Gathering Client Data
200-1: Determining a Client's Personal and Financial Goals, Needs and Priorities
The financial planning practitioner and the client shall mutually define
the client's personal and financial goals, needs and priorities that are
relevant to the scope of the engagement before any recommendation is
made and/or implemented.
Explanation of this Practice Standard
Prior to making recommendations to the client, the financial planning
practitioner and the client shall mutually define the client's personal
and financial goals, needs and priorities. In order to arrive at such a
definition, the practitioner will need to explore the client's values,
attitudes, expectations, and time horizons as they affect the client's
goals, needs and priorities. The process of "mutually-defining" is
essential in determining what activities may be necessary to proceed
with the client engagement. Personal values and attitudes shape the
client's goals and objectives and the priority placed on them. Accordingly,
these goals and objectives must be consistent with the client's values
and attitudes in order for the client to make the commitment necessary
to accomplish them.
Goals and objectives provide focus, purpose, vision
and direction for the financial planning process. It is important
to determine clear, and measurable objectives that are relevant
to the scope of the engagement. The role of the practitioner is
to facilitate the goal-setting process in order to clarify, with
the client, goals and objectives. When appropriate, the
practitioner shall try to assist clients in recognizing the
implications of unrealistic goals and objectives.
This Practice Standard addresses only the
tasks of determining the client's personal and financial goals,
needs and priorities; assessing the client's values, attitudes
and expectations; and determining the client's time horizons.
These areas are subjective and the practitioner's interpretation
is limited by what the client reveals.
This Practice Standard shall not be considered
alone, but in conjunction with all other Practice Standards.
Effective Date
Original version, January 1, 1999. Updated version, January 1, 2002.
Relationship of this Practice Standard to CFP Board's Code of Ethics and Rules of Conduct
This Practice Standard relates to CFP Board's Code of Ethics and Rules of Conduct through Principle 7 -
Diligence and Rules 3.3, 4.4 and 4.5
Anticipated Impact of this Practice Standard Upon the Public
The public is served when the relationship is based upon mutually
defined goals, needs and priorities. This Practice Standard reinforces
the practice of putting the client's interests first which is intended
to increase the likelihood of achieving the client's goals and objectives.
Upon the Financial Planning Profession
Compliance with this Practice Standard emphasizes to the public that
the client's goals, needs and priorities are the focus of financial
planning. This encourages the public to seek out the services
of a financial planning practitioner who uses such an approach.
Upon the Financial Planning Practitioner
The client's goals, needs and priorities help determine the direction
of financial planning. This focuses the practitioner on
the specific tasks that need to be accomplished. Ultimately, this
will facilitate the development of appropriate recommendations.
200-2: Obtaining Quantitative Information and Documents
The financial planning practitioner shall obtain sufficient quantitative
information and documents about a client relevant to the scope
of the engagement before any recommendation is made and/or implemented.
Explanation of this Practice Standard
Prior to making recommendations to the client and depending on the scope
of the engagement, the financial planning practitioner shall determine
what quantitative information and documents are sufficient and relevant.
The practitioner shall obtain sufficient and relevant
quantitative information and documents pertaining to the client's
financial resources, obligations and personal situation. This
information may be obtained directly from the client or other
sources such as interview(s), questionnaire(s), client records
and documents.
The practitioner shall communicate to the client a
reliance on the completeness and accuracy of the information
provided and that incomplete or inaccurate information will
impact conclusions and recommendations.
If the practitioner is unable to obtain sufficient
and relevant quantitative information and documents to form a
basis for recommendations, the practitioner shall either:
- Restrict the scope of the engagement to those matters
for which sufficient and relevant information is available; or
- Terminate the engagement.
The practitioner shall communicate to the client
any limitations on the scope of the engagement, as well as the
fact that this limitation could affect the conclusions and recommendations.
This Practice Standard shall not be considered alone,
but in conjunction with all other Practice Standards.
Effective Date
Original version, January 1, 1999. Updated version, January 1, 2002.
Relationship of this Practice Standard to CFP Board's Code of Ethics and Rules of Conduct
This Practice Standard relates to CFP Board's Code of Ethics and Rules of Conduct through Principle 7 - Diligence and Rules 3.3, 4.4 and 4.5
Anticipated Impact of this Practice Standard
Upon the Public
The public is served when financial planning recommendations are based
upon sufficient and relevant quantitative information and documents.
This Practice Standard is intended to increase the likelihood of
achieving the client's goals and objectives.
Upon the Financial Planning Profession
Financial planning requires that recommendations be made
based on sufficient and relevant quantitative data. Therefore,
compliance with this Practice Standard encourages the public to
seek financial planning practitioners who use financial
planning.
Upon the Financial Planning Practitioner
Sufficient and relevant quantitative information and documents
provide the foundation for analysis. Ultimately, this will
facilitate the development of appropriate recommendations.
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