Blog
CFP Board Completes 2024 Compensation Study
CFP® Board Updates The CFP Board has released its updated Compensation Study, and it shows the CFP Professionals earn more than their fellow advisors without the certification. In fact, it revealed a median compensation of $192,000, which is 10% higher than those without the CFP® Marks. Not only that, CFP® Professionals report greater satisfaction with…
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Current Ratio and Primary Residence
Course: Fundamentals of Financial PlanningLesson 3: Personal Financial Statements Student Question: What role does the client’s primary residence play in the current ratio calculation? Is their outstanding mortgage loan amount considered a liability? Instructor Response: That’s a great question. The residence is not considered a liquid asset and is excluded from “assets” for the current ratio. Only debt…
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Underinsured Dwelling Penalty
Sam carries an H0-3 policy with $500,000 of coverage and a $2,000 deductible. It would cost $700,000 to rebuild Sam’s house. How much will his insurance company pay on a $200,000 claim related to a fire that started in Sam’s kitchen? $176,571 $178,571 $231,235 $198,000 CLICK TO REVEAL ANSWER Expand A is the answer. Sam…
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The FED’s 50 Basis Point Interest Rate Cut
CFP® Certificants in the News CFP Board’s most recent newsletter advises that the “Federal Reserve announced a significant 50 basis point rate cut, surprising many who anticipated a smaller 25 basis point reduction.” CFP Board Ambassador Kurt Whitesell, CFP® highlighted the opportunity for investors to lock in high rates on CDs before further interest rate drops.” …
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Interest Rate Risk in a Bond
Course: Investment PlanningLesson 10: Fixed Income Securities Analysis Student Question: I’m not clear why holders of long-term bonds are subject to interest rate risk. If a 20-year bond is purchased at par with a coupon rate of 6.25% ($62.50/year), it seems to me that the investor would still receive $62.50 a year regardless of interest rate changes. What…
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Saving for a Retirement Goal
Erika wants $50,000 a year in today’s dollars in retirement. She anticipates retiring in 10 years and living in retirement for 30 years. Erika can earn 7% on her investments and she expects inflation to average 4%. Approximately how much should Erika have saved by the day she retires to meet this goal? $913,000 $983,000…
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Having Your Cake and Eating It Too
Good to Know “She cannot eat her cake and have her cake.” Jonathan Swift, Polite Conversation 1738 What does this quote from almost 3 centuries ago have to do with Medicaid eligibility? Conventional wisdom tells us that no one can qualify for nursing home care under Medicaid insurance and simultaneously have assets or income in…
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Owner of a Grantor Trust
In which of the following situations would the grantor of a trust not be considered the owner? The grantor has a reversionary interest in the trust, of which the grantor’s son is the sole beneficiary, but the grantor cannot exercise this power until eight years after transfer of property to the trust. The grantor retains…
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CFP Board Certification Marks Usage Updated
CFP® Board Updates Say goodbye to the TM after CERTIFIED FINANCIAL PLANNER. It’s now an ®. The U.S. Patent and Trademark Office officially registered the CERTIFIED FINANCIAL PLANNER® mark earlier this summer, strengthening the legal protections. This change signifies a great achievement for the CFP Board and Professionals alike. It means the mark is now…
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