Fundamentals Practice Q's Flashcards
(30 cards)
Elasticity indicates a lower price will:
increase overall revenues
Duties to the CFP Board require CFP Professionals to disclose:
FINRA investigations & outcomes other than an uncontested minor rule violation (under $2500 award)
Duties owed to the client:
diligence, competence, & integrity
A client should aim to save:
10-12% of gross income
A CFP Professional must disclose conflicts of interest:
at the initiation of the client relationship, before providing services
You cannot make a transaction on behalf of one client:
that will knowingly cause harm to another client
CFP professionals must adhere to practice standards when:
performing financial planning
Competence includes the planners ability to recognize:
his or her limitations
CFP Board does NOT:
impose fines on CFP Professionals
CFP Professionals are required to hold a fiduciary duty:
when they recommend financial assets or engage in financial planning
A CFP Professional must follow the code of ethics:
when providing professional services
Total debt should not exceed:
36% of gross income
Establishing which services will be provided during the engagement:
is done prior to the first practice standard - understanding the clients personal and financial circumstances
Public disciplinary history must be disclosed to a client when:
providing financial advice, but it is not an example of a conflict of interest
A CFP Professional is required to make the disclosure about third parties and areas of expertise:
prior to entering into a planning agreement
Conflicts of interest must be disclosed:
before providing services and as material conflicts occur
An individual w/ special needs should not be:
named as a beneficiary on a life insurance plan
A CFP Professional shall not borrow or comingle funds is stated:
under the standards of conduct
The CFP certification can be suspended for up to:
5 years
If a CFP Professional believes a client has unrealistic goals:
when appropriate, the practitioner shall try to assist the client in recognizing the implications of unrealistic goals and objectives
What would constitute a material conflict of interest:
it could cause harm or impact potential advice
Prepaid tuition is treated as an asset:
of the parents’ and is included in the expected family contribution formula
The Federal Pell Grant is usually awarded to:
undergraduate students who have a high degree of unmet financial need
What document must be disclosed in writing whether providing financial advice or financial planning?
the privacy policy
