, ESSENTIALS OF
PERSONAL FINANCIAL PLANNING
Susan M. Tillery, CPA/PFS
Thomas N. Tillery, CFP, AEP, CLU, ChFC, CRPC, LUTCF
21174-349
, Notice to Readers
Essentials of Personal Financial Planning does not represent an official position of the Association of International
Certified Professional Accountants, and it is distributed with the understanding that the author and publisher are not
rendering legal, accounting, or other professional services in the publication. If legal advice or other expert assistance
is required, the services of a competent professional should be sought.
Copyright © 2017 by
Association of International Certified Professional Accountants
All rights reserved. For information about the procedure for requesting permission to make copies of any part of this
work, please email with your request. Otherwise, requests should be written and mailed to the
Permissions Department, AICPA, 220 Leigh Farm Road, Durham, NC 27707-8110.
1 2 3 4 5 6 7 8 9 0 CS 1 9 8 7
ISBN: 978-1-94549-823-7
, TABLE OF CONTENTS
Introduction xiii
Chapter 1: Personal Financial Planning 1
Introduction 2
Phases of the Personal Financial Planning Engagement 2
Engage 3
Discover 4
Analyze 5
Recommend 5
Expanded or Additional Engagements 6
Behavioral and Psychological Methods of Building Client Rapport 8
Active Listening 8
Behavioral Biases and Heuristics 9
Socratic Questioning 9
Application of Behavioral Techniques to Client Relationships 10
Gathering Data: Quantitative Versus Qualitative Data 12
Quantitative Data 12
Qualitative Data 13
Risk Tolerance 14
Life Planning and the Personal Financial Planning Process 14
Chapter Review 16
Chapter 2: The Statement on Standards in Personal Financial Planning Services No. 1 19
Introduction 20
The Pathway to Standards in PFP 21
A Timeline of Personal Financial Planning in the United States 21
Statement on Standards in Personal Financial Planning Services 23
Personal Financial Planning Services 24
Applicability 26
Requirements of the Member 27
Steps in a Personal Financial Planning Engagement 27
Planning the PFP Engagement 27
Selecting Other Service Providers 28
Obtaining and Analyzing Information 28
Developing and Communicating PFP Recommendations 29
Other Types of Personal Financial Planning Engagements 29
Implementation Engagement 29
Monitoring Engagement 30
Updating Engagement 30
Chapter Review 30
Chapter 3: Time Value of Money Concepts 35
Introduction 36
Tools for Calculating Time Value of Money 36
Efficiency 37
Establishing Realistic Expectations 37
TABLE OF CONTENTS i
PERSONAL FINANCIAL PLANNING
Susan M. Tillery, CPA/PFS
Thomas N. Tillery, CFP, AEP, CLU, ChFC, CRPC, LUTCF
21174-349
, Notice to Readers
Essentials of Personal Financial Planning does not represent an official position of the Association of International
Certified Professional Accountants, and it is distributed with the understanding that the author and publisher are not
rendering legal, accounting, or other professional services in the publication. If legal advice or other expert assistance
is required, the services of a competent professional should be sought.
Copyright © 2017 by
Association of International Certified Professional Accountants
All rights reserved. For information about the procedure for requesting permission to make copies of any part of this
work, please email with your request. Otherwise, requests should be written and mailed to the
Permissions Department, AICPA, 220 Leigh Farm Road, Durham, NC 27707-8110.
1 2 3 4 5 6 7 8 9 0 CS 1 9 8 7
ISBN: 978-1-94549-823-7
, TABLE OF CONTENTS
Introduction xiii
Chapter 1: Personal Financial Planning 1
Introduction 2
Phases of the Personal Financial Planning Engagement 2
Engage 3
Discover 4
Analyze 5
Recommend 5
Expanded or Additional Engagements 6
Behavioral and Psychological Methods of Building Client Rapport 8
Active Listening 8
Behavioral Biases and Heuristics 9
Socratic Questioning 9
Application of Behavioral Techniques to Client Relationships 10
Gathering Data: Quantitative Versus Qualitative Data 12
Quantitative Data 12
Qualitative Data 13
Risk Tolerance 14
Life Planning and the Personal Financial Planning Process 14
Chapter Review 16
Chapter 2: The Statement on Standards in Personal Financial Planning Services No. 1 19
Introduction 20
The Pathway to Standards in PFP 21
A Timeline of Personal Financial Planning in the United States 21
Statement on Standards in Personal Financial Planning Services 23
Personal Financial Planning Services 24
Applicability 26
Requirements of the Member 27
Steps in a Personal Financial Planning Engagement 27
Planning the PFP Engagement 27
Selecting Other Service Providers 28
Obtaining and Analyzing Information 28
Developing and Communicating PFP Recommendations 29
Other Types of Personal Financial Planning Engagements 29
Implementation Engagement 29
Monitoring Engagement 30
Updating Engagement 30
Chapter Review 30
Chapter 3: Time Value of Money Concepts 35
Introduction 36
Tools for Calculating Time Value of Money 36
Efficiency 37
Establishing Realistic Expectations 37
TABLE OF CONTENTS i
