FPQP Financial Paraplanner Qualified Professional/
FPQP Final Exam Study Set WITH COMPLETE SOLUTION
RATED A+ NEW EDITION
Comprehensive Financial Plan - Ans covers almost all aspects of a personal's financial situa on
(including risk mamagenet, investment planning, tax, re rement, and estate planning)
Targeted Financial Plan - Ans focus on a segment of individual's objec ves. (ex - first home,
elderly care, reducing tax burden)
Goals should be... - Ans defined or definite
Steps to se(ng financial goal - Ans 1. Purpose, 2. Timeframe, 3. Amount
("PTA")
Personal financial planning is con nuous or noncon nuous? - Ans Con nuous
7 Steps of Financial Planning Process: - Ans 1. Understanding client's personal and financial
circumstances.
2. Iden fying and selec ng goals.
3. Analyzing the client's current course of ac on and poten al alternatre course(s).
4. Devleoping the financial planning recommenda ons.
5. Presen ng the financial planning recommenda ons.
6. Implemen ng the financial planning recommenda ons.
7. Monitoring process and upda ng.
,Two types of informa on:
(Step 1 - Understanding client's personal and financial circumstances) - Ans 1. Quan ta ve -
"names and numbers"
family profile, assets and liability, cash inflows/ou<laws, insurance policy info,
employee/pension plan, tax returns, re rement benefits
2. Quali ta ve - "lifestyle info"
goals/objec ves, health status, interests/hobbies, risk-tolerance level, changes in lifestyle,
estate planning issues, money values, family rela onships, planning assump ons
"SWOT" Approach
(Step 3 - analyze and evaluate) - Ans SWOT = Strenghs, Weaknesses, Opportuni es, Threats
Exis ng condi ons are reviewed to iden fy strengths and weakenesses in client's total current
financial situa on. Iden fying exis ng or poten al problems that could impact the client's
ability to achieve objec ves.
Emergency fund should be how much? - Ans 3-6 months expenses in emergency fund.
Developing a plan means...
(Step 4 - Reccommda ons) - Ans the planner determines the appropriate asset categories for
the client's objec ve, me horizon, etc.
What duty is required of a financial planner? - Ans Fiduciary Duty
, = keep client's best interest over your's or your firm's.
Cash Flow Statement - Ans A cash flow statement summarizes actual cash receipts and cash
disbusements for a specified period of me.
Records inflows and ou<lows over a period of me.
(Inflows = income, salary, investments
Outlfows = loan payments, u lity payments)
+/- cash flow likely affects an individual's net worth.
3 Asset categories - Ans 1. Cash/Cash equivalents
2. Invested assets
3. Use assets
Examples:
Cash/Cash eq. = checking account, credit union savings account.
Invested = stock por<olio, IRA, 401k
Use = Home, automobile, personal property
Assets are shown at ... ? - Ans Fair Market Value
Net Worth - Ans Is the difference between assets and liabili es.
FPQP Final Exam Study Set WITH COMPLETE SOLUTION
RATED A+ NEW EDITION
Comprehensive Financial Plan - Ans covers almost all aspects of a personal's financial situa on
(including risk mamagenet, investment planning, tax, re rement, and estate planning)
Targeted Financial Plan - Ans focus on a segment of individual's objec ves. (ex - first home,
elderly care, reducing tax burden)
Goals should be... - Ans defined or definite
Steps to se(ng financial goal - Ans 1. Purpose, 2. Timeframe, 3. Amount
("PTA")
Personal financial planning is con nuous or noncon nuous? - Ans Con nuous
7 Steps of Financial Planning Process: - Ans 1. Understanding client's personal and financial
circumstances.
2. Iden fying and selec ng goals.
3. Analyzing the client's current course of ac on and poten al alternatre course(s).
4. Devleoping the financial planning recommenda ons.
5. Presen ng the financial planning recommenda ons.
6. Implemen ng the financial planning recommenda ons.
7. Monitoring process and upda ng.
,Two types of informa on:
(Step 1 - Understanding client's personal and financial circumstances) - Ans 1. Quan ta ve -
"names and numbers"
family profile, assets and liability, cash inflows/ou<laws, insurance policy info,
employee/pension plan, tax returns, re rement benefits
2. Quali ta ve - "lifestyle info"
goals/objec ves, health status, interests/hobbies, risk-tolerance level, changes in lifestyle,
estate planning issues, money values, family rela onships, planning assump ons
"SWOT" Approach
(Step 3 - analyze and evaluate) - Ans SWOT = Strenghs, Weaknesses, Opportuni es, Threats
Exis ng condi ons are reviewed to iden fy strengths and weakenesses in client's total current
financial situa on. Iden fying exis ng or poten al problems that could impact the client's
ability to achieve objec ves.
Emergency fund should be how much? - Ans 3-6 months expenses in emergency fund.
Developing a plan means...
(Step 4 - Reccommda ons) - Ans the planner determines the appropriate asset categories for
the client's objec ve, me horizon, etc.
What duty is required of a financial planner? - Ans Fiduciary Duty
, = keep client's best interest over your's or your firm's.
Cash Flow Statement - Ans A cash flow statement summarizes actual cash receipts and cash
disbusements for a specified period of me.
Records inflows and ou<lows over a period of me.
(Inflows = income, salary, investments
Outlfows = loan payments, u lity payments)
+/- cash flow likely affects an individual's net worth.
3 Asset categories - Ans 1. Cash/Cash equivalents
2. Invested assets
3. Use assets
Examples:
Cash/Cash eq. = checking account, credit union savings account.
Invested = stock por<olio, IRA, 401k
Use = Home, automobile, personal property
Assets are shown at ... ? - Ans Fair Market Value
Net Worth - Ans Is the difference between assets and liabili es.
