Financial Planning In Practice

Question 1

What is the first step of financial planning?

Answer 1

• The financial planning process consists of six steps

Question 2

What is the second step of financial planning?

Answer 2

Data analysis.

Question 3

What is the third step of financial planning?

Answer 3

Development of recommendations.

Question 4

What is the fourth step of financial planning?

Answer 4

Preparation of an SOA (and presentation to the client)

Question 5

What is the fifth step of financial planning?

Answer 5

Implementation of recommendations.

Question 6

What is the sixth step of financial planning?

Answer 6

Reviewing and monitoring the financial plan.

Question 7

Is good communication vital for financial planners?

Answer 7

Yes.

Question 8

Whjat is the purpose of the first fact finding interview?

Answer 8

To gather the information required as a basis for the advice.

Question 9

In collecting information is quantitative or qualitative information important?

Answer 9

Both.

Question 10

Why is collecting qualitative information important?

Answer 10

Planners need to understand feelings.

Question 11

What is effective data gathering based on?

Answer 11

Sensitive interpretation of the client’s response to questions.

Question 12

Do you need confirm confidentality of client information?

Answer 12

Yes.

Question 13

What can recommendations be built on?

Answer 13

Clear client goals.

Question 14

What kind of goals should clients have?

Answer 14

SMART Goals.

Question 15

What are smart goals?

Answer 15

Specific, measurable, achievable, realistic and time bound.

Question 16

What is the development of recommendations based on?

Answer 16

The agreed scope of the advice and the client’s stated objectives.

• Objectives should have a specified time frame—– short, medium and long-term

Question 17

What needs to be considered when providing advice?

Answer 17

client’s income and expenses, the need for liquidity, flexibility, and growth and tax considerations.

Question 18

Should objectives have a specified time frame?

Answer 18

Yes.

Question 19

What are the time frames for financial objectives?

Answer 19

Short medium and long term.

Question 20

Should should form the framework for the development, presentation and implementation of financial product advice?

Answer 20

ASIC’s ‘safe harbour’ steps.