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CERTIFIED FINANCIAL PLANNER
BOARD OF STANDARDS, I NC.

C O D E O F E T H I C S A N D P R O F E S S I O N A L R E S P O N S I B I L I T Y

Rev. 07/03

Terminology in this Booklet

? C l i e n t ? denotes a person, persons, or entity who engages a practitioner and for whom professional services are ren-
dered. For purposes of this definition, a practitioner is engaged when an individual, based upon the relevant facts
and circumstances, reasonably relies upon information or service provided by that practitioner. Where the services
of the practitioner are provided to an entity (corporation, trust, partnership, estate, etc.), the client is the entity act-
ing through its legally authorized representative.

?CFP Board designee? denotes current certificants, candidates for certification, and individuals that have any entitle-
ment, direct or indirect, to the CFP certification marks.

? C o m m i s s i o n ? denotes the compensation received by an agent or broker when the same is calculated as a percent-
age on the amount of his or her sales or purchase transactions.

? C o m p e n s a t i o n ? is any economic benefit a CFP Board designee or related party receives from performing his or her
professional activities.

?Conflict(s) of intere s t ? exists when a CFP Board designee?s financial, business, property and/or personal interests, rela-
tionships or circumstances reasonably may impair his/her ability to offer objective advice, recommendations or services.

? F e e – o n l y ? denotes a method of compensation in which compensation is received solely from a client with neither the
personal financial planning practitioner nor any related party receiving compensation which is contingent upon the pur-
chase or sale of any financial product. A ?related party? for this purpose shall mean an individual or entity from whom
any direct or indirect economic benefit is derived by the personal financial planning practitioner as a result of implement-
ing a recommendation made by the personal financial planning practitioner.

A ?financial planning engagement? exists when a client, based on the relevant facts and circumstances, reasonably
relies upon information or services provided by a CFP Board designee using the financial planning process.

?Personal financial planning? or ?financial planning? denotes the process of determining whether and how an indi-
vidual can meet life goals through the proper management of financial resources.

“Personal financial planning pro c e s s ” or “financial planning process” denotes the process which typically includes,
but is not limited to, these six elements: establishing and defining the client-planner relationship, gathering client
data including goals, analyzing and evaluating the client’s financial status, developing and presenting financial plan-
ning recommendations and/or alternatives, implementing the financial planning recommendations and monitoring
the financial planning recommendations.

?Personal financial planning subject are a s ? or ?financial planning subject are a s ? denotes the basic subject fields cov-
ered in the financial planning process which typically include, but are not limited to, financial statement preparation
and analysis (including cash flow analysis/planning and budgeting), investment planning (including portfolio design,
i.e., asset allocation and portfolio management), income tax planning, education planning, risk management, retire-
ment planning and estate p l a n n i n g .

?Personal financial planning pro f e s s i o n a l ? or ?financial planning pro f e s s i o n a l ? denotes a person who is capable and
qualified to offer objective, integrated and comprehensive financial advice to or for the benefit of individuals to help
them achieve their financial objectives. A financial planning professional must have the ability to provide financial
planning services to clients, using the financial planning process covering the basic financial planning subjects.

?Personal financial planning practitioner? or ?financial planning practitioner? denotes a person who is capable and
qualified to offer objective, integrated and comprehensive financial advice to or for the benefit of clients to help
them achieve their financial objectives and who engages in financial planning using the financial planning process in
working with clients.

T E R M I N O L O G Y2

Rev. 07/03

Code of Ethics and Professional Responsibility

Preamble and Applicability …………………………………………………………………………………………………… 5
Composition and Scope ………………………………………………………………………………………………………… 5
Compliance …………………………………………………………………………………………………………………………… 5
Part I ? PRINCIPLES

Principle 1 ? Integrity ……………………………………………………………………………………………….. 6
Principle 2 ? Objectivity ……………………………………………………………………………………………. 6
Principle 3 ? Competence …………………………………………………………………………………………. 6
Principle 4 ? Fairness ………………………………………………………………………………………………… 6
Principle 5 ? Confidentiality ……………………………………………………………………………………… 7
Principle 6 ? Professionalism …………………………………………………………………………………….. 7
Principle 7 ? Diligence………………………………………………………………………………………………. 7

Part II ? RULES
Rules that Relate to the Principle of Integrity…………………………………………………………… 8
Rule 101…………………………………………………………………………………………………………………… 8
Rule 102…………………………………………………………………………………………………………………… 8
Rule 103…………………………………………………………………………………………………………………… 8
Rules that Relate to the Principle of Objectivity ……………………………………………………….. 9
Rule 201…………………………………………………………………………………………………………………… 9
Rule 202…………………………………………………………………………………………………………………… 9
Rules that Relate to the Principle of Competence …………………………………………………….. 9
Rule 301…………………………………………………………………………………………………………………… 9
Rule 302…………………………………………………………………………………………………………………… 9
Rules that Relate to the Principle of Fairness……………………………………………………………. 9
Rule 401…………………………………………………………………………………………………………………… 9
Rule 402……………………………………………………………………………………………………………………10
Rule 403……………………………………………………………………………………………………………………10
Rule 404……………………………………………………………………………………………………………………10
Rule 405……………………………………………………………………………………………………………………11
Rule 406……………………………………………………………………………………………………………………11
Rule 407……………………………………………………………………………………………………………………11
Rule 408……………………………………………………………………………………………………………………11
Rule 409……………………………………………………………………………………………………………………11
Rules that Relate to the Principle of Confidentiality ………………………………………………….11
Rule 501……………………………………………………………………………………………………………………11
Rule 502……………………………………………………………………………………………………………………11
Rule 503……………………………………………………………………………………………………………………12
Rules that Relate to the Principle of Professionalism…………………………………………………12
Rule 601……………………………………………………………………………………………………………………12
Rule 602……………………………………………………………………………………………………………………12
Rule 603……………………………………………………………………………………………………………………12
Rule 604……………………………………………………………………………………………………………………12
Rule 605……………………………………………………………………………………………………………………12
Rule 606……………………………………………………………………………………………………………………13
Rule 607……………………………………………………………………………………………………………………13
Rule 608……………………………………………………………………………………………………………………13
Rule 609……………………………………………………………………………………………………………………13

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Rule 610……………………………………………………………………………………………………………………13
Rule 611……………………………………………………………………………………………………………………13
Rule 612……………………………………………………………………………………………………………………13
Rules that Relate to the Principle of Diligence ………………………………………………………….14
Rule 701……………………………………………………………………………………………………………………14
Rule 702……………………………………………………………………………………………………………………14
Rule 703……………………………………………………………………………………………………………………14
Rule 704……………………………………………………………………………………………………………………14
Rule 705……………………………………………………………………………………………………………………14

Advisory Opinion 2000-1 ………………………………………………………………………………………………………15
Advisory Opinion 2003-1 ………………………………………………………………………………………………………18
Sample Disclosure Forms ……………………………………………………………………………………………………….21

Form FPE…………………………………………………………………………………………………………………..22
Form FPE (Sample Filled-In Form)………………………………………………………………………………25
Form OPS ………………………………………………………………………………………………………………….28
Form OPS (Sample Filled-In Form) ……………………………………………………………………………..30

Copyright ? 1986-2003, Certified Financial Planner Board of Standards Inc. All rights reserved.

Rev. 07/03

PREAMBLE AND APPLICABILITY

The Code of Ethics and Professional Responsibility (Code of Ethics) has been adopted by Certified Financial
Planner Board of Standards Inc. (CFP Board) to provide principles and rules to all persons whom it has recog-
nized and certified to use the CFP?, CERTIFIED FINANCIAL PLANNER? and certification marks (collectively ?the
marks?). CFP Board determines who is certified and thus authorized to use the marks. Implicit in the accept-
ance of this authorization is an obligation not only to comply with the mandates and requirements of all
applicable laws and regulations but also to take responsibility to act in an ethical and professionally responsi-
ble manner in all professional services and activities.

For purposes of this Code of Ethics, a person recognized and certified by CFP Board to use the marks is called
a CFP Board designee. This Code of Ethics applies to CFP Board designees actively involved in the practice of
personal financial planning, in other areas of financial services, in industry, in related professions, in govern-
ment, in education or in any other professional activity in which the marks are used in the performance of
professional responsibilities. This Code of Ethics also applies to candidates for the CFP? certification who are
registered as such with CFP Board. For purposes of this Code of Ethics, the term CFP Board designee shall be
deemed to include current certificants, candidates and individuals who have been certified in the past and
retain the right to reinstate their CFP certification without passing the current CFP? Certification Examination.

COMPOSITION AND SCOPE

The Code of Ethics consists of two parts: Part I ? Principles and Part II ? Rules. The Principles are statements
expressing in general terms the ethical and professional ideals that CFP Board designees are expected to dis-
play in their professional activities. As such, the Principles are aspirational in character but are intended to
provide a source of guidance for CFP Board designees. The comments following each Principle further explain
the meaning of the Principle. The Rules in Part II provide practical guidelines derived from the tenets embod-
ied in the Principles. As such, the Rules describe the standards of ethical and professionally responsible
conduct expected of CFP Board designees in particular situations. This Code of Ethics does not undertake to
define standards of professional conduct of CFP Board designees for purposes of civil liability.

Due to the nature of a CFP Board designee?s particular field of endeavor, certain Rules may not be applicable
to that CFP Board designee?s activities. For example, a CFP Board designee who is engaged solely in the sale
of securities as a registered representative is not subject to the written disclosure requirements of Rule 402
(applicable to CFP Board designees engaged in personal financial planning) although he or she may have dis-
closure responsibilities under Rule 401. A CFP Board designee is obligated to determine what responsibilities
he or she has in each professional relationship including, for example, duties that arise in particular
circumstances from a position of trust or confidence that a CFP Board designee may have. The CFP Board
designee is obligated to meet those responsibilities.

The Code of Ethics is structured so that the presentation of the Rules parallels the presentation of the
Principles. For example, the Rules which relate to Principle 1 ? Integrity are numbered in the 100 to 199 series,
while those Rules relating to Principle 2 ? Objectivity are numbered in the 200 to 299 series.

COMPLIANCE

CFP Board requires adherence to this Code of Ethics by all CFP Board designees. Compliance with the Code of
Ethics, individually and by the profession as a whole, depends on each CFP Board designee?s knowledge of
and voluntary compliance with the Principles and applicable Rules, on the influence of fellow professionals
and public opinion, and on disciplinary proceedings, when necessary, involving CFP Board designees who fail
to comply with the applicable provisions of the Code of Ethics.

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PA RT I ? PRINCIPLES

These Code of Ethics? Principles express the profession?s recognition of its responsibilities to the public, to
clients, to colleagues and to employers. They apply to all CFP Board designees and provide guidance to
them in the performance of their professional services.

Principle 1 ? Integrity

A CFP Board designee shall offer and provide professional services with integrity.

As discussed in ?Composition and Scope,? CFP Board designees may be placed by clients in
positions of trust and confidence. The ultimate source of such public trust is the CFP Board
d e s i g n e e ?s personal integrity. In deciding what is right and just, a CFP Board designee should
rely on his or her integrity as the appropriate touchstone. Integrity demands honesty and
candor which must not be subordinated to personal gain and advantage. Within the charac-
teristic of integrity, allowance can be made for innocent error and legitimate difference of
opinion; but integrity cannot co-exist with deceit or subordination of one?s principles.
Integrity requires a CFP Board designee to observe not only the letter but also the spirit of
this Code of Ethics.

Principle 2 ? Objectivity

A CFP Board designee shall be objective in providing professional services to clients.

Objectivity requires intellectual honesty and impartiality. It is an essential quality for any pro-
fessional. Regardless of the particular service rendered or the capacity in which a CFP Board
designee functions, a CFP Board designee should protect the integrity of his or her work,
maintain objectivity, and avoid subordination of his or her judgment that would be in
violation of this Code of Ethics.

Principle 3 ? Competence

A CFP Board designee shall provide services to clients competently and maintain the
necessary knowledge and skill to continue to do so in those areas in which the CFP B o a r d
designee is e n g a g e d .

One is competent only when he or she has attained and maintained an adequate level of
knowledge and skill, and applies that knowledge effectively in providing services to clients.
Competence also includes the wisdom to recognize the limitations of that knowledge and
when consultation or client referral is appropriate. A CFP Board designee, by virtue of having
earned the CFP? certification, is deemed to be qualified to practice financial planning.
H o w e v e r, in addition to assimilating the common body of knowledge required and acquiring
the necessary experience for certification, a CFP Board designee shall make a continuing
commitment to learning and professional improvement.

Principle 4 ? Fairn e s s

A CFP Board designee shall perform professional services in a manner that is fair and reason-
able to clients, principals, partners and employers, and shall disclose conflict(s) of interest in
providing such services.

Fairness requires impartiality, intellectual honesty and disclosure of conflict(s) of interest. It
involves a subordination of one?s own feelings, prejudices and desires so as to achieve a
proper balance of conflicting interests. Fairness is treating others in the same fashion that
you would want to be treated and is an essential trait of any professional.

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Principle 5 ? Confidentiality

A CFP Board designee shall not disclose any confidential client information without the spe-
cific consent of the client unless in response to proper legal process, to defend against
charges of wrongdoing by the CFP Board designee or in connection with a civil dispute
between the CFP Board designee and client.

A client, by seeking the services of a CFP Board designee, may be interested in creating a
relationship of personal trust and confidence with the CFP Board designee. This type of rela-
tionship can only be built upon the understanding that information supplied to the CFP
Board designee will be confidential. In order to provide the contemplated services eff e c t i v e l y
and to protect the client?s privacy, the CFP Board designee shall safeguard the confidentiality
of such information.

Principle 6 ? Pro f e s s i o n a l i s m

A CFP Board designee?s conduct in all matters shall reflect credit upon the profession.

Because of the importance of the professional services rendered by CFP Board designees,
there are attendant responsibilities to behave with dignity and courtesy to all those who use
those services, fellow professionals, and those in related professions. A CFP Board designee
also has an obligation to cooperate with fellow CFP Board designees to enhance and main-
tain the profession?s public image and to work jointly with other CFP Board designees to
improve the quality of services. It is only through the combined efforts of all CFP Board
designees, in cooperation with other professionals, that this vision can be realized.

Principle 7 ? Diligence

A CFP Board designee shall act diligently in providing professional services.

Diligence is the provision of services in a reasonably prompt and thorough manner. Diligence
also includes proper planning for, and supervision of, the rendering of professional services.

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PA RT II ? RULES

As stated in Part I ? Principles, the Principles apply to all CFP Board designees. However, due to the nature
of a CFP Board designee?s particular field of endeavor, certain Rules may not be applicable to that CFP
Board designee?s activities. The universe of activities engaged in by a CFP Board designee is indeed diverse
and a particular CFP Board designee may be performing all, some or none of the typical services provided
by financial planning professionals. As a result, in considering the following Rules, a CFP Board designee
must first recognize what specific services he or she is rendering and then determine whether or not a spe-
cific Rule is applicable to those services. To assist the CFP Board designee in making these determinations,
the Standards of Professional Conduct includes a series of definitions of terminology (see page 2) used
throughout the Code of Ethics. Based upon these definitions, a CFP Board designee should be able to deter-
mine which services he or she provides and, therefore, which Rules are applicable to those services.

Rules that Relate to the Principle of Integrity

Rule 101

A CFP Board designee shall not solicit clients through false or misleading communications or
a d v e r t i s e m e n t s :

( a ) Misleading Advertising: A CFP Board designee shall not make a false or misleading
communication about the size, scope or areas of competence of the CFP Board
d e s i g n e e ?s practice or of any organization with which the CFP Board designee is associ-
ated; and

( b ) Promotional Activities: In promotional activities, a CFP Board designee shall not make
materially false or misleading communications to the public or create unjustified expec-
tations regarding matters relating to financial planning or the professional activities and
competence of the CFP Board designee. The term ?promotional activities? includes, but
is not limited to, speeches, interviews, books and/or printed publications, seminars, radio
and television shows, and video cassettes; and

( c ) Representation of Authority: A CFP Board designee shall not give the impression that a
CFP Board designee is representing the views of CFP Board or any other group unless
the CFP Board designee has been authorized to do so. Personal opinions shall be clearly
identified as such.

Rule 102

In the course of professional activities, a CFP Board designee shall not engage in conduct
involving dishonesty, fraud, deceit or misrepresentation, or knowingly make a false or mis-
leading statement to a client, employer, employee, professional colleague, governmental or
other regulatory body or official, or any other person or entity.

Rule 103

A CFP Board designee has the following responsibilities regarding funds and/or other property
of clients:

( a ) In exercising custody of, or discretionary authority over, client funds or other property, a
CFP Board designee shall act only in accordance with the authority set forth in the gov-
erning legal instrument (e.g., special power of attorney, trust, letters testamentary, etc.);
a n d

( b ) A CFP Board designee shall identify and keep complete records of all funds or other
property of a client in the custody, or under the discretionary authority, of the CFP

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Board designee; and
( c ) Upon receiving funds or other property of a client, a CFP Board designee shall promptly

or as otherwise permitted by law or provided by agreement with the client, deliver to the
client or third party any funds or other property which the client or third party is entitled
to receive and, upon request by the client, render a full accounting regarding such funds
or other property; and

( d ) A CFP Board designee shall not commingle client funds or other property with a CFP
Board designee?s personal funds and/or other property or the funds and/or other
property of a CFP Board designee?s firm. Commingling one or more clients? funds or
other property together is permitted, subject to compliance with applicable legal
requirements and provided accurate records are maintained for each client?s funds or
other property; and

( e ) A CFP Board designee who takes custody of all or any part of a client?s assets for
investment purposes, shall do so with the care required of a fiduciary.

Rules that Relate to the Principle of Objectivity

Rule 201

A CFP Board designee shall exercise reasonable and prudent professional judgment in provid-
ing professional services.

Rule 202

A financial planning practitioner shall act in the interest of the client.

Rules that Relate to the Principle of Competence

Rule 301

A CFP Board designee shall keep informed of developments in the field of financial planning
and participate in continuing education throughout the CFP Board designee?s professional
career in order to improve professional competence in all areas in which the CFP Board
designee is engaged. As a distinct part of this requirement, a CFP Board designee shall satisfy
all minimum continuing education requirements established for CFP Board designees by CFP
B o a r d .

Rule 302

A CFP Board designee shall offer advice only in those areas in which the CFP Board designee
has competence. In areas where the CFP Board designee is not professionally competent, the
CFP Board designee shall seek the counsel of qualified individuals and/or refer clients to such
p a r t i e s .

Rules that Relate to the Principle of Fairn e s s

Rule 401

In rendering professional services, a CFP Board designee shall disclose to the client:

( a ) Material information relevant to the professional relationship, including, conflict(s) of
interest, the CFP Board designee’s business affiliation, address, telephone number, cre-
dentials, qualifications, licenses, compensation structure and any agency relationships,
and the scope of the CFP Board designee’s authority in that capacity; and

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( b ) The information required by all laws applicable to the relationship in a manner comply-
ing with such laws.

Rule 402

A CFP Board designee in a financial planning engagement shall make timely written disclo-
sure of all material information relative to the professional relationship. In all circumstances
and prior to the engagement, a CFP Board designee shall, in writing:

( a ) Disclose conflict(s) of interest and sources of compensation; and
( b ) Inform the client or prospective client of his/her right to ask at any time for information

about the compensation of the CFP Board designee.

As a guideline, a CFP Board designee who provides a client or prospective client with the fol-
lowing written disclosures, using Form ADV, a CFP Board Disclosure Form or an equivalent
document, will be considered to be in compliance with this Rule:

? The basic philosophy of the CFP Board designee (or firm) in working with clients. This
includes the philosophy, theory and/or principles of financial planning which will be uti-
lized by the CFP Board designee; and

? R?sum?s of principals and employees of a firm who are expected to provide financial
planning services to the client and a description of those services. Such disclosures shall
include educational background, professional/employment history, professional designa-
tions and licenses held; and

? A statement that in reasonable detail discloses (as applicable) conflict(s) of interest and
source(s) of, and any contingencies or other aspects material to, the CFP Board
d e s i g n e e ?s compensation; and

? A statement describing material agency or employment relationships a CFP Board
designee (or firm) has with third parties and the nature of compensation resulting from
such relationships; and

? A statement informing the client or prospective client of his/her right to ask at any time
for information about the compensation of the CFP Board designee.

Rule 403

Upon request by a client or prospective client, the CFP Board designee in a financial planning
engagement shall communicate in reasonable detail the requested compensation informa-
tion related to the financial planning engagement, including compensation derived from
implementation. The disclosure may express compensation as an approximate dollar amount
or percentage or as a range of dollar amounts or percentages. The disclosure shall be made
at a time and to the extent that the requested compensation information can be reasonably
ascertained. Any estimates shall be clearly identified as such and based on reasonable
assumptions. If a CFP Board designee becomes aware that a compensation disclosure pro-
vided pursuant to this rule has become significantly inaccurate, he/she shall provide the client
with corrected information in a timely manner.

Rule 404

The disclosures required of a CFP Board designee in a financial planning engagement
described under Rule 402 shall be offered at least annually for current clients, and provided
if requested.

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1 1C O D E O F E T H I C S

Rule 405

A CFP Board designee’s compensation shall be fair and reasonable.

Rule 406

A CFP Board

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