Certified Financial Planner (CFP) Practice Exam · Question
Which of the following is an ethical consideration for a financial planner when recommending products that generate commissions?
Transparency and full disclosure are essential ethical principles. Clients must be informed about compensation structures, including commissions, to understand
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Question: Which of the following is an ethical consideration for a financial planner when recommending products that generate commissions?
Answer options: ✅ Ensure the client understands the commission structure.
- Only recommend products with the highest commission.
- Avoid disclosing any commission amounts to the client.
- Assume commissions are irrelevant if the product is suitable.
Correct answer: Ensure the client understands the commission structure.
Explanation: Transparency and full disclosure are essential ethical principles. Clients must be informed about compensation structures, including commissions, to understand potential conflicts of interest.
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