HS 300 Financial planning process Exam Questions with Complete Solutions

Domain 4 CFP Board - ANSWER-Synthesize findings from analysis of the client's financial status. 2. Consider alternatives to meet the client's goals and objectives. • Conduct scenario analysis (changing lifestyle variables). • Conduct sensitivity analysis (change assumptions such as interest rate, rates of return, and time horizon). 3. Consult with other professionals on technical issues outside of the planner's expertise. 4. Develop recommendations. • Considering client attitudes, values and beliefs • Considering behavioral finance issues (e.g., anchoring, overconfidence, recency) • Consider interrelationships among financial planning recommendations 5. Document recommendations. Domain 5 - ANSWER-Communicating the Recs Plans for single goals (dom 5) - ANSWER-often only verbal Planner must make sure that what is available for plan implementation? (dom 5) - ANSWER-cash flow Planners must ensure that clients know what 3 things (dom 5) - ANSWER-understand what actions should be taken, what the cost (capital+ time) theyll take, consequences of inaction Domain 5 CFP Board - ANSWER-1. Present financial plan to the client and provide education. • Client goals review • Assumptions • Observations and findings • Alternatives • Recommendations 2. Obtain feedback from the client and revise the recommendations as appropriate. 3. Provide documentation of plan recommendations and any applicable product disclosures to the client. 4. Verify client acceptance of recommendations. Domain 6 - ANSWER-Implementing the Recs