CSI Applied Financial Planning Certification Exam 1 (AFP) Sample Questions:

1. Bruna is a senior financial planner. At 4 p.m. on Friday afternoon (an hour before closing), her manager asks her to complete the following:
Fix a mutual fund trade that was entered incorrectly by a junior financial planner.
Call her client to advise him that his account is overdrawn, and the bank will refuse recent payments unless he credits the account before 5 p.m.
Bruna determines she can only complete one of the two tasks before the end of the business day. How should Bruna address her supervisor's request?

A) Bruna should prioritize the client with the overdrawn account since he is one of her clients. She should then reverse the incorrect trade the following business day.
B) Bruna should let the client's payments bounce since the client is unable to manage his cash flow and Bruna should prioritize correcting the trade.
C) Ask the manager which of the two problems should be prioritized. Then ask the manager to delegate the other task to a colleague.
D) Stay after hours until she completes both tasks.

2. Owen and Lina are looking to purchase a home in the next few months. Owen is the primary income earner for the family. His credit history is weak with several recently paid collections Lina has a perfect credit record but limited income and irregular employment. What will their financial planner advise them about the impact their credit ratings will have on their ability to secure a mortgage?

A) Since Owen's collections are paid, they would be able to qualify
B) The primary income earner must have a minimum credit score to qualify
C) Lina's strong credit rating will make up for Owen's credit history
D) Lina's low income will prevent them from qualifying

3. A client asks when his RRSP must generally be converted to a retirement income vehicle. What should the planner explain?

A) By the end of the year he turns 71.
B) Only after all RRSP assets are withdrawn in cash.
C) On the day he turns 65.
D) Only when he stops working.

4. Bellamy, a registrant, recently prepared a financial plan for Stewart. As part of the plan, he recommended an asset allocation mutual fund that aligns with Stewart's Know Your Client and suitability. Stewart trusts Bellamy, accepts his recommendations, and is ready to provide purchase instructions. What next step should Bellamy complete in order to implement the strategy?

A) Provide Stewart with the fund facts document relevant to the recommended fund.
B) Distribute the simplified prospectus and annual report relevant to the recommended fund.
C) Place a buy order for the mutual fund on his workstation.
D) Advise Stewart of his licensing category, provinces and territories of registration, as well as dealer name.

5. A financial planner, Rachel, is preparing to recommend a discretionary portfolio manager to her client. The portfolio manager is owned by Rachel's former employer, and Rachel receives no referral fee. However, the former employer regularly sends new clients to Rachel's practice. What should Rachel do before making the recommendation?

A) Proceed because no monetary referral fee is paid.
B) Recommend the manager only if the client signs a risk acknowledgement form.
C) Avoid discussing the portfolio manager and let the client find one independently.
D) Disclose the relationship and the potential conflict before the client decides.

Solutions: