AWMA Exam 1Exam Questions Answered
Correctly (Qs) 2026 update
Which one of the following characteristics is more correct concerning younger wealthy individuals
(millennials and GenXers)?
A) Younger wealthy individuals are seeking more technological options in financial planning.
B) Younger wealthy individuals have not experienced significant bear markets.
C) Younger wealthy individuals have directly opposite financial needs as compared to baby boomers.
D) Younger wealthy individuals likely want to be advised by one of their own generation. - CORRECT
ANSWERS A) Younger wealthy investors (millennials and GenXers) are seeking fresh
approaches to financial planning, including more technological options. In addition, young clients also
have been through fewer years of investing but have experienced several significant bear markets. Mod
1
One of the most important life goals of wealthy individuals is
A) protecting wealth.
B) assuring their retirement lifestyle.
C) minimizing taxes.
D) travelling the world. - CORRECT ANSWERS D) The most frequently stated life goals for
wealthy individuals are having good health, travelling the world, and achieving financial success. To
achieve financial success, the most common financial goals are protecting wealth, assuring retirement
lifestyle, minimizing taxes, and leaving an estate to their heirs. Mod 1
One of the most important financial goals of wealthy individuals is
A)leaving an estate to their heirs.
B)having good health.
,C)none of these.
D)travelling the world. - CORRECT ANSWERS A) To achieve financial success, the most
common financial goals are protecting wealth, assuring retirement lifestyle, minimizing taxes, and
leaving an estate to their heirs. The most frequently stated life goals for wealthy individuals are having
good health, travelling the world, and achieving financial success. Mod 1
Which one of the following statements is true regarding sustainable and responsible investments (SRIs)?
A) Shareholder activism is a part of SRIs.
B) Baby boomers are the most likely demographic to invest in SRIs.
C) SRIs provide lower returns, but are a "feel-good" option for investors.
D) SRIs provide only a negative filter of staying away from certain assets. - CORRECT ANSWERS
A) Shareholder activism also plays a part in getting companies to listen by passing shareholder
resolutions. Sustainable and responsible investing has been found to be of importance to Gen Xers and
millennials. Several studies have now shown taking into account ESG factors actually increases long-term
returns. For SRI investments, the adviser needs to set up a series of filters to determine a client's specific
wants for a sustainable fund. For instance, tobacco may be a main prohibition for one client, while
religious aspects may be a positive filter for that same or another client. Mod 1
Concerning control of assets in a private foundation versus a donor-advised fund, which one of the
following aspects is true for a donor-advised fund?
A)Remains with founder's values
B) Needs lengthy IRS approval
C) Easier and less expensive to launch
D) Must pay out a certain percentage each year - CORRECT ANSWERS C) Donor-advised
funds (DAFs) are growing in popularity and have the advantage of being easier and cheaper to launch
and not requiring the lengthy IRS approval that private foundations need. Values may change with a
DAF, as major contributors have input into this type of charitable fund. In addition, only private
foundations must make payouts each year; DAFs have flexibility with this. Mod 1
,If a high net worth (HNW) business owner came to your office, what would you expect her financials to
show, as compared to a HNW non-business owner?
A) About the same income, with more assets and higher net worth
B) About the same income with more assets, yet lower net worth
C) Higher income, with fewer assets and lower net worth
D) Lower income, with fewer assets and lower net worth - CORRECT ANSWERS A) Income is
similar between all HNW professions; however, assets and net worth include business assets, so more
assets and higher net worth are common for HNW business owners. Many business owners are exposed
to a large amount of unsystematic risk because a significant amount of their capital is often tied up in
their business. Mod 1
When considering the social impact goals of a high net worth client, wealth planners should expect
those clients to
A)not want their planner to be involved in the charitable concern.
B)want their children to also develop charitable tendencies.
C) only want the charitable concern in order to reduce tax exposure.
D) overwhelmingly donate assets and not volunteer their time. - CORRECT ANSWERS B) The
reasons high net worth individuals make charitable donations are largely humanitarian in nature—only
half of these individuals donate to reduce tax exposure as a secondary concern. It is important for
advisers to be aware of and research any social impact their clients find important. In addition, the
preferred methods of accomplishing social impact in the U.S., as compared to worldwide, are more
religious and also include more aspects that are nonfinancial, such as volunteerism. Mod 1
As compared to younger high net worth individuals, older wealthy individuals describe their financial
needs as more geared toward
A)managing cash and credit.
B) digital meetings.
, C)investing outside of equities.
D) obtaining and using credit. - CORRECT ANSWERS A) Older clients describe their needs as
straightforward: managing cash and credit, and growing investments. Younger clients indicate more
complex needs, such as a reluctance to invest in equities, interest in digital meetings, and a propensity
toward using credit. Mod 1
Which one of the following top overall concerns was the same for those wealthy clients under 30 and
above 60?
A)Understanding of risk tolerance
B)Fee transparency
C)Strong investment performance
D)Ensuring children's well-being - CORRECT ANSWERS C) The top wealth concerns of
wealthy clients under 30 and above 60 differ greatly, but one area of agreement is wanting strong
investment performance. Under-30 clients generally want efficiency and transparency—they want to
understand what is being proposed and the costs and risks involved. They also will not hesitate to go to
other individuals or sources in order to better understand their options. This is not the case with a
typical over-60 client, who will work with just one adviser whom they trust, and will want that adviser to
have a strong understanding of their needs and risk tolerance. In addition, younger investors are more
concerned with child care and older investors with obtaining advice about risk tolerance. Mod 1
The top reasons for a wealthy client to leave an adviser have been found to be in the general category of
A)poor firm notoriety.
B)high fees.
C)poor investment advice.
D) poor communication. - CORRECT ANSWERS D) The top reasons a wealthy client would
leave an adviser, with the most egregious reason being first, are: not returning phone calls in a timely
manner, not being proactive with contact, not providing good ideas and advice, and not returning emails
in a timely manner. Mod 1
Correctly (Qs) 2026 update
Which one of the following characteristics is more correct concerning younger wealthy individuals
(millennials and GenXers)?
A) Younger wealthy individuals are seeking more technological options in financial planning.
B) Younger wealthy individuals have not experienced significant bear markets.
C) Younger wealthy individuals have directly opposite financial needs as compared to baby boomers.
D) Younger wealthy individuals likely want to be advised by one of their own generation. - CORRECT
ANSWERS A) Younger wealthy investors (millennials and GenXers) are seeking fresh
approaches to financial planning, including more technological options. In addition, young clients also
have been through fewer years of investing but have experienced several significant bear markets. Mod
1
One of the most important life goals of wealthy individuals is
A) protecting wealth.
B) assuring their retirement lifestyle.
C) minimizing taxes.
D) travelling the world. - CORRECT ANSWERS D) The most frequently stated life goals for
wealthy individuals are having good health, travelling the world, and achieving financial success. To
achieve financial success, the most common financial goals are protecting wealth, assuring retirement
lifestyle, minimizing taxes, and leaving an estate to their heirs. Mod 1
One of the most important financial goals of wealthy individuals is
A)leaving an estate to their heirs.
B)having good health.
,C)none of these.
D)travelling the world. - CORRECT ANSWERS A) To achieve financial success, the most
common financial goals are protecting wealth, assuring retirement lifestyle, minimizing taxes, and
leaving an estate to their heirs. The most frequently stated life goals for wealthy individuals are having
good health, travelling the world, and achieving financial success. Mod 1
Which one of the following statements is true regarding sustainable and responsible investments (SRIs)?
A) Shareholder activism is a part of SRIs.
B) Baby boomers are the most likely demographic to invest in SRIs.
C) SRIs provide lower returns, but are a "feel-good" option for investors.
D) SRIs provide only a negative filter of staying away from certain assets. - CORRECT ANSWERS
A) Shareholder activism also plays a part in getting companies to listen by passing shareholder
resolutions. Sustainable and responsible investing has been found to be of importance to Gen Xers and
millennials. Several studies have now shown taking into account ESG factors actually increases long-term
returns. For SRI investments, the adviser needs to set up a series of filters to determine a client's specific
wants for a sustainable fund. For instance, tobacco may be a main prohibition for one client, while
religious aspects may be a positive filter for that same or another client. Mod 1
Concerning control of assets in a private foundation versus a donor-advised fund, which one of the
following aspects is true for a donor-advised fund?
A)Remains with founder's values
B) Needs lengthy IRS approval
C) Easier and less expensive to launch
D) Must pay out a certain percentage each year - CORRECT ANSWERS C) Donor-advised
funds (DAFs) are growing in popularity and have the advantage of being easier and cheaper to launch
and not requiring the lengthy IRS approval that private foundations need. Values may change with a
DAF, as major contributors have input into this type of charitable fund. In addition, only private
foundations must make payouts each year; DAFs have flexibility with this. Mod 1
,If a high net worth (HNW) business owner came to your office, what would you expect her financials to
show, as compared to a HNW non-business owner?
A) About the same income, with more assets and higher net worth
B) About the same income with more assets, yet lower net worth
C) Higher income, with fewer assets and lower net worth
D) Lower income, with fewer assets and lower net worth - CORRECT ANSWERS A) Income is
similar between all HNW professions; however, assets and net worth include business assets, so more
assets and higher net worth are common for HNW business owners. Many business owners are exposed
to a large amount of unsystematic risk because a significant amount of their capital is often tied up in
their business. Mod 1
When considering the social impact goals of a high net worth client, wealth planners should expect
those clients to
A)not want their planner to be involved in the charitable concern.
B)want their children to also develop charitable tendencies.
C) only want the charitable concern in order to reduce tax exposure.
D) overwhelmingly donate assets and not volunteer their time. - CORRECT ANSWERS B) The
reasons high net worth individuals make charitable donations are largely humanitarian in nature—only
half of these individuals donate to reduce tax exposure as a secondary concern. It is important for
advisers to be aware of and research any social impact their clients find important. In addition, the
preferred methods of accomplishing social impact in the U.S., as compared to worldwide, are more
religious and also include more aspects that are nonfinancial, such as volunteerism. Mod 1
As compared to younger high net worth individuals, older wealthy individuals describe their financial
needs as more geared toward
A)managing cash and credit.
B) digital meetings.
, C)investing outside of equities.
D) obtaining and using credit. - CORRECT ANSWERS A) Older clients describe their needs as
straightforward: managing cash and credit, and growing investments. Younger clients indicate more
complex needs, such as a reluctance to invest in equities, interest in digital meetings, and a propensity
toward using credit. Mod 1
Which one of the following top overall concerns was the same for those wealthy clients under 30 and
above 60?
A)Understanding of risk tolerance
B)Fee transparency
C)Strong investment performance
D)Ensuring children's well-being - CORRECT ANSWERS C) The top wealth concerns of
wealthy clients under 30 and above 60 differ greatly, but one area of agreement is wanting strong
investment performance. Under-30 clients generally want efficiency and transparency—they want to
understand what is being proposed and the costs and risks involved. They also will not hesitate to go to
other individuals or sources in order to better understand their options. This is not the case with a
typical over-60 client, who will work with just one adviser whom they trust, and will want that adviser to
have a strong understanding of their needs and risk tolerance. In addition, younger investors are more
concerned with child care and older investors with obtaining advice about risk tolerance. Mod 1
The top reasons for a wealthy client to leave an adviser have been found to be in the general category of
A)poor firm notoriety.
B)high fees.
C)poor investment advice.
D) poor communication. - CORRECT ANSWERS D) The top reasons a wealthy client would
leave an adviser, with the most egregious reason being first, are: not returning phone calls in a timely
manner, not being proactive with contact, not providing good ideas and advice, and not returning emails
in a timely manner. Mod 1
