NAPA CPFA CERTIFICATION EXAM
CONTENT OUTLINE FLASH CARDS 100%
CORRECT!!
, Explain ERISA exclusive purpose and ERISA prudence rule - ANSWER The Exclusive
Purpose Rule: A fiduciary must act solely in the
best interest of plan participants.
The Fiduciary Standard of Care: Prudence, Loyalty, Diversification, Follow the Plan
Document
Identify actions that might establish a fiduciary relationship - ANSWER assuming
significant control over another person's property or finances, having a high degree of
trust and confidence placed in you by another party, making decisions on behalf of
someone else with their best interests in mind, providing professional advice in a field
where expertise is required, managing assets on behalf of another person, and entering
into a legal agreement where one party is explicitly designated as a fiduciary, such as a
trust or will.
Identify named fiduciaries - ANSWER Persons or entities specifically
named in the plan document
Explain roles and responsibilities of named fiduciaries - ANSWER Discretionary
authority over
management or the
administration of the plan
Identify actions covered by the Best Interest Contract Exemption - ANSWER
Acknowledge fiduciary status for itself and its financial advisers;
Adhere to basic standards of impartial conduct, including: Giving prudent advice that is
in the customer's best interest (i.e., based on the investment objectives, risk tolerance,
financial circumstances, and needs of the retirement investors, without regard to
financial or other interests of the financial institution or financial adviser); Avoiding
making misleading statements; and Charging no more than reasonable compensation
Commit to the impartial conduct standards in an enforceable contract when providing
advice to an IRA owner
Implement policies and procedures reasonably and prudently designed to prevent
violations of the impartial conduct standards
Refrain from giving or using incentives for financial advisers to act contrary to the
customer's best interest
Fairly disclose the fees, compensation, and material conflicts of interest associated with
their recommendations.
CONTENT OUTLINE FLASH CARDS 100%
CORRECT!!
, Explain ERISA exclusive purpose and ERISA prudence rule - ANSWER The Exclusive
Purpose Rule: A fiduciary must act solely in the
best interest of plan participants.
The Fiduciary Standard of Care: Prudence, Loyalty, Diversification, Follow the Plan
Document
Identify actions that might establish a fiduciary relationship - ANSWER assuming
significant control over another person's property or finances, having a high degree of
trust and confidence placed in you by another party, making decisions on behalf of
someone else with their best interests in mind, providing professional advice in a field
where expertise is required, managing assets on behalf of another person, and entering
into a legal agreement where one party is explicitly designated as a fiduciary, such as a
trust or will.
Identify named fiduciaries - ANSWER Persons or entities specifically
named in the plan document
Explain roles and responsibilities of named fiduciaries - ANSWER Discretionary
authority over
management or the
administration of the plan
Identify actions covered by the Best Interest Contract Exemption - ANSWER
Acknowledge fiduciary status for itself and its financial advisers;
Adhere to basic standards of impartial conduct, including: Giving prudent advice that is
in the customer's best interest (i.e., based on the investment objectives, risk tolerance,
financial circumstances, and needs of the retirement investors, without regard to
financial or other interests of the financial institution or financial adviser); Avoiding
making misleading statements; and Charging no more than reasonable compensation
Commit to the impartial conduct standards in an enforceable contract when providing
advice to an IRA owner
Implement policies and procedures reasonably and prudently designed to prevent
violations of the impartial conduct standards
Refrain from giving or using incentives for financial advisers to act contrary to the
customer's best interest
Fairly disclose the fees, compensation, and material conflicts of interest associated with
their recommendations.
