Module 1 Flashcards
The Financial Planning Process
- Understanding the Client’s Personal and Finanical Circumstances
- Identifying and Selecting Goals
- Analyizing the Client’s Current course of Action and Potential Alternative Coures of Action
- Developing the Financial Planning Recommendations
- Presenting the Financial Planning Recommendation
- Implementing the Financial Planning Recommendation
- Monitoring Progress and Updating
What takes place in the “Understanding Client’s Personal and Financial Circumstances” part of the Financial Planning Process?
- Obtain Qualitative and Quantitative Information
- Analyze the information
- Address incomplete information
What takes place in “Identifying and Selecting Goals” part of the Financial planning process?
- Identify potential goals
2. Select and Prioritize those goals
What takes place in “Analyzing the Client’s current course of action and potential alternative courses” part of the Financial planning process?
- Analyzing current course of action and their likelihood of reaching that goal, identify strengths and weaknesses of their financial situation
- Analyzing potential alternative coureses of action
What takes place in “Developing the Financial Planning Recommendations” part of the Financial planning process?
From the potential coureses of action, a professional must select one or more recommendations designed to maximize the potential for meeting the clients goals. Advisor must consider the following:
- Assumptions and estimates used to develop the recc.
- The basis for making the recc.
- The timing and priority of the recommendation
- Whether the recommendation is independent or must be implemented with another
What takes place in “Presenting the Financial Planning Recommendations” part of the Financial planning process?
CFP Professional must present to the client the selected recommendations and the information that was required to be considered when developing the recommendations.
- Briefly outline the problem and it’s potential consequences
- Provide a specific, actionable recommendation
- List advantages and disadvantages
- review second-best alternative
What takes place in “Implementing the Financial Planning Recommendations” part of the Financial planning process?
- Address Implementation Responsibilities
- Identify, Analyze and Select Actions, Products, and Services
- Recommend Actions, Products, and Services for Implementation
- Select and Implement Actions, Products or services
What takes place in “Monitoring Progress and Updating” part of the Financial planning process?
- Determine monitoring and updating responsibilities
- Monitor the clients progress
- Obtain Current Qualitative and Quantitative information
- Update Goals, Recommendations and Implementation if needed
Asset Accumulation Phase Characteristics
- limited access to funds
- high degree of debt to net worth
- low net worth
- Lack of concern for risks
Conservation or Protection Phase Characteristics
- increases to cash flow, assets and net worth
- decreases in proportionate use of debt
- more concerned about losing what they have acquired than acquiring more
- become aware of and are concerned with many risks ignored at the beginning of the asset accumulation phase
Distribution or Gifting Phase Characteristics
- Distributions Strategies
- Implementation of EState Planning Strategies
- High Net Worth and Cash Flow
- Low Debt
When recommending, engaging and working with additional professionals, a CFP professional must:
- Have a reasonable basis for the recommendation based on the other professionals reputation, experience and qualifications
- Disclose any arrangement by which someone other than the client will compensate the CFP professional or the firm.
When working with another professional on a client’s bhalf, the CFP must:
- Communicate with the other professional about the services that each will provide and their respective responsibilities
- Inform the client in a timely manner if the other professional did not perform the services in accordance with the scope of the service to be provided and the allocation of responsibilities
CFP Board Approved Nouns
-certificant, professional, practitioner, certification, mark or exam (or the persons name)
