FPQP EXAM Updated 2026

FPQP Exam Study Material 2026 | A+ Rated Study Resource 7 Steps of the Financial Planning Process - answer - 1. Understanding the client's personal and financial circumstances 2. Identifying and selecting goals 3. Analyzing the client's current course of action and potential alternative course(s) of action 4. Developing the financial planning recommendations 5. Presenting the financial planning recommendations 6. Implementing the financial planning recommendations 7. Monitoring progress and updating Financial planning is - answer - A collaborative process that helps maximize a Client's potential for meeting life goals through Financial Advice that integrates relevant elements of the Client's personal and financial circumstances. Areas of financial planning: - answer - Developing goals, cash and debt management, risk management and insurance planning, education needs, group benefits planning, investment planning, retirement savings and income planning, tax planning, estate planning A comprehensive financial plan: - answer - addresses most, if not all, of the client's circumstances A targeted financial plan: - answer - addresses only 1 or 2 of the client's objectives Planners help _____ and _____ goals and objectives - answer - identify, prioritize Steps to setting a financial goal: - answer - Purpose, Timeframe, Amount (PTA) Defining the engagement: - answer - - identifying the service(s) to be provided, and those that will be excluded - disclosing the planner's compensation arrangement(s) - disclosing existing and/or potential conflicts of interest - determining the responsibilities of both the planner and client - establishing the duration of the engagement - providing any additional information necessary to determine, define, or limit the scope of the engagement Financial planners are compensated by: - answer - sales (commission), fees (only), or a combination of both True or false: the use of other professionals is often necessary for clients to meet their goals as not one planner can know everything about financial planning - answer - true Behavioral Finance: - answer - a field of study that relates behavioral and cognitive psychology to financial planning and economics in an attempt to understand why people act irrationally during the financial decision-making process The 2 types of biases: - answer - Cognitive errors and emotional biases Cognitive errors: - answer - decision-making based on well-known concepts that may or may not be correct Emotional biases: - answer - which often occur impulsively based on the feelings of an individual when a choice is made List off the cognitive errors: - answer - Illusion of control Money illusion Conservation bias Mental accounting Self-attribution bias self-control bias List off the emotional biases: - answer - self-control bias status quo bias affinity bias Financial planners should be using what type of questions during the interview - answer - open-ended Non-directive counseling skills: - answer - clarification, paraphrasing, summarizing Directive counseling skills: - answer - reframing, explanation, advice FPQP code of ethics: - answer - 1. adherence to the Standards of Professional Conduct 2. self-disclosure of prior allegations or violations 3. adherence to the Terms and Conditions The standards of professional conduct are: - answer - Fiduciary duty, integrity, competence, diligence, professionalism, confidentiality the fiduciary standard: - answer - 1. Put a client's interests first 2. To act with utmost good faith 3. To provide full and adequate disclosure of all material facts 4. To refrain from misleading clients 5. To expose all conflicts of interests to clients Statement of financial position (balance sheet) - answer - A snapshot of the financial situation as of the given date. It is a complete representation of financial assets and liabilities. It is a statement of net worth Assets are separated into these 3 categories - answer - Cash/cash equival