Real-World Case Studies Bring "Code and Standards" to Life

Certified Financial Planner^TM professionals and their firms now have access to 12 situation-specific case studies to help them comply with the new Code of Ethics and Standards of Conduct (“Code and Standards”), which becomes effective October 1, 2019.

“These case studies bring the Code and Standards to life. They are real-world examples of interactions between CFP® professionals and their clients that demonstrate how the new standards apply to different situations,” said Kevin R. Keller, CFP Board’s Chief Executive Officer. “With this most recent guidance document, CFP Board continues to provide CFP® professionals and their firms with the tools necessary to understand and comply with the Code and Standards.”

The new case studies were developed by the Standards Resource Commission, a blue-ribbon group of individuals from financial services firms and members of the public assembled by CFP Board to assist in drafting guidance documents. The Commission’s work was informed by feedback collected from CFP® professionals at public forums, in emails, and in conversations with the Commission and staff. 

Each case study provides a specific factual situation and asks a question about the CFP® professional’s actions or duties under the new Code and Standards. A list of potential answers is provided, followed by the best answer and the rationale for why that answer is the best and the others are not.  

The initial 12 case studies present factual scenarios that cover these topics:

• How the Fiduciary Duty and the Duty to Disclose Material Conflicts of Interest apply to rollover recommendations;
• How the Fiduciary Duty and the Duty to Disclose Material Conflicts of Interest apply when providing information or services in response to Client requests and directions;
• How the Duty to Disclose Material Conflicts of Interest applies when recommending products issued by an affiliate;
• The duty of a CFP® professional when working within a firm on a team that is providing Financial Advice to a Client;
• When a CFP® professional is providing Financial Advice requires Financial Planning;
• When a Client may have a reasonable basis to believe that a CFP® professional will provide Financial Planning; and
• When a CFP® professional is providing general financial educational materials that do not invoke the Fiduciary Duty.

The case studies and additional guidance documents – such as a “Roadmap” to the Code and Standards and FAQs – may be found at www.CFP.net/code.