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This question is a part of BIF's Special Webinar series which was created to help students affected by the July 2020 CFP® Exam postponement to September 2020.
When establishing monitoring and updating responsibilities in Step 7 of the financial planning process (Monitoring Progress and Updating), each of the following must be communicated to the client, EXCEPT:
- Which actions, products, and services are and are not subject to your monitoring responsibility.
- Your responsibility to update the financial planning recommendations.
- Your responsibility to identify any material changes to the client’s qualitative and quantitative information.
- How and when you will monitor actions, products, or services.
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Correct answer: C. Your responsibility to identify any material changes to the client’s qualitative and quantitative information.
Instructor insight:
According to the Code and Standards, the client is responsible for informing you of any material changes to the their qualitative and quantitative information. You are responsible for communicating this responsibility to the client in Step 7 of the financial planning process.
CFP® Exam insight:
Code and Standards Section A.10.b.ii states that a financial planner is responsible for:
- implementing the client’s financial planning recommendation(s)
- monitoring and updating the client’s financial planning recommendation(s)
Unless specifically excluded from the Scope of Engagement. Therefore, it is assumed that the financial planner would have responsibility for implementation and monitoring unless he or she is excluded from these items at the onset of the planning engagement.
