CPFA EXAM NEWEST 2026 ACTUAL EXAM TEST
BANK| NAPA (CERTIFIED PLAN FIDUCIARY
ADVISOR) CERTIFICATION EXAM PREP WITH
COMPLETE 400 REAL EXAM QUESTIONS AND
CORRECT VERIFIED ANSWERS/ ALREADY GRADED
A+ (MOST RECENT!!)
Fiduciary Roles and Responsibilities
Q1. Under ERISA, a fiduciary must act for the exclusive purpose of providing
benefits to participants and their beneficiaries. This is known as the:
A) Prudent man rule.
B) Exclusive purpose rule.
C) Diversification requirement.
D) Prohibited transaction rule.
Answer: B
Rationale: The exclusive purpose rule is a core fiduciary duty requiring fiduciaries
to act solely in the interest of plan participants and beneficiaries.
Q2. A plan sponsor hires a third-party administrator (TPA) to perform annual
compliance testing. Under ERISA, the TPA is considered a:
A) Named fiduciary.
B) Non-fiduciary service provider.
C) 3(21) fiduciary.
D) Plan administrator.
Answer: B
Rationale: A TPA performing ministerial functions like compliance testing is
,considered a non-fiduciary service provider. Fiduciary status requires discretionary
authority or control over plan management or assets.
Q3. Which of the following actions would most likely establish a fiduciary
relationship under ERISA?
A) Providing investment education materials to participants.
B) Making a recommendation to a participant to transfer their account to a
specific fund.
C) Processing a participant's distribution request.
D) Preparing the plan's Form 5500.
Answer: B
Rationale: Providing individualized investment advice for a fee that serves as the
primary basis for investment decisions establishes fiduciary status under the DOL's
five-part test .
Q4. A 3(21) fiduciary advisor recommends investments to a plan committee, but
the committee makes the final decisions. This advisor is considered a fiduciary
because they:
A) Have discretionary authority over plan assets.
B) Are named in the plan document.
C) Render investment advice for a fee that serves as a primary basis for decisions.
D) Are responsible for all plan losses.
Answer: C
Rationale: A 3(21) fiduciary is an investment advice fiduciary. They act alongside
other fiduciaries, recommending investments, but the final decision rests with the
plan fiduciaries .
Q5. Which of the following is NOT a core requirement for a fiduciary under ERISA?
A) Acting with the care, skill, prudence, and diligence of a prudent person familiar
with such matters.
B) Diversifying plan investments to minimize the risk of large losses.
C) Investing plan assets to maximize returns, even if it involves a higher level of
,risk.
D) Acting solely in the interest of plan participants and beneficiaries.
Answer: C
Rationale: ERISA's prudent man standard requires fiduciaries to act with
prudence, diversify investments, and act solely in participants' interests.
Maximizing returns at all costs is not a stated requirement and could be a breach
of duty.
Q6. What is the five-part test used to determine?
A) Whether a plan document is compliant.
B) Whether an individual is an investment advice fiduciary.
C) Whether a service provider's fees are reasonable.
D) Whether a plan is subject to ERISA.
Answer: B
Rationale: The DOL's five-part test defines when a person becomes a fiduciary by
providing investment advice .
Q7. Which of the following individuals is automatically a fiduciary of a retirement
plan?
A) The plan's accountant.
B) The plan's investment advisor.
C) The plan sponsor.
D) The plan's recordkeeper.
Answer: C
Rationale: The plan sponsor, plan administrator, and plan trustee will almost
always be fiduciaries to the plan .
Q8. A fiduciary's duty of loyalty requires them to:
A) Place the interests of the plan sponsor first.
B) Place their own interests first.
C) Place the interests of participants and beneficiaries first.
D) Balance the interests of all parties equally.
, Answer: C
Rationale: ERISA requires fiduciaries to manage the plan for the exclusive benefit
of participants and their beneficiaries .
Q9. Which of the following is NOT considered an exercise of fiduciary
responsibility?
A) Selecting an investment option for the plan.
B) Monitoring a service provider.
C) Processing a routine participant distribution.
D) Hiring a plan advisor.
Answer: C
Rationale: Processing routine distributions is a ministerial function. Selecting,
monitoring, and hiring service providers are fiduciary acts.
Q10. A plan fiduciary delegates investment management to a 3(38) investment
manager. The fiduciary:
A) Is completely relieved of all liability.
B) Still has a duty to prudently select and monitor the manager.
C) No longer has any oversight responsibilities.
D) Must approve every trade made by the manager.
Answer: B
Rationale: While the fiduciary may not be directly liable for the delegated duties,
they are still responsible for overseeing the service providers to whom they
delegated those duties .
Q11. A plan sponsor hires an advisor to provide "education" to participants. The
advisor provides general information about the benefits of diversification. This
advisor is likely:
A) A fiduciary.
B) A non-fiduciary.
C) A 3(38) fiduciary.
D) A plan administrator.
BANK| NAPA (CERTIFIED PLAN FIDUCIARY
ADVISOR) CERTIFICATION EXAM PREP WITH
COMPLETE 400 REAL EXAM QUESTIONS AND
CORRECT VERIFIED ANSWERS/ ALREADY GRADED
A+ (MOST RECENT!!)
Fiduciary Roles and Responsibilities
Q1. Under ERISA, a fiduciary must act for the exclusive purpose of providing
benefits to participants and their beneficiaries. This is known as the:
A) Prudent man rule.
B) Exclusive purpose rule.
C) Diversification requirement.
D) Prohibited transaction rule.
Answer: B
Rationale: The exclusive purpose rule is a core fiduciary duty requiring fiduciaries
to act solely in the interest of plan participants and beneficiaries.
Q2. A plan sponsor hires a third-party administrator (TPA) to perform annual
compliance testing. Under ERISA, the TPA is considered a:
A) Named fiduciary.
B) Non-fiduciary service provider.
C) 3(21) fiduciary.
D) Plan administrator.
Answer: B
Rationale: A TPA performing ministerial functions like compliance testing is
,considered a non-fiduciary service provider. Fiduciary status requires discretionary
authority or control over plan management or assets.
Q3. Which of the following actions would most likely establish a fiduciary
relationship under ERISA?
A) Providing investment education materials to participants.
B) Making a recommendation to a participant to transfer their account to a
specific fund.
C) Processing a participant's distribution request.
D) Preparing the plan's Form 5500.
Answer: B
Rationale: Providing individualized investment advice for a fee that serves as the
primary basis for investment decisions establishes fiduciary status under the DOL's
five-part test .
Q4. A 3(21) fiduciary advisor recommends investments to a plan committee, but
the committee makes the final decisions. This advisor is considered a fiduciary
because they:
A) Have discretionary authority over plan assets.
B) Are named in the plan document.
C) Render investment advice for a fee that serves as a primary basis for decisions.
D) Are responsible for all plan losses.
Answer: C
Rationale: A 3(21) fiduciary is an investment advice fiduciary. They act alongside
other fiduciaries, recommending investments, but the final decision rests with the
plan fiduciaries .
Q5. Which of the following is NOT a core requirement for a fiduciary under ERISA?
A) Acting with the care, skill, prudence, and diligence of a prudent person familiar
with such matters.
B) Diversifying plan investments to minimize the risk of large losses.
C) Investing plan assets to maximize returns, even if it involves a higher level of
,risk.
D) Acting solely in the interest of plan participants and beneficiaries.
Answer: C
Rationale: ERISA's prudent man standard requires fiduciaries to act with
prudence, diversify investments, and act solely in participants' interests.
Maximizing returns at all costs is not a stated requirement and could be a breach
of duty.
Q6. What is the five-part test used to determine?
A) Whether a plan document is compliant.
B) Whether an individual is an investment advice fiduciary.
C) Whether a service provider's fees are reasonable.
D) Whether a plan is subject to ERISA.
Answer: B
Rationale: The DOL's five-part test defines when a person becomes a fiduciary by
providing investment advice .
Q7. Which of the following individuals is automatically a fiduciary of a retirement
plan?
A) The plan's accountant.
B) The plan's investment advisor.
C) The plan sponsor.
D) The plan's recordkeeper.
Answer: C
Rationale: The plan sponsor, plan administrator, and plan trustee will almost
always be fiduciaries to the plan .
Q8. A fiduciary's duty of loyalty requires them to:
A) Place the interests of the plan sponsor first.
B) Place their own interests first.
C) Place the interests of participants and beneficiaries first.
D) Balance the interests of all parties equally.
, Answer: C
Rationale: ERISA requires fiduciaries to manage the plan for the exclusive benefit
of participants and their beneficiaries .
Q9. Which of the following is NOT considered an exercise of fiduciary
responsibility?
A) Selecting an investment option for the plan.
B) Monitoring a service provider.
C) Processing a routine participant distribution.
D) Hiring a plan advisor.
Answer: C
Rationale: Processing routine distributions is a ministerial function. Selecting,
monitoring, and hiring service providers are fiduciary acts.
Q10. A plan fiduciary delegates investment management to a 3(38) investment
manager. The fiduciary:
A) Is completely relieved of all liability.
B) Still has a duty to prudently select and monitor the manager.
C) No longer has any oversight responsibilities.
D) Must approve every trade made by the manager.
Answer: B
Rationale: While the fiduciary may not be directly liable for the delegated duties,
they are still responsible for overseeing the service providers to whom they
delegated those duties .
Q11. A plan sponsor hires an advisor to provide "education" to participants. The
advisor provides general information about the benefits of diversification. This
advisor is likely:
A) A fiduciary.
B) A non-fiduciary.
C) A 3(38) fiduciary.
D) A plan administrator.
