Financial Planning Final Review

Question 1

Loans available for Graduate Students

Answer 1

Supplemental Loan for Students (Stafford Unsubsidized)

Question 2

Bankruptcy and the CFP Board

Answer 2

Bankruptcy must be disclosed to the CFP board, but would not likely prevent candidate from becoming a CFP.
It must be disclosed to clients when CFP is providing financial advice or financial planning
CFP w/ bankruptcy will also be included in a press release disclosing the bankruptcy.

Two or More bankruptcies are on the “Presumptive Bar List”.

Question 3

If client disagrees with CFP’s assumptions regarding inflation and other economics…

Answer 3

CFP should then limit the scope of the engagement and exclude retirement capital needs analysis from recommendations.

Question 4

If a client does not provide adequate information to CFP, the CFP must…

Answer 4

restrict or terminate the engagement. The choice to do so is subjective and based on facts. In income cannot be verified and no source is provided, this could lead to trouble for multiple areas of financial planning.

Question 5

If client insists on their own estate atty

Answer 5

CFP is required to have the documents reviewed by a qualified estate planning atty to ensure they are legal and accurate or CFP may need to terminate the agreement

Question 6

Who is governing body with ultimate authority over lack of regulatory disclosure?

Answer 6

The SEC regulates form ADV

Question 7

If CFP Disciplinary and Ethics commission sanctions a letter of aAdmonition

Answer 7

CFP may appeal decision of the DEC within 30 days after notice was sent

Question 8

Conflict of interest when a board member

Answer 8

a conflict does not exist if the cfp does not materially enefit from service on a board.

Question 9

When CFP begins discussing investments and on a flat fee w/ commissions r/d for investment products

Answer 9

They must provide a disclosure of the conflict of interest in recommending investments

Question 10

If a large change in life happens altering goals, next step is…

Answer 10

Explore with the client his personal and financial needs, priorites, and goals.
Essentially take it to the top

Question 11

Which assessment should occur during the step in the financial planning process when CFP is establishing and defining client-planner relationship?

Answer 11

The CFP should assess their own ability to meet the client’s needs and expectations.

Question 12

Sabbaticals

Answer 12

Are usually 2 months and generally beyond one’s vacation time allottment - they usually require a leave from work.

Question 13

PLUS Loans

Answer 13

are made to parents of students enrolled in higher education, interest is tax deductible to borrower.

Question 14

Efficient Market Hypothesis

Answer 14

All three forms : Weak , semi-strong, and strong form are supported by ANOMOLIES.
Anomalies are things liKE jANUARY EFFECT, Weekend Effect, and Value Line Effect.

Question 15

Code of Ethics and Standards of Conduct

Answer 15

Section A: Duties Owed to Clients
Section B: Financial Planning and Application of the Practice Standards for the Financial Planning Practice
Section C: Practice Standards for the Financial Planning Process

Section E: Duties owed to the CFP Board

Question 16

Letter of Agreement

Answer 16

If the scope of the work is changed, then a new letter of agreement would be the first thing to come for the client.

Question 17

Pay of credit cards or create emergency fund first?

Answer 17

First thing is to create an emergency fund and then the credit cards.