If You Use a Financial Planner, Read This Post

HNWElder Abuse and Financial Exploitation

  • Many financial planners are members of the Certified Financial Planner Board of Standards (CFP).
  • The CFP Board is the professional body for financial planners. The CFP Board establishes and enforces ethics requirements for CFP professionals and all CFP professionals agree to abide by CFP Board’s standards for competency and ethics.

financial plannerCFP Board’s Ethical Standards:  An In-depth Look

The CFP Board revised its Code of Ethics and Standards of Conduct (effective October 1, 2019).  It requires all CFP professionals to act as a fiduciary, and in the best interests of the client, at all times when providing financial advice. To act as a fiduciary under the Code and Standards, a CFP professional must fulfill the following duties:

  • Duty of Loyalty – 1) Place the interests of the client above the interests of the CFP professional and the CFP professional’s firm; and 2) Avoid conflicts of interest, or fully disclose material conflicts of interest to the client, obtain the client’s informed consent, and properly manage the conflict.
  • Duty of Care – A CFP professional must act with care, skill, prudence, and diligence that a prudent professional would exercise considering the client’s goals, risk tolerance, objectives, and financial and personal circumstances.
  • Duty to Follow Client Instructions – A CFP professional must comply with the terms of the client engagement and follow all directions of the client that are reasonable and lawful.

The Code and Standards contain other important requirements that apply to all CFP professionals, including the duty to provide clients with several categories of information that are important to the client relationship, such as a description of the products and services offered; how the client pays for the products and services; and how a CFP professional is compensated for providing the products and services.

CFP Board has a peer-review enforcement process. CFP Board staff investigates alleged violations of its standards to the CFP Board’s Disciplinary and Ethics Commission (Commission), which is composed of CFP professionals and members of the public (public members typically are attorneys or individuals with experience advocating on behalf of the public).

Where the Commission finds a violation, it may impose a private censure, a public censure, a public suspension of the right to use the CFP marks, or a public permanent revocation of the right to use the CFP marks. The CFP Board levies public discipline where necessary to protect the public by disclosing instances where a CFP professional has fallen short of his or her ethical obligations or committed violations of the Code and Standards.  CFP Board announces public discipline on its website and in a press release.

To discuss your NJ elder abuse and financial exploitation matter, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at fniemann@hnlawfirm.com.  Please ask us about our video conferencing consultations if you are unable to come to our office.

By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold Township, Monmouth County, NJ Elder Abuse and Financial Exploitation Attorney


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