[GDFP] Graduate Diploma of Financial
Planning Certification Exam Preparation
Question 1. **Which of the following is the primary purpose of the FAS Code of Ethics Best
Interests Duty?**
A) To maximize advisor commissions
B) To ensure advice is aligned with the client’s financial goals and needs
C) To reduce the regulator’s workload
D) To promote the sale of proprietary products
Answer: B
Explanation: The Best Interests Duty requires advisors to act in the best interests of the client,
placing the client’s objectives above the advisor’s own interests.
Question 2. **Under ASIC’s regulatory framework, which entity is responsible for handling client
complaints against financial planners?**
A) Australian Taxation Office (ATO)
B) Australian Securities and Investments Commission (ASIC)
C) Australian Financial Complaints Authority (AFCA)
D) Tax Practitioners Board (TPB)
Answer: C
Explanation: AFCA is the external dispute resolution scheme that manages complaints about
financial services providers.
Question 3. **Which of the following AML/CTF measures is mandatory for all Australian
financial services licensees?**
A) Conducting annual external audits of all client accounts
B) Implementing a risk‑based client identification and verification programme
C) Submitting quarterly financial statements to the regulator
D) Providing free financial advice to low‑income clients
, [GDFP] Graduate Diploma of Financial
Planning Certification Exam Preparation
Answer: B
Explanation: Licensees must have an AML/CTF program that includes client identity verification
and ongoing monitoring based on risk.
Question 4. **Professional indemnity insurance for a financial planner must primarily protect
against which type of claim?**
A) Loss of market value of investments
B) Breach of confidentiality
C) Negligence or breach of professional duty leading to client loss
D) Failure to meet sales targets
Answer: C
Explanation: Professional indemnity covers claims arising from professional negligence, errors,
or omissions that cause client loss.
Question 5. **If a client’s portfolio is heavily impacted by rising inflation, which asset class is
traditionally considered the most inflation‑protective?**
A) Cash deposits
B) Government bonds with fixed coupons
C) Real estate investment trusts (REITs)
D) High‑yield corporate bonds
Answer: C
Explanation: REITs often own property assets that can adjust rents with inflation, providing a
hedge against rising price levels.
Question 6. **Which of the following legal structures limits the personal liability of its owners to
the amount of their investment in the business?**
A) Sole trader
, [GDFP] Graduate Diploma of Financial
Planning Certification Exam Preparation
B) Partnership
C) Company (Pty Ltd)
D) Unincorporated association
Answer: C
Explanation: A company is a separate legal entity, and shareholders’ liability is limited to their
share capital.
Question 7. **The present value of $10,000 to be received in 5 years, discounted at an annual
rate of 6%, is closest to:**
A) $7,470
B) $7,940
C) $8,300
D) $9,200
Answer: B
Explanation: PV = 10,000 / (1.06)^5 ≈ 7,940.
Question 8. **Which element is NOT required for a contract to be legally enforceable in
Australia?**
A) Offer and acceptance
B) Consideration
C) Written document signed by both parties
D) Intention to create legal relations
Answer: C
Explanation: Contracts can be oral; a written, signed document is not a legal requirement for
enforceability.
, [GDFP] Graduate Diploma of Financial
Planning Certification Exam Preparation
Question 9. **Which of the following is taxed as assessable income for an individual under
Australian income tax law?**
A) Non‑taxable government pension
B) Capital gains from the sale of a primary residence
C) Interest earned on a term deposit
D) Child support payments received
Answer: C
Explanation: Interest income is assessable and must be declared in the tax return.
Question 10. **A small business owner sells a depreciating asset for $30,000 with a cost base of
$50,000. What is the capital gain or loss?**
A) Capital gain of $20,000
B) Capital loss of $20,000
C) No capital gain or loss
D) Capital gain of $30,000
Answer: B
Explanation: Capital loss = Sale price – Cost base = 30,000 – 50,000 = –20,000.
Question 11. **Which Fringe Benefits Tax (FBT) exemption applies to a vehicle that is used
solely for work‑related travel?**
A) No exemption – all private use is taxable
B) Exempt if the vehicle is a hybrid model
C) Exempt if the vehicle is a “car‑only” benefit and the employee provides a logbook proving
100% business use
D) Exempt for the first $5,000 of the vehicle’s value
Answer: C
Planning Certification Exam Preparation
Question 1. **Which of the following is the primary purpose of the FAS Code of Ethics Best
Interests Duty?**
A) To maximize advisor commissions
B) To ensure advice is aligned with the client’s financial goals and needs
C) To reduce the regulator’s workload
D) To promote the sale of proprietary products
Answer: B
Explanation: The Best Interests Duty requires advisors to act in the best interests of the client,
placing the client’s objectives above the advisor’s own interests.
Question 2. **Under ASIC’s regulatory framework, which entity is responsible for handling client
complaints against financial planners?**
A) Australian Taxation Office (ATO)
B) Australian Securities and Investments Commission (ASIC)
C) Australian Financial Complaints Authority (AFCA)
D) Tax Practitioners Board (TPB)
Answer: C
Explanation: AFCA is the external dispute resolution scheme that manages complaints about
financial services providers.
Question 3. **Which of the following AML/CTF measures is mandatory for all Australian
financial services licensees?**
A) Conducting annual external audits of all client accounts
B) Implementing a risk‑based client identification and verification programme
C) Submitting quarterly financial statements to the regulator
D) Providing free financial advice to low‑income clients
, [GDFP] Graduate Diploma of Financial
Planning Certification Exam Preparation
Answer: B
Explanation: Licensees must have an AML/CTF program that includes client identity verification
and ongoing monitoring based on risk.
Question 4. **Professional indemnity insurance for a financial planner must primarily protect
against which type of claim?**
A) Loss of market value of investments
B) Breach of confidentiality
C) Negligence or breach of professional duty leading to client loss
D) Failure to meet sales targets
Answer: C
Explanation: Professional indemnity covers claims arising from professional negligence, errors,
or omissions that cause client loss.
Question 5. **If a client’s portfolio is heavily impacted by rising inflation, which asset class is
traditionally considered the most inflation‑protective?**
A) Cash deposits
B) Government bonds with fixed coupons
C) Real estate investment trusts (REITs)
D) High‑yield corporate bonds
Answer: C
Explanation: REITs often own property assets that can adjust rents with inflation, providing a
hedge against rising price levels.
Question 6. **Which of the following legal structures limits the personal liability of its owners to
the amount of their investment in the business?**
A) Sole trader
, [GDFP] Graduate Diploma of Financial
Planning Certification Exam Preparation
B) Partnership
C) Company (Pty Ltd)
D) Unincorporated association
Answer: C
Explanation: A company is a separate legal entity, and shareholders’ liability is limited to their
share capital.
Question 7. **The present value of $10,000 to be received in 5 years, discounted at an annual
rate of 6%, is closest to:**
A) $7,470
B) $7,940
C) $8,300
D) $9,200
Answer: B
Explanation: PV = 10,000 / (1.06)^5 ≈ 7,940.
Question 8. **Which element is NOT required for a contract to be legally enforceable in
Australia?**
A) Offer and acceptance
B) Consideration
C) Written document signed by both parties
D) Intention to create legal relations
Answer: C
Explanation: Contracts can be oral; a written, signed document is not a legal requirement for
enforceability.
, [GDFP] Graduate Diploma of Financial
Planning Certification Exam Preparation
Question 9. **Which of the following is taxed as assessable income for an individual under
Australian income tax law?**
A) Non‑taxable government pension
B) Capital gains from the sale of a primary residence
C) Interest earned on a term deposit
D) Child support payments received
Answer: C
Explanation: Interest income is assessable and must be declared in the tax return.
Question 10. **A small business owner sells a depreciating asset for $30,000 with a cost base of
$50,000. What is the capital gain or loss?**
A) Capital gain of $20,000
B) Capital loss of $20,000
C) No capital gain or loss
D) Capital gain of $30,000
Answer: B
Explanation: Capital loss = Sale price – Cost base = 30,000 – 50,000 = –20,000.
Question 11. **Which Fringe Benefits Tax (FBT) exemption applies to a vehicle that is used
solely for work‑related travel?**
A) No exemption – all private use is taxable
B) Exempt if the vehicle is a hybrid model
C) Exempt if the vehicle is a “car‑only” benefit and the employee provides a logbook proving
100% business use
D) Exempt for the first $5,000 of the vehicle’s value
Answer: C
