PFS Cheat Sheet 2026

The 30 highest-yield PFS facts, distilled from real exam questions. Print it, save it as a PDF, or study it here — free, no sign-up.

1. The PFS (Personal Financial Specialist) credential is awarded exclusively by which organization? → American Institute of CPAs (AICPA)
2. How many hours of continuing professional education (CPE) must a PFS credential holder complete during each 3-year renewal cycle? → 60 hours
3. A client sells a vacation home used personally 30 days and rented 90 days during the year. How is the rental income classified? → Mixed-use property with proportional deductions
4. In Classroom Management & Support, what is the FIRST step a PFS professional should take when encountering a new case or situation? → Conduct a comprehensive assessment and gather all relevant information
5. When a conflict arises between standard procedures and a unique situation in Reading & Literacy Support, what should a PFS professional prioritize? → Safety and ethical obligations while seeking expert consultation
6. Which approach is most effective when a client with limited financial literacy must make an immediate retirement plan enrollment decision? → Present two or three clear options with simple pros and cons for each
7. In property and casualty insurance, 'subrogation' gives the insurer the right to: → Recover a paid loss from the negligent third party responsible
8. A client receives a mortgage disclosure with an 'APR' that is higher than the stated interest rate. How should a PFS explain this discrepancy? → APR includes fees and other costs, making it higher than the nominal interest rate
9. What is the primary objective of asset allocation in investment planning? → Balance risk and return
10. A client reads a real estate limited partnership agreement and sees 'passive activity loss rules' referenced. What is the main implication for the investor? → Passive losses can generally only offset passive income, not wages or portfolio income
11. Which life event should automatically trigger a full reassessment of a client's financial plan? → Marriage, divorce, birth of a child, or death of a spouse
12. Which of the following is an example of systematic risk that CANNOT be eliminated through diversification? → A central bank raising interest rates economy-wide
13. Which retirement plan type allows both employer and employee contributions and is commonly used by self-employed individuals? → Solo 401(k)
14. Spaced repetition in client financial education is best implemented by: → Revisiting key concepts at increasing intervals across multiple meetings
15. Which personal finance ratio measures the percentage of income directed toward savings and investments? → Savings ratio
16. UGMA/UTMA custodial accounts differ from 529 plans most significantly because UGMA/UTMA assets: → Become the minor's unrestricted property at the age of majority
17. A client is in the accumulation phase with a 25-year horizon. Their portfolio has drifted to 85% equities from a 70% target. The advisor should: → Rebalance back toward the 70% target to maintain risk alignment
18. Which diversification strategy best reduces unsystematic risk? → Adding more uncorrelated securities
19. A PFS who sends a short follow-up email summarizing the three key decisions made in the planning meeting is reinforcing learning through: → Retrieval cues and distributed practice
20. In Student Learning & Development, what is the FIRST step a PFS professional should take when encountering a new case or situation? → Conduct a comprehensive assessment and gather all relevant information
21. Which type of trust is irrevocable and allows the grantor to transfer life insurance proceeds outside of the taxable estate? → Irrevocable Life Insurance Trust (ILIT)
22. Which tax strategy helps reduce taxable income by deferring it to a later year? → Tax deferral
23. Which of the following expenses paid from a special needs trust would MOST LIKELY trigger an in-kind support and maintenance (ISM) reduction in SSI benefits? → Rent paid directly to a landlord on the beneficiary's behalf
24. Which income-driven repayment plan caps monthly federal student loan payments at 10% of discretionary income and forgives remaining balances after 20 years? → Pay As You Earn (PAYE)
25. Which of the following documents is most commonly used to transfer assets after death? → Will
26. Which ethical standard from the AICPA Code of Professional Conduct most directly governs a PFS professional's responsibility to maintain competence? → The due care principle
27. Which Monte Carlo simulation output metric is most commonly used to assess retirement plan sustainability? → Probability of success (not running out of money)
28. At what age can individuals begin taking required minimum distributions (RMDs) from most retirement accounts? → 73
29. A client is concerned about interest rate risk in their bond portfolio. Which strategy MOST directly hedges this exposure? → Entering a pay-fixed, receive-floating interest rate swap
30. A PFS advisor uses 'motivational interviewing' techniques during client meetings. This approach is designed to: → Elicit and strengthen the client's own motivation for financial behavior change