Sample Engagement Letters for CFP Board’s Code of Ethics and Standards of Conduct

CFP Board presents these sample engagement letters to help CFP® professionals effectively communicate to clients the information required by the Code of Ethics and Standards of Conduct (more specifically, the Duty to Provide Information to a Client).

Each sample engagement letter assumes a specific factual situation. For that reason, CFP Board does not intend for a CFP® professional to distribute these samples as they are written.  Instead, a CFP® professional must tailor the sample to fit the CFP® professional’s practice and the client’s circumstances. CFP Board has included drafting notes to consider in tailoring the documents. A CFP® professional might consider adding provisions to address legal and other issues and any regulatory requirements. A CFP® professional also should review the CFP® professional’s firm’s policies and procedures regarding communications with clients and required approvals and consult with the firm’s compliance officer. 

The sample engagement letters do not replace the CFP® professional’s firm’s contracts, agreements, or other legal documents or regulatory documents, such as Form ADV, Form CRS, or any other documents required by federal or state regulators or the Financial Industry Regulatory Authority, Inc. (FINRA).

An engagement letter is only one way that a CFP® professional may satisfy CFP Board’s Duty to Provide Information.  Whether information may be given orally or must be in writing depends on whether the financial advice being provided requires financial planning. When a CFP® professional must provide the information in writing, a CFP® professional may do so in one or more documents. The Roadmap to the Code and Standards identifies many kinds of documents that a CFP® professional’s firm delivers to clients that may contain the required information.

CFP Board’s sample engagement letters use plain language to help reduce consumer confusion, increase consumer trust, and reduce the number of questions a consumer may have regarding the engagement. CFP Board developed these sample engagement letters through its Standards Resource Commission and with the assistance of a consultant with experience in writing in plain language. The sample engagement letters also reflect the feedback that CFP Board received through qualitative and quantitative testing with consumers.

Sample Engagement Letter for Financial Planning-Fee only

This sample financial planning engagement letter is based upon the assumptions set forth below. Your circumstances may be different. The drafting notes identify issues to consider in developing your own financial planning engagement letter.

• The engagement is for financial planning.
• This sample engagement letter is for an investment adviser representative of a registered investment adviser who is providing financial planning, including investment advisory services.
• The CFP® professional has a “fee-only” compensation method.
• The firm offers mutual funds and exchange-traded funds (ETFs).

SAMPLE FINANCIAL PLANNING – FEE-ONLY ENGAGEMENT LETTER

DOWNLOAD THE SAMPLE FINANCIAL PLANNING – FEE-ONLY ENGAGEMENT LETTER (WITH DRAFTING NOTES)

SAMPLE ENGAGEMENT LETTER FOR FINANCIAL PLANNING - DUAL REGISTRANT

This sample financial planning engagement letter for a dual registrant is based upon the assumptions set forth below. Your circumstances may be different. The drafting notes identify issues to consider in developing your own financial planning engagement letter.

• The engagement is for financial planning, investment management and risk management (including insurance).
• This sample engagement letter is for a dual registrant (an investment adviser representative of a registered investment adviser and a registered representative of a broker-dealer) who is providing financial planning.
• The CFP® professional is insurance licensed.
• Her firm offers mutual funds, exchange-traded funds (ETFs), insurance, and fixed and variable annuities.
• Her firm has revenue-sharing agreements with mutual fund and insurance companies.
• Her firm has referral arrangements that may result in referral compensation.

SAMPLE FINANCIAL PLANNING – DUAL REGISTRANT ENGAGEMENT LETTER

DOWNLOAD THE SAMPLE FINANCIAL PLANNING - DUAL REGISTRANT ENGAGEMENT LETTER (WITH DRAFTING NOTES)

Sample Engagement Letter for Financial Advice

This sample financial advice engagement letter is based upon the assumptions set forth below. Your circumstances may be different. The drafting notes identify issues to consider in developing your own financial advice engagement letter.

• The engagement is for financial advice.
• This sample engagement letter is for a registered representative of a broker-dealer who is providing financial advice that does not require financial planning.
• The representative is not dually registered.
• The firm offers insurance products, mutual funds, exchange-traded funds (ETFs), and annuities.
• The representative is an agent of several insurance companies.
• Her firm has revenue-sharing agreements with mutual fund companies.
• Her firm also has referral arrangements that may result in referral compensation.

Sample Financial Advice Engagement Letter

Download the Sample Financial Advice Engagement Letter (with Drafting Notes)