CFP® Professional’s Firm(s)
Any entity on behalf of which a CFP® professional provides Professional Services to a Client, and that has the authority to exercise control over the CFP® professional’s activities, including the CFP® professional’s employer, broker-dealer, registered investment adviser, insurance company, and insurance agency.
Client
Any person, including a natural person, business organization, or legal entity, to whom the CFP® professional provides or agrees to provide Professional Services pursuant to an Engagement.
Conflict of Interest
- When a CFP® professional’s interests (including the interests of the CFP® Professional’s Firm) are adverse to the CFP® professional’s duties to a Client, or
- When a CFP® professional has duties to one Client that are adverse to another Client.
Control
The power, directly or indirectly, to direct the management or policies of the entity at the relevant time, through ownership, by contract, or otherwise.
Control Person
A person who has Control.
Engagement
An oral or written agreement, arrangement, or understanding.
Family
Grandparent, parent, stepparent, father-in-law/mother-in-law, uncle/aunt, spouse, former spouse, spousal equivalent, domestic partner, brother/sister, stepsibling, brother-in-law/sister-in-law, cousin, son/ daughter, stepchild, son-in-law/daughter-in law, nephew/niece, grandchild, and any other person the CFP® professional, directly or indirectly, supports financially to a material extent.
Financial Advice
- A communication that, based on its content, context, and presentation, would reasonably be viewed as a recommendation that the Client take or refrain from taking a particular course of action with respect to:
- The development or implementation of a financial plan;
- The value of or the advisability of investing in, purchasing, holding, gifting, or selling Financial Assets;
- Investment policies or strategies, portfolio composition, the management of Financial Assets, or other financial matters; or
- The selection and retention of other persons to provide financial or Professional Services to the Client; or
- The exercise of discretionary authority over the Financial Assets of a Client.
The determination of whether Financial Advice has been provided is an objective rather than subjective inquiry. The more individually tailored the communication is to the Client, the more likely the communication will be viewed as Financial Advice. The provision of services or the furnishing or making available of marketing materials, general financial education materials, or general financial communications that a reasonable CFP® professional would not view as Financial Advice, does not constitute Financial Advice.
Financial Assets
Securities, insurance products, real estate, bank instruments, commodities contracts, derivative contracts, collectibles, or other financial products.
A collaborative process that helps maximize a Client’s potential for meeting life goals through Financial Advice that integrates relevant elements of the Client’s personal and financial circ*mstances.
Material
Information is material when a reasonable Client or prospective Client would consider the information important in making a decision.
Professional Services
Financial Advice and related activities and services that are offered or provided, including, but not limited to, Financial Planning, legal, accounting, or business planning services.
Related Party
A person or business entity (including a trust) whose receipt of Sales-Related Compensation a reasonable CFP® professional would view as benefiting the CFP® professional or the CFP® Professional’s Firm, including, for example, as a result of the CFP® professional’s ownership stake in the business entity. There is a rebuttable presumption that a Related Party includes:
- Family Members. A member of the CFP® professional’s Family and any business entity that the Family or members of the Family Control; and
- Business Entities. A business entity that the CFP® professional or the CFP® Professional’s Firm Controls, or that is Controlled by or is under common Control with, the CFP® Professional’s Firm.
Scope of Engagement
The Professional Services to be provided pursuant to an Engagement.
