Introduction to Financial Planning

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Instructions: For multiple choice, choose the best and most accurate answer. For essay type,
answer in complete and grammatically correct sentences. Write your answer in the answer
sheet. Thank you!

PART 1. 25 items. 1 point per item. 40 minutes.

1. Which risk profile has the least allocation to growth assets?

a. Balanced

b. Conservative

c. Balanced Growth

d. Defensive

2. What do you call the advice document presented at the appointment after the first
appointment?

a. Record of Advice

b. Confidential Fact Find

c. Statement of Advice

d. File Note

3. How much is the concessional cap?

a. $10,000 per annum

b. $25,000 per annum

c. $25,000 every three years

d. $20,000 every three years

4. What is the first document to be generated at the end of the first appointment?

a. Record of Advice

b. Confidential Fact Find

c. Statement of Advice

d. File Note

5. Which of the following are types of beneficiary nominations?

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a. Binding nomination

b. Legal nomination

c. Lapsing nomination

d. Both a and c

6. What are loadings? Explain.

7. What are exclusions? Explain.

8. Which of the following is the licensee of Complete Financial Solutions?

a. Elders

b. Millenium3

c. Financial Services Partners

d. ANZ

9. What is the preservation age?

a. The age when you can withdraw your super

b. The age when you can access your super

c. The age when your super is restricted

d. Both a and c

10. How much should be the limit of the variance in the on-going service?

a. +/-2%

b. +/- 4%

c. +/- 8%

d. +/-10%

11. How much of the wage is contributed to superannuation?

a. 9.5% net of the wage

b. 9.5% on top of the wage

c. 10% net of the wage

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d. 10% on top of the wage

12. When do we start the on-going service?

a. Upon signing of the FNA on the second appointment

b. Upon signing of the Record of Advice on the first appointment

c. Upon signing of the FNA and Statement of Advice on the second appointment

d. Upon signing of the FNA, Statement of Advice and Record of Advice on the second appointment

13. Which of the following should be presented to the potential client on the first
appointment?

a. Confidential Fact Find

b. Completed Risk Profile Questionnaire

c. Financial Standards Guide (FSG)

d. Fee Disclosure Statement (FDS)

14. What is Insurance Affordability? Explain in your own words.

15. What is Life or Death cover?

a. It is the amount of benefit received by the nominated beneficiary or estate of the policy owner
upon the death of the insured.

b. It is the amount of benefit received by the nominated beneficiary or estate of the policy owner
upon the permanent disability of the insured.

c. Neither a or b

d. None of the above

16. What is Total or Permanent Disability? Explain in your own words.

17. Why is it important to know the Scope of the Advice? Explain in your own words.

18. Under the Advice Process training, ideally how many years’ interval should an FNA be
completed?

a. Every 1 year

b. Every 2 years

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c. Every 3 years

d. Every 4 years

19. The Financial Adviser (FA) met with the client on 1 September 2018. The third party
authority was lodged and attached on 2 September 2018. The Confidential Fact Find was
completed on 10 September 2018. The Confidential Fact Find was signed on 12 September
2018 and the Statement of Advice Authority to Proceed was signed on 13 September 2018.

What should be the SOA date on the Record of Advice?

a. 1 Sept 2018

b. 10 Sept 2018

c. 12 Sept 2018

d. 13 Sept 2018

20. What form is required to be completed is we are recommending risk or insurance to a

client?

a. Insurance Statement

b. Insurance Pre-Assessment

c. Risk Profile Questionnaire

d. None of the above

21. What is the best interest duty of the financial adviser?

a. It means that the strategies and products recommended must satisfy the best interest of the
practice.

b. It means that the strategies and products recommended must satisfy the best interest of the
adviser.

c. It means that the strategies and products recommended must satisfy the best interest of the
client.

d. It means that the strategies and products recommended must satisfy the best interest of the
beneficiary.

22. What is asset allocation?

a. It is the allocation of the investments in line with the licensee’s asset allocation standard and
client’s risk profile.

b. It is the allocation of the investments in line with the client’s asset allocation standard and client’s
risk profile.

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c. It is the allocation of the investments in line with the adviser’s asset allocation standard and
client’s risk profile.

d. It is the allocation of the investments in line with the paraplanner’s asset allocation standard and
client’s risk profile.

23. How much is our on-going adviser service fee for super and pension?

a. At least 1%

b. Not more than 1%

c. 1% plus commission

d. None of the above

24. An SOA must be addressed to each client or the client’s being advised. In the case of a
married couple where only the husband attended the appointment but he provided his
wife’s details, how will you address the SOA?

a. Husband only

b. Husband and wife jointly

c. Wife only

d. Addressed in blank

25. What is a sunset clause? How many days is the sunset clause? Choose the best answer.

a. SoA contains text informing the client that they can only rely on the SoA for a period of 30 days
from the date the SOA is presented.

b. SoA and Hold RoA contains text informing the client that they can only rely on the SoA and Hold
RoA for a period of 45 days from the date the SOA is presented.

c. SoA and RoA contains text informing the client that they can only rely on the SoA and RoA for a
period of 45 days from the date the SOA is presented.

d. All of the above

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