AFP Exam 1 — CSI Applied Financial Planning Certification Examination Exam Blueprint

How to Use This Exam Blueprint

Use this checklist as a practical study map for the Canadian Securities Institute CSI Applied Financial Planning Certification Examination: AFP Exam 1. The exam code is AFP Exam 1.

Because official weights can change, this page avoids assigning percentages or implying a scoring structure. Treat the sections below as readiness areas: if you can work through client facts, identify planning issues, apply relevant concepts, perform basic calculations, and justify a suitable recommendation, you are moving toward exam readiness.

For each topic area, mark your status:

• Learn: I need to review the concept.
• Apply: I can answer direct questions.
• Integrate: I can use the concept inside a client case.
• Defend: I can explain why one recommendation is better than another.

Exam Identity and Readiness Standard

Topic-Area Readiness Table

Core Applied Planning Flow

Use this sequence when reviewing any case-style question:

1. Identify the client facts

   • Age, marital/family status, dependants
   • Employment and income stability
   • Assets, liabilities, insurance, estate documents
   • Goals, timing, priorities
   • Risk tolerance and risk capacity
   • Tax position and liquidity needs

2. Separate goals from constraints

   • Goal: what the client wants to achieve.
   • Constraint: what limits the available solution.
   • Assumption: what must be true for the recommendation to work.
   • Missing fact: what prevents a final recommendation.

3. Quantify the gap

   • Cash-flow shortfall
   • Insurance shortfall
   • Retirement savings gap
   • Estate liquidity need
   • Debt affordability issue
   • Tax inefficiency

4. Evaluate alternatives

   • What solves the client’s priority?
   • What creates a new risk?
   • What is reversible or flexible?
   • What has tax, liquidity, cost, or timing consequences?

5. Recommend and document

   • State the recommendation.
   • Link it to client facts.
   • Explain trade-offs.
   • Identify implementation steps.
   • Note follow-up and review triggers.

“Can You Do This?” Skills Checklist

Client Discovery and Planning Judgment

• Identify the client’s primary objective from a long fact pattern.
• Distinguish between a client’s stated preference and the planner’s recommended priority.
• Recognize when a recommendation is premature because key facts are missing.
• Identify inconsistencies in the client profile, such as high return expectations with low risk tolerance.
• Determine whether the issue is mainly cash-flow, tax, investment, insurance, estate, retirement, or compliance related.
• Explain why two clients with similar incomes may need different recommendations.
• Identify when a referral to a lawyer, accountant, insurance specialist, mortgage professional, or other qualified professional may be appropriate.
• Document assumptions clearly instead of treating them as facts.

Cash Flow, Net Worth, and Debt

• Prepare a simple net-worth statement from scattered facts.
• Classify assets as liquid, investment, personal-use, registered, or business-related where relevant.
• Separate fixed expenses, variable expenses, discretionary expenses, debt payments, and savings.
• Identify whether a client has a surplus, deficit, liquidity problem, or debt-service problem.
• Prioritize emergency reserves before long-term commitments when the facts support it.
• Compare debt repayment with investing using after-tax cost, risk, flexibility, and client goals.
• Recognize when refinancing or consolidation may reduce payments but increase long-term cost or risk.
• Spot situations where credit use is masking a cash-flow deficit.

Tax-Aware Planning

• Distinguish marginal tax rate from average tax rate.
• Identify how interest, dividends, capital gains, employment income, business income, and pension income may be treated differently under current study rules.
• Explain why tax deferral can be valuable but is not always the only consideration.
• Compare registered and non-registered account placement at a conceptual level.
• Recognize when contribution limits, withdrawal rules, attribution rules, or current tax rates must be checked in the official study material.
• Explain the after-tax impact of deductibility, credits, taxable benefits, and investment income type.
• Avoid making a recommendation that is tax-efficient but unsuitable for liquidity, risk, or time horizon.

Investment Planning

• Match asset allocation to time horizon, goal priority, risk tolerance, and risk capacity.
• Explain diversification across asset classes, sectors, geography, and issuers.
• Identify when concentration risk is present.
• Distinguish volatility risk, inflation risk, liquidity risk, interest-rate risk, credit risk, currency risk, and sequence-of-returns risk.
• Explain why a long time horizon may increase risk capacity but does not automatically increase risk tolerance.
• Recognize the role of fees, taxes, liquidity, and account type in investment selection.
• Identify when rebalancing is appropriate.
• Explain why past performance alone is not a suitable basis for recommendation.

Retirement Planning

• Estimate whether current savings and expected retirement income sources align with desired spending.
• Identify retirement risks: longevity, inflation, market volatility, health costs, tax, and sequence risk.
• Compare saving more, spending less, retiring later, changing asset allocation, or adjusting retirement lifestyle.
• Recognize spouse or partner assumptions, survivor needs, and pension options as key planning variables.
• Identify when registered and non-registered withdrawals create different tax and cash-flow outcomes.
• Explain why retirement planning is an integrated cash-flow, investment, tax, and risk-management problem.

Insurance and Risk Management

• Identify risks that should be avoided, reduced, retained, or transferred.
• Distinguish life insurance needs from disability, critical illness, health, property, and liability needs.
• Calculate a broad insurance shortfall using obligations, income replacement, final expenses, debt, education goals, and available resources.
• Compare term and permanent insurance conceptually by need duration, cost, flexibility, and estate objective.
• Recognize when existing group coverage may be insufficient, non-portable, or incomplete.
• Check beneficiary designations and ownership against estate goals.
• Identify when insurance is unaffordable and recommend prioritization rather than over-insuring.

Estate Planning

• Identify whether the client has current estate documents.
• Recognize why wills, powers of attorney or equivalent provincial documents, beneficiary designations, and ownership structures should be coordinated.
• Identify estate liquidity needs, including tax, debt, final expenses, and family equalization concerns.
• Distinguish probate avoidance from broader estate planning.
• Recognize risks with joint ownership, blended families, minor beneficiaries, disabled beneficiaries, business assets, and cottages or vacation properties.
• Explain when trust concepts may be relevant without overstating legal advice.
• Identify when legal advice is required.

Ethics, Compliance, and Professional Conduct

• Apply know-your-client and suitability thinking to recommendations.
• Recognize conflicts of interest and required disclosure.
• Maintain confidentiality and privacy of client information.
• Avoid recommendations outside the client’s risk profile, objectives, or your professional scope.
• Document why a recommendation was made and what alternatives were considered.
• Identify when client instructions conflict with suitability, law, regulation, or professional standards.
• Choose the answer that protects the client and the integrity of the planning process, not the answer that merely completes a transaction.

Calculation and Formula Readiness

You do not need to turn the exam into a pure math exercise, but you should be comfortable with common financial planning calculations and, more importantly, their interpretation.

\[ \text{Net worth} = \text{Total assets} - \text{Total liabilities} \]\[ \text{Cash-flow surplus or deficit} = \text{Income and inflows} - \text{Expenses and outflows} \]\[ \text{Approximate real return} \approx \text{Nominal return} - \text{Inflation rate} \]\[ \text{After-tax return} = \text{Pre-tax return} \times (1 - \text{Marginal tax rate}) \]\[ \text{Insurance need} = \text{Capital required for obligations and goals} - \text{Available resources} \]

Calculation Traps to Review

• Using gross income when the question asks for after-tax cash flow.
• Treating an asset as liquid when it is locked in, registered, illiquid, or subject to tax.
• Ignoring inflation in long-term retirement or education goals.
• Ignoring tax when comparing debt repayment and investment returns.
• Double-counting the same asset for emergency reserves and long-term goals.
• Forgetting that insurance need may decrease or increase as life circumstances change.
• Selecting the mathematically highest return when the client cannot tolerate the risk.
• Applying current contribution limits or tax parameters from memory without checking the exam’s study context.

Scenario and Decision-Point Checks

Product and Strategy Comparison Checks

Registered, Non-Registered, and Tax-Sheltered Planning

Insurance Strategy Comparison

Investment Strategy Comparison

Documentation and Artifact Checklist

Before final review, make sure you can identify, interpret, and use these planning artifacts.

Common Weak Areas and Traps

Integrated Case Review Prompts

When reviewing practice cases, write short answers to these prompts before looking at choices.

Fact Pattern Prompts

• Who is the client, and who else depends on the client financially?
• What is the main stated goal?
• What is the unstated or implied problem?
• What is the time horizon?
• What is the client’s risk tolerance?
• What is the client’s risk capacity?
• What tax facts matter?
• What cash-flow facts matter?
• What liquidity need exists?
• What insurance risk exists?
• What estate planning issue exists?
• What information is missing?

Recommendation Prompts

• Which option best addresses the highest-priority issue?
• Which option is unsuitable even though it sounds beneficial?
• Which option creates an unacceptable trade-off?
• Which option requires a professional referral?
• Which option should be delayed until more facts are gathered?
• Which recommendation should be implemented first?
• What should be reviewed later?

Final-Week Checklist

Personal Readiness Scorecard

Practical Next Step

Pick one weak area from the scorecard and complete a focused set of applied practice questions before doing another mixed case set. For AFP Exam 1, prioritize practice that forces you to explain the recommendation, identify missing facts, and connect client facts to suitability, tax, risk, retirement, insurance, and estate consequences.