Question

Which of the following is a true statement?

I. Disclosure of material information relative to the professional relationship must be written.

II. Referral fees received, since not paid by the client, do not have to be disclosed.

III. There is no need to state the CFP® certificant's principles of financial planning in the CFP® certificant disclosure form.

IV. A CFP® certificant disclosure form should include the CFP® certificant's educational background and employment history.

V. It is not necessary to list professional designations and licenses held on the CFP® certificant's disclosure form.

A. I, III, IV
B. I, II, IV, V
C. II, V
D. I, IV
E. III, IV, V

Answer 1

The true statements are that disclosure of material information must be written and a CFP® certificant's disclosure form should include their educational background and employment history, thus answer D. I, IV is correct.

Step-by-step explanation:

The correct answer is D. I, IV. According to the ethical standards required of a Certified Financial Planner (CFP®), the disclosure of material information related to the professional relationship should indeed be in written form to ensure clarity and record-keeping. This includes disclosure of referral fees, as lack of disclosure could result in a conflict of interest, thus it is not true that referral fees do not have to be disclosed just because they are not paid by the client. Also, a CFP® certificant disclosure form should include the CFP® certificant's educational background and employment history to inform clients of their qualifications. But it is incorrect that there is no need to state the CFP® certificant's principles of financial planning or that it is not necessary to list professional designations and licenses held on the disclosure form. These are essential elements of full disclosure and serve to provide clients with complete information about the certificant's qualifications and approach to financial planning.