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CSI AFP-Exam-1 Exam Syllabus Topics:
| Section | Weight | Objectives |
|---|---|---|
| Topic 1: Client Relationship and Practice Management | 6% | - Communication and Advisory Process - Practice Management - Client Discovery |
| Topic 2: Asset and Liability Management | 11% | - Debt Management - Personal Balance Sheet Analysis - Cash Flow Management - Budgeting |
| Topic 3: Professional Conduct and Regulatory Compliance | 10% | - Compliance Responsibilities - Regulatory Requirements - Ethics and Professional Standards |
| Topic 4: Retirement Planning | 17% | - Registered Retirement Savings Plans - Retirement Needs Analysis - Retirement Income Strategies - Pension Plans |
| Topic 5: Investment Planning | 17% | - Investment Theory - Investment Products - Portfolio Construction - Asset Allocation |
| Topic 6: Estate Planning | 13% | - Powers of Attorney - Estate Transfer Strategies - Wills - Trust and Beneficiary Planning |
| Topic 7: Risk Management and Insurance | 12% | - Risk Transfer Strategies - Disability and Health Insurance - Risk Assessment - Life Insurance |
| Topic 8: Tax Planning | 14% | - Tax-Efficient Strategies - Income Tax Fundamentals - Tax Deductions and Credits - Registered Plans |
CSI Applied Financial Planning Certification Exam 1 (AFP) Sample Questions:
Question #1
Robert is meeting with his wealth advisor to review options to put a plan in place to save for his children's education. He has a daughter, age seven, and a disabled son, age four Robert would like to maximize his savings towards this goal, ensure the strategy is tax efficient and utilize available grants. Which option is most appropriate for Robert's plan?
A. Establish a family RESP and start contributions
B. Establish individual RESP for his children
C. Establish a group RESP and start contributions
D. Set up an education purpose trust account for both beneficiaries with a lump-sum investment
Question #2
Bill was recently declined for a loan application at his financial institution, and he is concerned that a liability has been added to his credit bureau that does not belong to him. He asks his financial planner to review his credit bureau with him to help him identify why he may have been declined. Which area of the credit bureau might his financial planner advise Bill to review?
A. Inquiries.
B. Public record information.
C. Number of previous declines.
D. Account history.
Question #3
A couple has stable employment, two dependants, and essential monthly expenses of $5,200. They have no emergency reserve. Which recommendation is most appropriate before increasing long-term investment contributions?
A. Use a credit card as the emergency plan.
B. Build a liquid emergency reserve of roughly three to six months of essential expenses.
C. Invest all surplus cash in a high-growth equity fund.
D. Withdraw from RRSPs when emergencies occur.
Question #4
Edward is risk averse and has limited investment knowledge. He will only purchase 100% guaranteed products insured by the CDIC. Edward is meeting with his financial planner, Marissa, for the third time this year about rates, and starts the meeting by criticizing her employer for paying such low returns on GICs.
Edward says he is considering taking his business elsewhere. How should Marissa respond to Edward's comments?
A. Offer to match any competitor rate Edward can provide in writing.
B. Let him know that her GIC rate is the highest in the market.
C. Explain that if he can increase his risk tolerance, she can get a better rate of return for him.
D. Show understanding of his frustration, assure him that these are the best rates she can offer and suggest a follow up meeting once Edward has had a chance to shop around.
Question #5
Jonah is meeting with his client, Muhsina, who owns Myke Inc., a Canadian-controlled private corporation.
Based on current market value, if he decides to sell Myke Inc., Muhsina will have a capital gain of $400.000.
He expects the value of Myke Inc. to increase in future years and has a CNIL balance of $100,000. He wants the future increase in value to be taxed in the hands of his children, Teshi and Kaliyah, and to minimize the cost. What action should Jonah advise Muhsina to take to meet his goal?
A. Set up a joint account with Teshi and Kaliyah.
B. Set up a joint account with Teshi.
C. Sell #### Inc. to his children for $1.
D. Sell #### Inc. to his children at fair market value.
Solutions:
| Question #1 Correct Answer: A | Question #2 Correct Answer: D | Question #3 Correct Answer: B | Question #4 Correct Answer: D | Question #5 Correct Answer: D |


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