Code of Ethics and Professional Responsibility CFP Essay

Excerpt from Essay :

Ethical Case Using the Applied Ethical Decision Model

Recognize the Ethical Issue

In the case in question, there is certainly a clear-cut ethical lapse on behalf of young Julia. Her failure to appropriately inform her clients of the potential risks associated with their newly proposed investments was dishonest and selfish. This lack of full disclosure certainly undermines the trust that these clients have put in her hands. Even the formulation of a relationship with the securities salesman is highly unethical. As an objective member of a financial planning firm, Julia must approach her job and her client recommendations with an opened and unbiased mind. Having a business relationship that would potentially award her personal gains for professional consideration unquestionably coincides with Julia's equitable responsibility to her customers.

Evaluate Alternative Actions


In this case, the consequences of Julia's unethical behavior can have massive effects on the lives of her clients. Especially knowing that this is a retirement situation and that her clients have specifically stipulated that they want to avoid major risks and hope to enjoy their retirement while "being able to sleep at night," Julia's action have the potential to destroy these plans. While not meeting a client's desired rate of annual growth is certainly a risk that all financial planners take (and one that they should accurately inform their clients of), the risks outlined in this case have a far greater negative potential than simply sluggish rates of growth.

Professional Principles and Standards

This grand misstep taken by Julia was in the form of a lapse in integrity, professionalism, objectivity and fairness to the customer. While the most gaping hole in Julia's action plan was certainly her failure to fully disclose her investment knowledge to her customers, her relationship with Alan certainly plays a role in her unethical framework. The failure to inform her clients of the risks of her recommended investment structure would likely fall into the ethical category of integrity. The exploitation of her clients' trust and her actions according to personal gains clearly define this lapse in integrity. What is more, these actions also fall into the category of fairness, as elucidated in the given Code of Ethics. For with Julia's utter disregard for the welfare of her clients through her failure to fully disclose investment information, she certainly behaved unfairly towards her trusted clients.

Julia's unethical relationship with the securities salesman would most likely fall into the category of professionalism. Being that this relationship was forged…

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