Elements of Financial Planning and Consideration (L3)

Question 1

External Environment

Answer 1

Question 2

Opportunity Cost

Answer 2

The HIGHEST VALUED alternative NOT chosen

Question 3

Practice Standards for the Financial Planning Process

Answer 3

Question 4

3-Panel Approach (RISK)

Answer 4

Question 5

3-Panel Approach (SHORT TERM)

Answer 5

Question 6

3-Panel Approach (LONG TERM)

Answer 6

Question 7

Principals of Communication and Counseling

Answer 7

Communication
○ Address client FORMALLY
○ Actively Listen using
* Restatements
* Paraphrasing
* Summarizing
* Open end questions
* Questions that show interest

Question 8

Reflective Listening

Answer 8

○ Listening to understand the message

○ Repeating the message back to the client for confirmation

Question 9

Nonverbal Behavior (“body language”)

Answer 9

○ Good vs Bad posture ==> Positive vs Lack of Self Esteem

○ Arms Uncrossed vs Crossed ==> open/ready vs. defensive/disinterested

Question 10

Motivational Interviewing

Answer 10

• Partnership ==> collaborative process
• Evocation ==> draws out priorities, values, and wisdom to explore reasons for change and support success
• Acceptance ==> practitioner is NONJUDGEMENTA, seeks to understand clients perspective
• Compassion ==> compassion promotes and prioritizes welfare and wellbeing in a selfless manner

Question 11

Learning Styles

Answer 11

• Visual
• Auditory
• Kinesthetic (hands on activities; online/technology driven exercises alternatives)

Question 12

Attitudes

Answer 12

Manage client’s expectations from the beginning to they understand what is required for the plan

Question 13

Values

Answer 13

○ Religious practices and beliefs may mean certain investments will NOT be tolerated OR charitable giving CANNOT BE REDUCED

○ Socially conscious –> disagree with investments to tobacco, alcohol, or gun companies

Question 14

Behavioral Characteristics

Answer 14

EVERYONE IS DIFFERENT