"Whatever type of arrangement they are in, in terms of the client, we would expect the certificant to adhere to a code of ethics," says Margaret Brock, director of the CFP Board's Professional Review Department. "They would have an obligation to disclose financial remuneration-a commission or fee."

Also, she warns, fee-only CFPs can not call themselves fee-only planners if they're making a commission on the sale of a mortgage loan. Whether a sponsorship of a client appreciation event could violate this rule, she says, depends entirely on the amount of money involved and the circumstances of a complaint.

Paul C. Bennett, consultant and former CEO of National Advisers, adds that an advisor had better discuss any revenue sharing mortgage relationship with his or her broker and disclose it as an outside business activity.

Verlin says that he has been originating mortgages for about one year and was about to embark on a client mailing seeking mortgage rates for his database. This way, he can contact appropriate clients for a mortgage analysis should rates drop. He also recently hired a part-time employee, who receives $100 per loan to handle the clerical work of closing. He says he splits that employee's fee with a title company.

Before hooking up with Nicholas & Co., Verlin had seen proposals from a few other companies seeking to establish a similar mortgage relationship. He was concerned that those arrangements, which did not provide him with as much mortgage time with a client, could be construed as a referral in violation the Real Estate Settlement Procedures Act and possibly state law.

Even with his current relationship, a few issues required tweaking. For one thing, he has done a mortgage analysis for some clients only to have them accept a lower rate at another bank or brokerage.

Now Verlin is careful to tell clients upfront that they're going to be able to find better interest rates somewhere. He suggests that they don't enter into his mortgage analysis unless they're also willing to let him be their mortgage planner. Another irritant: Some clients have referred friends directly to mortgage broker Nicholas, rather than to him. "We're brainstorming on that right now," he says.

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