FP 511 Practice EXAM | UPDATE|COMPREHENSIVE FREQUENT MOST-
TESTED QUESTIONS AND VERIFIED ANSWERS/SOLUTIONS|GET IT 100%
ACCURATE!!
Bill and Sophia have recently retired and want to travel to Europe and then
volunteer for local mission work. They would also like to meet with Humphrey,
their financial planner, to discuss charitable contributions they would like to make
to these local missions. Humphrey should determine Bill and Sophia's life cycle
phase to be - ANSWER-the distribution phase.
The distribution/gifting phase begins subtly when a couple realizes that they can
afford to spend on things they never believed possible. The asset accumulation
and conservation/protection phases make this phase possible. For many people,
there is a period when they are being influenced by all three phases
simultaneously, though not necessarily to the same degree.
Whitney is designing her new email template which will reflect her recent
certification as a CFP® professional. Under her name, she has identified herself
as a CFP™. In a tagline at the bottom of the template, she advertises herself as a
"CFP® expert." According to CFP Board's guidelines regarding how the CFP®"
marks may be used, which of the following is CORRECT?
1 Whitney has appropriately identified herself as a CFP™.
2 Advertising herself as a CFP® expert is prohibited by CFP Board. - ANSWER-2
,Although, Whitney can identify herself as a CFP®, it must be done behind her
name, not under it. If Whitney wants to identify herself under her name, she should
do so as a ™. Statement II is correct. "CFP®" must always be used with one of CFP
Board's approved nouns ("certificant", "professional", "practitioner",
"certification", "mark", or "exam") unless directly following the name of the
individual certified by CFP Board. Here, it can be used alone.
Maxine, age 57, would like to retire in 10 years. Currently, her debt is decreasing
as her cash flow and net worth are steadily increasing. Based on Maxine's current
financial life cycle phase, which of the following goals is she likely to have? -
ANSWER-Long-term goals, such as investing for retirement
Maxine is in the conservation/protection phase of the financial life cycle. As such,
her goals are likely longer-term goals, such as investing to provide for future
retirement income. In the accumulation phase of the financial life cycle, clients
have only limited discretionary income and, as a result, they are likely to focus on
short-term, cost-of-living goals. Finally, in the distribution/gifting phase, estate
planning and capital preservation are usually most important.
Which of the following activities would be appropriate if you were establishing and
defining the client-planner relationship or gathering information necessary to
fulfill the engagement?
,1 Collecting personal financial information
2 Inquiring about the number of dependents
3 Inquiring about the age or dates of birth of dependents
4 Determining which stocks to purchase for the client's investment portfolio -
ANSWER-1-3
Establishing and defining the client-planner relationship does not include
determining which stocks or investments to purchase. This occurs in the fourth
phase of the financial planning process, developing the recommendations.
Which of the following CFP® certificants would likely be considered to be engaged
in financial planning or the material elements of financial planning?
1 Lance, who reviews a life insurance sales brochure with his client, Arthur, and
completes a variable life insurance application
2 Nadia, who conducts comprehensive data gathering regarding Jason's
investments, life insurance, retirement plans, wills, and trusts and makes
recommendations for him - ANSWER-2
Because Nadia's services involve several of the financial planning subject areas
and she is involved in the elements of financial planning, she is likely providing
financial planning. Lance's service to Arthur is limited, and the engagement would
likely not be considered financial planning.
, According to CFP Board Code of Ethics, Connor, a CFP® professional, is
responsible for which of the following?
1 Acting in the client's best interests
2 Avoiding or disclosing and managing conflicts of interest
3 Acting with honesty, integrity, competence, and diligence
4 Maintaining the confidentiality and protect the privacy of client information -
ANSWER-All
CFP® professional must
Act with honesty, integrity, competence, and diligence.
Act in the client's best interests.
Exercise due care.
Avoid or disclose and manage conflicts of interest.
Maintain the confidentiality and protect the privacy of client information.
Act in a manner that reflects positively on the financial planning profession and
CFP® certification.
Amanda, a CFP® professional, is enjoying an afternoon at her son's school
playground when she is approached by Tracy, a fellow parent and teacher at a
local elementary school. Their conversation covers specifics about Tracy's
personal and financial situation, with emphasis on a recommended investment
strategy for her 403(b) account. Amanda is aware that she is providing Financial
TESTED QUESTIONS AND VERIFIED ANSWERS/SOLUTIONS|GET IT 100%
ACCURATE!!
Bill and Sophia have recently retired and want to travel to Europe and then
volunteer for local mission work. They would also like to meet with Humphrey,
their financial planner, to discuss charitable contributions they would like to make
to these local missions. Humphrey should determine Bill and Sophia's life cycle
phase to be - ANSWER-the distribution phase.
The distribution/gifting phase begins subtly when a couple realizes that they can
afford to spend on things they never believed possible. The asset accumulation
and conservation/protection phases make this phase possible. For many people,
there is a period when they are being influenced by all three phases
simultaneously, though not necessarily to the same degree.
Whitney is designing her new email template which will reflect her recent
certification as a CFP® professional. Under her name, she has identified herself
as a CFP™. In a tagline at the bottom of the template, she advertises herself as a
"CFP® expert." According to CFP Board's guidelines regarding how the CFP®"
marks may be used, which of the following is CORRECT?
1 Whitney has appropriately identified herself as a CFP™.
2 Advertising herself as a CFP® expert is prohibited by CFP Board. - ANSWER-2
,Although, Whitney can identify herself as a CFP®, it must be done behind her
name, not under it. If Whitney wants to identify herself under her name, she should
do so as a ™. Statement II is correct. "CFP®" must always be used with one of CFP
Board's approved nouns ("certificant", "professional", "practitioner",
"certification", "mark", or "exam") unless directly following the name of the
individual certified by CFP Board. Here, it can be used alone.
Maxine, age 57, would like to retire in 10 years. Currently, her debt is decreasing
as her cash flow and net worth are steadily increasing. Based on Maxine's current
financial life cycle phase, which of the following goals is she likely to have? -
ANSWER-Long-term goals, such as investing for retirement
Maxine is in the conservation/protection phase of the financial life cycle. As such,
her goals are likely longer-term goals, such as investing to provide for future
retirement income. In the accumulation phase of the financial life cycle, clients
have only limited discretionary income and, as a result, they are likely to focus on
short-term, cost-of-living goals. Finally, in the distribution/gifting phase, estate
planning and capital preservation are usually most important.
Which of the following activities would be appropriate if you were establishing and
defining the client-planner relationship or gathering information necessary to
fulfill the engagement?
,1 Collecting personal financial information
2 Inquiring about the number of dependents
3 Inquiring about the age or dates of birth of dependents
4 Determining which stocks to purchase for the client's investment portfolio -
ANSWER-1-3
Establishing and defining the client-planner relationship does not include
determining which stocks or investments to purchase. This occurs in the fourth
phase of the financial planning process, developing the recommendations.
Which of the following CFP® certificants would likely be considered to be engaged
in financial planning or the material elements of financial planning?
1 Lance, who reviews a life insurance sales brochure with his client, Arthur, and
completes a variable life insurance application
2 Nadia, who conducts comprehensive data gathering regarding Jason's
investments, life insurance, retirement plans, wills, and trusts and makes
recommendations for him - ANSWER-2
Because Nadia's services involve several of the financial planning subject areas
and she is involved in the elements of financial planning, she is likely providing
financial planning. Lance's service to Arthur is limited, and the engagement would
likely not be considered financial planning.
, According to CFP Board Code of Ethics, Connor, a CFP® professional, is
responsible for which of the following?
1 Acting in the client's best interests
2 Avoiding or disclosing and managing conflicts of interest
3 Acting with honesty, integrity, competence, and diligence
4 Maintaining the confidentiality and protect the privacy of client information -
ANSWER-All
CFP® professional must
Act with honesty, integrity, competence, and diligence.
Act in the client's best interests.
Exercise due care.
Avoid or disclose and manage conflicts of interest.
Maintain the confidentiality and protect the privacy of client information.
Act in a manner that reflects positively on the financial planning profession and
CFP® certification.
Amanda, a CFP® professional, is enjoying an afternoon at her son's school
playground when she is approached by Tracy, a fellow parent and teacher at a
local elementary school. Their conversation covers specifics about Tracy's
personal and financial situation, with emphasis on a recommended investment
strategy for her 403(b) account. Amanda is aware that she is providing Financial
