Financial Advisor Cheat Sheet 2026

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

1. Which of the following must a financial advisor disclose to clients under Form ADV Part 2? → Material conflicts of interest
2. Which practice best demonstrates a fiduciary standard when managing client assets? → Placing client interests above personal financial gain
3. When projecting retirement income sustainability, which Monte Carlo simulation input has the greatest impact on the probability of portfolio success? → Withdrawal rate
4. A client gifts a financial advisor tickets to a major sporting event worth $350. Under FINRA rules, what is the gift limit per person per year? → $100
5. Which type of risk CANNOT be eliminated through diversification? → Systematic (market) risk
6. A client's portfolio has a beta of 1.4. If the market rises 10%, what is the expected portfolio return according to the Capital Asset Pricing Model (CAPM)? → 14%
7. Which type of employer retirement plan allows employees to make pre-tax contributions and employers to make matching or profit-sharing contributions? → 401(k) plan
8. A client calls in a panic after seeing news about market volatility. What is the MOST appropriate first response? → Acknowledge their concerns and review their long-term financial plan together
9. Under IRC Section 1035, which exchange is NOT a tax-free exchange? → Annuity exchanged for a life insurance policy
10. Which life insurance policy type combines a permanent death benefit with a cash value component that grows at a guaranteed interest rate? → Whole life insurance
11. A Special Needs Trust (SNT) is structured to provide supplemental support to a disabled beneficiary without disqualifying them from: → Government benefit programs like Medicaid and SSI
12. The efficient market hypothesis (EMH) in its strong form states that: → All public and private information is fully reflected in stock prices
13. Which of the following best describes a fiduciary duty in the context of a financial advisor? → Acting in the client's best interest at all times
14. A trustee's duty to keep accurate records and provide accountings to beneficiaries falls under which fiduciary obligation? → Duty to inform and report
15. What activities are regulated and supervised by (FINRA) in the United States? → Brokerage firms
16. Which type of annuity provides a guaranteed income stream that cannot be outlived but has no residual value for heirs? → Immediate life-only annuity
17. Which of the following is the difference between an investment's actual return and its predicted return? → Abnormal Return
18. Under the Uniform Fiduciary Income and Principal Act (UFIPA), a trustee may make an 'equitable adjustment' to: → Reallocate receipts between income and principal to achieve fairness
19. A client receives a large year-end bonus. Which strategy best reduces the current-year tax impact? → Contribute the maximum to a 401(k) to reduce taxable income
20. What is 'churning' in the context of financial advisory compliance? → Excessive trading in a client account to generate commissions
21. Which document must an investment adviser deliver to a prospective client before or at the time of entering an advisory contract? → Form ADV Part 2 (brochure)
22. Which fundamental insurance principle holds that a policyholder cannot profit from an insurance claim beyond their actual financial loss? → Principle of indemnity
23. Which estate planning technique uses the annual gift tax exclusion to remove assets from an estate by making direct gifts each year? → Annual gifting program using the annual exclusion
24. A self-employed client earns $120,000 net from her business. What is the maximum deductible SEP-IRA contribution she can make for 2024? → $22,040 (approximately 20% of net self-employment income after the SE tax deduction)
25. A client dies without a valid will. How are her assets distributed? → State intestacy laws determine distribution, typically prioritizing spouse and children
26. The Series 66 exam combines the content of which two exams? → Series 63 and Series 65
27. A client has $20,000 in short-term capital gains and $15,000 in long-term capital losses. What is the net tax result? → $5,000 short-term capital gain taxed at ordinary income rates
28. An 'elimination period' in a disability income policy is BEST described as: → A waiting period the insured must satisfy before benefits begin
29. Which definition of disability in a disability income insurance policy is most favorable to the insured? → Own occupation definition
30. A dynasty trust is designed primarily to: → Pass wealth across multiple generations while minimizing transfer taxes