Brainscape's Knowledge GenomeTM


Top Flashcards (Certified)
All Flashcards

2012 CFP > Process & Misc Factoids > Flashcards

Process & Misc Factoids Flashcards

1
Q

What is the personal equivalent to a business balance sheet?

A

Statement of financial position

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What are the steps to the financial planning process?

A

EGPRIM or EGADIM

1) Establish Scope
2) Gather Info
3) Process or Analyze
4) Recommend or Develop
5) Implement
6) Monitor

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Practice Standard 100-1

A

Establish scope

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Practice Standard 200-1

A

Determine personal and financial goals and priorities

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Practice Standard 200-2

A

Obtain quantitative info and statements

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Practice Standard 300-1

A

Analyze data

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Practice Standard 400-1

A

Identify and analyze planning alternatives

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Practice Standard 400-2

A

Develop recommendations

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Practice Standard 400-3

A

Present recommendations

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Practice Standard 500-1

A

Agree on implementation responsibilities

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Practice Standard 500-2

A

Select products and/or services for implementation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Practice Standard 600-1

A

Define monitoring responsibilities

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Code of Ethics and Professional Responsibility

A

IOCFCPD - “Icing On the Cake Forced the Cat to Puke and Die.”

Integrity
Objectivity
Competence
Fairness
Confidentiality
Professionalism
Dillegence
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What is the personal equivalent to a business income statement?

A

Cash flow statement

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What is the minimum size of an emergency fund?

A

3 months of expenses (minus taxes and savings)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Max debt load for housing

A

28% of GROSS. Includes PITI & HOA

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Max debt load (ALL)

A

36% of GROSS

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Max consumer debt

A

20% of NET

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

What is quantitative data?

A

Names and numbers

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

What is qualitative data?

A

Lifestyle (risk tolerance, health,expectations, etc.)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

What is liquidity or current ratio?

A

Current assets / current liabilities

Should be 2 or higher

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Acid test or quick ratio

A

(Cash & CE) / current liabilities

should be 1 or higher

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Age restriction for reverse mortgages

24
Q

Lifetime learning Credit max amount

A

$2000….20% of $10,000

25
American Opportunity Tax Credit details
Max is $2,500 (100% of first 2K, 25% on next 2K) For first 4 years of college
26
Who is an investment advisor?
A-B-C test Gives Investment ADVICE Is in the BUSINESS of giving advice Gets COMPENSATION
27
What are the exceptions (not considered investment advisors) that don't have to register?
- banks or holding companies - LATE (lawyer, accountant, teacher, engineer) - broker or dealer where advice is incidental and receive no special compensation - publishers - give advice only on US securities
28
What are the exemptions or those that are investment advisors BUT DON'T have to register?
- all clients in home state AND NO LISTED securities - clients are insurance companies - fewer than 15 clients and don't act like advisors - qualified charitable organizations - works only with church plans - registered commodities futures trader that doesn't give advice
29
When does a brochure need to be provided to client?
48 hours before contract OR At contract signing IF client can cancel in 5 days
30
When do you you register with the FED?
- are an investment advisor - manage $100 million or more (flexibility up to 150 M) - no state registration available
31
What is FINRA?
Financial Industry Regulatory Authority which was established in 2007 when the NASD and parts of the NYSE
32
CFP rules of conduct categories
- defining relationship with clients - information disclosed to prospects & clients - prospect & client info and property - obligation to the public - obligation to employer - obligation to CFP Board
33
CFP disciplinary actions
1) private censure 2) public letter of admonition 3) suspension 4) revocation
34
Maximum length of CFP Board suspension?
5 years
35
Securities Act of 1933
Primarily deals with rules for new issues (IPOs)
36
Securities Act of 1934
Established SEC Deals with exchanges (secondary markets)
37
Glass-Stegall Act (1933)
Prohibited commercial banks from acting as investment bankers. Mostly repealed in 1999 by Gramm-Leach-Biley Act
38
FINRA Notice to Members 94-44 & 96-33
Can't sell away from firm
39
Rule 204A-1
Code of ethics instituted for Investment Advisor's Act
40
CFP Board view on commission
As long as you follow the rules they don't care how you are paid. If there is a conflict of interest....focus on disclosure.
41
CFP Board view of fiduciary standard
One who acts in the utmost good faith in a manner the he reasonably believes is in the best interest of client (which may or may not be ion the interest of the certificant)
42
CFP Board engagement form
Denotes the process of determining how an individual can meet life goals through proper management of financial resources.
43
CFP Board difference between objectivity and fairness
Fairness is putting others feelings first, objectivity is the ability to maintain judgement regardless of circumstance
44
CFP Board written agreements must have 4 parts:
1) parties 2) date of agreement and length of service 3) how is it terminated 4) scope of work
45
How long do you have to tell CFP Board about suspension?
10 calendar days
46
How long do you have to tell the CFP Board of contact info?
45 days
47
What does the CFP Board consider financial planning?
They consider: 1) clients understanding of CFP 2) the degree of multiple subject areas 3) the comprehensiveness of data gathering 4) breadth and depth of recommendations
48
What does the CFP Board NOT consider planning?
1) open account 2) KYC questions 3) solely providing brokerage or insurance services 4) seller of specific product 5) mortgage only 6) tax returns only 7) teacher of finance
49
CFP Board grounds for discipline:
1) violation of code of ethics and professional responsibility 2) fails to comply with practice standards 3) violates criminal law 4) suspension of license 5) violates disciplinary rules & procedures 6) fail to respond to a request by disciplinary and ethics commission 7) obstructs performance of d&e commission 8) lying
50
How long do you have to respond to a CFP notice of investigation?
Within 30 days
51
What do you have to do if you get a Complaint and Notice of Hearing?
1) answer within 20 days | 2) submit documents and $750 (hearing fee) within 30 days
52
How long is the attorney and witness identification process for a CFP hearing?
The 45 days before the hearing
53
How long does a decision take in a CFP hearing?
Within 30 days of hearing
54
How long can you appeal a decision in a CFP hearing?
Anytime within 30 days of decision order
55
Max time of CFP suspension
5 years

2012 CFP (7 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2025 Bold Learning Solutions. Terms and Conditions