CSI AFP-Exam-1 Value Pack (Frequently Bought Together)

Francois and Brigitte are meeting with their financial planner, Robin. They would like to ensure that if one of them were to die suddenly that their mortgage would be paid in full. Their current mortgage has an outstanding balance of $400,000 with 10 years remaining. The couple are in good health and have a well- balanced financial plan that focuses on debt reduction and savings. Which type of insurance policy should Robin recommend to assist the couple in meeting their objective?

• A. Joint whole life last-to-die policy.
• B. Joint 10-year term first-to-die policy.
• C. Joint 10-year term last-to-die policy.
• D. Joint whole life first-to-die policy.

Jonathan owns a medium size consulting firm and earns an average annual income of $150,000. He is reviewing his retirement plan with his financial planner. Jonathan asked his planner about retirement compensation arrangement and how this may benefit him. What should his financial planner tell him?

• A. It is exempt from regulatory limits and withdrawals are tax-exempt for the executive.
• B. It reduces RRSP contribution room but is exempt from regulatory limits.
• C. It leaves RRSP contribution room unaffected and is exempt from regulatory limits.
• D. It results in a pension adjustment and withdrawals are tax-exempt for the recipient.

A higher-income spouse contributes to a spousal RRSP for the lower-income spouse. The lower-income spouse withdraws the contribution amount the following year. What should the planner warn them about?

• A. The withdrawal may attribute back to the contributing spouse.
• B. The contribution permanently eliminates all future spousal RRSP room.
• C. The withdrawal is always tax-free.
• D. The withdrawal must be taxed as capital gains.

Ram Patel, age 65, is meeting with his financial planner, Maria Romano, to complete a financial plan. Ram is retiring this year, and his company provides a defined benefit pension plan. Upon retirement, he has the choice of receiving $20,000 each year for 20 years or until death (whichever is earlier), or he can take
$304,300, which is the commuted value at retirement. Ram has confirmed that he will be transferring the commuted value to a LIRA. After further discovery, Maria suggests that they utilize a 5% market rate of return and project the funds to last 25 years. What should Maria update Ram's projected annual retirement income to?

• A. $21,000.
• B. $24,418.
• C. $21,591.
• D. $20,000.

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. Stay after hours until she completes both tasks.
• B. 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.
• C. 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.
• D. Ask the manager which of the two problems should be prioritized. Then ask the manager to delegate the other task to a colleague.