Financial Planning: Process & Environment:
Chapter 1 Questions with Answers (100%
Correct Answers)
8 Financial Planning Domains Answer: 1. Establish & Define the Client-
Planner Relationship-- structuring (determine format and subject matter of
what follows)
2. Gathering Information Necessary to Fulfill the Engagement-
3. Analyzing and Evaluating the Client's Current FInancial Status
4. Developing the Recommendations
5. Communicating the Recommendations
6. Implementing the Recommendations
7. Monitoring the Recommendations
8. Practicing Within Professional Regulatory Standards
Financial Planning Answer: A process that ascertains the client's financial goals
and objectives and develops a plan for achieving the client's goals and
objectives
Financial Planning Process Answer: A selling/planning process that has ten
steps (the eight domains of the financial planning process" plus two additional
steps (1) identify the prospect (2) approach the prospect
Financial Risk Tolerance Answer: Attitude towards risk, usually a third party
scientific risk questionnaire is used
Fact-Finder Form Answer: A form only a few pages long that asks for basic
information. Designed for financial planning to simplify data entry.
, 2
Identifying Client's Values & Attitudes Answer: 1. Explore personal needs,
priorities and goals
2. Explore time horizon for each goal
3. Assess the client's level of knowledge and experience with matters
4. Assess the client's risk exposures and tolerances
Gather Data Answer: 1. Summary of Assets (cost basis, designations and
titling)
2. Summary of Liabilities (balances, terms and interests)
3. Summary of income & expenses
4. Estate planning documents
5. Education plan and resources
6. Retirement plan information
7. Employment benefits
8. Gov't Benefits
9. Special circumstances (legal docs, agreements, family stuff, etc)
10. Tax docs
11. Investment statements
12. Insurance policies
13. Closely held biz docs (shareholder agreements)
14. Inheritances, windfalls, etc
Analyzing Client's Current Financial Status Answer: 1. Evaluate & document
strengths and vulnerabilities
Chapter 1 Questions with Answers (100%
Correct Answers)
8 Financial Planning Domains Answer: 1. Establish & Define the Client-
Planner Relationship-- structuring (determine format and subject matter of
what follows)
2. Gathering Information Necessary to Fulfill the Engagement-
3. Analyzing and Evaluating the Client's Current FInancial Status
4. Developing the Recommendations
5. Communicating the Recommendations
6. Implementing the Recommendations
7. Monitoring the Recommendations
8. Practicing Within Professional Regulatory Standards
Financial Planning Answer: A process that ascertains the client's financial goals
and objectives and develops a plan for achieving the client's goals and
objectives
Financial Planning Process Answer: A selling/planning process that has ten
steps (the eight domains of the financial planning process" plus two additional
steps (1) identify the prospect (2) approach the prospect
Financial Risk Tolerance Answer: Attitude towards risk, usually a third party
scientific risk questionnaire is used
Fact-Finder Form Answer: A form only a few pages long that asks for basic
information. Designed for financial planning to simplify data entry.
, 2
Identifying Client's Values & Attitudes Answer: 1. Explore personal needs,
priorities and goals
2. Explore time horizon for each goal
3. Assess the client's level of knowledge and experience with matters
4. Assess the client's risk exposures and tolerances
Gather Data Answer: 1. Summary of Assets (cost basis, designations and
titling)
2. Summary of Liabilities (balances, terms and interests)
3. Summary of income & expenses
4. Estate planning documents
5. Education plan and resources
6. Retirement plan information
7. Employment benefits
8. Gov't Benefits
9. Special circumstances (legal docs, agreements, family stuff, etc)
10. Tax docs
11. Investment statements
12. Insurance policies
13. Closely held biz docs (shareholder agreements)
14. Inheritances, windfalls, etc
Analyzing Client's Current Financial Status Answer: 1. Evaluate & document
strengths and vulnerabilities
