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| Section | Weight | Objectives |
|---|---|---|
| Savings Planning & Debt Management | 10% | - Debt management and repayment plans - Savings vehicles and strategies |
| Investment and Tax Planning | 10% | - Investment portfolio construction - Tax-efficient investing and income planning |
| Retirement Planning | 20% | - Government and private retirement programs - Retirement income needs analysis - Retirement savings and withdrawal strategies |
| Insurance Planning | 10% | - Property and liability risk management - Life, disability, and critical illness insurance |
| Family Law | 15% | - Marriage, cohabitation, and separation agreements - Support obligations and asset division |
| Financial Planning for Small Business | 15% | - Business structure and financial considerations - Succession planning and exit strategies |
| Financial Planning Practice | 10% | - Client engagement and data gathering - Financial plan development process |
| Estate Planning | 10% | - Wills, trusts, and powers of attorney - Estate taxation and wealth transfer |
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NEW QUESTION # 11
Which resource will affect a pensioner's Guaranteed Income Supplement entitlement?
Answer: B
Explanation:
The Guaranteed Income Supplement is income-tested rather than asset-tested. Consequently, the relevant item is dividend income.
For GIS purposes, taxable investment income-including taxable Canadian dividends-forms part of the income used to determine entitlement. As income rises, GIS benefits may be reduced or eliminated depending on the recipient's marital status and applicable income threshold. Service Canada specifically includes interest, investment income, capital gains, and taxable Canadian dividends among the income sources relevant to income-tested OAS benefits.
By contrast, merely owning a cottage or holding investment assets does not directly reduce GIS because there is no general GIS asset test. Those assets become relevant when they generate reportable income-for example, rental income, interest, dividends, or realized taxable capital gains.
Old Age Security itself is specifically excluded when determining income for GIS purposes. Therefore, receiving the basic OAS pension is not treated in the same way as taxable investment income when calculating GIS entitlement.
This distinction is important in retirement planning because two clients with identical net worth can have very different GIS outcomes depending on the type, timing, and tax characterization of their retirement income.
FPII reference/topic: Retirement Planning - Old Age Security; Guaranteed Income Supplement; income testing; retirement-income taxation.
NEW QUESTION # 12
In order to complete the analysis and development of a financial plan, an advisor receives a client's investment statements and tax returns. From the perspective of principle six (code of ethics), what action should the advisor take in order to maintain a relationship of trust and confidence?
Answer: C
Explanation:
Principle 6 of the FP Canada Code of Ethics is Confidentiality. It requires client information to be secured, protected, and maintained so that access is limited to authorized persons.
FP Canada's Standards state directly that client information must be handled in a manner that permits access only to those who are authorized, and that the relationship of trust and confidence depends on personal and confidential information being collected, used, and disclosed only as authorized.
Investment statements and tax returns contain highly sensitive financial and personal information. The advisor must therefore maintain appropriate physical and electronic safeguards, restrict internal access to personnel who require the information for authorized purposes, and avoid disclosure to external parties unless the client has authorized it or disclosure is otherwise legally permitted or required.
Option B involves professional referrals and raises separate considerations concerning competence, scope, and client consent. Option C is more closely related to placing the client's interests first. Option D relates to analysis and diligence but does not specifically address the ethical requirement described by Principle 6.
Accordingly, securing the documents so that only authorized personnel can access them directly satisfies the confidentiality obligation.
FPII reference/topic: Financial Planning Practice - Code of Ethics; Principle 6 Confidentiality; protection and authorized use of client information.
NEW QUESTION # 13
If an employee earns more than the yearly maximum pensionable earnings, but an employer continues to deduct Canada Pension Plan contributions, what will happen to the excess contributions?
Answer: A
Explanation:
Where an employee has contributed more CPP than required for the year, the excess employee contribution is ultimately refunded or credited through the individual's income tax return.
CRA specifically provides for CPP overpayments to be calculated on the applicable Schedule 8 or interprovincial CPP/QPP form. The excess is reported on the individual's tax return, and CRA will either refund it or apply it against another balance owing.
An employer that discovers an over-deduction during the same year should generally correct its payroll records and reimburse the employee directly. However, where the overpayment remains on the T4 and has not been reimbursed, CRA credits the excess when the employee files the personal return.
The excess is not transferred to an RRSP, nor is it automatically carried forward against the employee's CPP obligation for the next calendar year. CPP contribution calculations operate on an annual basis.
Option A is also incorrect because repayment of the employee's own excessive CPP deduction is not a taxable employment benefit.
Accordingly, within the circumstances presented in the question, option D is the correct treatment.
FPII reference/topic: Retirement Planning - Canada Pension Plan; maximum pensionable earnings; employee contributions; CPP overpayments and refunds.
NEW QUESTION # 14
Hannah would like to replace her current vehicle and is considering leasing instead of financing. Hannah commutes a considerable distance from outside the city each day for her work. She thinks leasing would allow her to always have a newer and more reliable vehicle. What is an important factor for Hannah to consider before making her decision?
Answer: C
Explanation:
Hannah's long daily commute makes the lease's kilometre allowance a critical consideration. Vehicle leases normally specify a maximum number of kilometres that may be driven during the lease term. Where actual usage exceeds the contractual allowance, the lessee can be charged an excess-kilometre fee when the vehicle is returned. Because Hannah travels a considerable distance each day, her annual driving is likely to be substantially higher than that of a typical driver, increasing the risk of a material end-of-lease charge.
Leasing may provide access to a newer vehicle and can produce lower periodic payments than financing an equivalent vehicle, but this advantage can be offset by kilometre charges, wear-and-tear charges, and the absence of vehicle ownership at the end of the term.
Option A is not generally correct because routine maintenance remains the lessee's responsibility unless a specific maintenance package is included. Option B is not inherently true; lease payments are frequently lower than financing payments because the lessee finances primarily the vehicle's depreciation during the lease term. Option D is similarly not a general leasing requirement.
For Hannah, expected annual mileage should therefore be calculated before selecting leasing over financing.
FPII reference/topic: Savings Planning and Debt Management - vehicle acquisition; leasing versus financing; cash-flow and contractual considerations.
NEW QUESTION # 15
From the perspective of self-employment, how are personal benefits treated for the purposes of calculating child support?
Answer: A
Explanation:
Personal benefits paid through a self-employed individual's business are generally added back to income and grossed up when determining appropriate income for child-support purposes.
The purpose of the child-support income calculation is to identify the parent's true financial capacity rather than simply accept taxable income reported under the Income Tax Act. A business may legitimately deduct an expenditure for tax purposes while all or part of that expenditure provides a personal benefit to the owner- for example, personal vehicle use, housing expenses, meals, utilities, or other personal consumption paid by the business.
Where such expenditures effectively replace expenses the parent otherwise would have paid personally from after-tax income, the benefit is added back. A gross-up may then be necessary to express that tax-free or after- tax economic benefit as an equivalent amount of pre-tax income. Canadian child-support jurisprudence has repeatedly applied this approach to personal benefits funded through a business.
This prevents a self-employed support payor from artificially depressing guideline income by routing personal consumption through deductible business expenses.
Therefore, option D correctly reflects both required adjustments: add the personal benefit to income and gross it up where appropriate.
FPII reference/topic: Family Law - Federal Child Support Guidelines; determination of self-employment income; personal benefits; imputed income.
NEW QUESTION # 16
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