PFS Study Guide 2026
Everything you need to pass the PFS exam in one place: the exam format, every topic to study, real practice questions with explanations, flashcards, and full-length practice tests. Free, no sign-up needed.
📋 PFS Exam Format at a Glance
📚 PFS Topics to Study (69)
✍️ Sample PFS Questions & Answers
1. When reading a defined benefit plan summary, a client sees the term 'normal retirement age.' What does this typically signify?
Normal retirement age in a pension plan is the age set by the plan at which a participant qualifies for unreduced retirement benefits.
2. A business owner sells goodwill from a sole proprietorship. How is the gain on self-created goodwill generally taxed?
Self-created goodwill is a capital asset; when sold, the gain qualifies for long-term capital gain treatment if the business was held for more than one year.
3. Which behavioral finance technique involves presenting investment choices in terms of outcomes rather than percentages to improve client comprehension?
Framing refers to how information is presented, and presenting outcomes in concrete terms (e.g., dollar amounts) rather than percentages can significantly affect client decision-making.
4. A 401(k) plan that passes the ADP test allows higher-paid employees to contribute more. What does ADP stand for?
ADP stands for Actual Deferral Percentage; the test compares average deferrals of highly compensated employees to non-highly compensated employees to prevent discrimination.
5. A PFS practitioner sets a SMART goal for a client to accumulate $1,000,000 in retirement assets by age 65. The 'M' in SMART requires that this goal be:
In the SMART framework, 'M' stands for Measurable, meaning the goal includes a specific, quantifiable target such as a dollar amount.
6. In Communication with Teachers & Parents, what is the FIRST step a PFS professional should take when encountering a new case or situation?
In Communication with Teachers & Parents, a thorough initial assessment ensures all relevant factors are identified before deciding on an appropriate course of action. This systematic approach is fundamental to Personal Financial Specialist practice.