CFP General Principles Exam Questions and Answers

Financial Planning. - ANSWER-The process of determining whether and how clients can meet their goals through proper management of financial resources. 8 Major Domains. - ANSWER-Establishing and defining the client-planner relationship. Gathering information necessary to fulfill the engagement. - ANSWER-Analyzing and evaluating the client's current financial status. Developing the recommendations. - ANSWER-Communicating the recommendations. Implementing the recommendations. - ANSWER-Monitoring the recommendations. Practicing within - ANSWER-professional and regulatory standards. Domain One. - ANSWER-Establishing and defining the client planner relationship. Identify the client. - ANSWER-Discuss financial planning needs and expectations of the client. Discuss the financial planning process with the client. - ANSWER-Explain scope of services offered by the CFP professional and his firm. Assess and communicate the CFP professional's ability to meet the client's needs and expectations. - ANSWER-Identify and resolve apparent and potential conflicts of interest in client relationships. Discuss the client's responsibilities and those of the CFP professional. - ANSWER-Define and document the scope of the engagement with the client. Provide client disclosures. - ANSWER-Regulatory disclosure. Compensation arrangements and associated potential conflicts of interest. Domain Two. - ANSWER-Gathering information necessary to fulfill the engagement. Identify the client's values and attitudes. - ANSWER-Explore with the client their personal and financial needs, priorities and goals. Explore the client's time horizon for each goal. - ANSWER-Assess the client's level of knowledge and experience with financial matters .