Leena and Harry are married and hold RRSPs with a value exceeding $500,000. They are concerned about their final tax liability and want to cover the taxes after they have both died. What would their financial planner recommend them to implement in order for the couple to achieve the objective?

• A. Transfer the funds into an inter vivos trust.
• B. Set up a testamentary trust through their wills.
• C. Purchase a joint last-to-die permanent life insurance policy.
• D. Update the beneficiary of the RRSP plans to each other.

Alexander and Irena, age 30 and 32 respectively, are married and have been working full-time for one year.
They have a daughter, age 3, and are expecting their second child. They recently bought a home with a mortgage balance of $390,000 at 4% amortized over 25 years. Their financial planner is trying to determine their tolerance for risk. After completing the life-cycle analysis, how can their financial planner explain the stage in which the couple finds themselves and the risk tolerance associated with it?

• A. They are at the consolidation stage where they can tolerate moderate to high level of risk.
• B. They are at the financial independence stage where their tolerance of risk is low.
• C. They are at the accumulation stage where they can tolerate a high level of risk.
• D. They are at the gifting stage where their tolerance of risk is low.

A high-income parent gives $80,000 to a 12-year-old child to invest in a non-registered bond fund. The parent expects the child to report the annual interest income. What rule should the planner identify?

• A. Attribution rules may tax the interest income back to the parent.
• B. The child must contribute the amount to an RRSP.
• C. Attribution rules apply only when property is transferred to a spouse.
• D. The income is always taxed to the child because the account is in the child's name.

Dianna is visiting with Karen, her Financial Planner, and is excited to report that she has just bought her dream home. She has also let Karen know she Is meeting with an insurance representative to purchase a whole life insurance to cover her 20-year mortgage. Why might Karen suggest Dianna consider term life insurance instead?

• A. The cost of premiums is lower than whole life.
• B. The client's health may deteriorate as she gets older.
• C. It is better suited for long term insurance needs.
• D. The term policy has a cash value, which can be borrowed against.

Mary, an accredited financial planner, recently met with clients Michael and Radha. They are high- net-worth clients who are in their mid-40s. Michael is a heavy equipment operator at a local oil field, and Radha is a homemaker. They are ready to retire in 10 years and very excited to start planning for the next chapter in their lives. Mary explained her planning process, her accreditation, and her remuneration. When Mary presented the client agreement letter, both clients were surprised. They said they did not know why they would sign a letter to get advice on their own finances. How should Mary answer their question?

• A. The client agreement letter outlines the overall investment strategy that is being recommended by Mary to Michael and Radha.
• B. The client agreement letter is a non-legally binding contract that outlines the business relationship between the clients and the financial institution.
• C. The client agreement outlines the specific financial planning strategies that will be implemented to help both Michael and Radha achieve their financial goals.
• D. The client agreement letter sets expectation for the partnership between, the client, the financial planner and their partners.