Chapter 1

Question 1

High Net Worth

Answer 1

an individual or family that owns at least $1MM in of investable assets (liquid)

Question 2

Private Wealth Management

Answer 2

consist of private banking, investment counsel and personal trust services offered by the banks and other deposit taking organizations

Question 3

Full service brokerage

Answer 3

dominated by large, bank owned dealers, which increasingly focus their product and service offering on the HNW segment

Question 4

Private Investment Counsel

Answer 4

mono-line firms offering only investment management

Question 5

Fully integrated firms

Answer 5

major banks and some other large financial institutions that offer a comprehensive range of private wealth services

Question 6

Semi integrated:

Answer 6

offer a limited range of HNW services. This group includes FSB firms, financial advisor firms,
a limited number of foreign banks, and a few PIC firms

Question 7

Mono-line firms

Answer 7

offer a single set of services, such as discretionary management which includes most PIC firms, family offices offering advice only, and other foreign banks

Question 8

Who regulates the banks?

Answer 8

The federal government regulates the banking sector under the Bank Act

Question 9

Who regulates credit unions?

Answer 9

Provincially regulated

Question 10

Who regulates insurance companies?

Answer 10

Government of Canada largely regulates

Question 11

Who regulates mutual fund companies?

Answer 11

MFDA is self-regulatory organization (SRO) responsible for regulating the operations, standards of practice, and business conduct. Provincial securities commission regulates the mutual funds themselves

Question 12

Who regulates securities dealers?

Answer 12

governed by provincial legislation regulating the underwriting, distribution and sale of securities

Question 13

FATCA

Answer 13

objective is to have all income earned by U.S. taxpayers reported to the IRS so that appropriate federal taxes may be collected, affects all foreign financial institutions (FFIs) globally

Question 14

Canada-US Intergovernmental Agreement

Answer 14

Rather than requiring Canadian financial institutions to provide information about their U.S. clients directly to U.S. authorities, the intergovernmental agreement allows those institutions to provide it to the CRA who then transfers required info to the IRS

Question 15

PIPEDA

Answer 15

federal legislation governs how private sector companies may collect, use, and disclose their clients’ personal information in the course of their commercial activities

Question 16

PCMLTFA

Answer 16

requires financial institutions to implement protocols to detect and deter money laundering and terrorist financing activities

Question 17

CRM 2

Answer 17

is designed to increase investor protection and raise transparency standards

Question 18

The wealth management process

Answer 18

1. Understanding the Client
2. Formulating the Plan
3. Formalizing and Implementing the Plan
4. Reporting, Reviewing, and Rebalancing the plan