hard · Certified Financial Planner Professional Conduct
Elena, a dual-registered certificant, meets with the Ruiz household to discuss a $580,000 rollover from Mr. Ruiz's former employer's 401(k). Elena’s firm is currently running a sales contest for a proprietary variable annuity that offers a higher payout than the firm's standard advisory accounts. Mr. Ruiz expresses interest in the annuity's 'guaranteed' features.
Based on CFP Board Practice Standards, what is Elena's required first step?
- Analyze the internal expenses of the proprietary annuity against a low-cost IRA rollover to satisfy the Duty of Care.
- Recommend the annuity if Elena's analysis shows the 'guaranteed' features meet Mr. Ruiz's stated goal of principal protection.
- Disclose the material conflict of interest regarding the firm contest and the higher compensation associated with the annuity.
- Gather additional quantitative and qualitative data regarding the Ruiz family’s overall tax picture and liquidity needs.
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