CTFA Exam Format | CTFA Course Contents | CTFA Course Outline | CTFA Exam Syllabus | CTFA Exam Objectives

- Understand and articulate fiduciary principles. - What it means to be a fiduciary - Different fiduciary standards – ’40 act, reg bi, Uniform Trust Code - Fiduciary standard vs. Suitability standard (moved from ethics section) - The prudent investor rule - OCC Reg 12 CFR 9 - Understand and articulate fiduciary responsibilities. - Powers - Duties - Uniform Acts/Codes - Safekeeping of Assets - Environmental Issues - Accountability – Who assumes/is ascribed fiduciary responsibility - Identify and interpret duties related to legal structure. - Different legal entity types commonly used to hold assets – Trust, LLC, LLP, IRA, TIC, JTWROS, SOLE PROPRIETORSHIP - How different legal entity structures align to meet client’s objectives - How to identify structural challenges/conflicts - Asset location (taxable, tax deferred) and how it informs asset allocation - Develop a financial plan and/or investment selection. - Goals - Time horizon - Risk tolerance - Income sources - Review of a client’s tax return - Net worth - Educational planning - Cash flow analysis - Budget - Insurance types and usage - Debt management - Identify and interpret types of ownership interests. - Powers of appointment - Types of joint ownership - Joint tenancy with right of survivorship (JTWROS) - Tenancy in common (TIC) - Tenancy by entirety (TBE) - Controlling document - Beneficiary designations - Transfer on death (TOD)/payable on death (POD) - Community property versus separate property - Educate clients in regard to estate planning. - Current client goals - Probate versus non-probate assets - Powers of appointment - Incapacity - Disclaimers - Gifting techniques for trust and individuals to optimize transfer tax planning - Planning and administering for clients with special needs - Philanthropic intent and options to optimize transfer tax planning - Digital assets - Modeling an estate plan flow with terms and dollar calculations - Knowledge of estate and gift tax limits and unused exemptions - Business succession planning - Educational planning - Consult and implement retirement strategies. - Types of IRA accounts - Qualified versus non-qualified plans - Social Security - Medicare/Medicaid - Employee stock ownership plans (ESOPs) - Net unrealized appreciation (NUA) - Educate clients regarding the use of insurance to mitigate risk. - Life insurance - Health insurance - Property and casualty insurance - Homeowner’s insurance - Disability insurance - Long-term care insurance - Umbrella insurance - Malpractice insurance - Analyze and interpret income tax reporting. - Individual income tax - Fiduciary tax - Foundations, charitable trusts and split interest trusts tax - Business tax (LLC, LLP, FLP, S Corp, C Corp) - Foreign tax reporting requirements - Identify, communicate, and apply generation-skipping transfer tax (GSTT). - Skip persons/trusts - GSTT - Taxable distributions - Taxable termination - Planning strategy - Understand and explain fiduciary income tax. - Simple versus complex - Grantor trusts - Fiscal and calendar year end filings - Distributable net income (DNI) - 65-day rule - 645 election - Right of withdrawal power - Treatment of capital gains - Foreign tax withholding - Understand and apply knowledge of federal estate and gift tax. - Determine taxable estate assets - Estate tax - Marital and charitable deductions - Portability - Payment of taxes - Gift tax exclusion - Potential difference between federal and state transfer taxes - Coordinate distributions from retirement vehicles. - Required minimum distributions - Ability to withdraw - Penalties for early withdrawals - Rollovers - Qualified charitable distribution (QCD) - Profile and understand a client’s risk appetite. - Inquiry/profiling techniques to learn about the client, their financial resources and all relevant assets - Risk dimensions (market risk, liquidity risk, concentration risk, credit risk, reinvestment risk, inflation risk, time horizon risk) and client’s appetite for risks - Recommend an appropriate investment strategy based on goals and objectives. - Asset allocation and asset location (taxable, tax-deferred structures) - Prudent investor rule - Concentration of assets - Time horizon - Client needs - Trust provisions - Risk tolerance - Current and remainder beneficiary needs - Tax considerations - Measure, compare, and communicate investment performance for clients. - Time-weighted versus dollar-weighted - Risk adjusted - Benchmarks and indices - Identify economic and market outlook concepts. - Monetary policy - Government fiscal policy - Inflation - Interest rates - Gross domestic product - International currency/assets/markets - Economic cycles - Implement multi-asset class investment strategy. - Equities - Fixed income - Convertible securities - Mutual funds - Closely held businesses - Real estate and farms - International assets - Master limited partnerships - Stock options - ETFs - Oil, gas, and minerals - Commodities - Currencies - Precious metals - Prohibited Industries - Alternative investments - Environmental, social and governance (ESG) - Create and manage portfolios. - Modern portfolio theory - Equity investment management approaches - Fixed income investment management approaches - Hedging strategies - Tax efficient management - Review nature and characteristics of legal entity structure and account capacity. - Trusts - Estates - Guardianships/conservatorships - Custodians - Agencies - Review and interpret trust provisions. - Trust interests (current, remainder, vested) - Understanding beneficiary financial situation - Right to statements and copy of trust agreement - Mandatory and discretionary distributions (full versus limited) - Ascertainable standards (HEMS) - Power to adjust - Uniform Trust Code (UTC) - Rights of withdrawal - Crummey powers - Unitrust and annuity calculations - Final distributions and settlement - Classify transactions using principal and income accounting. - Fee calculation and allocation - Real estate income and expenses - Income (interest, royalty, rental), dividends, and capital gains - Taxes - Additional expenses - Governing document versus statutory guidelines - Distribution criteria (from income, principal, P&I) - Determine roles and fiduciary responsibilities. - Trustee’s duties and powers - Financial power of attorney - Grantor powers - Directed Trustee - Trust protector - Power to decant/reform - Apply and administer common types of trusts. - Revocable trusts - Irrevocable trusts - Marital trusts (Examples for Internal Blueprint Only: QTIP/SLAT/Q-DOT) - Irrevocable life insurance trusts (Examples for Internal Blueprint Only: ILIT) - Split interest trusts (Examples for Internal Blueprint Only: GRIT/GRAT/GRUT) - Charitable interest trusts (Examples for Internal Blueprint Only: CRUT/CRAT/CLAT/CLUT) - Intentionally defective trusts (Examples for Internal Blueprint Only: IDGT/BDIT) - Qualified personal residence trusts (Example for Internal Blueprint Only: QPRT) - Pet trusts - Blind trust - Silent trusts - Dynasty trust - Special needs/supplemental needs trusts - Other legal entity structures holding assets (LLC, LLP, corporation, partnerships) - Maintain compliance with Bank Secrecy Act (BSA)/Anti-Money Laundering (AML). - Source of funds - Identity of beneficial owners, beneficiaries, and other interested parties - Expected transactions as they relate to all interested parties - BSA - AML - Suspicious Activity Reports (SAR) - Execute the pre-acceptance process to eliminate potential risk. - Your client (KYC) - OFAC - Capacity - Due diligence - Enhanced due diligence situations - Foreign clients and beneficiaries - Unique assets - Concentrated assets - Environmental site assessment and compliance with Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) - Review and remediate overdrafts. - Principal and income accounting - Uniform Principal and Income Act (UPIA) - Unauthorized loans (e.g., Regulation O) - Perform administrative reviews pursuant to internal policies or external regulations. - Regulation 9 - Internal policies - Asset allocation in alignment with investment policy statement - Comprehend and articulate fiduciary responsibilities. - Duty of loyalty - Duty to inform - Duty of impartiality - Duty to account - Breach of trust and personal liability - Confidentiality - Privacy - Undue influence - Disclosure of compensation - Recognize the signs of financial and elder abuse and how and when to report. - Definition of elderly and vulnerable adults - Change in client behavior - Client competence/capacity - Clarify the limits of capacity to advise. - Unauthorized practice of law - Limitation of tax advice - Identify, disclose, and/or avoid potential conflicts of interest. - Self-dealing - Gifts to and from clients and vendors - Business solicitation - Compensation arrangements - Related parties and affiliates - Proprietary investments - Adhere to investment regulatory requirements. - Insider information - Equal treatment of accounts - Directed brokerage - Disclosures - Prudent investor standards - Control person - Summarize and document the client relationship. - Family dynamics and extended relationships of clients - Family tree - Related parties - Other trusted advisors and designations - Differing beneficial interests - Cash needs versus wants and balancing interests - Overall relationship net worth - Alternate solutions - Manage client expectations. - Document limitation - Monte Carlo simulations – cash needs and projections - Communication preferences and frequency - Timing of deliverables - Tax reporting - Capacity and role - Behavioral finance - Evaluate and develop new business. - Asset retention strategies - Developing relationships with internal/external partners or professionals - Strategies to encourage referrals