511 - Module 1

Question 1

Asset accumulation phase

Answer 1

Usually up to age 45, low income, little disposable income, high debt.

Question 2

Code of Ethics and Standard of Conduct

Answer 2

CFP Board developed Code and Standards to establish best practices within the financial planning profession.

Question 3

Conservation or protection phase

Answer 3

Ages 45-60, long-term goals, retirement planning, asset protection.

Question 4

Distribution or gifting phase

Answer 4

Retirement or end of plan, travvel or other goals, estate and endowment decisions.

Question 5

Financial advice

Question 6

Financial planning

Question 7

Practice Standards for the Financial Planning Process

Question 8

Relevant elements

Question 9

Financial Planning Process

Answer 9

1. Understanding the client’s personal and financial circumstances.
2. Identifying and selecting goals.
3. Analyzing the client’s current course of action and potential alternatives.
4. Developing the Financial Planning recommendations.
5. Presenting the Financial Planning recommendations.
6. Implementing the Financial Planning recommendations.
7. Monitoring progress and updating.

Question 10

Step 1 of the Financial Planning process

Answer 10

Understanding the client’s personal and financial circumstances.
* Obtain qualitative (subjective) and quantitative (measurable) information.
* Analyze information.
* Address incomplete information.

Question 11

Step 2 of the Financial Planning process

Answer 11

Identifying and selecting goals
* Identify potential goals.
* Select and prioritize goals.

Question 12

Step 3 of the Financial Planning process

Answer 12

Analyzing the client’s current course of action and potential alternatives.
* Analyze current course of action
* Analyze potential alternatives

Question 13

Step 4 of the Financial Planning process

Answer 13

Developing Financial Planning recommendations.
For each recommendation, consider:
* The assumptions and estimates used to develop the recommendation.
* The basis for making the recommendation.
* The timing and priority of the recommendation.
* Whether the recommendation is independent or must be implemented with another recommendation.

Question 14

Step 5 of the Financial Planning process

Answer 14

Presenting the Financial Planning recommendation(s).
Planner must communicate critical factors, including:
* Personal and economic assumptions.
* Interdependence of recommendations.
* Material advantages and disadvantages.
* Risks.
* Time sensitivity.

Question 15

Step 6 of the Financial Planning process

Answer 15

Implementing the Financial Planning recommendations.
* Address implementation responsibilities.
* Identify actions, products and services.
* Recommend actions, products and services for implementation.
* Select and implement actions, products and services.

Question 16

Step 7 of the Financial Planning process

Answer 16

Monitoring progress and updating.
* Establish monitoring and updating responsibilities.
* Monitor client’s progress.
* Obtain current qualitative and quantitative information.

Question 17

Written for verbal, Financial Advice

Answer 17

Privacy policy must be written. Everything else may be written or verbal.

Question 18

Written or verbal, Financial Planning

Answer 18

Material conflicts of interest may be written or verbal. Everything else MUST be in writing.

Question 19

Understand - Identify - Analyze - Develop - Present - Implement - Monitor

Answer 19

Umbrellas In A Downpour Prevent Immense Mess.

Utterly Impossible Acronyms Do Produce Impeccable Memory!

Question 20

CFP Board Contextual Variables

Answer 20

• Family Status
• Net Worth
• Income Level
• Life or Professional Stage
• Other Circumstances