Preview Questions Financial Planner | Role Specific Skill

Question 1: How would you incorporate the impact of capital gains taxes into a client's retirement portfolio withdrawal strategy?

Which action should you take?

Choose only one option

Sell low-performing assets to offset gains from high performers

Sell high-yielding assets first to avoid paying capital gains taxes

Prioritize selling investments with the lowest capital gains tax rates

Utilize tax-deferred accounts to reduce capital gains exposure

Question 2: What is the key difference between systematic and unsystematic risk in portfolio management?

Which action should you take?

Choose only one option

Systematic risk affects the whole market, unsystematic risk is specific to individual investments

Unsystematic risk is easier to mitigate

Systematic risk affects specific sectors, unsystematic risk is broader

Systematic risk is diversified, unsystematic risk is not

Question 3: How does a dynasty trust benefit clients in long-term estate planning?

Which action should you take?

Choose only one option

Simplifies asset transfer

Avoids all income taxes

Reduces liability in creditor claims

Preserves wealth for multiple generations

Question 4: When considering estate planning, which of the following would be most critical in minimizing estate taxes?

Which action should you take?

Choose only one option

Use irrevocable trusts and other tax-efficient strategies

Maximize asset accumulation in taxable accounts

Minimize the amount of life insurance coverage

Keep assets under the gift tax exemption limit

Question 5: In light of potential capital gains rate hikes, how can a planner structure a strategy that anticipates multiple policy outcomes, balancing immediate realization, stepped-up basis opportunities, and deferral strategies (e.g., installment sales, 1031 exchanges)?

Which action should you take?

Choose only one option

Wait indefinitely for lower rates without action

Policy-sensitive modeling that tests various capital gains hike scenarios, timing of realization events, use of 1031 exchanges, and stepping up basis at death or trusts to minimize total tax

Ignore policy changes and maintain the current capital gain realization schedule

Realize all gains now to avoid future hikes

Question 6: When assessing a client's risk capacity, which of the following factors is most relevant?

Which action should you take?

Choose only one option

The client's tolerance for market volatility

The client's current income and future earning potential

The client's financial goals

The client's age