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GPP Flashcards

1
Q

Use of Initials Registered Investment Advisor and Certified Financial Planner

A
  • Registered Investment Advisor
  • CFP
  • CERTIFIED FINANCIAL PLANNER
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2
Q

When can a CFP Licensee release a client file to other persons

A
  • When an attorney or court subpoenas the file
  • at the clients request
  • as a defense again charges or wrongdoing
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3
Q

Determining an Emergency Fund

Use 3 or 6 months if..

A

3 Months:

  • Single w/ second source of income
  • Married, both work
  • Married, only 1 spouse works, but have a 2nd source of income

6 Months:

  • Single wage earner
  • Married, only 1 spouse works
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4
Q

Debt Management:
Housing Expenses (PITI)
Total Monthly Debt
Consumer Debt

A
  • Less then 28% of gross income (PITI)
  • Less then 36% of gross income (total monthly debt)
  • Less then 20% of net income (consumer debt)
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5
Q

Current Ratio

A

current assets / current liabilities

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6
Q

Current Assets

A

Cash Equivalents, Marketable securities, accounts receivable, inventory

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7
Q

Current Liabilities

A

Accounts Payable, credit card debt, taxes payable

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8
Q

Securities Act of 1933

A

Required that new issue purchasers be provided with a detailed prospectus before a purchase was completed.

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9
Q

Securities Act of 1934

A

Passed to regulate the secondary market (trading of issued securities) this act also created the SEC to enforce securities laws.

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10
Q

Investment Company Act of 1940

A

Authorized the SEC to regulate unit investment trusts (UITS) and managed investment companies plus variable products.

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11
Q

Securities Investor Protection Act of 1970

A

Established the SIPC to supervise securities firms that get into financial difficulties. The SIPC insures investors against losses arising from the failure of a brokerage firm.

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12
Q

Deductible Housing Interest

A
  • All mortgages cannot exceed $750k combined (MFJ) $375k Single (MFS)
  • Home equity interest is only deductible if used for home renovation/improvement
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13
Q

529 Key points

A
  • Lump sum gift up to $75,000
  • Donor can retain control
  • K-12 for tuition its allowed up to 10k/year
  • Can be used to pay student loans (10k over student lifetime)
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14
Q

Federal Reserve Open Market Operations

A

Repo: Fed buys securities - expansionary/easy money policy

Reverse Repo: Fed sells securities - contractionary/tight money policy

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15
Q

Gross Domestic Product (GDP)

A
  • Total dollar value of all goods and services produced within the US only!
  • GDP counts economic activity without regard ti yearly price fluctuations
  • Does not include any income generated outside the US or adjustments for foreign currencies.
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16
Q

Recession

A

Two consecutive quarters of economic decline (negative GDP)

17
Q

Depression

A

Six consecutive quarters of economic decline (negative GDP)

18
Q

Exceptions to filing as an investment advisor

A
  • Banks that are not also investment companies
  • Lawyers, accountants teachers (incidental advice)
  • Broker/dealers or registered reps whose performance is incidental and who get no special compensation for advice
  • Publishers of bona fide newspapers
  • Those who give advice solely relating to US government securities
19
Q

Exemptions to filing as an investment advisor

A
  • Advisor whose clients are insurance companies

- Family Office

20
Q

How does an investment advisor register with the SEC?

A
  • Initially Field the ADV part 1 and 2 with the SEC
  • Pays a minimum filing fee of 150$
  • RIA must submit part 1 of ADV and Schedule 1 annually
21
Q

FINRA initial Registration process

A
  • The individual associates with a broker dealer
  • Registers w/ FINRA through broker/dealer on Form U-4
  • Takes and passes appropriate exams
  • is issued a CRD number
22
Q

Series 6 Exam

A

Mutual funds, UITs and variables (only new UITs)

23
Q

Series 7 Exam

A

general securities (UITs on the secondary market)

24
Q

Series 63 Exam

A

Uniform Securities Agent state law exam

25
Q

Series 65 Exam

A

Uniform Investment advisor law exam

26
Q

Series 66 Exam

A

Uniform Combined State law exam (63 + 65)

27
Q

Basic Components of a legal contract as applied to insurance

A
  1. Offer and acceptance
  2. Consideration
  3. Legal Object
  4. Competent Parties
  5. Legal Form
28
Q

Express Authority

A

written, explicit direction from principal to agent

29
Q

Implied Authority

A

is that which the public believes the individual holds and includes signage, rate books ext. Implied authority is actual authority that the agent must carry out principles business

30
Q

Apparent Authority

A

Arises out of negligence of the principle in allowing the agent to appear to have the authority because of certain actions of the agent in the past. this typically affects terminated agents.

31
Q

Debts not cancelable by Bankruptcy

A
  • Student Loans
  • Government Loans
  • Child Support
  • Alimony

CFP (5 decks)

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