Module 1 (Financial Planning Process)

Question 1

I determine a client’s goals and objectives by creating a plan. Who am I?

Answer 1

Financial planning

Question 2

EGADCIMP…?

Answer 2

– Establish the relationship
– Gather information
– Analyze/evaluate current financial status
– Develop recommendations
– Communicate recommendations
– Implement recommendations
– Monitor recommendations
– Practice within professional standards

Question 3

In this part of the financial planning process the advisor explains the financial process, fees/payment, and talk about background and philosophy related to financial planning.

Answer 3

Establish Relationship

Question 4

In this part of the financial planning process the advisor gathers tax/will/trust/insurance info, create goals, and determine the clients risk tolerance.

Answer 4

Gather Data

Question 5

In this part of the financial planning process the advisor determine the clients present financial status, identify strengths/weaknesses, modify goals, and determine where the client is in regards to reaching their goals.

Answer 5

Analyze and Evaluate Status

Question 6

In this part of the financial planning process the advisor write a detailed report on the financial planning recommendations.

Answer 6

Develop Recommendations

Question 7

In this part of the financial planning process the advisor communicates the recommendations, make changes if needed, but ensures the client that the plan is achievable.

Answer 7

Communicating Recommendations

Question 8

In this part of the financial planning process the advisor acquires the financial products/services to implement the plan and motivate the client during the process.

Answer 8

Implementing Recommendations

Question 9

In this part of the financial planning process the advisor review/revise the implemented plan and can change the plan if the client has a change in their financial environment.

Answer 9

Monitoring Recommendations

Question 10

In this part of the financial planning process the advisor follows federal/state regulation, implement plans in the correct legal framework as laws change frequently.

Answer 10

Practice Within Standards

Question 11

This approach involves solving A single problem for the client.

Answer 11

single-purpose approach

Question 12

This approach involves solving more than one financial problem by implementing the financial planning process for the client.

Answer 12

multiple-purpose approach

Question 13

This type of financial planning encompasses all personal/financial situations and integrates all techniques and narrowly focuses the approaches to solve financial problems.

Answer 13

comprehensive financial planning

Question 14

What are the 10 core areas for specializing in financial planning?

Answer 14

General principles
Financial status evaluation
Insurance and risk management
Evaluation of benefits
Investment evaluation
Taxation
Retirement planning
Estate planning
Business ownership planning
Real estate valuation

Question 15

A comprehensive financial plan is something that you normally do not see. Why is that?

Answer 15

It’s expensive and it’s hard to get clients to commit to it.

Question 16

What is the best way to present a client with a comprehensive financial plan?

Answer 16

In writing

Question 17

What are the five phases a career minded person will go through in their financial life cycle?

Answer 17

– Early Career
– Career Development
– Peak Accumulation (moving towards the maximum earnings and trying to meet goals)
– Pre-Retirement (Implementation of risk reduction)
– Retirement

Question 18

What are the 3 stages of a financial planning pyramid?

Answer 18

Stage 1 – protecting against uncertainty (emergency savings, insurance, will)
Stage 2 – wealth accumulation
Stage 3 – retirement/estate distribution

Question 19

What is the top reason people begin financial planning?

Answer 19

Build a retirement fund.

Question 20

According to the CFP board survey, what are the 6 reasons people begin financial planning?

Answer 20

1. Build a retirement fund 👌🏾
2. Accumulate capital
3. Build an emergency fun
4. Generate current income
5. Tax planning
6. Education planning

Question 21

What is the most popular area of financial planning that people specialize in?

Answer 21

Investment planning

Question 22

According to the Retirement Confidence Survey conducted by the Employment Benefit Research Institution, how long do workers anticipate their retirement will last?

Answer 22

20 years at least

Question 23

What are the top three obstacles that prevent people from gaining control of their financial freedom?

Answer 23

1. Living beyond their means
2. Procrastination
3. Lack of financial knowledge