AFP Exam 2 – Sample Case

Sample Case: Bryan’s Multiple Challenges [23 Marks]

1. Based on Sanjay’s meeting with Bryan, outline four red flags that will impact his ability to service Bryan as a client? For each red flag, outline the best course of action as a financial planner. [8 Marks]

Red Flag
[1 Marks Each]
Action
[1 Marks Each]


Competency Area: Client Relationship and Practice Management
Competency Statement: Methods to deal with ethical dilemmas, suspicious activities and fraud
Knowledge Statement: Manage the client’s expectations regarding financial planning


 

Sample Case: Bryan’s Multiple Challenges [23 Marks]

2. Bryan has provided some useful information to Sanjay regarding his investment behaviour. Using behavioural finance studies, outline three biases that might be impacting Bryan’s ability to make better investing decisions. For each bias, explain them in relation to Bryan’s situation [6 Marks]

Human Bias (any 3 of the 5 below)
[1 Mark Each]
Explanation (any 3 of the 5 below)
[1 Mark Each]

Competency Area: Client Relationship and Practice Management
Competency Statement: Behavioural Finance, Personality traits
Knowledge Statement: Adapt communication based on the client’s age, needs and life circumstances


 

Sample Case: Bryan’s Multiple Challenges [23 Marks]

3. Because Jason is eligible to receive the DTC, he is allowed to open a Registered Disability Savings Plan (RDSP). Assuming Jason only contributes the maximum amount to his RDSP to qualify for the maximum yearly Canadian Disability Savings Grant (CDSG) of $3,500 per year, what will his RDSP grow to by 65 if he earns 4% and makes his contributions at the beginning of the year? Note: Jason is not eligible to receive the Canadian Disability Savings Bond (CDSB) [9 Marks]

For each item below, provide the correct amount
[1 Mark Each]
Yearly Contribution Required to receive Maximum CDSG
Lifetime CDSG grant available
Maximum Lifetime contributions to an RDSP

Competency Area: Asset and Liability Management
Competency Statement: Savings Planning
Knowledge Statement: Analyze the advantages and disadvantages of asset and liability management strategies in relation to the client’s goals and objectives


 

Part A: Value of Jason’s RDSP after CDSG grants and contributions cease [1 Mark] Supporting Calculations
[2 Marks]
N =
I =
PV =
PMT =
FV =
MODE BGN
Part B: Value of Jason’s RDSP until age 65
[1 Mark]
Supporting Calculations
[2 Marks]
N =
I =
PV =
PMT =
FV =
MODE BGN

Competency Area: Financial Management
Competency Statement: Savings Planning
Knowledge Statement: Calculates required rate of return to reach client’s objectives