Certified Financial Planner Professional Conduct and Regulation

1.Mara Ellison can place client Benito Alvarez in a municipal bond fund that fits his tax bracket and costs 0.15% a year, or in a similar fund that pays her firm a 1.1% commission. The cheaper fund leaves Benito with more after costs and matches his income goal. What should Mara recommend?

2.Devon Cho is choosing a 529 plan for client Pam Hale. The state plan holds the stock-and-bond mix Pam asked for and charges her family less. An out-of-state plan pays Devon $900 more and adds a fund Pam did not want. What should Devon do?

3.Priya Nandakumar's client, Neil Patel, asked for 20-year term life to cover a mortgage. Carrier A's term policy fits and pays Priya $400. A whole-life policy pays her $3,200, adds cash value he did not ask for, and strains his budget. What should Priya sell?

4.Luis Ortega's retired client, Pearl Cho, wants a three-year bond ladder for money she may spend. An outside ladder matches that timeline and pays Luis a small fee. A proprietary annuity pays him 6% and locks the money for seven years, which Pearl refused. What should Luis set up?

5.Helen Brooks is investing $20,000 of client Rohan Singh's IRA. A no-load index fund matches his retirement mix. A load fund tracks the same index and pays Helen 5%, which comes off the amount invested on day one. Rohan asked to keep costs low. What should Helen use?

6.Andre Wallace is rolling client Ida Berg's old workplace plan into an IRA. A low-cost IRA at a custodian fits the funds she listed. His firm's managed account pays him an ongoing 1% and uses similar funds with higher inner fees. Ida wrote that cost was her priority. What should Andre open?

7.Sofia Petrov is comparing disability policies for client Alan Voss, a surgeon. Policy L covers his own occupation and pays Sofia a modest commission. Policy H pays her twice as much but defines disability so narrowly that a partial hand injury may pay nothing. What should Sofia recommend?

8.Marcus Hale's client, Faye Brooks, has a credit card at 19% and $6,000 she could invest. A balanced fund would pay Marcus a commission. Paying the card saves more interest than the fund is likely to earn after fees. Faye asked which use of the cash helps her more. What should Marcus tell her?

9.Gina Okonkwo's client, Nestor Blum, has no emergency fund and needs a referral for a simple will. A savings account matches the emergency-fund goal and pays Gina nothing. A variable annuity would pay her well, but Nestor said he will not lock money up. What should Gina do?

10.Caleb Nguyen wants client Wendy Salazar to hire a roofing company for a rental house. Caleb's brother owns that company. Wendy has not signed the contract or paid a deposit. What should Caleb do before she hires the firm?

11.Ruth Feldman sits on a company board and is paid partly in that company's stock, which she still holds. She wants client Seth Adler to buy the same stock. No order has been entered. What must happen before Seth buys?

12.Omar Haddad will receive a forgivable loan from a fund sponsor if client Nadia Brooks buys that sponsor's fund this quarter. Nadia is about to sign the form. She does not know about the loan. What should Omar do?

13.Elise Brennan's firm receives a revenue-sharing payment from the custodian she is about to recommend to client Martin Lang. Martin has not moved his account. He asked why she prefers this custodian. What should Elise do?

14.Jonah Park would be paid from a trust to manage its investments, and he is also a trustee of that trust. Beneficiary Farah Shah is deciding whether to hire him. She has not signed. What should Jonah do?

15.Nadia Kowalski owns 8% of a private real estate deal she plans to offer client Trevor Shaw. The subscription papers are unsigned, and Trevor does not know she is an owner. What should Nadia do?

16.Victor Lang recommends a disability policy to client Pilar Ortiz. Victor's spouse is the agent who would earn the commission. The application is still blank, and Pilar does not know about the spouse. What should Victor do?

17.Amina Diallo receives game tickets and a yearly marketing stipend from a mutual-fund family. She is about to recommend that family to new client Glenn Brooks. He has not agreed, and he has not been told about the tickets or the stipend. What should Amina do?

18.Trevor Shaw refers client Irene Vogel to a lawyer who pays Trevor a referral fee if Irene hires that lawyer. Irene has not hired anyone, and she does not know about the fee. What should Trevor do?

19.Camille Duarte's neighbor asks what client Hugo Martins earns and whether his bonus was cut. Hugo has not allowed Camille to share that. No court or police demand has been made. The neighbor does not work on the file. What should Camille do?

20.A court clerk serves Ethan Vogel with a valid subpoena for client Lila Chen's account statements. The subpoena names Lila, lists the accounts, and sets a production date. Lila has not signed a separate release. What should Ethan do?

21.Lila Chen's paraplanner, Sam Ortiz, is updating client Wes Harlow's tax projection and needs Wes's return to finish that assigned work. Sam is on Lila's staff and works on Wes's file. Wes has not signed a separate release. What should Lila do?

22.Client Hana Vogel emailed planner Samuel Ortiz that he may tell her adult daughter only that an account exists, and nothing more. The daughter then asks Samuel for the holdings and the balance. What may Samuel share?

23.A detective gives Freya Lindstrom a signed warrant for client Malik Jefferson's wire records for the dates listed on the warrant. The warrant is addressed to her firm and describes those records. What should Freya do?

24.Malik Jefferson's assistant is booking a meeting for client Hannah Berg and needs the phone number in Hannah's file to confirm the time. The assistant works on Hannah's matters. A radio host also asked Malik for that number. What should Malik allow?

25.Hannah Berg's friend asks whether client Rafael Costa is behind on alimony. Rafael has not consented. No subpoena or other lawful demand has arrived. The friend does not work for Hannah. What should Hannah do?

26.Rafael Costa wants a public seminar slide to show client Irene Papadopoulos's real balance sheet and her name. Irene said no. His associate, who is preparing Irene's plan, already uses that file for the plan. What should Rafael do about the seminar?

27.After client Owen Briggs complains about a fee, the firm's compliance officer asks planner Irene Papadopoulos for Owen's file. The officer is assigned to review that complaint. Owen has not signed a new release. What should Irene do?

28.Owen Briggs charges clients planning fees and also earns commissions when they buy insurance he sells. His website banner says "fee-only planner." A prospect asks whether that banner is accurate. What should Owen do?

29.Keisha Moore is paid only by hourly invoices her clients pay. She receives no commissions, trails, or product bonuses. A prospect asks whether fee-only describes her. What is the accurate answer?

30.Felix Abramov charges a planning fee and also takes a commission when a client buys an annuity. His new business cards say "fee-only planner." He is about to reorder them. What should the cards say?

31.Nora Quinn is paid only by client invoices. She sometimes suggests a commission product, then sends the client to another agent. She takes no commission and no referral fee. A client asks if Nora is fee-only. What should she say?

32.Damian Sato's advertisement says he is fee-only. In March he collected a $1,500 planning fee and a $2,000 commission on a life policy for the same household. What is the problem with the ad?

33.Yvette Moreau charges client Colin Fraser a retainer and also receives commissions on funds she sells him. Colin asks what to call her compensation. What should Yvette tell him?

34.Colin Fraser charges planning fees and also receives a bonus from a product sponsor when clients buy that sponsor's proprietary funds. He tells prospects he is fee-only. How should he describe his pay?

35.Amara Singh is paid only $250 an hour by her clients and receives no commissions. Her office profile calls every planner fee-based, and in that office fee-based means fees plus commissions. What should she do about the profile?

36.Patrick Doyle's invoice for client Bianca Rossi says "Fee-only engagement." On that same work he will also take a 5% commission on a variable annuity. Bianca has not been shown the commission. What should the invoice do?

37.Client Bianca Rossi hands planner Hugo Martins a $4,000 check for a fund purchase. Bianca's account at the custodian is open. Hugo's firm operating account is in the same banking app. Where should the check go?

38.Hugo Martins is short on rent. Client Sasha Levin offers to lend him $10,000 from her brokerage account, repaid next quarter with interest. What should Hugo do?

39.Sasha Levin opens one envelope that holds a client's insurance premium and the firm's commission. She considers depositing both in the firm's checking account until Monday, then sending the premium on. What should she do with the premium?

40.A client gives Derek Nguyen $1,500 in cash as a gift for a grandchild and asks him to hand it over at a party in three days. Derek plans to park the cash in his personal savings account until then. What should he do?

41.Miriam Cohen's car repair is $800. She plans to take $800 from client Leo Vasquez's money-market account and replace it on payday. Leo did not offer a loan and does not know about the plan. What should Miriam do?

42.Client Tessa Okada asks planner Leo Vasquez to keep her bond coupons in his desk, mixed with the firm's petty cash, until she returns from a trip. What should Leo do?

43.Tessa Okada's brother is her client. He offers to lend her $25,000 from his trust, with interest, so she can buy a car. She is the planner on the trust and is not its only beneficiary. What should Tessa do?

44.Grant Holloway's office account is overdrawn by $1,200. A client's $9,000 settlement check arrives the same morning. Grant could deposit it, clear the overdraft, and wire the client later that day. What should he do?

45.Imani Brooks drafts a promissory note so client Julian Hart can lend her money for a personal bill. The note has interest, a due date, and a signature line. Julian has not been asked yet. If he is willing to sign, what should Imani do?

46.Julian Hart has never prepared an estate tax return. Client Mei-Ling Zhou's estate needs one that includes closely held business interests. Julian does not ask a tax lawyer or a CPA who does that work. He plans to file from a software template. What should he do?

47.Mei-Ling Zhou advises on retail mutual funds. Client Robert Klein wants a value for employee stock options in a private company. She builds a spreadsheet from a blog and delivers it as the value, without a valuation specialist. What should she have done?

48.Robert Klein has no insurance license and little training in disability coverage. Client Aisha Rahman asks him to choose a disability policy and submit the application. He does not involve a licensed insurance professional. What should Robert do?

49.Aisha Rahman's client needs a court order dividing a retirement plan after a divorce. Aisha has never drafted one. She downloads a form and sends it to the plan administrator without a family-law attorney. What should she do?

50.Peter Novak's planning work is household budgets. A lawyer asks him to testify as an expert on oil-and-gas royalty accounting. Peter has no royalty experience and lines up no co-expert. He is about to accept. What should he do?

51.Grace Adeyemi has never advised on a pension split governed by another country's rules. Client Simon Berger's pension is under those rules. Grace tells him it can be rolled like a domestic workplace plan and prepares that paperwork alone. What should she do?

52.Simon Berger prepares household plans. He agrees to design a charitable remainder trust for client Lucia Ferrara's $4 million gift. He has never drafted one, hires no estate attorney, and plans to adapt a trust he found online. What should he do before the gift?

53.Lucia Ferrara is asked to choose individual options trades for client Nathan Cole. She has no options training. The firm's options specialist is available. Lucia enters three trades herself without calling the specialist. What should she do?

54.Nathan Cole knows retirement accounts. Client Elena Varga needs a Medicaid eligibility plan, a subject he has not practiced. He writes the plan from a general checklist and does not involve an elder-law lawyer. What should he do?

55.Elena Varga supervises junior planner Ben Adler. Ben told client Lewis Brooks that a portfolio would double in five years with no downside. The chart assumed a constant 15% return and did not say so. Elena sees it after the meeting. What should she do?

56.Wyatt Brooks supervises Sara Quinn. Sara sent client Odette Marin a retirement chart that left fees out, so the ending balance is too high. Odette has not chosen a product. Wyatt learns of the omission the same day. What should Wyatt do?

57.Fatima El-Sayed supervises Paul Ike. Paul projected that client Howard Dalton's pension would replace 80% of pay by treating a one-time bonus as permanent salary. Howard is about to retire on that figure. What should Fatima do?

58.Chris Dalton supervises Nora Blake. Nora gave client Alma Mendes a college-savings figure labeled guaranteed. The figure was a hypothetical return, not a promise from any product. Alma has told her family the number is locked in. What should Chris do?

59.Rosa Mendes supervises Evan Ruiz. Evan emailed client Piotr Cho that Social Security would cover his full rent, using today's benefit and ignoring inflation and taxes. Rosa sees the email after it was sent. What should Rosa do?

60.Benjamin Cho supervises Maya Chen. Maya showed client Maren Solberg a home-sale projection that counted the gain twice. Maren is meeting a realtor tomorrow morning to raise her price based on that gain. What should Benjamin do?

61.Ingrid Solberg supervises Omar Said. Omar told clients Quinn Hart and Lea Hart that a variable annuity cannot lose money because of a rider. The rider expired last year. The couple is about to add $50,000. What should Ingrid do?

62.Quentin Marsh supervises Tess Kaplan. Tess put client Denise Nguyen's possible inheritance into a spending plan as if the money were already received. The relative is alive and has not promised the gift. Denise raised her monthly spending. What should Quentin do?

63.Harper Nguyen supervises Adam Frost. Adam sent client Ruben Ruiz a results chart cropped so only the successful paths showed. The full chart includes many failing paths. Ruben likes the cropped picture, and Harper considers leaving it. What should Harper do?

64.Dominic Ruiz's certification expired in March. In June he still prints the certification marks after his name on client proposals. Renewal is not complete. What should he do with the marks?

65.Anika Bose let her certification lapse. A conference biography she already approved still shows the marks after her name. The program has not gone to print. What should Anika do?

66.Carl Jensen's certification has lapsed. He tells prospect Paige Whitaker that renewal papers are in the mail, so he can still put the letters on today's proposal. The renewal is not approved. What is he allowed to do?

67.Paige Whitaker's certification lapsed last week. Her email signature still carries the marks. She has a client appointment today and has not renewed. What should she do before the appointment?

68.Karim Farouk's certification has lapsed. A clerk said the renewal is being processed, and Karim put the marks back on a plan he will sign today. The certification is not active. What should he do?

69.Sylvia Grant's certification has lapsed. Her website still shows the marks beside her name, with a footnote that says renewal is pending. No renewal has been granted. What should she do?

70.Theo Park's certification lapsed yesterday. Client Rebecca Stein asks him to sign a letter that includes the marks because the draft was written last month, when he still held the certification. What should Theo do?

71.Rebecca Stein's certification lapsed in January. In November she posts a social update with the marks beside her name and the caption that she is proud of the credential. She has not renewed. What should she do with the post?

72.Jordan Blake's certification has lapsed. The firm's public directory still lists the marks after his name. He figures the firm, not he, maintains the directory, so he does nothing. What should Jordan do?

73.Nina Kapoor asks her planner to sell 200 shares of a listed stock with a market order. A bank, an insurer, an investment adviser who only gives advice, and a broker-dealer are available. Who executes the sale?

74.Hector Alvarez has $40,000 he wants held as an insured deposit. He does not want it invested, and he is not buying a policy. His planner can introduce a broker-dealer, a bank, an insurer, or an investment adviser. Which firm fits?

75.Claire Dubois wants a life insurance policy issued on her life. She already keeps a bank deposit, uses a broker-dealer for trades, and pays an adviser for advice. Which institution issues the policy?

76.Sean Murphy will pay a firm a fee for ongoing portfolio advice. He does not want that firm to fill his orders, hold his checking deposits, or issue a policy. Which firm matches the paid advice?

77.Yasmin Darwish enters a limit order to buy municipal bonds. She needs the firm that will fill that order. A bank, an insurer, an adviser who only advises, and a broker-dealer are on her list. Who executes it?

78.Elliot Crane receives his paycheck and wants the cash kept in a checking account. He is not placing a trade, not buying a policy, and not paying for investment advice with this money. Which institution holds it?

79.Paloma Reyes will pay a firm 1% a year to recommend a fund mix. The firm will not execute her trades, will not issue a policy, and will not hold her deposits. Which description matches that firm?

80.Ivan Petrov needs a homeowners policy put in force on a house he just bought. He is not asking anyone to fill a securities order, hold a new deposit, or charge an advice fee for this step. Who issues the policy?

81.Dana Whitfield's house-sale cash must sit in an insured deposit until she chooses investments next month. Her cousin says a broker-dealer should hold it as a deposit because that firm handles money. She is not placing a trade today. What should she use?

82.Terrence Boyd's firm contest pays extra when he sells the firm's proprietary bond fund. A cheaper outside fund fits client Edith Nakamura's three-year ladder better. Terrence works under a standard that requires the client's best interest. What should he recommend?

83.June Nakamura can win a trip if she sells her firm's proprietary annuity this week. Client Emmett Brennan needs a liquid savings account for a tax bill due in four months. He does not need an annuity. June's standard requires the client's best interest. What should she do?

84.Kyle Brennan's contest score rises if he moves clients into a proprietary mutual fund. Client Soraya Hassan's written policy is a low-cost index mix, and that mix still fits her goals. Kyle works under a best-interest standard. What should he do?

85.Leila Hassan's manager calls a sales contest optional and still posts daily rankings. A proprietary real-estate fund pays contest points and cannot be sold quickly. Client Nico Papas needs cash for a house in eight months. Leila's standard requires his best interest. What should she do?

86.George Papas is one sale from a contest bonus on his firm's proprietary long-term care policy. An outside policy has a stronger inflation rider. Client Shira Weiss's family history makes that rider important. George works under a best-interest standard. What should he recommend?

87.Naomi Weiss's contest pays double points on the firm's proprietary target-date fund. Client Gavin Holt is 29. That fund costs 0.90% a year, and a similar outside fund costs 0.08%. Naomi works under a best-interest standard. What should she use?

88.Darren Holt can earn contest credit by replacing client Deepa Raman's low-cost term policy with the firm's proprietary whole life. Deepa asked only to keep the term coverage she has. Darren works under a best-interest standard. What should he do?

89.Ananya Iyer's contest rewards proprietary managed accounts. Client Oscar Cruz already uses a self-directed mix he understands, and it meets his goal at a lower cost. Ananya works under a best-interest standard. What should she recommend?

90.Mateo Cruz is told that colleagues win the sales contest by using the house balanced fund. Client Maeve Callahan is in a high tax bracket, and a municipal bond fund fits her taxable account better. It pays Mateo less contest credit. His standard requires her best interest. What should he use?

91.Bridget Callahan meets prospect Joel Gold at a seminar and takes his phone number from the sign-in sheet. Her firm gives a privacy notice explaining what nonpublic information it collects and how that information is used. Joel has not asked her to stop calling. What should Bridget do?

92.Prospect Cora Marchand tells planner Ezra Gold, "Do not call me again." Ezra has not yet delivered the firm's privacy notice about how it uses nonpublic information. He is about to dial her and read the notice aloud. What should he do?

93.Noelle Marchand's prospect, after reading a privacy notice that says the firm may call about products, says, "Put me on your do-not-call list." A colleague argues the notice already permitted calls. What should Noelle do?

94.Anton Weber's privacy notice says a prospect's information is used for the planning the prospect asked about, not given to outside marketers. Prospect Talia Greene wrote her income on a fact-finder. Anton's friend, who sells cars, asks for that income. Talia has not agreed. What should Anton do?

95.Talia Greene's prospect emails, "Please do not call." The number is still on her assistant's dial list for tomorrow morning. Talia has already given this prospect the firm's privacy notice. What should she do about the list?

96.Miles Carter gave a prospect the privacy notice at their first meeting. The prospect then said Miles may email but may not call. Miles's partner wants to call to confirm the notice arrived. What should Miles allow?

97.Willa Santos's privacy notice says the firm shares information with affiliates for their own marketing unless the person opts out. Her prospect opted out. A sister company asks for the phone number for a credit-card offer. What should Willa do?

98.Rowan Ellis read a privacy notice aloud on a prospect's voicemail. The prospect then texted, "Do not call." Rowan wants one more call to ask whether the voicemail was clear. What should Rowan do?

99.Beatriz Lima has given her client the firm's privacy notice. The client's neighbor, a prospect, said at the door, "Don't call me," after Beatriz offered weekly annuity calls. The client suggests she call the neighbor anyway. What should Beatriz do?

100.The certification terms that apply to Calvin Hodge require him to report a bankruptcy. He filed personal bankruptcy last month after a rental property failed. He told his brother and has stayed silent toward the certification. What do those terms require?

101.The certification terms that apply to Vera Popov require her to report a felony. She was convicted of felony tax evasion and plans to leave the conviction off her renewal. She has stayed silent. What should she do?

102.The certification terms that apply to Spencer Ng require him to report a bankruptcy. He filed bankruptcy and has stayed silent because he is embarrassed. His partner says embarrassment is a private reason to wait. What should Spencer do?

103.The certification terms that apply to Celeste Marin require her to report a felony. She pleaded guilty to a felony and has filed no report, waiting to see whether the sentence is light. What should she do?

104.The certification terms that apply to Diego Salazar require him to report a bankruptcy. His bankruptcy was discharged six weeks ago. He says the discharge means he may stay silent. What should he do?

105.The certification terms that apply to Petra Holm require her to report a felony to the certifying body. She was convicted of a felony. She told her manager and stayed silent toward that body, and she calls the conversation enough. What should she do?

106.The certification terms that apply to Blake Donovan require him to report a felony. He entered a guilty plea to a felony. He told his clients at a meeting, stayed silent toward the certifying body, and says he is therefore not fully silent. What should he do?

107.The certification terms that apply to Soren Peck require him to report a felony. He was convicted three years ago and never reported it. He renewed twice without mentioning it and says the age of the case lets him stay silent. What should he do?

108.The certification terms that apply to Arthur Bell require him to report a bankruptcy. He filed last week. He will mention it only if someone asks, and nobody has asked, so he has stayed silent. What should he do?