CFP (Certified Financial Planner) Practice Questions — All Questions

A CFP professional providing financial advice must act as a:

• a.Salesperson maximizing commissions
• b.Fiduciary acting in the client's best interest✓
• c.Neutral party with no duty
• d.Regulator

CFP professionals owe a fiduciary duty to act in the client's best interest.

An early step in the financial planning process is to:

• a.Understand the client's personal and financial circumstances✓
• b.Sell a product
• c.Skip goal setting
• d.File the client's taxes

Planning starts with understanding the client's situation and goals.

An emergency fund is generally recommended to cover:

• a.One day of expenses
• b.Only luxury purchases
• c.Several months of living expenses✓
• d.Retirement entirely

An emergency fund typically holds several months of expenses in liquid savings.

Conflicts of interest should be:

• a.Hidden from the client
• b.Ignored
• c.Encouraged
• d.Disclosed and managed✓

Fiduciaries must disclose and manage conflicts of interest.