Certified Financial Planner (CFP) Exam 2026 – 400 Free Practice Questions to Pass the Exam

The correct choice highlights the importance of transparency in financial planning, especially in situations where a professional may face conflicts of interest. John, as a CFP® professional working for a firm that offers proprietary products, is obligated to disclose any material conflicts of interest that arise when he sells proprietary funds. This requirement stems from the need to maintain ethical standards and trust in the financial planning profession.

Disclosing potential conflicts is crucial because it allows clients to make informed decisions about whether to proceed with the advisory services or products being offered. It reinforces the fiduciary duty that CFP® professionals have to act in the best interest of their clients. By providing this disclosure, John ensures that clients understand the nature of the products being recommended and any potential biases resulting from the firm's proprietary offerings.

The other statements may imply limitations or restrictions that do not accurately reflect the responsibilities of a CFP® professional like John. For instance, he is not barred from participating in the financial planning process nor does he have to offer only non-proprietary funds; he just needs to be clear about the nature of the products he is selling and disclose any conflicts of interest.