911 Financial Planning Profession and Financial Services Industry Regulation PDF

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Question 1 (1 point) Gwen, a CFP professional, is working with her clients to create a financial plan. After gathering the information needed to create the financial plan, she is now identifying opportunities, potential constraints and developing strategies. According to FP Canada’s competency profile, in what level of activity is Gwen currently operating? a) Evaluation b) Analysis c) Collection d) Recommendation Question 2 (1 point) Greg is an IIROC licensed financial planner with OakRidge Investments. Although he can sell third party products, Greg uses OakRidge funds exclusively in his client portfolios. He feels that he is supporting his firm, and Greg also earns a higher commission when he uses OakRidge products. Greg was recently flagged due to this practice. Which of FP Canada’s Code of Ethics Principle is most relevant in this situation? a) Competence b) Objectivity c) Diligence d) Confidentiality Question 3 (1 point) Identify the statements that are correct concerning the Property and Casualty Insurance Compensation Corporation (PACICC). 1. PACICC is a not-for-profit private company. 2. PACICC provides policy-holders protection against the insolvency of property and casualty insurance companies. 3. Where the same individual owns several policies through the same insolvent carrier, the maximum recovery is $500,000 for all claims arising from all policies. 4. The maximum amount of recovery through PACICC is $250,000 per lifetime of any single individual. a) 1 and 2 b) 1 and 4 c) 2 and 3 d) 2 and 4 Question 4 (1 point) Which of the following individuals would not meet the fitness standards set out by FP Canada as part of the Standards of Professional Responsibility?

a) Peter, who had his insurance license revoked and now offers only fee for service financial planning. b) Jarrod, who had claimed personal bankruptcy 8 years ago. c) Hannah, who used an exam prep provider that was not approved by FP Canada. d) Carly, who recently had two speeding tickets within the same month. Question 5 (1 point) Ten years ago, Jane invested $100,375 into a segregated fund contract from TOP Insurance Inc. Upon maturity, the fund is now worth $62,507.50. The contract has a 75% maturity guarantee and 100% death benefit guarantee. Unfortunately, TOP Insurance Inc. has gone bankrupt and can no longer honour its guarantees. If Jane redeemed her contract today, how much would she receive? a) $63,989.06 b) $75,281.25 c) $60,000.00 d) $62,507.50 Question 6 (1 point) I) The Life insurance policy is covered up to $191,250 II) The Life insurance policy is covered up to $200,000 III) The Critical Illness policy is covered up to $60,000 IV) The Critical Illness policy is covered up to $68,000 a) I and III b) I and IV c) II and III d) II and IV Question 7 (1 point) Rachel is receiving disability insurance benefit of $2,500 per month. In her TFSA, she owns 2 accumulation annuities with values of $60,000 and $40,000. All products are from the same insurance company. Which statement properly describes Rachel’s Assuris coverage? a) The disability insurance policy is covered up to $2,000 per month. b) The accumulation annuities are covered for a total of $60,000. c) The disability insurance policy is covered up to $2,125 per month. d) The accumulation annuities are covered for a total of $85,000. Question 8 (1 point) Darren has the following funds held with a CDIC-insured financial institution (all $ values in CAD): RRSP:  $45,000 money market mutual fund;



$41,000 1-year GIC

TFSA:  $34,000 US dollar 90-day term deposit  $21,000 Government of Canada 2-year bond Non-Registered – held as sole owner:  $35,000 4-year GIC  $23,000 Government of Canada T-bill  $11,000 savings account 

$8,000 US dollar savings account



$23,000 chequing account

Non-Registered – held as joint owner with spouse:  $40,000 3-year GIC  $54,000 7-year GIC What is the total amount of funds that are eligible for CDIC coverage? a) $192,000 b) $150,000 c) $246,000 d) $335,000 Question 9 (1 point) Fern, a compliance officer at DAB Investment Inc., is explaining different ways money laundering can take place. Which of the following scenarios that Fern provides is the best example of structuring? a) Buying and selling art at inflated prices. b) Depositing cash into a mobile phone wallet. c) A business that operates primarily in cash. d) Taking in a large sum of money and creating a series of smaller transactions under $10,000. Question 10 (1 point) Which of the following statements best describes the financial planning process and guidelines for financial planners when creating financial plans for clients? a) The final stage of the six step financial planning process, after the plan has been developed, is the implementation of the financial plan. b) The six step financial planning process begins with gathering client data, and determining client goals and expectations. c) Financial planners in both Quebec and the rest of Canada should consult the same set of

guidelines in order to estimate future inflation rates, return rates, and other assumptions. d) Financial planners in Quebec should use the guidelines developed by the IQPF, whereas financial planners in the rest of Canada should use the guidelines developed by FP Canada. Question 11 (1 point) Harvey is an investment advisor and has started working with Joe, a new client. Although Harvey doesn’t know him that well, he is starting to suspect something strange in his recent transactions. Joe has been requesting quite a few wire transfers to third parties. Harvey is unsure what to do, he thinks it’s probably nothing and since Joe is such a large new client he really doesn’t want to risk anything. What is an important consideration for Harvey? a) Harvey is only required to report if Joe starts bringing in large amounts of cash over $10,000. b) This could be an example of trade-based laundering. c) It is possible for Harvey to be charged criminally under the PCMLTFA. d) The risks are quite low as the maximum penalty for Harvey would be $1,000. Question 12 (1 point) Harriet started recently with GloboAdvisors, a registered investment dealer. Harriet was hired as an advisors assistant and will be providing assistance to the clients of the firms advisors. Sometimes Harriet may be dealing with cash that clients bring in and Tony, which organization sets the rules that Harriet must be aware of when dealing with these situations? a) FCAC b) AML c) FINTRAC d) ASSURIS Question 13 (1 point) Amanda is a CFP Professional. During the winter semester, Amanda completed a personal tax planning course at a local college, which earns her a credit toward her college diploma. What is the maximum number of verifiable CE credits that Amanda may claim for participation in this college course? a) 100 b) 15 c) 40 d) 50 Question 14 (1 point) Nancy is a CFP Professional. Earlier this year, Nancy conducted a financial planning seminar for a group of new financial planners that were recently hired at her company. Since this was Nancy's first time presenting this seminar, it took her 10 hours to prepare her information, while the

seminar itself lasted a total of five hours. How many Continuing Education (CE) credits does Nancy acquire for this work? a) A maximum of 15 CE credits for developing the material and delivering the seminar. b) A total of 30 CE credits; 2 for each hour of preparation and presentation delivery. c) A maximum of 5 CE credits for delivering the seminar, and no credits for the time it took her to prepare. d) A total of 25 CE credits: 20 for preparation and 5 for presentation delivery. Question 15 (1 point) Raymond, a CFP professional, updated his online profile to promote his strength in the area of personal taxation. Raymond is a new CFP professional and has focused most of the past two years in the field of retirement planning. While Raymond has no formal training or practical in-depth experience in the field of personal taxation, he does not see this as an issue because he is quite prepared to learn quickly if he is able to attract clients with in-depth needs in the area of personal taxation. What principle within the FPSC code of ethics has Raymond violated? a) Diligence b) Professionalism c) Integrity d) Fairness Question 16 (1 point) Identify the FPSC Code of Ethics Principle that addresses the issue of staff supervision with regard to the delivery of financial planning services. a) Diligence b) Integrity c) Competence d) Professionalism Question 17 (1 point) Which of the following statement/s is correct concerning stock exchanges in Canada. I) Montreal Stock Exchange is the market for derivatives products like Futures and Options II) Toronto Stock Exchange (TSX) is the major stock exchange in Canada; provides trading services in senior equities and preferred shares III) Canadian Securities Exchange (CSE) provides trading platform for senior equities

IV) TSX Venture Exchange is a capital market, provides access to emerging and senior equities a) I and II b) II and III c) III and IV d) I and IV Question 18 (1 point) Which of the following statements best describe the purpose and function of the provincial securities commissions? I) Supervise investment dealers and trading carried out in debt or equity marketplaces in Canada II) Protect investors from fraudulent, manipulative, unfair or misleading practices. III) Deter, or detect and penalize, market manipulation and unfair trading practices. IV) Conduct compliance reviews to ensure adherence to Universal Market Integrity Rules (UMIR) a) I and III b) I and IV c) II and III d) II and IV Question 19 (1 point) Which level(s) of government is/are responsible for securities regulation? a) Federal b) Responsibility is shared between all levels of government c) Municipal d) Provincial Question 20 (1 point) Jason, a financial advisor in Ontario, was emailing sensitive personal information about a client to his assistant when he sent the information to several other non-related individuals by mistake. What act is Jason most likely in contravention of? a) CASL b) PIPEDA c) OPC d) AML Question 21 (1 point) Caleb and Janine Schwartz have two children, Beth and Dwayne, who both live at home. They also are caring for Janine’s elderly mother Glenda who recently moved in with them so they could provide better care. The Schwartz’ current living situation is often referred to as which of the following?

a) The baby boomer generation. b) The sandwich generation. c) The aging parent generation. d) The structured household generation. Question 22 (1 point) Javier, a financial planner, would like to expand his offering to clients. He is considering becoming licensed to sell insurance products so that he can help his clients obtain insurance if they require it based on the financial planning work he does. What should Javier consider while pursuing this? a) His licensing will be completed through the national SRO for insurance in Canada. b) He would be required to complete the LLQP prior to getting his license. c) Selling insurance would breach principle 1 of FP Canada’s code of ethics. d) One license allows him to offer life insurance along with property and casualty insurance. Question 23 (1 point) Georgina recently started working as an investment advisor in Ontario, and would like to eventually start offering financial planning services. It was recommended she review the financial planning practice standards to learn more information about the process. What organization would provide Georgina with what she is looking for? a) IQPF b) MFDA c) FP Canada d) OSC Question 24 (1 point) Gary is meeting with an advisor at ABC bank about obtaining a mortgage for a cottage he is planning on purchasing. The advisor informs Gary that he will be able to approve him for the mortgage, but lets him know that if he moves his investments to the bank they will be able to offer a discounted rate on the mortgage. Which of the following terms best describes this practice? a) Relationship-based pricing b) Discount underwriting c) Volume discounting d) Coercive tied selling Question 25 (1 point) In which of the following situations, if any, would you be exempt from the fund facts disclosure requirement? a) Initial purchase of a domestic or international fund for amounts less than $500.

b) All purchases of funds that hold international stocks and have no Canadian companies. c) A fund facts document is always required for mutual fund purchases, without exception. d) Subsequent purchases of a managed solution with ongoing purchases and rebalancing. Question 26 (1 point) Which of the following individuals or entities would be regulated by the Mutual Fund Dealers Association (MFDA)? i. John, who is a mutual fund sales representative in the province of Ontario. ii. Megan, who is John's client. iii. TopFunds Inc, John's mutual fund dealer. iv. Ontario Securities Commission (OSC). a) I and III b) I and IV c) II and III d) II and IV Question 27 (1 point) Which of the following statements properly describes the function of the Mutual Fund Dealers Association (MFDA)? a) The MFDA regulates mutual fund salespeople and the distribution of mutual funds. b) The MFDA oversees the Investment Industry Regulatory Organization of Canada (IIROC). c) The MFDA provides compliance for mutual funds and mutual fund companies. d) The MFDA governs the members of the Canadian Securities Administrators (CSA). Question 28 (1 point) Which of the following individuals should escalate a complaint to the General Insurance Ombudservice (GIO)? a) Adrian, who was asked out on a date by his life insurance advisor. b) Donald, who has an unresolved complaint regarding his car insurance. c) Brent, who wants to file a formal complaint in regard to his disability insurance policy. d) Craig, who lost over $20,000 on a segregated fund investment. Question 29 (1 point) Martin is a financial planner, meeting with a new client, James, for the first time. During this initial meeting, Martin has established the roles and responsibilities of their relationship, for both himself and for James. Further, he clarified his deliverables and discussed his method of compensation with James. Before Martin moves on to the next step in the financial planning process, what else, if anything, should he do? a) Identify James’ goals, needs, and priorities before developing his planning recommendations.

b) Obtain James’ signature in a written letter of engagement. c) Martin has completed this step and should move on to the next step in the process. d) Gather James’ information such as employee benefits, pension projections, and investments. Question 30 (1 point) Steve has a large amount of cash he has gathered from selling drugs. In an attempt to disguise the source of the funds, he uses the cash to purchase several used cars that he intends to resell immediately. Steve is currently in which stage of the money laundering process? a) Layering b) Structuring c) Placement d) Integration Answers: BBAAA DCCDC CCDAC AACDB BBCAD AABBA...