4300 North Miller Road Suite 231
The Certified Financial Planner Board of Standards, Inc. Rules of Conduct require CFP® professionals to disclose to clients and prospective clients certain information concerning the CFP® Professional’s compensation. CFP Board defines “compensation” as “any non-trivial economic benefit, whether monetary or non-monetary, that a certificant or related party receives or is entitled to receive for providing professional activities.” Therefore, in addition to informing a client or prospective client of the compensation that the CFP® professional receives or is entitled to receive for providing professional activities, a CFP® professional is required to disclose the compensation that a related party, such as the CFP® professional's employer or affiliated Broker Dealer, receives or is entitled to receive for providing professional activities. This includes:
Note that as set forth in the “compensation” definition, compensation includes “any non-trivial economic benefit, whether monetary or non-monetary.” As a general rule, CFP Board considers as non-trivial any consideration received in exchange for providing professional activities. That includes, for example, consideration received for a recommendation provided by the CFP® professional or a related party.
In the Standards of Professional Conduct, CFP Board defines “Commission” as “compensation generated from a transaction involving a product or service and received by an agent or broker, usually calculated as a percentage on the amount of his or her sales or purchase transactions. This includes 12b-1 fees, trailing commissions, surrender charges and contingent deferred sales charges.” If the CFP® professional or a related party receives or is entitled to receive commissions for providing professional activities, the CFP® professional must disclose that he/she receives commissions as part of his/her compensation. For example, if the CFP® professional works for a registered investment adviser that is under common ownership with a broker-dealer, CFP Board considers the broker-dealer to be a related party. Therefore, any CFP® professional working for an organization that has a broker-dealer subsidiary or affiliate must include “commission” as part of his/her compensation disclosure.
The “fee-only“ definition set forth in the Standards of Professional Conduct provides that a CFP® professional “may describe his or her practice as ‘fee-only’ if and only if, all of the certificant’s compensation from all of his or her client work comes exclusively from the clients in the form of fixed, flat, hourly, percentage or performance-based fees.” When read in conjunction with the definition of compensation, the “fee-only” description applies when the CFP® professional and any related parties receive, or are entitled to receive, only fees for providing professional activities. For example, a CFP® professional may work for an investment advisor that charges only fees for the CFP® professional’s professional activities. However, if a related party receives commissions, the definition of “fee-only” is not satisfied, and the CFP® professional may not describe his or her compensation as “fee-only.”
Commission and Fee:
If a CFP® professional and any related party receives or is entitled to receive both commissions and fees for providing professional activities, the CFP® professional must disclose his or her compensation as “Commission and Fee.”
Based on these definitions provided by the CFP Board, Jason E. Washo is considered to be compensated on a Commission and Fee basis.
Click here to view a copy of the Form ADV Part 2B