Free CFP Exam Professional Conduct and Regulation Practice Questions
Professional conduct and regulation on the CFP exam covers the CFP Board's Code of Ethics, Standards of Conduct, fiduciary duty, and regulatory requirements for financial planners. This domain tests the ethical foundation required of all CFP professionals (CFP Board).
Sample Questions
Question 1
Easy
Under CFP Board's Standards, which scenario would LEAST likely trigger the fiduciary standard for a CFP® professional?
Solution
C is correct.
Posting a general educational article on a website is not directed at a specific individual's circumstances and does not constitute financial advice. The fiduciary standard applies when a CFP® professional provides financial advice to a client, not when disseminating general financial information to the public.
Posting a general educational article on a website is not directed at a specific individual's circumstances and does not constitute financial advice. The fiduciary standard applies when a CFP® professional provides financial advice to a client, not when disseminating general financial information to the public.
Question 2
Medium
A CFP® professional must act as a fiduciary when providing which type of service?
Solution
B is correct.
CFP® professionals must act as fiduciaries when providing both financial planning and financial advice. The CFP Board's Standards of Conduct require the fiduciary duty to apply at all times when these services are rendered, not just during formal financial planning engagements.
CFP® professionals must act as fiduciaries when providing both financial planning and financial advice. The CFP Board's Standards of Conduct require the fiduciary duty to apply at all times when these services are rendered, not just during formal financial planning engagements.
Question 3
Hard
Which of the following is a component of the fiduciary duty of CARE under CFP Board's Standards of Conduct?
Solution
C is correct.
The duty of care requires CFP® professionals to act with the competence, skill, thoroughness, and diligence that a prudent professional would exercise. This includes making informed recommendations based on adequate investigation and analysis.
The duty of care requires CFP® professionals to act with the competence, skill, thoroughness, and diligence that a prudent professional would exercise. This includes making informed recommendations based on adequate investigation and analysis.