CRPC Questions with Complete Solutions
Which of the following types of information are important to gather from a client prior to
developing retirement planning recommendations? his or her desired age of retirement,
the client's assumption for the long-term rate of inflation, investments the client prefers not to
use, number of children client and spouse intend to have
the age of retirement is required for determining investment and life insurance needs.
Economic assumptions need to be gathered from the client. While the planner may help
refine the assumption, it is nonetheless the client's assumption that is needed.
Planners also need to gather information on investments the client absolutely does not
want to include in an investment mix.
The number of children a couple may have provides an indication as to what may be
needed for education expenses, how children will affect family income, and creates the need for
other forms of planning such as trusts and guardianship issues.
,You have just finished identifying & disclosing all of the apparent & potential conflicts of
interest in the relationship with your client. What is the next step that you would undertake as
you continue through the planning process? Gather information necessary to fulfill the
engagement
The identification and resolution of apparent and potential conflicts of interest in the
planner/client relationship occurs? in the first step of the retirement planning process:
Establishing and Defining the Client/Planner Relationship.
The next step after Establishing and Defining the Client/Planner Relationship. is to gather
information necessary to fulfill the engagement, the second step in the retirement planning
process.
Discounting and ___________ compounding are opposite time value of money concepts.
Compounding is the opposite of discounting when talking about time value of money.
Having annual client meetings is not a requirement of the fiduciary standard, but it is
certainly good practice.
,Income = salaries, dividends, interest income
expenses auto payments, insurance, food, utilities, mortgage payments, taxes, clothing,
vacations, donations
The checking account and credit card balances would be on on the statement of financial
position.
Taxes and auto note payments appear on the cash flow statement.
income replacement percentages Income replacement percentages vary between low-
income and high-income retirees. income replacement ratios should not be used as the only basis
for planning. Income replacement ratios are useful for younger clients as a guide to their long-
range planning and investing
those with a lower preretirement income typically need a need a much higher income
replacement percentage in retirement.
, Assume a client and investment professional have worked together for several years. Recently,
the client's personal and financial circumstances have changed. According to the course
materials, what is the next asset management step that the investment professional should take?
gather data
When the client's circumstances change, the asset management process goes back back to
the data gathering step in the process.
An investment policy provides guidelines that are standards to be followed.
if they are fluid, they are ever-changing and therefore would be difficult to implement
and would provide inconsistency in the management of the portfolio.
Alpha is not an asset allocation strategy, but a way to measure a portfolio manager's
return relative to the amount of risk that has been taken.
examples of asset allocation strategies tactical, core/satellite, strategic.
Gold provides more diversification than large stocks.
Which of the following types of information are important to gather from a client prior to
developing retirement planning recommendations? his or her desired age of retirement,
the client's assumption for the long-term rate of inflation, investments the client prefers not to
use, number of children client and spouse intend to have
the age of retirement is required for determining investment and life insurance needs.
Economic assumptions need to be gathered from the client. While the planner may help
refine the assumption, it is nonetheless the client's assumption that is needed.
Planners also need to gather information on investments the client absolutely does not
want to include in an investment mix.
The number of children a couple may have provides an indication as to what may be
needed for education expenses, how children will affect family income, and creates the need for
other forms of planning such as trusts and guardianship issues.
,You have just finished identifying & disclosing all of the apparent & potential conflicts of
interest in the relationship with your client. What is the next step that you would undertake as
you continue through the planning process? Gather information necessary to fulfill the
engagement
The identification and resolution of apparent and potential conflicts of interest in the
planner/client relationship occurs? in the first step of the retirement planning process:
Establishing and Defining the Client/Planner Relationship.
The next step after Establishing and Defining the Client/Planner Relationship. is to gather
information necessary to fulfill the engagement, the second step in the retirement planning
process.
Discounting and ___________ compounding are opposite time value of money concepts.
Compounding is the opposite of discounting when talking about time value of money.
Having annual client meetings is not a requirement of the fiduciary standard, but it is
certainly good practice.
,Income = salaries, dividends, interest income
expenses auto payments, insurance, food, utilities, mortgage payments, taxes, clothing,
vacations, donations
The checking account and credit card balances would be on on the statement of financial
position.
Taxes and auto note payments appear on the cash flow statement.
income replacement percentages Income replacement percentages vary between low-
income and high-income retirees. income replacement ratios should not be used as the only basis
for planning. Income replacement ratios are useful for younger clients as a guide to their long-
range planning and investing
those with a lower preretirement income typically need a need a much higher income
replacement percentage in retirement.
, Assume a client and investment professional have worked together for several years. Recently,
the client's personal and financial circumstances have changed. According to the course
materials, what is the next asset management step that the investment professional should take?
gather data
When the client's circumstances change, the asset management process goes back back to
the data gathering step in the process.
An investment policy provides guidelines that are standards to be followed.
if they are fluid, they are ever-changing and therefore would be difficult to implement
and would provide inconsistency in the management of the portfolio.
Alpha is not an asset allocation strategy, but a way to measure a portfolio manager's
return relative to the amount of risk that has been taken.
examples of asset allocation strategies tactical, core/satellite, strategic.
Gold provides more diversification than large stocks.
