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CSI FP2 Exam Syllabus Topics:

Section	Weight	Objectives
Topic 1: Estate Planning	10%	- Estate Distribution and Tax Planning 1. Minimizing or Deferring Taxes at Death 2. Probate Fee and Estate Administration Cost Reduction 3. Will Preparation and Probate 4. Estate Planning for Individuals, Families and Business Owners - Trusts and Powers of Attorney 1. Taxation of Trusts 2. Powers of Attorney for Personal Care and Property 3. Types of Trusts and Trust Establishment 4. Incapacity Planning and Substitute Decision-Making
Topic 2: Financial Planning for Small Business	15%	- Business Law and Agency Relationships 1. Contract Formation and Types of Contracts 2. Contract Termination and Discharge 3. Agency Relationships - Small Business Financial Planning 1. Business Valuation and Employment Law 2. Business Succession and Estate Freezes 3. Business Structures and Entity Selection 4. Business Taxation
Topic 3: Financial Planning Practice	10%	- The Personal Financial Planning Process in Canada 1. The Six Steps of the Financial Planning Process 2. Identifying Client Goals and Risk Profiles 3. Ethics and Financial Advisors 4. The Financial Planning Business Today 5. Client Responsibilities and Professional Standards
Topic 4: Savings Planning and Debt Management	10%	- Net Worth and Cash Management Planning 1. Emergency Funding 2. Budgeting and Savings Strategies 3. Net Worth and Cash Flow Analysis - Debt Planning and Mortgages 1. Lease-versus-Buy Decisions and Borrowing to Invest 2. Debt Refinancing and Debt Service Ratios 3. Consumer Credit and Debt Management 4. Mortgage Planning and Real Estate Ownership
Topic 5: Family Law	15%	- Fundamental Aspects of Family Law 1. Spousal Support and Child Support 2. Marriage, Cohabitation, Separation and Divorce 3. Custody and Access - Financial and Property Issues 1. Disclosure Requirements and Financial Obligations 2. Impact of Divorce on Financial Planning 3. Property Division on Relationship Breakdown 4. Domestic Contracts
Topic 6: Investment and Tax Planning	10%	- Tax Planning Strategies 1. RESPs, RDSPs, TFSAs and In-Trust Accounts 2. Tax Shelters and Tax-Efficient Strategies 3. Income Deferral and Income Splitting 4. Taxation of Business Structures - Investment Management 1. Investment Selection and Risk Management 2. Modern Portfolio Theory and Asset Allocation 3. Portfolio Performance Measurement and Benchmarking
Topic 7: Insurance Planning	10%	- General Insurance 1. Homeowners and Automobile Insurance 2. Liability and Professional Liability Insurance - Disability and Health Insurance 1. Critical Illness and Long-Term Care Insurance 2. Extended Health, Travel and Group Insurance 3. Disability Income Insurance 4. Government Disability Benefits and Workers' Compensation - Life Insurance 1. Personal and Business Applications of Life Insurance 2. Life Insurance Needs Analysis 3. Insurance Contract Provisions, Riders and Taxation
Topic 8: Retirement Planning	20%	- Registered Pension and Retirement Income Plans 1. Individual Pension Plans and Executive Retirement Arrangements 2. Registered Retirement Income Funds and Life Income Funds 3. Annuities and Retirement Income Products 4. Registered Retirement Savings Plans 5. Registered Pension Plans and Deferred Profit Sharing Plans - Retirement Income Needs Analysis 1. Estimating Retirement Income Requirements 2. Canada Pension Plan and Quebec Pension Plan 3. Managing Retirement Income Shortfalls 4. Old Age Security and Guaranteed Income Supplement

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CSI Financial Planning II (FPII) Sample Questions (Q50-Q55):

NEW QUESTION # 50
What tax consideration should employers take into account when setting up a supplemental executive retirement plan (SERP)?

A. The employer does not receive a tax deduction for the SERP contribution until the employee receives the benefits.
B. When a SERP is registered with the Canada Revenue Agency (CRA) under the Income Tax Act, it provides for the employers contributions to be tax-deductible.
C. A SERP permits higher tax-deductible contributions by the employer than those allowed under a registered retirement savings plan.
D. A SERP is eligible to be registered with the CRA provided that the employer makes a minimum contribution on behalf of the employee based on a percentage of the company's profits.

Answer: A

Explanation:
A Supplemental Executive Retirement Plan is generally an unregistered deferred compensation arrangement designed to provide highly compensated employees with retirement benefits beyond limits available through registered retirement arrangements.
Where the SERP is structured as an unfunded or notional arrangement, the employer normally records the promised benefit as an obligation rather than receiving an immediate deduction for a funded registered-plan contribution. The employer's deduction generally arises when the benefit is ultimately paid and becomes taxable compensation to the executive. Canadian SERP structures commonly use this deferred-deduction treatment.
This is an important distinction from a registered pension plan. A SERP is not simply registered with CRA so that unrestricted deductible contributions may be made. Its principal purpose is precisely to supplement benefits limited by the tax rules governing registered retirement arrangements.
A funded SERP can also involve a Retirement Compensation Arrangement, which brings a separate tax regime, including refundable tax on contributions to the RCA custodian. Therefore, the precise tax consequences depend on funding structure.
For the examination scenario, option C describes the core tax consideration associated with a conventional unfunded SERP: the employer's tax deduction is deferred until the retirement benefit is paid.
FPII reference/topic: Retirement Planning - SERPs; executive compensation; deferred compensation; registered versus non-registered retirement arrangements.

NEW QUESTION # 51
What is the primary difference between a Life Income Fund (LIF) and a Registered Retirement Income Fund (RRIF)?

A. RRIFs may be purchased with a registered retirement savings plan, another RRIF or pension funds that are not locked-in, but a LIF can only be purchased with funds from a retirement compensation arrangement.
B. Plan holders of either type must make minimum withdrawals each year, but there is also a maximum annual amount LIF holders may withdraw.
C. All plan holders must purchase a life annuity in the year they reach 80 with the balance of funds remaining in the LIF.
D. Minimum LIF payments are fully taxable as income for the year in which they are received but minimum RRIF payments are not taxable.

Answer: B

Explanation:
Both a RRIF and a LIF provide retirement income and are subject to prescribed minimum annual withdrawals. The distinguishing feature of a LIF is that it contains pension money that remains subject to locking-in legislation. Consequently, in addition to the minimum required withdrawal, the amount that may normally be withdrawn from a LIF is subject to an annual maximum.
The Office of the Superintendent of Financial Institutions confirms that federally regulated LIFs have minimum and maximum annual withdrawal limits. The minimum is governed by income-tax rules, while pension standards legislation determines the maximum.
A conventional RRIF does not impose this pension-based maximum withdrawal limit. Once the required minimum has been taken, the annuitant may generally withdraw additional amounts, although those amounts remain taxable.
Option A is incorrect because there is no universal rule requiring all LIF holders to purchase a life annuity at age 80. Option B incorrectly describes the permitted source of LIF assets; LIFs are primarily funded from locked-in pension arrangements, not simply retirement compensation arrangements. Option D is also incorrect because taxable RRIF withdrawals do not become tax-free merely because they represent the prescribed minimum.
FPII reference/topic: Retirement Planning - RRIFs; LIFs; locked-in pension assets; minimum and maximum retirement withdrawals.

NEW QUESTION # 52
Nelson Smith has hired Jackie Fraser to be his financial advisor. Jackie works for FP Inc. On Nelson's behalf, Jackie has placed an order for units of the QBR Balanced Fund from QBR Investments Inc., a subsidiary of the QBR Insurance Company. Who is the principal and third-party for this transaction?

A. Nelson Smith and Jackie Fraser.
B. FP Inc. and QBR Insurance Company.
C. Nelson Smith and QBR Investments Inc.
D. Jackie Fraser and QBR Investments Inc.

Answer: C

Explanation:
In an agency relationship, the principal is the person on whose behalf the agent acts. The agent is the person authorized to act for the principal, while a third party is the external person or organization with whom the agent deals in carrying out that authority.
Here, Nelson Smith retained Jackie Fraser as his financial advisor. Jackie places the investment order on Nelson's behalf. Nelson is therefore the principal, and Jackie is acting as the agent in the transaction.
The transaction is placed with QBR Investments Inc., the entity offering the QBR Balanced Fund. QBR Investments is therefore the relevant third party with whom the agent deals for the principal.
Jackie's employer, FP Inc., does not replace Nelson as the principal in the client-advisor agency relationship described by the question. Similarly, QBR Insurance Company's status as the parent of QBR Investments does not make it the relevant third party because the actual fund transaction is with QBR Investments.
The legal distinction matters because an agent owes obligations to the principal and must act within the authority conferred by that principal.
FPII reference/topic: Financial Planning Practice - agency law; principal-agent relationships; authority; dealings with third parties.

NEW QUESTION # 53
What factors are used for calculating contributions to an individual pension plan?

A. Annual contributions required to fund the plan must be calculated based on the age of the employee, their earnings history and the benefit formula.
B. Annual contributions are based on the lesser of 18% of the employee's salary paid by the employer or half the limit for money purchase plans.
C. Annual contributions required to fund the plan must be calculated based on the age of the employee, the benefit formula and amount of business profits available.
D. Annual contributions are based on the employee's unused registered retirement savings plan deduction room plus 18% of their earned income from the previous year.

Answer: A

Explanation:
An Individual Pension Plan (IPP) is normally structured as a defined benefit registered pension plan. Unlike an RRSP, where contribution room is determined primarily by a statutory percentage of earned income and applicable pension adjustments, the required funding of an IPP is actuarially determined.
The contribution required to support the promised pension depends materially on the member's age, pensionable earnings history, and the pension benefit formula. Older members generally require larger contributions because fewer years remain to fund the promised retirement benefit. Earnings history is relevant because defined benefits are commonly based on final-average or best-average earnings, while the benefit formula determines the pension entitlement that must ultimately be funded.
CRA describes defined benefit arrangements as plans in which the retirement pension is determined by a prescribed benefit formula, including formulas based on earnings and pensionable service. The associated pension calculations therefore reflect the member's pensionable earnings and the benefit structure.
Business profitability may affect the employer's practical ability to fund the plan, but it is not itself one of the actuarial determinants of the required pension contribution.
FPII reference/topic: Retirement Planning - Individual Pension Plans; defined benefit pensions; actuarial funding; pensionable earnings and benefit formulas.

NEW QUESTION # 54
For spousal claims relating to joint family ventures, what does a proprietary award grant?

A. The right of first refusal for purchasing an asset.
B. Ownership interest in an asset.
C. A lump-sum monetary payment.
D. An equal split of future income generated by an asset.

Answer: B

Explanation:
A proprietary award provides the claimant with an interest in specific property, rather than merely requiring the other party to pay money. The distinction is fundamental in unjust-enrichment and joint-family-venture analysis.
Where one spouse or partner has contributed to the acquisition, preservation, maintenance, or improvement of identifiable property and the legal requirements are satisfied, the court may impose a proprietary remedy, commonly through a constructive trust. Such a remedy recognizes a beneficial ownership interest in the property itself. Canadian jurisprudence distinguishes this from a monetary remedy, where the claimant simply receives compensation measured either by the value of services provided or by an appropriate share of wealth accumulated through the joint family venture.
Option A describes a monetary award, not a proprietary award. A right of first refusal does not constitute the standard equitable remedy arising from unjust enrichment, while an automatic equal division of future income is not the legal consequence of establishing a joint family venture.
Accordingly, the defining feature of a proprietary award is that the claimant receives a beneficial or ownership interest linked to a particular asset.
FPII reference/topic: Family Law - unjust enrichment; joint family venture; constructive trusts; monetary versus proprietary remedies.

NEW QUESTION # 55
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