Core Curriculum Chapter 1

Question 1

What are the six key areas of financial planning?

Answer 1

1. Financial Management,
2. Investment Planning,
3. Insurance & Risk Management,
4. Tax Planning,
5. Retirement Planning,
6. Estate Planning & Legal Aspects.

Question 2

What professional skills are required for financial planners? Hint: 4 areas.
CT-C-IRM-TC

Answer 2

Critical Thinking, Communication, Interpersonal & Relationship Management, Teamwork & Collaboration.

Question 3

What is the purpose of the CFP certification program?
Hint: 3 parts

Answer 3

To train financial planners to collect and analyze information, provide recommendations, and follow professional standards.

Question 4

What are the six key steps of the financial planning process? Hint: DE-IG-GI-AS-IES-DIR

Answer 4

1. Define the Engagement,
2. Identify Goals,
3. Gather Information,
4. Assess the Situation,
5. Identify & Evaluate Strategies,
6. Develop & Implement Recommendations.

Question 5

What is the importance of defining the engagement?
CE-OS-C-R

Answer 5

It sets clear expectations for both the planner and client, outlining services, compensation, and responsibilities.

Question 6

Why is client data collection important?

Answer 6

A well-informed financial plan requires accurate and complete quantitative and qualitative client data.

Question 7

How does a financial planner add value to a client’s life?

Answer 7

By providing a roadmap for financial decision-making and helping clients understand trade-offs and risks.

Question 8

What 4 ethical considerations must a financial planner follow?

Answer 8

1. Disclosure of fees,
2. conflicts of interest,
3. privacy and confidentiality, and
4. putting the client’s best interests first.

Question 9

What 6 items must a Letter of Engagement include?

Answer 9

1. Scope of services,
2. costs,
3. compensation,
4. conflicts of interest,
5. client responsibilities, and
6. planner contact details.

Question 10

Why is it important to clarify who the client is in the engagement?

Answer 10

To determine whether planning services are for an individual, a couple, a business, or an entire family.

Question 11

What 5 factors should be considered when evaluating financial strategies?
CO-PO-R-F-IOFS

Answer 11

1. client objectives,
2. Potential outcomes,
3. risks,
4. feasibility, and
5. impact on other financial strategies.

Question 12

What is the role of financial projections in strategy development?
AIS-FFS

Answer 12

They help assess the impact of different strategies on future financial stability.

Question 13

Why is implementation a critical step in financial planning?

Answer 13

Without execution, even the best financial plan is ineffective.

Question 14

How should financial plans be maintained over time?
RF-A-MPG

Answer 14

Through regular follow-ups, adjustments based on life changes, and monitoring progress towards goals.

Question 15

What are the key takeaways from the Samantha & Lorna case study?

Answer 15

• A financial planner must clearly define engagement with a new client.

Comprehensive data collection ensures better analysis and recommendations. Ongoing adjustments and follow-ups improve financial planning success.