A client asks to limit engagement to the first four steps of the financial planning process. Can you enter into a written agreement to limit engagement to the first four steps and then end it?

A client asks to limit engagement to the first four steps of the financial planning process. Can you enter into a written agreement to limit engagement to the first four steps and then end it?

• A. Yes, the written agreement can be limited.
• B. No, as a CFP professional you have to couple to the six steps.
• C. Yes, but your obligation would continue into step 5 and 6.
• D. No, the written agreement has to spell out the six steps.

Answer: (A)

The main idea here is that a CFP professional can define a limited scope of services in a written engagement, using the six-step financial planning process as a framework. If the client wants only the first four steps, you can document that agreement in writing and end the engagement after those steps. The key is clarity: the written agreement must specify the exact scope (which steps will be done) and that the engagement ends after those steps unless a new agreement is created. This is allowed because the standard emphasizes transparent disclosures of scope and fees. If later the client wishes to proceed with steps 5 and 6, you would need a separate agreement outlining that new scope and compensation. Why the other options don’t fit: you’re not required to stay tied to all six steps in a single engagement, so coupling to the entire six steps isn’t mandatory. The obligation to continue into steps 5 and 6 only exists if a separate continuation agreement is in place. And while it’s important to be clear about scope, you don’t have to spell out every step in the initial agreement if you’re limiting the engagement to a defined subset.

The main idea here is that a CFP professional can define a limited scope of services in a written engagement, using the six-step financial planning process as a framework. If the client wants only the first four steps, you can document that agreement in writing and end the engagement after those steps. The key is clarity: the written agreement must specify the exact scope (which steps will be done) and that the engagement ends after those steps unless a new agreement is created.

This is allowed because the standard emphasizes transparent disclosures of scope and fees. If later the client wishes to proceed with steps 5 and 6, you would need a separate agreement outlining that new scope and compensation.

Why the other options don’t fit: you’re not required to stay tied to all six steps in a single engagement, so coupling to the entire six steps isn’t mandatory. The obligation to continue into steps 5 and 6 only exists if a separate continuation agreement is in place. And while it’s important to be clear about scope, you don’t have to spell out every step in the initial agreement if you’re limiting the engagement to a defined subset.