AWMA Exam 1: Practice Test, Study Guide & Certification Review
Questions (2026)
Which one of the following characteristics is more correct concerning younger wealthy
individuals (millennials and GenXers)?
A) Younger wealthy individuals are seeking more technological options in financial planning.
B) Younger wealthy individuals have not experienced significant bear markets.
C) Younger wealthy individuals have directly opposite financial needs as compared to baby
boomers.
D) Younger wealthy individuals likely want to be advised by one of their own generation. - ANS
✔✔A) Younger wealthy investors (millennials and GenXers) are seeking fresh approaches to
financial planning, including more technological options. In addition, young clients also have
been through fewer years of investing but have experienced several significant bear markets.
Mod 1
One of the most important life goals of wealthy individuals is
A) protecting wealth.
B) assuring their retirement lifestyle.
C) minimizing taxes.
D) travelling the world. - ANS ✔✔D) The most frequently stated life goals for wealthy individuals
are having good health, travelling the world, and achieving financial success. To achieve
financial success, the most common financial goals are protecting wealth, assuring retirement
lifestyle, minimizing taxes, and leaving an estate to their heirs. Mod 1
One of the most important financial goals of wealthy individuals is
A)leaving an estate to their heirs.
,B)having good health.
C)none of these.
D)travelling the world. - ANS ✔✔A) To achieve financial success, the most common financial
goals are protecting wealth, assuring retirement lifestyle, minimizing taxes, and leaving an
estate to their heirs. The most frequently stated life goals for wealthy individuals are having
good health, travelling the world, and achieving financial success. Mod 1
Which one of the following statements is true regarding sustainable and responsible
investments (SRIs)?
A) Shareholder activism is a part of SRIs.
B) Baby boomers are the most likely demographic to invest in SRIs.
C) SRIs provide lower returns, but are a "feel-good" option for investors.
D) SRIs provide only a negative filter of staying away from certain assets. - ANS ✔✔A)
Shareholder activism also plays a part in getting companies to listen by passing shareholder
resolutions. Sustainable and responsible investing has been found to be of importance to Gen
Xers and millennials. Several studies have now shown taking into account ESG factors actually
increases long-term returns. For SRI investments, the adviser needs to set up a series of filters
to determine a client's specific wants for a sustainable fund. For instance, tobacco may be a
main prohibition for one client, while religious aspects may be a positive filter for that same or
another client. Mod 1
Concerning control of assets in a private foundation versus a donor-advised fund, which one of
the following aspects is true for a donor-advised fund?
A)Remains with founder's values
B) Needs lengthy IRS approval
C) Easier and less expensive to launch
D) Must pay out a certain percentage each year - ANS ✔✔C) Donor-advised funds (DAFs) are
growing in popularity and have the advantage of being easier and cheaper to launch and not
requiring the lengthy IRS approval that private foundations need. Values may change with a DAF,
,as major contributors have input into this type of charitable fund. In addition, only private
foundations must make payouts each year; DAFs have flexibility with this. Mod 1
If a high net worth (HNW) business owner came to your office, what would you expect her
financials to show, as compared to a HNW non-business owner?
A) About the same income, with more assets and higher net worth
B) About the same income with more assets, yet lower net worth
C) Higher income, with fewer assets and lower net worth
D) Lower income, with fewer assets and lower net worth - ANS ✔✔A) Income is similar between
all HNW professions; however, assets and net worth include business assets, so more assets and
higher net worth are common for HNW business owners. Many business owners are exposed to
a large amount of unsystematic risk because a significant amount of their capital is often tied up
in their business. Mod 1
When considering the social impact goals of a high net worth client, wealth planners should
expect those clients to
A)not want their planner to be involved in the charitable concern.
B)want their children to also develop charitable tendencies.
C) only want the charitable concern in order to reduce tax exposure.
D) overwhelmingly donate assets and not volunteer their time. - ANS ✔✔B) The reasons high
net worth individuals make charitable donations are largely humanitarian in nature—only half
of these individuals donate to reduce tax exposure as a secondary concern. It is important for
advisers to be aware of and research any social impact their clients find important. In addition,
the preferred methods of accomplishing social impact in the U.S., as compared to worldwide,
are more religious and also include more aspects that are nonfinancial, such as volunteerism.
Mod 1
As compared to younger high net worth individuals, older wealthy individuals describe their
financial needs as more geared toward
, A)managing cash and credit.
B) digital meetings.
C)investing outside of equities.
D) obtaining and using credit. - ANS ✔✔A) Older clients describe their needs as straightforward:
managing cash and credit, and growing investments. Younger clients indicate more complex
needs, such as a reluctance to invest in equities, interest in digital meetings, and a propensity
toward using credit. Mod 1
Which one of the following top overall concerns was the same for those wealthy clients under
30 and above 60?
A)Understanding of risk tolerance
B)Fee transparency
C)Strong investment performance
D)Ensuring children's well-being - ANS ✔✔C) The top wealth concerns of wealthy clients under
30 and above 60 differ greatly, but one area of agreement is wanting strong investment
performance. Under-30 clients generally want efficiency and transparency—they want to
understand what is being proposed and the costs and risks involved. They also will not hesitate
to go to other individuals or sources in order to better understand their options. This is not the
case with a typical over-60 client, who will work with just one adviser whom they trust, and will
want that adviser to have a strong understanding of their needs and risk tolerance. In addition,
younger investors are more concerned with child care and older investors with obtaining advice
about risk tolerance. Mod 1
The top reasons for a wealthy client to leave an adviser have been found to be in the general
category of
A)poor firm notoriety.
B)high fees.
Questions (2026)
Which one of the following characteristics is more correct concerning younger wealthy
individuals (millennials and GenXers)?
A) Younger wealthy individuals are seeking more technological options in financial planning.
B) Younger wealthy individuals have not experienced significant bear markets.
C) Younger wealthy individuals have directly opposite financial needs as compared to baby
boomers.
D) Younger wealthy individuals likely want to be advised by one of their own generation. - ANS
✔✔A) Younger wealthy investors (millennials and GenXers) are seeking fresh approaches to
financial planning, including more technological options. In addition, young clients also have
been through fewer years of investing but have experienced several significant bear markets.
Mod 1
One of the most important life goals of wealthy individuals is
A) protecting wealth.
B) assuring their retirement lifestyle.
C) minimizing taxes.
D) travelling the world. - ANS ✔✔D) The most frequently stated life goals for wealthy individuals
are having good health, travelling the world, and achieving financial success. To achieve
financial success, the most common financial goals are protecting wealth, assuring retirement
lifestyle, minimizing taxes, and leaving an estate to their heirs. Mod 1
One of the most important financial goals of wealthy individuals is
A)leaving an estate to their heirs.
,B)having good health.
C)none of these.
D)travelling the world. - ANS ✔✔A) To achieve financial success, the most common financial
goals are protecting wealth, assuring retirement lifestyle, minimizing taxes, and leaving an
estate to their heirs. The most frequently stated life goals for wealthy individuals are having
good health, travelling the world, and achieving financial success. Mod 1
Which one of the following statements is true regarding sustainable and responsible
investments (SRIs)?
A) Shareholder activism is a part of SRIs.
B) Baby boomers are the most likely demographic to invest in SRIs.
C) SRIs provide lower returns, but are a "feel-good" option for investors.
D) SRIs provide only a negative filter of staying away from certain assets. - ANS ✔✔A)
Shareholder activism also plays a part in getting companies to listen by passing shareholder
resolutions. Sustainable and responsible investing has been found to be of importance to Gen
Xers and millennials. Several studies have now shown taking into account ESG factors actually
increases long-term returns. For SRI investments, the adviser needs to set up a series of filters
to determine a client's specific wants for a sustainable fund. For instance, tobacco may be a
main prohibition for one client, while religious aspects may be a positive filter for that same or
another client. Mod 1
Concerning control of assets in a private foundation versus a donor-advised fund, which one of
the following aspects is true for a donor-advised fund?
A)Remains with founder's values
B) Needs lengthy IRS approval
C) Easier and less expensive to launch
D) Must pay out a certain percentage each year - ANS ✔✔C) Donor-advised funds (DAFs) are
growing in popularity and have the advantage of being easier and cheaper to launch and not
requiring the lengthy IRS approval that private foundations need. Values may change with a DAF,
,as major contributors have input into this type of charitable fund. In addition, only private
foundations must make payouts each year; DAFs have flexibility with this. Mod 1
If a high net worth (HNW) business owner came to your office, what would you expect her
financials to show, as compared to a HNW non-business owner?
A) About the same income, with more assets and higher net worth
B) About the same income with more assets, yet lower net worth
C) Higher income, with fewer assets and lower net worth
D) Lower income, with fewer assets and lower net worth - ANS ✔✔A) Income is similar between
all HNW professions; however, assets and net worth include business assets, so more assets and
higher net worth are common for HNW business owners. Many business owners are exposed to
a large amount of unsystematic risk because a significant amount of their capital is often tied up
in their business. Mod 1
When considering the social impact goals of a high net worth client, wealth planners should
expect those clients to
A)not want their planner to be involved in the charitable concern.
B)want their children to also develop charitable tendencies.
C) only want the charitable concern in order to reduce tax exposure.
D) overwhelmingly donate assets and not volunteer their time. - ANS ✔✔B) The reasons high
net worth individuals make charitable donations are largely humanitarian in nature—only half
of these individuals donate to reduce tax exposure as a secondary concern. It is important for
advisers to be aware of and research any social impact their clients find important. In addition,
the preferred methods of accomplishing social impact in the U.S., as compared to worldwide,
are more religious and also include more aspects that are nonfinancial, such as volunteerism.
Mod 1
As compared to younger high net worth individuals, older wealthy individuals describe their
financial needs as more geared toward
, A)managing cash and credit.
B) digital meetings.
C)investing outside of equities.
D) obtaining and using credit. - ANS ✔✔A) Older clients describe their needs as straightforward:
managing cash and credit, and growing investments. Younger clients indicate more complex
needs, such as a reluctance to invest in equities, interest in digital meetings, and a propensity
toward using credit. Mod 1
Which one of the following top overall concerns was the same for those wealthy clients under
30 and above 60?
A)Understanding of risk tolerance
B)Fee transparency
C)Strong investment performance
D)Ensuring children's well-being - ANS ✔✔C) The top wealth concerns of wealthy clients under
30 and above 60 differ greatly, but one area of agreement is wanting strong investment
performance. Under-30 clients generally want efficiency and transparency—they want to
understand what is being proposed and the costs and risks involved. They also will not hesitate
to go to other individuals or sources in order to better understand their options. This is not the
case with a typical over-60 client, who will work with just one adviser whom they trust, and will
want that adviser to have a strong understanding of their needs and risk tolerance. In addition,
younger investors are more concerned with child care and older investors with obtaining advice
about risk tolerance. Mod 1
The top reasons for a wealthy client to leave an adviser have been found to be in the general
category of
A)poor firm notoriety.
B)high fees.
