Wealth Management MCQs

Financial planning primarily seeks to:

• Offer investment advice

• Offer tax advice

• Assess transmission plan

• Assess adequacy of income and assets for needs

Which of the following is a key reason for the increasing need for financial planning?

• Declining income levels

• Increasing complexities in financial products

• Decreasing life expectancy

• Joint families becoming more common

The primary role of a financial planner is to:

• Maximize client’s returns

• Ensure client has adequate money for financial goals

• Minimize client’s taxes

• Provide legal advice

Which is NOT a step in the financial planning process defined by the CFP Board?

• Gathering client data

• Monitoring recommendations

• Selling only mutual funds

• Developing recommendations

Proper documentation in financial planning helps to:

• Increase client costs

• Manage client relationships and protect against legal claims

• Avoid taxes

• Guarantee investment returns

Data collected from clients does NOT typically include:

• Family structure

• Bank accounts

• Political preferences

• Income and expenses

The stage in life cycle where saving habits are formed is:

• Retirement

• Young and unmarried

• Married with older children

• Windfall gain

The “accumulation” phase in the wealth cycle is characterized by:

• Major expenses are imminent

• Scope to save and take more risk

• Focus on distributing wealth

• Planning for inheritance

Which asset class is considered the most illiquid?

• Debt

• Equity

• Gold

• Real estate

SIP stands for:

• Systematic Investment Plan

• Secure Investment Portfolio

• Special Investment Policy

• Systematic Insurance Plan