CFP Reminders Flashcards
What are the CFP Code Of Ethics?
A CFP Professional Must:
- Act with honesty, integrity, competence, and diligence.
- Act in the client’s best interest.
- Exercise due care.
- Avoid or disclose and manage conflicts of interest.
- Maintain confidentiality and protect the privacy of client information.
- Act in a manner that reflects positively on the financial planning profession and CFP certification.
What Is A Material Conflict of Interest?
A material conflict is one that could IMPACT ADVICE given by the CFP professional or CAUSE POTENTIAL HARM.
Using CFP Marks Appropriately
You can us the CFP Marks three ways:
- Your Name, CFP®
- CERTIFIED FINANCIAL PLANNER™ (All caps)
- Followed by one of six nouns: Professional, Certificant, Practitioner, Certification, Mark, Exam.
What is Chapter 11 Bankruptcy
Relief through reorganization for business or self employed.
What is Chapter 13 Bankruptcy?
Relief through adjusting debts.
Programs to Reduce Student Loan
Payments
- Pay As You Earn Repayment:
• Monthly student loan repayment of 10% of discretionary income with remaining debt forgiveness after 20 years.
• Only Direct Federal loans & Graduate PLUS loans eligible. - Income Based Repayment (IBR):
• Monthly student loan repayment of 15% of discretionary income with remaining debt forgiveness after 25 years.
• Most Federal (except parent PLUS) loans eligible. - Income Contingent Repayment (ICR):
• Monthly student loan repayment of 20% of discretionary income with remaining debt forgiveness after 25 years.
• Only Direct Federal loans & Graduate PLUS loans eligible
What is a 529 Able Account (529A)
Achieving a Better Life Experience
• Similar to state sponsored 529 plans
•Beneficiary must be entitled to SS disability or SSI
• TCJA allows 529 rollover to 529A ABLE (2018-2025) - subject to annual max
Beneficiary same or family member of original bene
• Only 1ABLE Account per beneficiary
• Max contribution $17,000 (2023)
Good to knows:
• Account balance over $100K will suspend SSI
• Qualified Expenses
• Education, housing, transportation, assistive technology, personal support services, legal fees
• Investment selections can be changed twice per year
Boot / gain recognized / basis - Income Tax Planning
- No boot received - recognized gain is zero.
- When boot is received just answer the recognized gain is theboot received.
- Boot paid is added to basis.
- Basis carries over from prior property.
The Yield Ladder
Market Anomalies
• January Effect
‘ Small Firm Effect
• Value Line Effect
• P/E Effect
• AFC/NFC
• Presidential Elections
° If the EMH is correct, why do we see anomalies in the marketplace?
Market anomalies do not support the EMH or any of the three forms.
What are the Quarterly Tax Payment Dates?
- 1st Quarter - Due April 15th
- 2nd Quarter - Due June 15th
- 3rd Quarter - Due September 15th
- 4th Quarter - Due January 15th
Cash Bais & Accrual Basis Tax Payers
Cash Basis- Recognized income when it is received.
Accrual Basis - Recognize income when it is earned.
***Companies who earn below $27Million can use cash or accrual.
***Companies who earn more than $27Million must use accrual.
What are deductions FROM AGI (Below the line)?
Itemized deductions FROM AGI include:
- Medical Expenses
- Certain state and local taxes
- Contributions to qualified charitable organizations.
- Casualty losses
- Certain personal interest expense
- Qualified Business Income
- Miscellaneous itemized deductions not subject to the 2% floor (2017-2025)
Taxation of Trusts
Social Security Survivor Benefits
All Heuristics (Psychology of Financial Planning)
Taxation of gain/loss on Assets
