CFP (Certified Financial Planner) Practice Questions — All Questions

A CFP professional providing financial advice must act as a:

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

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

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

An emergency fund is generally recommended to cover:

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

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

Conflicts of interest should be:

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

Fiduciaries must disclose and manage conflicts of interest.