FPQP - Module 1 - The Financial Planning Process Exam Questions And Answers
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Course
FPQP
Institution
FPQP
LO 1-1: Definition of personal financial planning - ANS "a collaborative process that helps maximize a Client's potential for meeting life goals through Financial Advice that integrates relevant elements of the Client's personal and financial circumstances."
LO 1-1: Areas of financial pl...
FPQP - Module 1 - The Financial
Planning Process Exam Questions And
Answers
LO 1-1: Definition of personal financial planning - ANS "a collaborative process that helps
maximize a Client's potential for meeting life goals through Financial Advice that integrates
relevant elements of the Client's personal and financial circumstances."
LO 1-1: Areas of financial planning - ANS 1. developing goals
2. cash management
3. debt management
4. risk management planning
5. insurance planning
6. educational needs
7. group benefits planning
8. investment planning
9. retirement planning
10. income tax planning
11. philanthropic interests
12. estate planning
LO 1-1: Seven Steps of (personal) Financial Planning - ANS 1. Understanding the client's
personal and financial circumstances
2. Identifying and selecting goals
3. Analyzing the client's current course of action and potential alternate course(s) of action
4. Developing the financial planning recommendations
5. Presenting the financial planning recommendations
6. Implementing the financial planning recommendations
7. Monitoring the progress and updating
, LO 1-1: What is the difference between comprehensive and targeted planning? - ANS 1.
Comprehensive planning just about covers all aspects of a person's financial situation including
consideration of risk management, investment planning, tax planning, retirement planning, and
estate planning
2. Targeted planning typically addresses only a segment of an individual's objectives such as
trying to buy a first home, caring for an elderly parent, or reducing tax burdens. Often times a
targeted plan becomes the starting point for a comprehensive plan.
LO 1-2: Steps to setting a financial goal - ANS 1. Potential goals should be identified by the
client
2. Time frame has to be established
3. Goal should be stated in quantifiable terms as far as amount (e.g., how much money and
beginning when)
LO 1-2: What does PTA stand for? (as it relates to goal setting) - ANS Purpose
Time frame, and
Amount
LO 1-3: Defining the engagement - ANS -Done prior to the seven-step financial planning
process
-Client and planner mutually agree on the SCOPE of the engagement
-Defining the engagement is the following steps:
-identifying the service(s) to be provided (and services being excluded)
-disclosing the planner's compensation arrangement(s)
-determining the responsibilities of client and planner
-establish the duration of the engagement
-provide any additional info necessary to determine, define, or limit the scope of engagement
LO 1-3: Step 1 of Financial Planning Process: Understanding the client's personal and financial
circumstances - ANS it-2 types of information the must be gathered to properly assess
client's situation:
1. determining a client's personal and financial goals, needs, and priorities (qualitative info)
2. obtaining quantitative info and documents
-QuaLitative info (Lifestyle info):
-planner has to understand the client's values, attitudes, priorities, and expectations.
-the planner is dependent on the client for this info so the planner needs to stress the
importance of being open and honest and accurate
-QuaNtitative info (Names and Numbers):
-the planner needs to determine what documents they may need
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