Module 1 Flashcards
Identify the steps included CFP‘s board practice standards for the financial planning process:
I. Mutually defining terms
II. Presenting goals
III. Establishing defining the client planner relationship
IV. Developing the financial planning recommendations
IV. Developing the financial planning recommendations
Which of these are disclosure requirements that apply when a planner provides financial planning services
- The privacy policy must be disclosed in writing
- Material conflicts of interest must be disclosed either verbally or in writing
- Services and products offered by the planner must be disclosed in writing
- Referral compensation agreements must be disclosed either verbally or in writing
1, 2 & 3
Identify the lifecycle phase that is best described by the following characteristics
- Limited excess funds for investing
- High degree of debt to net worth
- Low net worth
- lack of concerns for risk
Asset accumulation phase
Which phase of the financial life cycle typically begins when a client is age 45 to 60 and is characterized by an increase in cash flow, assets, and net worth, with some decrease in the proportional use of debt
Conservation/protection phase
Which of the following are major components of a sound financial plan 1 estate planning 2 Insurance planning 3 retirement planning 4 Investment planning
All of the above
Which of the following types of data are considered qualitative
- Health status
- List of current investments
- Copies of wills and trust
- Risk tolerance level
2 & 4 Health status and risk tolerance level
To properly use the CFP marks on documents or marketing materials certain guidelines must be followed. Identify the items that are required when the word certified financial planner are used
Always use capital letters or small cap font, always use the trademark symbol, always use with one of CFP boards approve nouns unless directly following the name of the individual certified by the CFP board
Identify the number of steps in the practice standards for the financial planning process
7
Which of these may be the responsibility of the financial planner during the implementing the financial planning recommendations step of the financial planning process
- Sharing information as authorized
- Coordinating with other professionals
- Determining likelihood of reaching stated objectives
- Advising on material advantages and disadvantages of implementation
1 & 2 Sharing information as authorized and coordinating with other professionals
Which of these activities would be appropriate if you were understanding the clients personal and financial circumstances?
- Determining which stocks to purchase for a client investment portfolio
- Inquiring about the number of dependents
- Collecting personal financial info
- Inquiring about age and dates of birth of dependents
2, 3, & 4
Which activity that takes place during the financial planning process is generally the most demanding?
A. Gathering info necessary to fulfill the engagement
B. Prospecting for new clients
C. Analyzing and evaluating the clients current financial status
D. Communicating recommendations
C Analyzing and evaluating the clients current financial status
According to the guidelines on proper use of the CFP certification mark, under which circumstance may a planner Display either CFP or certified financial planner without including a board approve noun?
When directly following the name of the individual certified by the CFP Board
Financial planning recommendations will be directly affected by all of these except
A. Alternatives selected by the planner
B. Quantitative and qualitative data provided by the client
C. The planners defined scope of engagement
D. Personal and economic assumptions
C Financial planning recommendations will be affected by mutually defined scope of engagement including the client
If a practitioner is unable to secure sufficient and relative quantitative information and documentation to form a basis for recommendations, which of these is an option for the practitioners next step
- Terminate the engagement
- Restrict the scope of the engagement to those matters for which sufficient information is available
Both one and two
If financial planner often participates in a financial planning team to ensure an efficient and infective plan. Which of these may be a step and working as a member of the cooperative?
- Establish what services each member can provide
- Share information with other members, provided the client has given permission
- Coordinate with other members to be certain the client has been provided services that enable them to meet their goals
1,2, & 3
Analyze the list to determine CFP boards approved nouns to use following the “certified financial planner “
- Professional
- Certificate
- Candidate
- Test
1 & 2
A client is usually in what phase of the financial life cycle until approximately age 45 or later if the clients children are not yet independent
Asset Accumulation phase
assume you have a new financial planning client. Arrange the following task he would perform during the financial planning process with this client, in their logical order, from first to last
- Collaborate with the client prioritize goals
- Document the specific ownership of the client assets
- Identify the clients financial strengths and weaknesses
- Review the clients financial plan and evaluate changes in the legal, text, or economic environment
2, 1, 3, & 4
which of these best describes data that subjective in nature? A. Quantitative data B. Cash flow data C. Measurable data D. Qualitative data
D qualitative data
When using the CFP board approved plaque, ACF professional must take care to do all of the following except
A. Always maintain clear space around the mark to maintain legibility
B. Refrain from associating with individual certified by CFP Board
C. Never alter or modify the plaque design
D. Always reproduce the plaque design from original artwork
B Refrain from associating with individual certified by CFP Board
Personal and financial circumstances within the lifecycle are influence by all of the following except A. Financial status B. Attitudes values and beliefs C. Marital status D. Investment policy statement
D. Investment policy statement
