CFP Cheat Sheet 2026

The 30 highest-yield CFP facts, distilled from real exam questions. Print it, save it as a PDF, or study it here — free, no sign-up.

1. Under per stirpes distribution, if a beneficiary predeceases the testator, the deceased beneficiary's share passes to: → The deceased beneficiary's own descendants by representation
2. When in the business cycle do demand and hiring start to slow down, while inflation is trending up and unemployment is still declining but more slowly? → Peak phase
3. Under ERISA, which party is legally responsible for ensuring a qualified retirement plan operates solely in the interest of plan participants? → The plan fiduciary
4. Which type of annuity provides the highest initial payout but leaves a surviving spouse with no continued income? → Life only (straight life) annuity
5. A client purchased stock for $10,000 and sold it 8 months later for $16,000. What is the federal tax treatment of the $6,000 gain? → Short-term capital gain taxed as ordinary income
6. What does the 'safe harbor' rule under Section 4% withdrawal rate assume about a retirement portfolio? → A portfolio of 50–75% stocks can sustain 4% annual withdrawals for 30 years
7. A client's estate is valued at $14 million at death in 2024. Assuming no prior taxable gifts, how much is subject to federal estate tax? → Approximately $700,000 (excess over $13.61M exemption)
8. The USA PATRIOT Act requires financial institutions to implement Customer Identification Programs (CIP) primarily to combat which risk? → Money laundering and terrorist financing
9. Which type of trust allows the grantor to retain full control during their lifetime and avoids probate at death? → Revocable living trust
10. In estate planning, what is the primary advantage of a Charitable Remainder Trust (CRT) for a client with highly appreciated stock? → Avoids immediate capital gains tax on the donated asset and provides an income stream
11. Which of the following is an example of 'anchoring bias' affecting a financial planner's interpretation of research? → Over-relying on the first piece of information encountered when assessing study quality
12. Which CFP Board Standard addresses the obligation to keep client information confidential and outlines specific exceptions where disclosure is permitted? → Standard B.5 — Confidentiality of Client Information
13. What is the benefit of interdisciplinary collaboration in Certified Financial Planner practice? → It brings diverse expertise and perspectives that improve outcomes and innovation
14. A client wants to retire at age 62. Which Social Security strategy should they consider regarding claiming benefits? → Wait until full retirement age (FRA) or later to maximize monthly benefit
15. Which of the following BEST describes the purpose of a compliance calendar in a financial planning practice? → To schedule recurring regulatory deadlines and internal review tasks
16. Which Social Security claiming strategy is generally most beneficial for a healthy single individual who expects to live past age 80? → Delay claiming until age 70 to maximize the monthly benefit
17. A researcher conducting a survey on estate planning intentions sends questionnaires to 1,000 clients; only 120 respond. The primary concern is: → Non-response bias, as non-responders may differ systematically from responders
18. What role does peer review play in Certified Financial Planner practice? → It provides quality assurance and professional development through collegial evaluation
19. What is the 'step-up in basis' rule as applied to inherited assets? → The asset's cost basis is reset to its fair market value at the decedent's date of death
20. A client is in the 32% marginal tax bracket. A municipal bond yields 4.2%. What is the taxable equivalent yield? → 6.18%
21. A study randomly assigns 500 households to either receive a financial planning intervention or a control condition. This design is best described as: → True experimental (randomized controlled trial)
22. When converting a traditional IRA to a Roth IRA, how is the converted amount taxed? → It is taxed as ordinary income in the year of conversion
23. Maria, a self-employed consultant earning $120,000 net, wants to maximize retirement savings. She has no employees. Which plan allows the highest contribution? → Solo 401(k) with employee + employer contributions
24. What is the primary value of case study analysis in Certified Financial Planner training? → Developing critical thinking by applying theory to realistic professional scenarios
25. The annual compliance review required of SEC-registered investment advisers is designed to: → Assess the adequacy and effectiveness of the firm's compliance policies and procedures
26. A 55-year-old employee separates from service. Under the IRC Section 72(t) 'Rule of 55,' which account allows penalty-free withdrawals? → Current employer's 401(k)
27. Which of the following assets passes outside of probate by operation of law? → A bank account held as joint tenancy with right of survivorship
28. What is the federal estate tax exemption amount per individual in 2024? → $13.61 million
29. What is 'basis' in the context of capital gains taxation? → The original cost of an asset, adjusted for improvements, depreciation, and other factors
30. A client has $500,000 in a taxable account with a $200,000 cost basis. If they donate the appreciated securities directly to a charity, what is the tax benefit? → Deduction of $500,000 FMV with no capital gains tax due