Deck 1: Emerging Role of the Financial Planner

Question 1

Question 4. Which of the following is not one of the stages of financial planning?

A) Establishing client objectives
B) Analyzing the planning data
C) Plan implementation
D) Conducting periodic reviews
E) All of the above are stages

Answer 1

E

Question 2

What credentials and experience are desirable for maintaining a high standard in the financial planning profession?

Answer 2

Besides an undergraduate or graduate degree with a concentration in personal financial planning, it is desirable for the planner to hold the CFP® certification mark (or other equivalent marks). The CFP Board requires a minimum amount of work experience prerequisite for giving the CFP® certification mark to those with a baccalaureate degree. Finally, all CFP® registrants are required to maintain continuing education credits; the requirement is based on a two-year period. These credit hours must be earned in two areas: (a) ethics (minimum number of hours as specified by the CFP Board's Code of Ethics and professional responsibility and (b) the remaining hours can be represented by one or more of the specified areas. The intent of continuing education is to ensure that certified planners maintain their competencies.

Question 3

Why would a financial planner want or need to work with another financial professional?

Answer 3

Financial planning encompasses a wide breadth of content knowledge. While the typical planner understands the key concepts and strategies across the content disciplines, he or she may not specialize in a given area of need for the client. For example, the planner might offer holistic financial planning and specialize in asset management. It makes sense in this situation to refer the client to a financial professional who specializes in income tax preparation. In some situations, law dictates that another professional be consulted. If the planner is not a licensed attorney, then the client would have to be referred to a qualified attorney who would draw up the estate planning documents and set up the trusts.

Question 4

Question 8. Which organization designs, tests, and grants the certified financial planning designation?

A) IBCFP
B) IAFP
C) CFP Board
D) Either A or B
E) None of the above

Question 5

Question 2. Which of the following best describes the CFP Board's definition of financial planning?

A) Financial planning is a one-time activity that involves recommending products to clients.
B) Financial planning is an integrative process in which the planner helps the client achieve their goals.
C) In order for an engagement to be considered financial planning, it must include all core subject areas i.e., cash and debt management, risk management, funding education, investments, income tax, retirement planning and estate planning).

Question 6

Financial planning is a dynamic, integrative process. Explain this statement.

Question 7

Describe the major emerging trends in financial planning.

Question 8

What are the key content areas of financial planning?

Question 9

Question 6. In which stage of the economic life cycle would a client typically have high debt?

A) Accumulation stage
B) Consolidation stage
C) Spending stage
D) Gifting stage

Question 10

Question 5. Which of the following is an example of the "art of financial planning?"

A) Determining the client's retirement need
B) Calculating a prudent emergency fund amount
C) Deciding which qualified retirement plan would meet the client's objectives
D) Interviewing the client to understand his or her goals and objectives
E) Assessing how best to lower the tax liabilities

Question 11

Is it possible for a financial planner to coordinate the activities of various professional advisers, or is that the figment of the imagination of the authors?

Question 12

The authors emphasize the value of ethics in all phases of financial planning. What should a planner do if an effort to maintain the highest level of ethics adversely affects the business?

Question 13

What is meant by the statement "financial planning is both an art and a science?"

Question 14

Describe the three stages of the typical client's life cycle.

Question 15

Create the profile of a financial planner who does not quite fit the description of a professional financial planner.

Question 16

Question 3. What is the correct sequence of steps in the financial planning process?

A) Make recommendations, analyze the data, and determine goals
B) Determine goals, make recommendations, and analyze the data
C) Determine goals, analyze the data, and make recommendations
D) Analyze the data, determine goals, and make recommendations

Question 17

Is it possible for the financial planner as a businessman to be ethical and still stay in business for very long?

Question 18

Question 7. A financial planner would most likely interact with all except the following professional:

A) Certified public accountant
B) Stockbroker
C) Lawyer
D) Banker
E) All of the above are professionals with whom the financial planner will interact

Question 19

Question 1. Which of the following best describes the current and expected future retirement environment?

A) Most clients will be able to count on secure defined-benefit pension incomes from employer and government retirement plans.
B) Social Security benefit increases will more than make up for most retirees' income needs due to longer retirement periods.
C) The lengthening of longevity, partially the result of medical technology means that many Americans will have to delay retirement in order to work longer.
D) Comfortable retirements are a thing of the past, regardless of planning.

Question 20

Question 9. Which of the following are certification designations in the field of personal financial planning?

A) Certified financial planner CFP)
B) Certified financial consultant ChFC)
C) Registered financial planner RFP)
D) All of the above
E) B and C

Question 21

Question 10. A qualified financial planner should:

A) Have a minimum net worth of $100K
B) Possess an appropriate professional certification
C) Meet continuous education requirements
D) B and C
E) None of the above

Question 22

Question 11. Financial service professionals are expected to act in a highly ethical manner. Which of the following traits do the textbook authors suggest as important?

A) Act in a way that promotes client trust
B) Listen and act in an empathic manner
C) Maintain honesty when dealing with your client
D) Put your client's interest before yours
E) All of these are traits of a highly ethical planner