, without limitation, an assertion that a response would violate a CFP Board designee's constitutional privilege against self-incrimination;

7. Any false or misleading statement made to CFP Board.

The enumeration of the foregoing acts and omissions constituting grounds for discipline is not exclusive and other acts or omissions amounting to unprofessional conduct may constitute grounds for discipline.

Article 4: Forms of Discipline

In cases where no grounds for discipline have been established, the Board may dismiss the matter as either without merit or with a cautionary letter. In all cases, the Board has the right to require CFP Board designees to complete additional continuing education or other remedial work. Such continuing education or remedial work may be ordered instead of, or in addition to, any discipline listed below. Where grounds for discipline have been established, any of the following forms of discipline may be imposed in these cases where grounds for discipline have been established.

4.1 Private Censure

The Board may order private censure of a CFP Board designee which shall be an unpublished written reproach mailed by the Board to a censured CFP Board designee.

4.2 Public Letter of Admonition

The Board may order that a Letter of Admonition be issued against a CFP Board designee, which shall be a publishable written reproach of the CFP Board designee's behavior. It shall be standard procedure to publish the Letter of Admonition in a press release or in such other form of publicity selected by the Board. In some cases when the Board determines that there are mitigating circumstances, it may decide to withhold public notification.

4.3 Suspension

The Board may order suspension for a specified period of time, not to exceed five (5) years, for those individuals it deems can be rehabilitated. In the event of a suspension, it shall be standard procedure to publish the fact of the suspension together with identification of CFP Board designee in a press release, or in such other form of publicity as is selected by the Board. In some cases when the Board determines that there are extreme mitigating circumstances it may decide to withhold public notification. CFP Board designees receiving a suspension may qualify for reinstatement to use the marks as provided in Article 15.

4.4 Revocation

The Board may order permanent revocation of a CFP Board designee's right to use the marks. In the event of a permanent revocation it shall be standard procedure to publish the fact of the revocation together with identification of the CFP Board designee in a press release, or in such other form of publicity as is selected by the Board. In some cases when the Board determines that there are extreme mitigating circumstances it may decide to withhold public notification. Revocation shall be permanent.

4.5 Forms of Discipline Concerning Candidates

Under certain circumstances, the Board may take action in matters involving the conduct of candidates for CFP^® certification. Action that may be taken in these cases, where grounds have been established, correspond in character and degree to the four forms of discipline described in Articles 4.1 through 4.4 above, and are correspondingly as follows:

1. Subject to the candidate's meeting all other requirements of certification, certification, if any, of the candidate with a private censure in the candidate's record in the form stated;

2. Subject to the candidate's meeting all other requirements of certification, certification, if any, of the candidate with issuance of a Letter of Admonition, published as applicable, and in the candidate's record in the form stated;

3. Certification, if any, suspended for a specified period, not to exceed five (5) years;

4. Certification, if any, denied.

In the event of either a suspension or a denial of certification, the fact of such suspension or denial shall be publishable at the discretion of the Board. A candidate for the CFP certification who has been the subject of an order to suspend certification may seek to reapply for certification according to the same procedures in Article 15.2. Such candidates, in addition, shall meet the requirements of original certification.

Article 5: Interim Suspension Status

Interim suspension is the temporary suspension by the Board of a CFP Board designee's right to use the marks for a definite or indefinite period of time, while proceedings conducted pursuant to these procedures are pending against the CFP Board designee. Imposition of an interim suspension shall not preclude the imposition of any other form of discipline entered by the Board in final resolution of the disciplinary proceeding.

5.1 Issuance of a Show Cause Order

Although a CFP Board designee's right to use the marks shall not ordinarily be suspended during the pendency of such proceedings, when it appears that a CFP Board designee has been convicted of a serious crime as defined in Article 12.5, or has been the subject of a professional suspension as defined in Article 12.6, or has converted property or funds, has engaged in conduct which poses an immediate threat to the public, or has engaged in conduct the gravity of which impinges upon the stature and reputation of the marks, the Inquiry Panel or CFP Board Staff Counsel may issue an Order to Show Cause why the CFP Board designee's right to use the marks should not be suspended during the pendency of the proceedings.

5.2 Service

CFP Board shall serve the Order to Show Cause upon the CFP Board designee either by personal service or by certified mail, return receipt requested, mailed to the last known address of the CFP Board designee, as provided in Article 17.2.

5.3 Response

All responses to Orders to Show Cause shall be in writing and shall be submitted within twenty (20) calendar days from the date of service of the Order to Show Cause upon the CFP Board designee. The CFP Board designee shall, in the response, either request or waive the right to participate in the Show Cause Hearing.

5.4 Failure to Respond to the Order to Show Cause

If the CFP Board designee fails to file a Response within the period provided in Article 5.3, that CFP Board designee shall be deemed to have waived the right to respond and the allegations set forth in the Order to Show Cause shall be deemed admitted and an interim suspension will automatically be issued.

5.5 Show Cause Hearing

Upon receiving the CFP Board designee's Response as provided in Article 5.3, a hearing shall be scheduled before no less than a quorum of the Board. If so requested, the CFP Board designee shall have the opportunity to participate at such hearing presenting arguments and evidence on his/her behalf. All evidence presented must be submitted to the CFP Board staff not less than twenty (20) days prior to the scheduled hearing. Any evidence not so submitted may only be admitted by motion at the hearing.

5.6 Interim Suspension

An interim suspension will be issued when the Board determines that the CFP Board designee has failed to provide evidence which establishes, by a preponderance of the evidence, that the CFP Board designee does not pose an immediate threat to the public and that the gravity of the nature of the CFP Board designee's conduct does not impinge upon the stature and reputation of the marks. The fact that a convicted or suspended CFP Board designee is seeking appellate review of the conviction or suspension shall not limit the power of the Board to impose an interim suspension.

5.7 Automatic Reinstatement Upon Reversal of Conviction or Suspension

A CFP Board designee subject to a suspension under this Article shall have the suspension vacated immediately upon filing with the Board a certificate demonstrating that the underlying criminal conviction or professional suspension has been reversed; provided, however, the reinstatement upon such reversal shall have no effect on any proceeding conducted pursuant to these procedures then pending against a CFP Board designee.

5.8 Publication

It shall be standard procedure to publish the fact of an interim suspension together with identification of the CFP Board designee in a press release.

Article 6: Investigation

6.1 Commencement

Proceedings involving potential ethics violations shall be commenced upon a written request for investigation made by any person which shall be directed to the Board or commenced at the behest of CFP Board Staff Counsel. Proceedings involving Practice Standards nonconformance shall be commenced upon a written request for investigation made by any person(s) who have a contractual relationship with the CFP Board designee whose practices are being called into question. In either situation, the Board may, in making a determination of whether to proceed, make such inquiry regarding the underlying facts as they deem appropriate.

6.2 Procedures for Investigation of a Grievance

Upon receipt of a request for investigation containing allegations which, if true, could give rise to a violation of the Code of Ethics, or upon the acquisition by CFP Board Staff Counsel of information which, if true, could give rise to a violation of the Code of Ethics, the CFP Board designee in question shall be given written notice by CFP Board Staff Counsel that the CFP Board designee is under investigation and of the general nature of the allegations asserted against the CFP Board designee. The CFP Board designee shall have twenty (20) calendar days from the date of notice of the investigation to file a written response to the allegations with the Board.

1. No Response. At the expiration of the twenty (20) calendar-day period if no response has been received, the matter shall be referred to a Hearing Panel.

2. Response. Upon receipt of a response, CFP Board Staff Counsel shall compile all documents and materials and submit a report to an Inquiry Panel as soon thereafter as is reasonably practicable.

6.3 Procedures Before the Inquiry Panel

From the report of CFP Board Staff Counsel referred to in Article 6.2(b), the Inquiry Panel shall determine if there is probable cause to believe grounds for discipline exists and shall either; (1) dismiss the allegations as being without merit; (2) dismiss the allegations with a letter of caution recommending remedial action and entering other appropriate orders; or (3) refer the matter to CFP Board for preparation and processing of a Complaint against the CFP Board designee.

6.4 Disposition

CFP Board Staff Counsel and the Inquiry Panel shall conduct CFP Board's investigation as expeditiously as reasonably practicable.

Article 7: Complaint - Answer - Default

7.1 Inquiry Panel Decision

If the Inquiry Panel determines that there is probable cause to believe grounds for discipline exists, the Inquiry Panel shall direct CFP Board Staff Counsel to issue a Complaint as set forth in Article 7.2. The issuance of a Complaint for any other reason shall also be in accordance with Section 2 of this article.

7.2 Complaint

An original Complaint shall be prepared by CFP Board staff and forwarded to the CFP Board designee. Copies of the Complaint shall be included with the materials provided to the Hearing Panel in advance of the hearing. The Complaint shall reasonably set forth the grounds for discipline with which the CFP Board designee is charged and the conduct or omission which gave rise to those charges.

7.3 Service of the Complaint

CFP Board staff shall promptly serve the Complaint upon the CFP Board designee either by personal service or by certified mail, return receipt requested, mailed to the last known address of the CFP Board designee or as provided in Article 17.2.

7.4 Answer

All Answers to Complaints shall be in writing. The Answer shall be submitted within twenty (20) calendar days from the date of service of the Complaint upon the CFP Board designee. The CFP Board designee shall file an original and the number of copies specified in the Complaint of such Answer with CFP Board. Copies of the Answer shall be included with the materials provided to the Hearing Panel in advance of the hearing. In the Answer, the CFP Board designee shall respond to every material allegation contained in the Complaint. In addition, the CFP Board designee shall set forth in the Answer any defenses or mitigating circumstances.

7.5 Default and Orders of Revocation and Denial

If the CFP Board designee fails to file an Answer within the period provided by Article 7.4, such CFP Board designee shall be deemed to be in default, and the allegations set forth in the Complaint shall be deemed admitted. In such circumstance, CFP Board Staff Counsel shall serve upon the CFP Board designee, consistent with Article 7.3, an Order of Revocation or, in cases involving a candidate for certification, an Order of Denial. Such orders shall state clearly and with reasonable particularity the grounds for the revocation or denial of the CFP Board designee's right to use the marks. These Orders are subject to the CFP Board designee's right of appeal as outlined in Article 11.

7.6 Request for Appearance

Upon the filing of an Answer, the CFP Board designee may request an appearance at the hearing before the Hearing Panel, at which the CFP Board designee may present arguments, witnesses and evidence on his behalf.

Article 8: Discovery and Evidence

8.1 Discovery

Discovery of a disciplinary case may be obtained only after a Complaint has been issued against a CFP Board designee. The CFP Board designee may obtain copies of all documents in the CFP Board designee's disciplinary file which are not privileged and which are relevant to the subject matter in the pending action before the Hearing Panel. Requests for copies of CFP Board documents must be made to CFP Board Staff Counsel in writing. Release of information contained in a CFP Board designee's disciplinary file is premised on the understanding that materials will be used only for purposes directly connected to the pending CFP Board action.

8.2 Documents

Documents submitted by CFP Board designees to the Board for consideration in resolution of the issues raised during an investigation shall be limited to 100 pages. No evidence may be accepted less than thirty (30) days prior to the scheduled hearing, except by motion at the hearing.

Should a CFP Board designee deem it necessary to exceed the 100 page limit, the CFP Board designee shall be required to submit a written memorandum that outlines clearly and with reasonable particularity how each and every document submitted by the CFP Board designee or on his or her behalf relates to the allegations contained in the CFP Board Complaint. After reviewing such outline, the Board shall determine which documents will be permitted.

8.3 Witnesses

Witnesses, if any, shall be identified to the Board no later than thirty (30) days prior to the scheduled hearing. When witnesses are identified, the CFP Board designee shall also state the nature and extent of the witnesses' testimony.

Article 9: Hearings

9.1 Notice

Not less than thirty (30) calendar days before the date set for the hearing of a Complaint, notice of such hearing shall be given as provided in Article 17.2 to the CFP Board designee or to the CFP Board designee's counsel. The notice shall designate the date and place of the hearing and shall also advise the CFP Board designee that the CFP Board designee is entitled to be represented by counsel at the hearing, to cross-examine witnesses and to present evidence on behalf of the CFP Board designee.

9.2 Designation of a Hearing Panel

All hearings on Complaints seeking disciplinary action against a CFP Board designee shall be conducted by the Hearing Panel.

9.3 Procedure and Proof

Hearings shall be conducted in conformity with such rules of procedure and evidence as

established by the Hearing Panel. It shall not be necessary that rules of procedure and evidence applicable in a court of law are followed in any hearing, but the Hearing Panel may be guided by such rules to the extent it believes it is appropriate. Proof of misconduct shall be established by a preponderance of the evidence. A CFP Board designee may not be required to testify or to produce records over the objection of the CFP Board designee if to do so would be in violation of the CFP Board designee's constitutional privilege against self-incrimination in a court of law. In the course of the proceedings, the Chair of the Hearing Panel shall have the power to require the administration of oath and affirmations. A complete record shall be made of all testimony taken at hearings before the Hearing Panel.

Article 10: Report, Findings of Fact and Recommendation

10.1 Hearing Panel

At the conclusion of the hearing, the Hearing Panel shall record its findings of fact and recommendations and submit the findings and recommendations to the Board for its consideration. In making its recommendation, the Hearing Panel may take into consideration the CFP Board designee's prior disciplinary record, if any.

10.2 Report of the Hearing Panel

The Hearing Panel shall report its findings and recommendations to the Board. In this report, the Hearing Panel shall: (1) determine that the Complaint is not proved or that the facts as established do not warrant the imposition of discipline and recommend the Complaint be dismissed, either as without merit or with caution; or (2) refer the matter to the Board with the recommendation that discipline by the Board is appropriate. The recommendation of the Hearing Panel shall state specifically the form of discipline the Hearing Panel deems appropriate. The Hearing Panel may also recommend that the Board enter other appropriate orders.

10.3 Power of the Board

The Board reserves the authority to review any determination made by the Hearing Panel in the course of a disciplinary or Practice Standards proceeding and to enter any order with respect thereto including an order directing that further proceedings be conducted as provided by these Procedures. The Board shall review the report of the Hearing Panel and may either approve the report or modify it. The Board must accept the Hearing Panel's findings of fact, unless, on the basis of its own review of the record, it determines that such findings are clearly erroneous. The Board may modify the Hearing Panel's recommendation without reviewing the record and must state the reasons for the modification.

Article 11: Appeals

All appeals from orders of the Board shall be submitted to CFP Board's Board of Appeals in accordance with the Rules and Procedures of the Board of Appeals. If an order of the Board is not appealed within thirty (30) calendar days after notice of the order is sent to the CFP Board designee, such order shall become final.

Article 12: Conviction of a Crime or Professional Suspension

12.1 Proof of Conviction or Professional Suspension

Except as otherwise provided in these Procedures, a certificate from the clerk of any court of criminal jurisdiction indicating that a CFP Board designee has been convicted of a crime in that court or a letter or other writing from a governmental or industry self-regulatory authority to the effect that a CFP Board designee has been the subject of an order of professional suspension (as hereinafter defined) by such authority, shall conclusively establish the existence of such conviction or such professional suspension for purposes of disciplinary proceedings and shall be conclusive proof of the commission of that crime or of the basis for such suspension, by the CFP Board designee.

12.2 Duty to Report Criminal Conviction or Professional Suspension

Every CFP Board designee, upon being convicted of a crime, except misdemeanor traffic offenses or traffic ordinance violations unless such offense involves the use of alcohol or drugs, or upon being the subject of professional suspension, shall notify CFP Board in writing of such conviction or suspension within ten (10) calendar days after the date on which the CFP Board designee is notified of the conviction or suspension.

12.3 Commencement of Disciplinary Proceedings Upon Notice of Conviction or Professional Suspension

Upon receiving notice that a CFP Board designee has been convicted of a crime other than a serious crime (as defined herein) CFP Board shall, following investigation as provided in these Procedures, refer the matter to an Inquiry Panel for further proceedings. If the conviction is for a serious crime or if a CFP Board designee is the subject of professional suspension, CFP Board shall obtain the record of conviction or proof of suspension and file a Complaint against CFP Board designee as provided in Article 7. If the CFP Board designee's criminal conviction or professional suspension is either proved or admitted as provided herein, the CFP Board designee shall have the right to be heard by the Hearing Panel only on matters of rebuttal of any evidence presented by Staff Counsel other than proof of the conviction or suspension.

12.4 Conviction of Serious Crime or Professional Suspension - Immediate Suspension

Upon receiving notification of a CFP Board designee's criminal conviction or professional suspension, CFP Board Staff Counsel may, at its discretion, issue a notice to the convicted or suspended CFP Board designee directing that the CFP Board designee show cause why the CFP Board designee's right to use the marks should not be immediately suspended pursuant to Article 5.

12.5 Serious Crime Defined

The term serious crime as used in these rules shall include: (1) any felony; (2) any lesser crime, a necessary element of which as determined by its statutory or common law definition involves misrepresentation, fraud, extortion, misappropriation or theft; and/or (3) an attempt or conspiracy to commit such crime, or solicitation of another to commit such crime.

12.6 Definition of a Professional Suspension

A professional suspension as used herein shall include the suspension or bar as a disciplinary measure by any governmental or industry self-regulatory authority of a license as a registered securities representative, broker/dealer, insurance or real estate salesperson or broker, insurance broker, attorney, accountant, investment adviser or financial planner.

Article 13: Settlement Procedure

A CFP Board designee may submit an Offer of Settlement in lieu of a disciplinary hearing pursuant to these Disciplinary Rules and Procedures. The Offer of Settlement shall be in writing and must be submitted to CFP Board Staff Counsel at least 30 days prior to the CFP Board designee's scheduled disciplinary hearing. A Hearing Panel will consider the Offer and take one of the actions described in Articles 13.2 and 13.3. Submitting an Offer of Settlement shall stay all proceedings conducted pursuant to these Disciplinary Rules and Procedures.

13.1 Offer of Settlement

Offers of Settlement may be made where the nature of the proceeding, and the interests of the public and CFP Board permit. A CFP Board designee shall be permitted to submit only one Offer of Settlement during the course of a disciplinary proceeding. The Offer must be made in conformity with the provisions of this Article and should not be made frivolously or propose an action inconsistent with the seriousness of the violations alleged in the proceedings. Every Offer of Settlement shall contain and describe in reasonable detail:

1. The act or practice which the member or person associated with a member is alleged to have engaged in or omitted;

2. The principle, rule, regulation or statutory provision which such act, practice or omission to act is alleged to have been violated;

3. A statement that the CFP Board designee consents to findings of fact and violations consistent with the statements contained in the offer required by paragraphs 13.1(a) and 13.1(b);

4. Proposed Board action to be taken and a statement that the CFP Board designee consents to the proposed Board action; and

5. A waiver of all rights of appeal to CFP Board's Board of Appeals and the courts or to otherwise challenge or contest the validity of the Order issued if the Offer of Settlement is accepted.

13.2 Acceptance of Offer

If an Offer of Settlement is accepted by a Hearing Panel, the decision of the Hearing Panel shall be reviewed by the Board. The Board's decision to affirm the decision of the Hearing Panel to accept the Offer of Settlement shall conclude the proceeding as of the date the Offer of Settlement is accepted. If the Offer of Settlement includes a penalty of revocation or suspension, the revocation or suspension shall become effective immediately upon acceptance by the Hearing Panel and affirmance by the Board.

13.3 Rejection of Offer

If the Offer of Settlement is rejected by a Hearing Panel, the Offer of Settlement shall be deemed void and the matters raised in the Complaint will be set for hearing at the next meeting of the Board. The CFP Board designee shall not be prejudiced by the prior Offer of Settlement, and it shall not be given consideration in the determination of the issues involved in the pending or any other proceeding.

13.4 Publication

In the event proceedings pursuant to Article 13 result in a permanent revocation, or suspension, or otherwise result in a termination of the right to use the marks, it shall be standard procedure to publish such fact together with identification of the CFP Board designee in a press release, or in such other form of publicity as is selected by the Board.

Article 14: Required Action After Revocation or Suspension

After the entry of an order of revocation or suspension is final, the CFP Board designee shall promptly terminate any use of the marks and in particular shall not use them in any advertising, announcement, letterhead or business card.

Article 15: Reinstatement After Discipline

15.1 Reinstatement After Revocation

Revocation shall be permanent, and there shall be no opportunity for reinstatement.

15.2 Reinstatement After Suspension

Unless otherwise provided by the Board in its order of suspension, a CFP Board designee who has been suspended for a period of one (l) year or less shall be automatically reinstated upon the expiration of the period of suspension, provided the CFP Board designee files with CFP Board within thirty (30) calendar days of the expiration of the period of suspension an affidavit stating that the suspended CFP Board designee has fully complied with the order of suspension and with all applicable provisions of these Procedures, unless such condition is waived by the Board in its discretion. A CFP Board designee who has been suspended for a period longer than one (l) year must petition the Board for a reinstatement hearing within six months of the end of his/her suspension, or failure to do so will result in administrative relinquishment. Before any reinstatement hearing will be scheduled, the CFP Board designee must meet all administrative requirements for recertification, pay the reinstatement hearing costs and provide evidence, if necessary, that all prior hearing costs have been paid. At the reinstatement hearing, the CFP Board designee must prove by clear and convincing evidence that the CFP Board designee has been rehabilitated, has complied with all applicable disciplinary orders and provisions of these Procedures, and that the CFP Board designee is fit to use the marks.

15.3 Investigation

Immediately upon receipt of a petition for reinstatement, CFP Board Staff Counsel will initiate an investigation. The petitioner shall cooperate in any such investigation, and CFP Board Staff Counsel shall submit a report of the investigation to the Board which shall report on the petitioner's past disciplinary record and any recommendation regarding reinstatement.

15.4 Successive Petitions

If an individual is denied reinstatement, he/she must wait two (2) years to again petition for reinstatement; if this second petition is denied, the individual's right to use the marks shall be administratively relinquished.

15.5 Reinstatement Fee

Petitioners for reinstatement will be assessed the costs of the reinstatement proceeding.

Article 16: Confidentiality of Proceedings

16.1 Confidentiality

Except as otherwise provided in these Procedures, all proceedings conducted pursuant to these Procedures shall be confidential and the records of the Board, Hearing Panel, CFP Board Staff Counsel and CFP Board staff shall remain confidential and shall not be made public.

16.2 Exceptions to Confidentiality

The pendency, subject matter and status of proceedings conducted pursuant to these Procedures may be disclosed if (1) the proceeding is predicated on criminal conviction or professional suspension as defined herein; or (2) the CFP Board designee has waived confidentiality; or (3) such disclosure is required by legal process of a court of law or other governmental body or agency having appropriate jurisdiction.

Article 17: General Provisions

17.1 Quorum

A majority of members of the Board shall be present in order to constitute a quorum of such Board, and the approval of a majority of the quorum shall be the action of such Board.

17.2 Notice and Service

Except as may otherwise be provided in these Procedures, notice shall be in writing and the giving of notice and/or service shall be sufficient when made either personally or by certified mail or overnight mail sent to the last known address of the CFP Board designee according to the records of CFP Board.

17.3 Costs

In all disciplinary cases wherein a hearing is convened, the Board will assess against the CFP Board designee the costs of the proceedings. In addition, a CFP Board designee who desires an appearance, either telephonically or in person, or who submits an Offer of Settlement pursuant to Article 13, will be required to submit hearing costs not less than thirty (30) days prior to the date of the scheduled hearing. In the event that the hearing results in a dismissal without merit, the Board shall have the discretion to refund the CFP Board designee's hearing fee; a CFP Board designee may specifically request that the Board consider refunding the hearing fee but such request must be made to the Hearing Panel in the CFP Board designee's Answer or at the hearing. A CFP Board designee who petitions for reinstatement from a suspension or revocation or who petitions for appeal shall bear the costs of such proceeding.

Financial hardship. In the event a CFP Board designee is unable to pay the required hearing costs due to financial hardship, the CFP Board designee may submit a written statement explaining his or her financial situation and request a deferral, reduction or waiver of the hearing costs. Upon receipt and review of such request, Staff Counsel shall have the discretion to defer, reduce or waive the required hearing costs. All written requests for a reduction or waiver of hearing costs due to financial hardship must be submitted at least forty-five (45) days prior to the date of the scheduled hearing.

17.4 Electronic Signature

Some documents that require a handwritten signature may be submitted electronically through CFP Board's closed Web site. Any document received by CFP Board through this process shall constitute conclusive proof that: (1) the CFP Board designee whose name appears on the document submitted such document; and (2) the CFP Board designee intended to be bound by the terms and conditions contained therein. Accordingly, the document shall be as legally binding as any containing a handwritten signature.\

Anonymous Case Histories

Anonymous case histories are available upon request to CFP Board