Banking services Exam Guide Questions with Correct Answers

What is the most likely reason banks offer personal financial planning services? - ANSWER-to increase profits In order to become a financial advisor, an exam must be passed to allow you to practice throughout the United States. - ANSWER-false broker agent a licensed financial planner who places orders on the stock exchange on behalf of their clients, acting as a middle-man between their clients and the stock market broker-dealer firms a business serving smaller financial planning firms; handles the administration of client accounts and also manages compliance and financial reporting for the smaller firms; may also purchase orders from the smaller firms and sell them as blocks into the stock market, acting as a middle-man between the smaller financial planning firms and the stock market Financial Industry Regulatory Authority (FINRA) a self-regulatory agency overseeing brokers-dealers; formerly know as NASD, the National Association of Security Dealers mutual funds a pool of selected securities held in a portfolio, usually administered by a manager who watches the performances of all securities; investors buy shares in the fund, owning a portion of the por - ANSWER-certified financial planner (CFP) financial professionals who have attained required levels of education and training in financial planning, have been trained in ethics, and have passed an exam given by the Certified Financial Planner Board of Standards; they have at least three years of experience in finances Consumer Price Index (CPI) a statistic representing the change in price for 80,000 products in the United States, published monthly by the Bureau of Labor Statistics, and used to compute the rate of inflation Ted is planning to retire from the police department and needs some financial planning advice. What is the most appropriate question Ted should ask potential financial advisors to determine if they are the best for him? - ANSWER-What area does the financial planner specialize in? What distinguishes a bank teller from a certified financial planner? - ANSWER-A teller provides basic financial services, while a certified financial planner offers a variety of more complex products. What is one similarity between a bank teller and a certified financial planner? - ANSWER-Both provide financial services A business that handles client accounts but also manages compliance and reporting for smaller firms is called a(n): - ANSWER-insurance company