Module 1 (Financial Planning Process) Flashcards
I determine a client’s goals and objectives by creating a plan. Who am I?
Financial planning
EGADCIMP…?
– Establish the relationship – Gather information – Analyze/evaluate current financial status – Develop recommendations – Communicate recommendations – Implement recommendations – Monitor recommendations – Practice within professional standards
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.
Establish Relationship
In this part of the financial planning process the advisor gathers tax/will/trust/insurance info, create goals, and determine the clients risk tolerance.
Gather Data
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.
Analyze and Evaluate Status
In this part of the financial planning process the advisor write a detailed report on the financial planning recommendations.
Develop Recommendations
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.
Communicating Recommendations
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.
Implementing Recommendations
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.
Monitoring Recommendations
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.
Practice Within Standards
This approach involves solving A single problem for the client.
single-purpose approach
This approach involves solving more than one financial problem by implementing the financial planning process for the client.
multiple-purpose approach
This type of financial planning encompasses all personal/financial situations and integrates all techniques and narrowly focuses the approaches to solve financial problems.
comprehensive financial planning
What are the 10 core areas for specializing in financial planning?
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
A comprehensive financial plan is something that you normally do not see. Why is that?
It’s expensive and it’s hard to get clients to commit to it.
What is the best way to present a client with a comprehensive financial plan?
In writing
What are the five phases a career minded person will go through in their financial life cycle?
– Early Career
– Career Development
– Peak Accumulation (moving towards the maximum earnings and trying to meet goals)
– Pre-Retirement (Implementation of risk reduction)
– Retirement
What are the 3 stages of a financial planning pyramid?
Stage 1 – protecting against uncertainty (emergency savings, insurance, will)
Stage 2 – wealth accumulation
Stage 3 – retirement/estate distribution
What is the top reason people begin financial planning?
Build a retirement fund.
According to the CFP board survey, what are the 6 reasons people begin financial planning?
- Build a retirement fund 👌🏾
- Accumulate capital
- Build an emergency fun
- Generate current income
- Tax planning
- Education planning
What is the most popular area of financial planning that people specialize in?
Investment planning
According to the Retirement Confidence Survey conducted by the Employment Benefit Research Institution, how long do workers anticipate their retirement will last?
20 years at least
What are the top three obstacles that prevent people from gaining control of their financial freedom?
- Living beyond their means
- Procrastination
- Lack of financial knowledge
