Question

Rule 1.4 states that "a certificant shall at all times place the interest of the client ahead of his or her own." Which of the following apply to this rule?

A. This Rule applies when the certificant provides financial planning or material elements of the financial planning process.
B. This Rule explains that the certificant owes to the client the duty of care of a fiduciary as defined by CFP Board.
C. Disclosure of Form ADV satisfies all requirements of this Rule.
D. Brokers who are CFP® certificants are not subject to this Rule.

Answer 1

The correct application of Rule 1.4, which requires a certificant to prioritize client interests, applies to financial planning activities (A) and establishes a fiduciary duty of care (B). Disclosure of Form ADV alone does not satisfy the rule (C), and brokers who are CFP® certificants must follow this rule (D).

Step-by-step explanation:

Rule 1.4 states that "a certificant shall at all times place the interest of the client ahead of his or her own." This principle is central to the ethics and professional conduct expected of CFP® certificants. When we examine this rule, we find that:

• This Rule applies when the certificant provides financial planning or material elements of the financial planning process.
• This Rule explains that the certificant owes to the client the duty of care of a fiduciary as defined by CFP Board.
• Disclosure of Form ADV does not satisfy all requirements of this Rule.
• Brokers who are CFP® certificants are also subject to this Rule.

Accordingly, the correct answers that apply to this rule are A and B, as they directly relate to the certificant's ethical responsibility and the fiduciary duty owed to the client. Option C is incorrect because simply disclosing Form ADV does not fulfill all fiduciary duties, and option D is incorrect because all CFP® certificants, including brokers, must adhere to this rule.