Which statement regarding gifts is compliant with CFP ethics?

• A. Gifts may be accepted without disclosure.
• B. Gifts must be disclosed but may exceed reasonable limits.
• C. Gifts must be disclosed and kept within reasonable limits; avoid gifts that could create conflicts.
• D. Gifts are always prohibited.

Answer: (C)

Gifts can influence judgment or appear to influence it, so CFP ethics emphasize transparency and avoiding conflicts of interest. The proper approach is to disclose any gift of value and keep it within reasonable limits, with a preference to avoid gifts that could create conflicts. This ensures the client maintains trust in the independence of the advice and helps the planner manage potential conflicts. The other options fall short: accepting gifts without disclosure risks bias and undermines trust; allowing gifts to exceed reasonable limits increases the chance of real or perceived influence; claiming gifts are always prohibited ignores the possibility of appropriate, disclosed gifts that do not affect objectivity. So the compliant statement is that gifts must be disclosed and kept within reasonable limits, avoiding those that could create conflicts.