Certified Financial Planner (CFP) Exam 2025 – 400 Free Practice Questions to Pass the Exam

Question: 1 / 505

What should a CFP® professional do if they discover a potential conflict of interest?

Ignore it to avoid losing the client.

Discuss it openly with the client.

A Certified Financial Planner (CFP®) professional should discuss a potential conflict of interest openly with the client because transparency is key to maintaining trust and integrity in the advisor-client relationship. By bringing the conflict to the client’s attention, the planner enables the client to make informed decisions regarding their financial situation and the advisor's services. This open dialogue helps to facilitate ethical practices and ensures that the client's best interests are prioritized.

Moreover, discussing potential conflicts demonstrates professionalism and a commitment to adhering to fiduciary responsibilities, which is a fundamental aspect of the CFP® Board's Code of Ethics and Standards of Conduct. This approach not only protects the interests of the client but also fortifies the credibility of the CFP® professional, reinforcing their role as a trusted advisor.

In contrast, ignoring the issue or only addressing it if the client brings it up can damage the relationship and could lead to ethical breaches. Consulting with a supervisor is a prudent action but should ideally be done alongside the open discussion with the client, ensuring that all parties are aware of any issues and the potential implications involved.

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Only worry about it if the client brings it up.

Consult with a supervisor before addressing it.

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