CFP EXAM 2026/2027 UPDATE | VERIFIED QUESTIONS & ANSWERS
100% CORRECT | GRADED A+
Steps in Financial Planning Process - ANSWER 1. Understand client's personal and financial
circumstances
2. Identify and select goals
3. Analyze the client's current course of action and potential alternative courses of action
4. Develop the financial planning recommendations
5. Present the financial planning recommendations
6. Implement the financial planning recommendations
7. Monitoring progress and updating
UN. I. Are. Drunk. Prepare. Iced. Mimosas.
Financial Advice vs Financial Advice that requires financial planning - ANSWER
Fee-only vs. fee based vs sales related compensation - ANSWER
What disclosures must be in writing and what can be oral or writing? - ANSWER privacy policies are
ALWAYS in writing
conflicts of interest are always oral (& documented) or in writing
others depend on financial advice vs planning
CFP professionals must disclose FINRA investigations and outcomes except for - ANSWER an
uncontested minor rule violation under $2500 award
CFP code of ethics - ANSWER 1. Act with honesty, integrity, competence, and diligence. (HICD)
2. Act in the client's best interests.
3. Exercise due care.
4. Avoid or disclose and manage conflicts of interest.
5. Maintain the confidentiality and protect the privacy of client information.
6. Act in a manner that reflects positively on the financial planning profession and CFP® certification.
,Honesty
Clients Best Interests
Care
Conflicts of Interest
Confidentiality
Act Right
Fiduciary Duty = - ANSWER Duty of Loyalty
Duty of Care
Duty to Follow Client Instructions
LCF - learn CFP fodder
if not providing financial advice... - ANSWER fiduciary duty doesn't apply, but CFP still needs to abide
by the code of ethics
if providing financial advice but not financial planning - ANSWER fiduciary duty applies, but CFP isn't
required to apply the practice standards for the financial planning process or provide info to client in
writing
how do you know if you're providing financial planning? - ANSWER -have i agreed to provide or have
provided financial planning?
-does the financial advice i agreed to provide require integration of relevant elements of the client's
personal and/or financial circumstances in order to act in their best interest?
-does the client have reasonable basis to believe that I will provide or have provided financial
planning?
financial planning integration factors - ANSWER -number of relevant elements of the client's personal
and financial circumstances the financial advice may affect
-portion and amount of assets
-length of time circumstances would be affected
-effect on risk exposure
, -barriers to modifying the actions taken to implement financial advice
if client doesn't agree to financial planning, options are - ANSWER 1. not enter into engagement
2. limit the scope of engagement (provide the services you will not be performing)
3. provide the services after informing client how financial planning will benefit the client and how
the decision to not do financial planning may limit financial advice
4. terminate engagement
how to calculate how much someone needs for retirement based on capital conservation method.
only required income and interest are given. - ANSWER required income/interest rate
think about the 4% rule. you need your required income/4% to reach your income goal without ever
running out of money
rule of 72 - ANSWER 72/rate of return = time for investment to double
which of these, if we're given all of them, do NOT need to be included in an annuity due calculation?
-PV
-FV
-interest
-inflation
-PMT - ANSWER inflation, since annuity streams won't increase for inflation
if NPV is positive, is the investment good or bad? - ANSWER good. that means you expect to profit
from the investment
if cash flows are uneven and you want to solve for interest rate, which button do you need to push? -
ANSWER IRR - not I/yr!
if NPV is 0, what does that mean? - ANSWER you'll break even on your investment. that is, you'll
make exactly the required rate of return (aka discount rate)
100% CORRECT | GRADED A+
Steps in Financial Planning Process - ANSWER 1. Understand client's personal and financial
circumstances
2. Identify and select goals
3. Analyze the client's current course of action and potential alternative courses of action
4. Develop the financial planning recommendations
5. Present the financial planning recommendations
6. Implement the financial planning recommendations
7. Monitoring progress and updating
UN. I. Are. Drunk. Prepare. Iced. Mimosas.
Financial Advice vs Financial Advice that requires financial planning - ANSWER
Fee-only vs. fee based vs sales related compensation - ANSWER
What disclosures must be in writing and what can be oral or writing? - ANSWER privacy policies are
ALWAYS in writing
conflicts of interest are always oral (& documented) or in writing
others depend on financial advice vs planning
CFP professionals must disclose FINRA investigations and outcomes except for - ANSWER an
uncontested minor rule violation under $2500 award
CFP code of ethics - ANSWER 1. Act with honesty, integrity, competence, and diligence. (HICD)
2. Act in the client's best interests.
3. Exercise due care.
4. Avoid or disclose and manage conflicts of interest.
5. Maintain the confidentiality and protect the privacy of client information.
6. Act in a manner that reflects positively on the financial planning profession and CFP® certification.
,Honesty
Clients Best Interests
Care
Conflicts of Interest
Confidentiality
Act Right
Fiduciary Duty = - ANSWER Duty of Loyalty
Duty of Care
Duty to Follow Client Instructions
LCF - learn CFP fodder
if not providing financial advice... - ANSWER fiduciary duty doesn't apply, but CFP still needs to abide
by the code of ethics
if providing financial advice but not financial planning - ANSWER fiduciary duty applies, but CFP isn't
required to apply the practice standards for the financial planning process or provide info to client in
writing
how do you know if you're providing financial planning? - ANSWER -have i agreed to provide or have
provided financial planning?
-does the financial advice i agreed to provide require integration of relevant elements of the client's
personal and/or financial circumstances in order to act in their best interest?
-does the client have reasonable basis to believe that I will provide or have provided financial
planning?
financial planning integration factors - ANSWER -number of relevant elements of the client's personal
and financial circumstances the financial advice may affect
-portion and amount of assets
-length of time circumstances would be affected
-effect on risk exposure
, -barriers to modifying the actions taken to implement financial advice
if client doesn't agree to financial planning, options are - ANSWER 1. not enter into engagement
2. limit the scope of engagement (provide the services you will not be performing)
3. provide the services after informing client how financial planning will benefit the client and how
the decision to not do financial planning may limit financial advice
4. terminate engagement
how to calculate how much someone needs for retirement based on capital conservation method.
only required income and interest are given. - ANSWER required income/interest rate
think about the 4% rule. you need your required income/4% to reach your income goal without ever
running out of money
rule of 72 - ANSWER 72/rate of return = time for investment to double
which of these, if we're given all of them, do NOT need to be included in an annuity due calculation?
-PV
-FV
-interest
-inflation
-PMT - ANSWER inflation, since annuity streams won't increase for inflation
if NPV is positive, is the investment good or bad? - ANSWER good. that means you expect to profit
from the investment
if cash flows are uneven and you want to solve for interest rate, which button do you need to push? -
ANSWER IRR - not I/yr!
if NPV is 0, what does that mean? - ANSWER you'll break even on your investment. that is, you'll
make exactly the required rate of return (aka discount rate)
