• Exam Code: AFP-Exam-1
  • Exam Name: Applied Financial Planning Certification Exam 1 (AFP)
  • Certification Provider: CSI
  • Corresponding Certification:Canadian Securities Course
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CSI AFP-Exam-1 Exam Syllabus Topics:

SectionWeightObjectives
Topic 1: Client Relationship and Practice Management6%- Practice Management
- Communication and Advisory Process
- Client Discovery
Topic 2: Tax Planning14%- Tax Deductions and Credits
- Registered Plans
- Income Tax Fundamentals
- Tax-Efficient Strategies
Topic 3: Professional Conduct and Regulatory Compliance10%- Regulatory Requirements
- Compliance Responsibilities
- Ethics and Professional Standards
Topic 4: Risk Management and Insurance12%- Life Insurance
- Disability and Health Insurance
- Risk Transfer Strategies
- Risk Assessment
Topic 5: Estate Planning13%- Trust and Beneficiary Planning
- Powers of Attorney
- Estate Transfer Strategies
- Wills
Topic 6: Investment Planning17%- Portfolio Construction
- Investment Theory
- Asset Allocation
- Investment Products
Topic 7: Retirement Planning17%- Retirement Income Strategies
- Retirement Needs Analysis
- Pension Plans
- Registered Retirement Savings Plans
Topic 8: Asset and Liability Management11%- Budgeting
- Cash Flow Management
- Debt Management
- Personal Balance Sheet Analysis

CSI Applied Financial Planning Certification Exam 1 (AFP) Sample Questions:

1. Mark, a financial planner, is meeting his client Adam for the first time. From the conversation, Mark learned that Adam has some experience on trading stocks. Adam asked Mark to explain about efficient market theory that he overheard a colleague talking about a few days ago. How should Mark respond to Adam's question in simple terms?

A) Market prices of stocks have no relation to past price behaviour.
B) Investors react differently to information.
C) Stock prices reflect all publicly-available information.
D) Past mistakes can be avoided by using the information to anticipate change.


2. Chris is a self-employed contractor discussing his retirement plans with his financial planner, Joseph. Chris is considering incorporating his business and drawing funds from his corporation to fund his retirement income, yet he wants to ensure it does not impact his business's financial position. What advice should Joseph give to Chris?

A) Consult an online service that helps individuals incorporate.
B) Inform Chris of the impacts of incorporating and recommend any changes he feels are appropriate.
C) Speak with an accountant to review the impact of incorporating.
D) Speak with a lawyer to review the impact of incorporating.


3. Richard reviewed his divorce settlement from his partner Alex with his advisor Maria. He is deciding between providing a lump sum spousal support payment of $60,000 or making monthly payments. If Richard's income is $200,000 and Alex's income is $40,000, what should Maria advise Richard about the tax implications for both Richard and Alex in regard to the lump sum payment?

A) Richard will pay taxes on the entirety of the $200,000 and Alex will pay taxes only on his earned income of $40,000.
B) Richard will deduct the payment and pay taxes on the remaining $140,000 of income, and Alex will pay taxes on the lump-sum payment of $60,000.
C) Richard will deduct half of the lump-sum support payment and pay taxes on the remaining $170,000 of income and Alex will claim the other half of the lump-sum support payment in addition to his earned Income of $40,000.
D) Richard will deduct the payment and pay taxes on the remaining $140,000 of income and Alex will pay taxes only on his earned income of $40,000.


4. William and Jennifer are selling their business which qualifies as a Canadian-controlled private corporation.
When the sale is complete at the end of this year, William and Jennifer will each receive $4 million for their common shares which have nominal cost. Jennifer has unused capital losses from previous years. They are meeting with Laurel, their financial planner, to discuss the tax implications of the sale. Based on the information provided, what should Laurel recommend to William and Jennifer so that they are best able to make use of the Lifetime Capital Gains Exemption?

A) Only William should claim 100% of the exemption.
B) They should each claim 100% of the exemption.
C) They should each claim 50% of the exemption.
D) Only Jennifer should claim 100% of the exemption.


5. A household has gross monthly income of $9,500. Their monthly mortgage payment is $2,100, property taxes are $425, heating costs are $175, car payments are $600, and minimum credit card payments are $250. What is their total debt service ratio?

A) 37.4%.
B) 31.1%.
C) 28.4%.
D) 44.2%.


Solutions:

Question # 1
Answer: C
Question # 2
Answer: C
Question # 3
Answer: A
Question # 4
Answer: A
Question # 5
Answer: A

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