Seven-Rank Decision Hierarchy
Certified Financial Planner glossary · Certified Financial Planner
Definition
Apply in order and stop when resolved: (1) Duty of Loyalty, (2) Process Precedence, (3) Competence and Scope, (4) Disclosure, (5) Constraint Satisfaction, (6) Cost and Reversibility, (7) Quantitative Optimality. Never start at Rank 7 when Rank 1-2 already kills the answer.
Seven-Rank Decision Hierarchy in plain English
A stem asks what you should do first, and the answer choices jump straight into IRR and product fees. Use the Seven-Rank Decision Hierarchy in order and stop when resolved: Duty of Loyalty, Process Precedence, Competence and Scope, Disclosure, Constraint Satisfaction, Cost and Reversibility, then Quantitative Optimality. Never start at Rank 7 when Rank 1 or 2 already kills the answer. On first, best, or should stems, name the highest unresolved rank before doing arithmetic; Premature Recommendation is the usual distractor family.
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