Chapter 1: Introduction to Financial Planning

Question 1

Personal Financial Planning is the process of what three things?

Answer 1

Formulating, implementing, and monitoring financial decisions into an integrated plan.

Question 2

The Financial Planning Process Steps

Answer 2

1. Understanding the circumstances
2. Identifying and selecting goals
3. Analyzing the client’s current course of actions
4. Developing the Financial Planning Recommendations
5. Presenting the Financial Planning Recommendations
6. Implementing the Financial Planning Recommendations
7. Monitoring the Updating Responsibilities

Question 3

UIADPIM

Answer 3

Ugliness Is Always Developing People Into Monsters

Question 4

Quantitative Information Gathering

Answer 4

Information with numbers. Age, health, education, income, special circumstances, portfolio and investment information, taxes, estate planning, etc.

Question 5

Qualitative Information

Answer 5

Attitude and beliefs regarding education goals, retirement goals, employment goals, savings goals, risk tolerance, charitable goals, and general attitude towards spending.

Question 6

Client External Data

Answer 6

Interest rate, current markets, expected rates, etc.

Question 7

The basic components of an engagement letter should include

Answer 7

defining the parties to the agreement, the duration of the agreement, the services to be provided, a description of the fees and costs, and the conditions under which the agreement can be terminated

Question 8

A financial planner brings ______________, whereas a client generally views their financial position __________.

Answer 8

objectivity, subjectively.

Question 9

A workable goal should be

Answer 9

specific, prioritized and quantified