Question

Toby Adams, CFP® is meeting with a new client. He wants to establish and define the relationship. What are his obligations to the client?

I. To disclose his exact commissions on the potential sale of life insurance products.

II. To define the time frame for the engagement.
III. To give the client a brochure about his firm.
IV. To explain and make clear the client's own responsibilities.

A. All of the above
B. I, II, IV
C. Ill, IV
D. II, IV
E. I, III

Answer 1

Toby Adams, as a CFP®, needs to disclose commissions, define the engagement time frame, provide a firm brochure, and clarify the client's responsibilities when establishing a relationship. Therefore, the answer is A. All of the above.

Step-by-step explanation:

When Toby Adams, CFP® (Certified Financial Planner), is meeting with a new client and wants to establish and define the relationship, he has several obligations to the client. These include:

• Disclosing his exact commissions on the potential sale of life insurance products. This is crucial for maintaining transparency and trust in the financial advisor-client relationship.
• Defining the time frame for the engagement. Both parties should have a clear understanding of the length and scope of the services to be provided.
• Providing the client with informative materials, such as a brochure about his firm, to help them understand the services offered and the firm's background.
• Explaining the client's own responsibilities. It is essential that the client is aware of their role in the financial planning process and what is expected of them.

In summary, all the listed obligations are part of establishing a professional and ethical relationship with the client. Hence, the correct answer to what his obligations to the client are would be A. All of the above.