HS 300 Fundamentals Of Financial Planning –
Questions With Correct Solutions
How many steps are in the Financial Planning Process? Correct
Answer - 7
What is step 1 of the Financial Planning Process? Correct Answer
- Understanding the Client's Personal and Financial
Circumstances.
What is step 2 of the Financial Planning Process? Correct Answer
- Identifying and Selecting Goals
What is step 3 of the Financial Planning Process? Correct Answer
- Analyzing the Client's Current Course of Action and Potential
Alternative Course(s)
What is step 4 of the Financial Planning Process? Correct Answer
- Developing the Financial Planning Recommendation(s)
What is step 5 of the Financial Planning Process? Correct Answer
- Presenting the Financial Planning Recommendation(s)
What is step 6 of the Financial Planning Process? Correct Answer
- Implementing the Financial Planning Recommendation(s)
What is step 7 of the Financial Planning Process? Correct Answer
- Monitoring Progress and Updating
What is Financial Planning? Correct Answer - The process of
formulating financial decisions to form an integrated plan and
implementing and monitoring those financial decisions.
,What step of the Financial Planning Process is this?: A financial
planner asks a new client about her job, typical income, and
common expenses. After getting "big picture" amounts, the planner
asks her to complete a detailed fact finder. Correct Answer -
Understanding the Client's Personal and Financial Circumstances
What step of the Financial Planning Process is this?: A financial
planner asks her clients to complete an activity to help them
prioritize their goals. After identifying the client's main goals, the
planner writes down the goals on notecards then asks her clients to
arrange them on the table from "must have" to "nice to have."
Correct Answer - Identifying and Selecting Goals
What step of the Financial Planning Process is this?: A financial
planner enters her clients' data into dedicated planning software
and then models a variety of scenarios. When she realizes the clients
will be unable to meet all of their goals, she runs a series of
alternative scenarios that delay those goals, use different funding
sources, or omit those goals altogether. Correct Answer -
Analyzing the Client's Current Course of Action and Potential
Alternative Course(s) of Action
What step of the Financial Planning Process is this? A financial
planner develops two education funding recommendations: one in
which the client pays for the entire cost of college, including living
expenses, and the other in which the client only pays for part of his
tuition. The planner also develops alternative recommendations for
retirement and a vacation home purchase that are dependent on the
client's education-funding choice. Correct Answer - Developing
the Financial Planning Recommendation(s)
What step of the Financial Planning Process is this?: A financial
planner drafts an implementation schedule that delineates his
responsibilities and his clients' responsibilities. By the next meeting,
,he will provide the clients with life and disability insurance
applications. The clients will move their IRAs from their current
broker into a wrap account managed by the planner. Correct
Answer - Implementing the Financial Planning
Recommendation(s)
What step of the Financial Planning Process is this?: Every 6 months,
a financial planner meets with her clients. She collects new
qualitative and quantitative data with a short act finer. If the clients'
progress toward their goals is short of expectations, she develops
new recommendations to help them catch up. Correct Answer -
Monitoring Progress and Updating
Your client, Jed, engaged you to help him with his financial situation.
During the course of your meetings you sold Jed a $1,000,000 life
insurance policy. Which part of the financial planning process were
you engaged in? Correct Answer - Implementing the financial
planning recommendations
After meeting with your client, Sid, you prepared his current
financial statements. In which part of the financial planning process
were you engaged when you prepared the statements? Correct
Answer - Analyzing the client's current course of action and
potential alternative courses of action
During this step, planners will update client and planner
responsibilities, check on goal progress, and gather up-to-date client
information. Correct Answer - Monitoring Progress and
Updating
What is the final step of the financial planning process? Correct
Answer - Monitoring Progress and Updating
, What is an engagement letter? Correct Answer - A legal
agreement that is prepared by the advisor and should be signed by
both the advisor and the client before proceeding.
When should the financial planner and the client identify specific
responsibilities? Correct Answer - When establishing the
relationship.
What is internal data? Correct Answer - Information that is
specific to the client, which is obtained through the use of
questionnaires, interviews, and conversations.
Goals, values, risk tolerance and psychology are examples of which?
(Qualitative or Quantitative) Correct Answer - Qualitative
Current income, expected future income, family member ages, and
value of assets and debts are examples of which? (Qualitative or
Quantitative) Correct Answer - Quantitative
What. determines whether a planner is regulated by the SEC?
Correct Answer - If they manage at least $100 million
All of the following are examples of qualitative information that
should be collected by the financial planner EXCEPT:
A)
the client's general attitude about spending.
B)
the client's risk tolerance level.
C)
the client's age and number of children.
D)
the client's education goals. Correct Answer - C
Questions With Correct Solutions
How many steps are in the Financial Planning Process? Correct
Answer - 7
What is step 1 of the Financial Planning Process? Correct Answer
- Understanding the Client's Personal and Financial
Circumstances.
What is step 2 of the Financial Planning Process? Correct Answer
- Identifying and Selecting Goals
What is step 3 of the Financial Planning Process? Correct Answer
- Analyzing the Client's Current Course of Action and Potential
Alternative Course(s)
What is step 4 of the Financial Planning Process? Correct Answer
- Developing the Financial Planning Recommendation(s)
What is step 5 of the Financial Planning Process? Correct Answer
- Presenting the Financial Planning Recommendation(s)
What is step 6 of the Financial Planning Process? Correct Answer
- Implementing the Financial Planning Recommendation(s)
What is step 7 of the Financial Planning Process? Correct Answer
- Monitoring Progress and Updating
What is Financial Planning? Correct Answer - The process of
formulating financial decisions to form an integrated plan and
implementing and monitoring those financial decisions.
,What step of the Financial Planning Process is this?: A financial
planner asks a new client about her job, typical income, and
common expenses. After getting "big picture" amounts, the planner
asks her to complete a detailed fact finder. Correct Answer -
Understanding the Client's Personal and Financial Circumstances
What step of the Financial Planning Process is this?: A financial
planner asks her clients to complete an activity to help them
prioritize their goals. After identifying the client's main goals, the
planner writes down the goals on notecards then asks her clients to
arrange them on the table from "must have" to "nice to have."
Correct Answer - Identifying and Selecting Goals
What step of the Financial Planning Process is this?: A financial
planner enters her clients' data into dedicated planning software
and then models a variety of scenarios. When she realizes the clients
will be unable to meet all of their goals, she runs a series of
alternative scenarios that delay those goals, use different funding
sources, or omit those goals altogether. Correct Answer -
Analyzing the Client's Current Course of Action and Potential
Alternative Course(s) of Action
What step of the Financial Planning Process is this? A financial
planner develops two education funding recommendations: one in
which the client pays for the entire cost of college, including living
expenses, and the other in which the client only pays for part of his
tuition. The planner also develops alternative recommendations for
retirement and a vacation home purchase that are dependent on the
client's education-funding choice. Correct Answer - Developing
the Financial Planning Recommendation(s)
What step of the Financial Planning Process is this?: A financial
planner drafts an implementation schedule that delineates his
responsibilities and his clients' responsibilities. By the next meeting,
,he will provide the clients with life and disability insurance
applications. The clients will move their IRAs from their current
broker into a wrap account managed by the planner. Correct
Answer - Implementing the Financial Planning
Recommendation(s)
What step of the Financial Planning Process is this?: Every 6 months,
a financial planner meets with her clients. She collects new
qualitative and quantitative data with a short act finer. If the clients'
progress toward their goals is short of expectations, she develops
new recommendations to help them catch up. Correct Answer -
Monitoring Progress and Updating
Your client, Jed, engaged you to help him with his financial situation.
During the course of your meetings you sold Jed a $1,000,000 life
insurance policy. Which part of the financial planning process were
you engaged in? Correct Answer - Implementing the financial
planning recommendations
After meeting with your client, Sid, you prepared his current
financial statements. In which part of the financial planning process
were you engaged when you prepared the statements? Correct
Answer - Analyzing the client's current course of action and
potential alternative courses of action
During this step, planners will update client and planner
responsibilities, check on goal progress, and gather up-to-date client
information. Correct Answer - Monitoring Progress and
Updating
What is the final step of the financial planning process? Correct
Answer - Monitoring Progress and Updating
, What is an engagement letter? Correct Answer - A legal
agreement that is prepared by the advisor and should be signed by
both the advisor and the client before proceeding.
When should the financial planner and the client identify specific
responsibilities? Correct Answer - When establishing the
relationship.
What is internal data? Correct Answer - Information that is
specific to the client, which is obtained through the use of
questionnaires, interviews, and conversations.
Goals, values, risk tolerance and psychology are examples of which?
(Qualitative or Quantitative) Correct Answer - Qualitative
Current income, expected future income, family member ages, and
value of assets and debts are examples of which? (Qualitative or
Quantitative) Correct Answer - Quantitative
What. determines whether a planner is regulated by the SEC?
Correct Answer - If they manage at least $100 million
All of the following are examples of qualitative information that
should be collected by the financial planner EXCEPT:
A)
the client's general attitude about spending.
B)
the client's risk tolerance level.
C)
the client's age and number of children.
D)
the client's education goals. Correct Answer - C
