cfp level 4 workbook

Workbook- Level-4 (Part-1) This workbook has been prepared to prepare for 25 questions of 1 mark each in Level-4 Final examination. 1) Financial Planners should have a basic understanding of client characteristics, that is, the behavioral aspects of financial planning, and how they can significantly impact clients’ financial health. a) True b) False c) Partly true 2) With a ------------- focus, long-term and effective client relationships can be built and clients can feel secure in the knowledge that their financial planner is looking out for their best interests. a) Client-first b) Knowledge –first c) Effective Communication-first d) None of the above 3) ------------------is a type of insurance where the policy holder is paid directly in the event of an accident resulting in injury of the insured. The insured can spend the benefit payment however they choose. Accident insurance is complementary to, not a replacement for, health insurance. a) Indemnity Policy b) Accident insurance c) Health Insurance d) Any of the above 4) Which of the objectives can be met by implementing strategies across financial planning practice areas: a) Cash flow and debt management b) Savings plans, insurance coverage and other risk management techniques, c) Investment vehicles, tax strategies, employment benefits, retirement plans, and estate planning techniques. d) All of the above 5) It is a critical exercise in ensuring long-term financial security. a) Education funding of child b) Retirement Planning c) Estate Planning d) Financial Planning Process 6) Financial planning is very much a people -oriented profession. It is about establishing long term, trusting relationships with clients, which confers on planners a number of professional responsibilities and obligations a) True b) False 7) ---------------- is set out in writing in a formal document signed by both parties or formally accepted by the client and includes a process for terminating the engagement. a) The scope of the engagement

b) The plan Format c) Investment Policy statement d) None of the above 8) The financial planning professional and the client agree on the services to be provided a) True b) False 9) Mutually defining the -------------- establishes realistic expectations for both the client and the financial planning professional. It can be comprehensive or limited advice. a) Investment Policy statement b) Scope of the engagement c) Strategies to be followed d) None of the above 10) The risk absorbing capacity of a person depends on his income levels, age, liabilities, attitude towards risk and also on the time horizon a) True b) False 11) Some clients have asked your advice on a new financial product that has caught the media attention lately. What would the code of ethics of Diligence demand from you in such an instance? a) Since you have already created a financial plan after due diligence, there is no scope for the new product b) Media attention does not mean that product will be good to invest in c) Study the product's features and then apply the same to various clients' scenario, sometimes a separate recommendation altogether for a segment of clients. d) None of the above 12) Which of the following is true regarding financial planning services offered by professionals in India? a) Follow SEBI (Investor Protection guidelines ) as per SEBI rule 2013 b) Follow advisory given by product manufacturers like MF and Insurance companies c) Investment Advice includes Financial Planning and such services come under the SEBI (Investment Advisers) Regulations, 2013. 13) At what stage of the financial planning process does a planner consider the opportunities and constraints presented by the client's financial situation rationalise between the current course of action and the anticipated changes to determine the likelihood of the client reaching his or her objectives? a) At the time of entering into client planner relationship b) It can be done anytime c) At the time of implementing the plan d) Assessment of the client's objectives, needs, and priorities. 14) Which of the following aspects of financial planning will necessitate registration as an investment adviser under SEBI (Investment Advisor) Regulations, 2013? a) Getting paid for advice by the Mutual Funds and other companies b) Preparing a financial plan for a client and seeking remuneration directly from the client. c) In can be mix of fees and commission d) None of the above

15) Which is the most appropriate in respect of services provided by CFP professionals? a) CFP professionals provide advice and also execute of plan b) Implementation also can be done by Financial Planners c) CFP professionals offer general advice in all aspects of personal finance, generally, the execution of advice however needs to be outsourced. 16) You have been engaging with a client to know her perspective and aspiration from financial plan. Among the personal competence skills that you practice often in such situations, what is closest to Self Awareness? a) You need to be careful while interacting with clients b) You need to have appropriate behaviour with clients c) Perception & understanding your own emotions that trigger a reaction or response is also a self-reflection of how you feel, think and operate. 17) Your client has strong beliefs that are in direct conflict with you as a financial planner. What you should first determine and then what action steps need to do to help move beyond the area of conflict? a) You need to educate client about his wrong belief system as you have more knowledge b) You can accept his beliefs and act accordingly c) Determine in what extent the client's as well as your personal belief systems are far from the actual truth of the situation. Ask questions and provide information that serve to clarity you mutual understanding of the other's version of the truth. 18) What information is important to a financial planner when collecting data on assets of a Client? a) Every information about his asset, income and expenses etc. is required b) Title & ownership of assets, their date and cost of acquisition, any debt used to acquire them, and the yield obtained on individual assets. c) Purchase date and selling date is very important d) Yield obtained and loan is very important 19) Under SEBI (Investment Adviser) Regulations, which rationale guides the \"Client level segregation\" at group level for investment and distribution services offered by a non-individual investment adviser? a) Same client cannot be offered both advisory and distribution services within the group of the non-individual entity. b) There can be mix of clients i.e. fee based and commission based c) No particular model for advisory business as such is specified by SEBI 20) Details of a client's investments have been sent to you. At this stage what information can be helpful in reallocating resources and selecting appropriate investment vehicles? a) Client's risk tolerance level and capacity to take risks, client's financial and other life goals. b) Client’s various financial goals and time horizon is required c) Only Client’s risk appetite is important d) None of the above 21) Which of the following cannot be considered investment advice under SEBI IA Regulations, 2013?

a) Advice given in written format b) Advice given after meetings and discussions with the client c) Advice that is given through newspapers, magazines, and audio-visual media to the general Public. 22) Which is in contradiction with the SEBI (Investment Advisers) Regulations, 2013 of an Investment Advisor? a) Giving advice following ethics of Financial Planning designed by FPSB b) Providing commission based services to clients as Distributor c) Providing commission-based execution services for the investment advice furnished under the same entity. d) None of the above 23) The financial planner has a responsibility to identify the insurance policies currently in place. These should include life insurance, asset protection, income protection, disability cover, and trauma/critical illness cover. In addition, the financial planner should identify the level of insurance protection over fixed asset. a) True b) False 24) ----------------------- technique involves asking the client a prescribed series of questions, whose answers are designed to produce a ‘value’, or point on a scale, that indicates the client’s risk acceptance. a) Client’s total Profile b) Client’s Cash flow c) Risk Profiling d) None of the above 25) Strategies and consequences identified by the financial planning professional may differ from those of other practitioners or advisors, illustrating the subjective nature of exercising professional judgment. a) False b) May be c) Very True d) None of the above 26) Which of the following is not true with respect to plans made for the client? a) The financial planning professional communicates to the client that financial planning is a static process that may not require updates due to changes in the client’s personal, economic or other conditions. b) The financial planning professional and the client mutually agree on, and understand, their respective roles, if any, in ensuring that the client’s situation is being adequately reviewed. c) The financial planning professional defines and communicates to the client the nature and scope of the reviewing activities that the financial planning professional will provide. d) The reviewing process may require the financial planner professional to modify the original scope of engagement or initiate a new engagement. 27) Why a Financial Planner need to know the title of an asset while creating plans? a) It is not required to be shared with the Financial Planner b) Knowing the way in which an asset is titled lets the financial planner know whether it may be available for funding the current financial need. c) Assets may be titled in ways that limit their availability, and the financial planner should know about these limitations.

d) b and c are correct 28) Potential ---------- is an area that is frequently overlooked. The likelihood of ---------- is greater than the likelihood of premature death for most people, and clients should be financially prepared for the impact of ---------if other goals are to be met. a) Health wellness b) Old age c) Disability d) None of the above 29) Why financial goals need to be prioritized many a times? a) Sometimes no amount of advice can help the client achieve his or her goals within the desired time frame, given available resources. b) Therefore, time frames may have to be adjusted, funding amounts required may need to be changed, or goals may need to be re-evaluated. c) During the information-gathering stage, clients prioritize their goals so the financial planner can work to help the client achieve the most important goal(s) within the desired time frames. d) If the financial planner finds that goals cannot be satisfactorily met with current resources, the client will need to be presented with options for potential adjustments. e) All of the above are true 30) Individuals should retain a sufficient amount of liquid assets – enough to cover at least three to six months’ worth of expenses – to handle potential emergencies without having to borrow or to sell assets at an inopportune time. Because investment vehicles with the greatest liquidity tend to have the lowest returns, the amount of money in emergency funds should be sufficient, but not excessive. a) True b) False 31) Which of the following is to be considered as use of “Professional Judgment?? a) Is the recommended plan of action cost effective with a relatively high probability of success? b) Are the assumptions valid, especially in the current economic and legal environment? c) Can the plan be adjusted as necessary? d) Are the recommendations socially and culturally acceptable? e) All of the above 32) How does the financial planning professional put a client’s interest first? a) Abide by the supporting principles. Act in accordance with professional expectations. b) Provide full and appropriate disclosure. Act with transparency. c) Manage conflicts of interest. Secure fully informed client consent. d) Communicate the compensation and remuneration model. e) All of the above 33) Which of the following is not true? a) No two clients are the same. b) They have different goals, different backgrounds, different amounts of income and assets; they are different from one another. c) Clients think and respond differently from one another, and financial planners relate to them in different ways. d) Clients have same characteristics that impact financial planning engagements. 34) What is Retail Therapy? a) Doing shopping from retail stores

b) Buying things is the solution to emotional distress and bad feelings c) Retail stores offer discount, so they go there d) None of the above 35) Emotional intelligence (EQ) is the ability to recognize and understand emotions in you and others, and the ability to use this awareness to manage behaviour and relationships. “EQ affects how people manage behaviour, navigate social complexities, and make personal decisions that achieve positive results a) True b) False 36) ------------------ is the ability to accurately perceive your own emotions and understand your tendencies over a variety of situations. It includes staying on top of typical reactions to events, challenges and people a) Self-Management b) Self-awareness c) Personal competence d) None of the above 37) ---------------- is what happens when a person does or does not act. It depends on self- awareness and is the second component of personal competence. --------------- is the ability to be aware of emotions and direct your behaviour appropriately. --------------- allows an individual to delay initial, current needs so you can pursue more important, significant goals. a) Self-Management b) Self-awareness c) Personal competence d) None of the above 38) You must consider the other person’s feelings, and say the right words in the right ways to support their feelings. You acknowledge their ego and control your own emotions. A very good way to do this is to think before you speak. Ask yourself how you think the other person will feel as a result of what you say and how you say it. If you need to, edit your remarks before making them. This is---------- a) Self -Awareness b) Self-Management c) Empathy d) None of the above 39) Client engagement is more than simply meeting with a client, hearing what they want and providing a potential solution or two. a) Very true b) False c) Partly true d) None of the above 40) Which of the following is true? a) Discovery is the process of learning about the client – really learning about the client. b) Discovery can include both qualitative and quantitative information, and the primary focus for the financial planner is to discover the client’s life dreams and goals, along

with information to help facilitate the process of developing strategies to help the client achieve those goals c) Both of the above d) None of the above 41) -----------Setting refers to the characteristics of the problem the financial planner must address. This includes recognition of the types of decisions to be made, such as: Time-constrained issues, unexpected problems or issues, Issues that require collaboration with other professionals, High or low-stakes issues The financial planner and client may view the --------------- differently, e.g., to the planner, something may be routine, but to the client it may be viewed as a high stakes matter. a) Problem solving b) Self-awareness c) Self-Management d) Setting 42) A CFP professional shall treat the client’s information as confidential except as required in response to proper legal process or regulatory requirements; as necessitated by obligations to a CFP professional’s employer or partners; to defend against charges of wrongdoing; in connection with a civil dispute; or as needed to perform professional services on behalf of the client. a) True b) False 43) Which of the following is not true with respect to skills a Financial Planner should have? a) Sufficient knowledge is not mandatory to qualify an individual as a competent financial planner. b) In addition to understanding and operating according to required standards and rules of practice, a financial planner must also have the functional competence to apply professional skills in practice. c) These skills and social competencies support the high degree of trust clients place with CFP professionals. d) This is especially true when a financial planning engagement involves uncertainty and complexity. 44) Which principles designed to guide the activities and behaviour of financial planners with clients during financial planning engagements is true for following. An accurate and understandable description of the compensation arrangements being offered, including information related to the costs to the client and general form and source of compensation to the financial planner and/or the financial planner’s employer a) Put the Client’s Interest First b) Acts in Accordance with Professional Expectations c) Provide Full and Appropriate Disclosure d) None of the above 45) Which of the following are professional Practices? a) Comply with relevant financial services laws and regulations b) Adhere to the professional code of ethics and standards of practice c) Make appropriate judgments in areas not addressed by existing practice standards

d) Maintain awareness of changes in the economic, political and regulatory environments e) Engage in continuous learning to ensure currency of knowledge and skills f) Conduct appropriate research when performing analysis and developing strategies g) Exercise autonomy and initiative in the performance of professional activities h) Exercise responsibility for own ability to deliver services to the client for the duration of the engagement i) All of the above are required 46) As the financial planning professional integrates professional skills with appropriate knowledge and abilities, and continually updates these to maintain competency, he or she upholds and promotes the interests of the global financial planning profession for the benefit of society. a) True b) False 47) “Buying things or spending money is the solution to emotional distress and bad feelings” What is this phenomenon called? a) Emotional Therapy b) Feeling good Therapy c) Retail therapy d) None of the above 48) “-------------are human tendencies that lead us to follow a particular quasi-logical path, or form a certain perspective based on predetermined mental notions and beliefs” a) Emotional system b) Temperament c) Behavioral biases d) None of the above 49) Financial DNA includes a three-stage discovery process that looks at different aspects of a person’s financial personality. Following belong to which state of Financial DNA? 1) Communication 2) Relationship 3) Information 4) Decision Style 5) Control 6) Stress 7) Natural Risk 8) Setting Goals 9) Trust a) Behaviour b) Financial Propensities c) Quality Life Goal Visioning d) None of the above 50) Financial DNA includes a three-stage discovery process that looks at different aspects of a person’s financial personality. Following belong to which state of Financial DNA? 1) Attitudes 2) Fears

3) Asset Aptitudes 4) Investment Style 5) Management 6) Motivation 7) Values 8) Emotion a) Behaviour b) Financial Propensities c) Quality Life Goal Visioning d) None of the above 51) Financial DNA includes a three-stage discovery process that looks at different aspects of a person’s financial personality. Following belong to which state of Financial DNA 1) Passion and Vision 2) Environment 3) Values 4) Astuteness 5) Futurity 6) Future Needs and Wants 7) Strategies a) Behaviour b) Financial Propensities c) Quality Life Goal Visioning d) None of the above 52) A conservator is one, also a fiduciary, who is responsible for managing the financial affairs of the child/adult. This can include everything from paying bills, investing funds, paying for housing and much more for special child. a) True b) False 53) ------------------------- is the ability to recognize and understand emotions in you and others, and the ability to use this awareness to manage behaviour and relationships a) Intelligence b) Good understanding c) Emotional intelligence (EQ) d) None of the above 54) --------------------is the ability to accurately perceive your own emotions and understand your tendencies over a variety of situations. It includes staying on top of typical reactions to events, challenges and people. a) Self-management b) Relationship Management c) Self-awareness d) None of the above 55) -------------is the ability to be aware of emotions and direct your behaviour appropriately. ----- ------allows an individual to delay initial, current needs so you can pursue more important, significant goals.

a) Self-management b) Relationship Management c) Self-awareness d) None of the above 56) It is the ability to pick up on other people’s emotions (accurately) and understand what is happening with them. It may include stepping into the other person’s shoes to feel what they feel, even when doing so does not mirror your own feelings. It allows you to consider the other person’s perspective a) Relationship Management b) Self-awareness c) Social competence d) None of the above 57) ------------------ is the ability to use awareness of your own emotions, along with those of others, to successfully manage the interaction. Doing this encompasses clear communication and effective handling of conflict. This skill supports your ability to engage with many people, including those of which you may not be particularly fond. a) Relationship Management b) Self-awareness c) Social competence d) None of the above 58) Which of these principles to employ as you try to move to being seen/accepted as a partner 1) Control your own emotions 2) Understand the clash of belief systems 3) Acknowledge their ego 4) Set the proper frame 5) Communicate with tact and empathy 6) All of the above 59) Client engagement is more than simply meeting with a client, hearing what they want and providing a potential solution or two. For a Financial Planner, client engagement requires learning about the client and their dreams and goals. a) Detailed meeting with client b) Understanding his attitude c) Client Engagement d) None of the above 60) In general, the better the communication flow, the better the relationship a) True b) False 61) Listening openly is of equal or greater importance than talking (and effective talking is crucial). -----------------is a conversation between two or more people; an exchange of ideas or opinions. At its best, it is not a debate, or an attempt to convince the other person. Rather, good --------------provides an opportunity for mutual exploration leading to greater understanding. a) Communication b) Effective Listening c) Dialogue

d) None of the above 62) To move through the cycle, speak with people in a way that moves them from: 1) Resisting to listening 2) Listening to considering 3) Considering to willingness to take action 4) Willingness to act to acting 5) Acting, glad they did and continuing to do so What will be the right word for this? a) Using force to make client accept recommendations b) Persuasion c) Convincing him that you have taken best decisions d) None of the above 63) Which of the following need to be taken care of by Financial Planner while interacting with clients? a) When people move into distress, they often lose sight of their long-term goals as they look for ways to find relief. b) This tends to make them less rational/reachable. c) When a person is deeply distressed, do not add to their stress. d) Exhaling moves the person from deep stress to a more relaxed state – they gain breathing room e) All of the above 64) By focusing on the positive aspects of a client’s situation, the financial planner can more easily help the client move forward and accomplish goals rather than plod along solving problems. Problems may well exist, but the focus shifts to goal-achievement. By doing this, problems get solved in the context of reaching goals and achieving life dreams. Any issues that are not necessary to accomplish this more positive purpose fall by the wayside. What is this called in Financial Planning term? a) Problem solving b) Enquiry thoroughly c) Appreciative enquiry d) None of the above 65) ”------------- mandates that financial planners never simply embrace certain practices or recommend specific products because they seem to be popular or recommended by others. The most critical part of -------------is thinking. a) Empathy b) Self awareness c) Self Management d) Critical thinking e) None of the above 66) Six skills that will help you grow in your critical thinking ability a)Interpretation b) Analysis

c) Inference d) Evaluation e) Explanation f) Self-Regulation g) All of the above 67) With the objective of ensuring complete avoidance of conflict of interest, SEBI amended the IA Regulations in July 2020 vide SEBI (Investment Advisers) (Amendment) Regulations, 2020 (“2020 Amendment”), inserting Regulation 22A, which provides that an investment adviser can provide implementation or execution services only through direct schemes/products and shall ensure that no consideration is received, either directly or indirectly, for provision of such services. a) True b) False 68) SEBI under regulation 15 A of the amended IA regulations stipulate fees to be charged by investment advisers to: a) Not to exceed 2.5% per annum per client of the Assets Under Advice (AUA) across all services offered by RIA; The AUA should be duly supported by documents, and any portion of AUA held by the client under any pre-existing distribution arrangement with any entity shall be deducted from such AUM; b) Not to exceed Rs 125,000 under fixed fee mode per annum per client across all services offered by RIA. c) Both the above are true d) None of the above is true 69) Within ----------- from the end of a financial year, the investment adviser shall get an annual audit conducted in respect of compliance of SEBI (Investment Advisers) Regulations, 2013 and the circulars issued thereunder a) 1 year b) 3 months c) 6 months d) None of the above 70) The focus on ---------does not eliminate the need for gathering data. Instead, it shifts the focus away from simply and solely accumulating quantitative information. a) Collecting data b) Engaging with clients c) Discovery d) None of the above 71) ----------------is the study of joining feelings and emotions and rational thinking. For many people, this is a skill that requires development. ---------------- can, at least in part, be understood as having empathy. a) Empathy b) Joining the dots of fear c) Emotional intelligence (EQ)

d) None of the above 72) Setting priorities can help the client make hard decisions. Clients will face a choice between current desires and future goals. You can help them set priorities by referring to their aspirations, and then recapturing the concept. Once the priorities are clear, decisions often come quickly. Reaching this point indicates the client has begun to own the plan. Now paint the picture by sharing how the client’s aspirations can be developed into a practical, achievable, attainable financial plan. a) True b) False 73) For financial planning engagements, Appreciative Inquiry often is the preferable approach. As a financial planner, who is charged with the responsibility of developing solutions to help individuals achieve life goals, it is highly unlikely you will accomplish your objective by using an approach primarily based on solving problems. AI is a more life-centered, positive approach a) Very true b) False c) Can be considered d) None of the above 74) The underlying assumption of -------------is that people and organizations are full of assets, capabilities, resources, and strengths that can be located, affirmed, leveraged and encouraged a) Problem solving b) Empathy c) Appreciative inquiry d) None of the above 75) Effective communication is a primary component of successful discovery. It encompasses a broad range of objectives, including: Engage, Listen, Frame, Envision and Commit. a) True b) False 76) If you ask the equivalent of why a client has failed to achieve prior goals, you will be guiding the discussion into a negative realm. If, instead, you ask how the client managed to save any money when he or she was in such a difficult financial environment, you will be praising and encouraging the client to think more positively. You may get the desired information either way, but the second option shifts the focus in the direction you want it to go. You set the discovery direction as you decide the questions to ask. a) True b) False 77) In difficult conversations with clients, you should respond rather than react and also do so with the goal of understanding why the client is struggling and then helping him or her work through the difficulty. In part, this means you cannot assume a defensive or authoritarian stance. These situations demand even more than normal that you come alongside the individual as a partner. This also is a good time to rely on basic communication skills. a) True b) False

78) ---------------carefully will always be a key component of effective discovery. Asking insightful questions related to what the client is saying is another important factor. You should also maintain an emphasis on being candid and open. Most clients want a long-term relationship, so your conversations should be truthful and transparent. This will allow you to individualize your approach and provide the proper focus. a) Hearing b) Knowing c) Listening d) None of the above 79) a) Research shows engaged clients are consistently more satisfied with advisors connecting in a more meaningful way to better understand their values, needs, and priorities. b) They are far more likely to sustain a long-term commitment to their advisors, as well as increase their assets with them, if they sense a strong connection and personal touch. c) Taking the time to listen and find out what your clients really want in life, and then helping them to establish purposeful goals, will build stronger relationships and reap greater rewards. d) All the above are true 80) How can a financial planner help and recommend in situations where one or more client goals are in conflict? a) Working with the client to reprioritize goals is one helpful tool. b) Another is to refine existing goals to shift timing, financial allocations, scope, or a combination. c) The refining process can be a beneficial tool to help clients determine their real priority order. d) All the above are true 81) ---------------is a tool that allows users to move information from their minds onto paper (or a computer or app). A ------------ can take several forms, but each follows a core concept. Start with a main idea, usually placed in the center of the map, and then branch out from the center identifying related ideas, topics, action steps, etc. Organization can come after first identifying the map items a) Goal prioritization b) Mind Mapping c) Enthusiastic presentation d) None of the above 82) Financial planning is an integrated and holistic discipline. You cannot develop recommendations for one area that ignores the impact on the remaining areas. It is true that not every financial planning engagement involves all financial planning topics. However, even when only developing recommendations for one or two topics, you must consider the potential impact on the other topics a) Wealth management b) Retirement Planning c) Financial Planning

d) None of the above 83) The financial planner is not --------------to behavioral biases. These may include the financially based biases that often affect clients. Therefore, the financial planner must be aware of potential biases and attempt to neutralize their impact when considering prospective planning strategies. It does no good to deny that you have biases. a) Ready b) Happy c) Immune d) None of the above 84) In creating recommendations and developing financial plans, financial planners may review all relevant aspects of a client’s situation across a breadth of financial planning activities, including interrelationships among often conflicting objectives a) True b) False 85) Which of the following is right? a) You should not try to convince without them understanding the recommendations. But attempt should be made to gain acceptance of the recommendations. b) The client needs to know how you arrived at the recommendations, including some degree of the background process. c) They also must recognize that you have worked on their behalf trying to develop recommendations to serve their goals. d) If they understand this, they are more likely to consider the recommendations in a positive light. e) All of the above 86) What does SPIN stands for? a) Situation, Problem, Implication, Need-Payoff b) Situation, Property, Important, Need-Payoff c) Sampling, Problem, Implication, Need-Payoff d) None of the above 87) When the client objects to a recommendation and wants to make a change, carefully acknowledge the objection, seek clarification, and write it down. It’s perfectly acceptable to explain your rationale and attempt to ----------to objections. Ultimately, though, unless the requested change is harmful, you should plan to make the adjustment. a) React b) Respond c) Explain d) None of the above 88) a) Influence is the ability to move a person to a desired action, usually within the context of a specific goal” b) The financial planner has the option to attempt to try to persuade. Persuasion works because, by its nature, it helps the person understand that the outcome they desire is the same as the one you propose. c) Part of your solution may require modification (e.g., picking a different investment option), but the overall recommendation is in the client’s interest.

d) All the above are true 89) The -------------of the plan of action, or financial plan, is less important than what it accomplishes a) Format b) Decisions c) Flow of events d) None of the above 90) Financial planning is, in many cases, a ------------------in which the financial planner continues working with the client, making adjustments, encouraging on-going action, and continuing to partner with the client on the road to reaching life goals. A well-developed financial plan provides a strong foundation a) One time action b) Few years engagement c) Lifelong engagement d) None of the above 91) Placing the client’s interest first is a hallmark of professionalism, requiring the financial planning professional to act honestly and not place personal gain or advantage before the client’s interests. a) True b) False 92) Client behaviour might, be categorized as amiable (sociable), driven (task-oriented), analytical (interested in facts and figures) or expressive (talkative). In most cases, these categories are based on the client’s communication style. a) Although categorization tools can help you better understand clients and enhance your communication, they should never solely dictate how to approach a client. b) Depending on circumstances, a client might be acting in a way that is contradictory to his or her normal style. c) It is important to remain open and not make judgments about the client’s preferred style too soon. d) All of the above are true 93) By adhering to a professional code of ethics, financial planners agree to provide financial planning in the interest of clients, with the highest ethical and professional standards, and to uphold and promote the interests of the financial planning profession for the benefit of society. As part of this professional commitment, planners provide appropriate disclosures and agree to be bound by ethical standards when delivering financial planning to clients a) True b) False 94) a) You must keep all existing and former client information in strict confidence. This includes the client’s identity, financial circumstances, security holdings and the nature of the advice furnished to the client by the firm. b) You cannot disclose information about the client to other parties without proper consent (except in certain situations related to legal due process). Also, ensure that all client information and files are kept secure to prevent access by unauthorized persons. c)Maintaining client confidentiality is not only good business practice, it is part of your

responsibility as a financial planner. Security relates to paper as well as electronic documents. d) All of the above 95) The financial plan must balance the commitment to achieving the client’s goals with the reality of the assets or cash flow available for funding those goals. By focusing on cash flow (which may include discretionary income as well as other available assets), you can attempt to ensure, but cannot guarantee, that funding will be available both for client goals and for meeting daily living expenses. A goal orientation keeps the plan’s focus on the client’s values, needs and desires, both now and in the future. a) True b) False 96) The client’s risk profile comprises which of the following aspects a) Required risk, b) Risk capacity and c) Risk tolerance. d) All of the above 97) Identifying client attitudes, goals and objectives before making meaningful recommendations seems like a straightforward aspect of the financial planning process. However, it is not unusual for the client to have a limited or less-than-perfect understanding of certain aspects of his or her financial situation. Taking time during the Discovery process to thoroughly discuss goals will help the planner to develop a financial plan that meets the client’s needs a) Very True b) Partly true c) False d) None of the above 98) Good presentations are an outcome of -----------------(oral, verbal and nonverbal, written and graphic), thorough preparation, and a genuine concern for the client. Clients are best served by unbiased presentations that acknowledge that tax; legislative, economic or personal lifechanging events may positively or negatively affect projections. a) Effective understanding b) Effective communication skills c) Good Technical skills d) None of the above 99) The executive summary highlights the most important aspects of the financial plan and typically includes: Client goals, needs and objectives, Relevant financial data and key findings Recommendations, including a clear action plan for the client and how the recommendations address the client’s goals, needs and objectives The executive summary should be able to stand alone as an independent document—a “snapshot” of the financial plan as a whole

a) True b) False 100) When --------------- client information and formulating recommendations, the financial planner should include an analysis of relevant economic factors such as the current status of the business cycle, central bank monetary policy and fiscal policy. Each of these can have a significant impact on allowing a client to achieve financial goals. a) Implementing b) Recommending c) Synthesizing d) None of the above