CFP Exam Memory Techniques

Investment Advisor (ABC)
Advice, Business, Compensation

Perils - Basic (WHARVES/FLT)
Windstorm, Hail, Aircraft, Riot, Vandalism, Vehicles, Explosion, Smoke, Fire, Lightning, and Theft

Perils - Broad (RAFF)
Basic + Rupture of System, Artificially Generated Electricity, Falling Objects, and Freezing of Plumbing

Insurance Exclusions (OPEN WIF)
Ordinance of Law, Power Failure, Earth Movement (Earthquake), Neglect, Nuclear Hazard, War, Intentional Loss, and Flood

T-Notes / T- Bonds Risk (RIP)
Reinvestment, Interest Rate, Purchasing Power

Corporate / Muni Bond Risk (DRIP)
Default, Reinvestment, Interest Rate, Purchasing Power

Government Bond Risk (RIP)
Reinvestment, Interest Rate, Purchasing Power

Accredited Investor (1-2-3 Test)
$1,000,000 Net Worth (excluding residence)
$200,000 individual income
$300,000 joint income

Systematic Risk (PRIME)
Purchasing Power
Reinvestment Rate
Interest Rate
Market
Exchange Rate

Zero Bonds (IP)
Interest Rate, Purchasing Power

Interest Rates Up (UPS)
If interest rates are expected to rise, shorten duration
Shorten Up

Interest Rates Fall (FALLEN)
If interest rates are expected to fall, lengthen duration
Fall - lengthen

High r-squared
Look for the answer with the highest positive alpha
If no alpha, go to highest Treynor

Low r-squared
Look for the answer with the highest Sharpe

Personal Service Corporation (PSC) (HALE)
Health, Accounting, Architectural, Law, Engineering

QTIP (LAME)
Lifetime income interest for spouse
Annual payments to spouse
Mandatory payments to spouse
Exclusively for spouse

For AGI Deductions (4Samish)
4S:
1/2 Self Employment Tax
Self Employment Health Insurance
Self Employment Retirement Contributions
Self Employment Business Expenses

Alimony
Moving
IRA
Student Loan Interest
HSA

Itemized Deductions (My Income Tax Check Comes Monday)
Medical, Interest, Taxes, Casualty, Charitable, Misc

Exclusions from Income (Cap West Work)
Return of Capital

Whole (Worker's Compe, Life Insurance Death Benefit, Bodily Damages)
Education (Scholarships for Tuition, Fees & Books)
Support (Child)
Transfers (Gifts and Bequests)

Work - Fringe Benefits
Meals and Lodging (Premises, Convenience)
Group Term Insurance < 50k
Athletic Facility (Premises, Employees Only)
No Addition Cost Services
Employee Discount (20% Services, Profit % Products)
Employer Provided Eduction ($5,250)
Dependent Care ($5,000)
Employer Provided Adoption