Blog
Will 401(k) Rollovers Equal Advisors’ Fiduciary Responsibility?
CFP® Certificants in the News The CFP Board’s recent news release opined that “The Department of Labor’s new retirement security rule standard expanding fiduciary duties will likely face legal opposition. Advocates for the rule, including CFP Board, plan to submit amicus briefs in support of the DOL in any lawsuits.” The news release cites an…
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Value of Life Insurance in Buy-Sell Agreements
Course: Insurance PlanningLesson 17: Business Uses of Life Insurance Student Question: Do buy sell agreements accounts for projected growth of the company? Do the life insurance benefits increase over time to account for projected growth, or perhaps can they invest and grow conservatively to keep up with inflation (or COLA on the plan)? Instructor Response:…
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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. Frank…
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Fiduciary Rule Rises Again
Good to Know If the term “Department of Labor Fiduciary Rule” sounds familiar, there’s a reason. The DOL’s previous Fiduciary Rule (2016) was a failed regulatory effort that was struck down by the Fifth Circuit Court of Appeals in 2018. The Court held that the DOL exceeded its authority. One perspective of the Court’s ruling…
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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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Selecting an Appropriate Trust
Which of the following trusts should Jason establish in his Will to provide for his son Gaven’s living expenses until Gaven reaches age 65 if Gaven is currently a 30-year old unemployed aspiring actor? 2503(b) trust 2503(c) trust Crummey trust Totten trust CLICK TO REVEAL ANSWER Expand A is the answer. The 2503(b) trust would…
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CFP Board Announces March 2024 Exam Results
CFP® Board Updates The March 2024 Exam cycle took place from March 12-19, 2024. With 3,683 individuals being administered the exam, it was the largest number of people ever to sit for the CFP Board Exam. The pass rate for the March 2024 exam was 68%. Based on those results, the number of CFP® Professionals…
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Solving for Annual Equivalent Rate
Course: Fundamentals of Financial PlanningLesson 5: Using the Calculator Student Question: I am confused as to how to get the correct answer for number 4. Jackie invests her bonus at the beginning of this calendar year. If she earns 7% compounded monthly, what is the annual equivalent rate? Round your answer to two decimal places. I…
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Refinance Payment Calculation
Sharon refinanced her home mortgage to a 30-year fixed mortgage with biweekly payments. How much is each payment if she owed $150,000 at the time of the refinance and the interest rate is 6%? $415 $589 $691 $702 CLICK TO REVEAL ANSWER Expand A is the answer. Sharon pays her mortgage every two weeks which…
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