FPQP
Comprehensive Financial Plan - answercovers almost all aspects of a personal's
financial situation (including risk mama genet, investment planning, tax, retirement, and
estate planning)
Targeted Financial Plan - answer focus on a segment of individual's objectives. (ex -
first home, elderly care, reducing tax burden)
Goals should be... - answerdefined or definite
Steps to setting financial goal - answer1. Purpose, 2. Timeframe, 3. Amount
("PTA")
Personal financial planning is continuous or noncontinuous? - answerContinuous
7 Steps of Financial Planning Process: - answer1. Understanding client's personal and
financial circumstances.
2. Identifying and selecting goals.
3. Analyzing the client's current course of action and potential alternatre course(s).
4. Devleoping the financial planning recommendations.
5. Presenting the financial planning recommendations.
6. Implementing the financial planning recommendations.
7. Monitoring process and updating.
Two types of information:
(Step 1 - Understanding client's personal and financial circumstances) - answer1.
Quantitative - "names and numbers"
family profile, assets and liability, cash inflows/outflaws, insurance policy info,
employee/pension plan, tax returns, retirement benefits
2. Qualititative - "lifestyle info"
goals/objectives, health status, interests/hobbies, risk-tolerance level, changes in
lifestyle, estate planning issues, money values, family relationships, planning
assumptions
"SWOT" Approach
(Step 3 - analyze and evaluate) - answerSWOT = Strenghs, Weaknesses,
Opportunities, Threats
, Existing conditions are reviewed to identify strengths and weakenesses in client's total
current financial situation. Identifying existing or potential problems that could impact the
client's ability to achieve objectives.
Emergency fund should be how much? - answer3-6 months expenses in emergency
fund.
Developing a plan means...
(Step 4 - Reccommdations) - answerthe planner determines the appropriate asset
categories for the client's objective, time horizon, etc.
What duty is required of a financial planner? - answerFiduciary Duty
= keep client's best interest over your's or your firm's.
Cash Flow Statement - answerA cash flow statement summarizes actual cash receipts
and cash disbusements for a specified period of time.
Records inflows and outflows over a period of time.
(Inflows = income, salary, investments
Outlfows = loan payments, utility payments)
+/- cash flow likely affects an individual's net worth.
3 Asset categories - answer1. Cash/Cash equivalents
2. Invested assets
3. Use assets
Examples:
Cash/Cash eq. = checking account, credit union savings account.
Invested = stock portfolio, IRA, 401k
Use = Home, automobile, personal property
Assets are shown at ... ? - answerFair Market Value
Net Worth - answerIs the difference between assets and liabilities.
Areas most often bulk of individual's net worth is in home equity, personal property,
and/or retirement benefits.
Fixed Outflows - answerPredictable and reoccurring. (Indviduals have little to no conrol
over fixed outflow amounts).
Examples:
Comprehensive Financial Plan - answercovers almost all aspects of a personal's
financial situation (including risk mama genet, investment planning, tax, retirement, and
estate planning)
Targeted Financial Plan - answer focus on a segment of individual's objectives. (ex -
first home, elderly care, reducing tax burden)
Goals should be... - answerdefined or definite
Steps to setting financial goal - answer1. Purpose, 2. Timeframe, 3. Amount
("PTA")
Personal financial planning is continuous or noncontinuous? - answerContinuous
7 Steps of Financial Planning Process: - answer1. Understanding client's personal and
financial circumstances.
2. Identifying and selecting goals.
3. Analyzing the client's current course of action and potential alternatre course(s).
4. Devleoping the financial planning recommendations.
5. Presenting the financial planning recommendations.
6. Implementing the financial planning recommendations.
7. Monitoring process and updating.
Two types of information:
(Step 1 - Understanding client's personal and financial circumstances) - answer1.
Quantitative - "names and numbers"
family profile, assets and liability, cash inflows/outflaws, insurance policy info,
employee/pension plan, tax returns, retirement benefits
2. Qualititative - "lifestyle info"
goals/objectives, health status, interests/hobbies, risk-tolerance level, changes in
lifestyle, estate planning issues, money values, family relationships, planning
assumptions
"SWOT" Approach
(Step 3 - analyze and evaluate) - answerSWOT = Strenghs, Weaknesses,
Opportunities, Threats
, Existing conditions are reviewed to identify strengths and weakenesses in client's total
current financial situation. Identifying existing or potential problems that could impact the
client's ability to achieve objectives.
Emergency fund should be how much? - answer3-6 months expenses in emergency
fund.
Developing a plan means...
(Step 4 - Reccommdations) - answerthe planner determines the appropriate asset
categories for the client's objective, time horizon, etc.
What duty is required of a financial planner? - answerFiduciary Duty
= keep client's best interest over your's or your firm's.
Cash Flow Statement - answerA cash flow statement summarizes actual cash receipts
and cash disbusements for a specified period of time.
Records inflows and outflows over a period of time.
(Inflows = income, salary, investments
Outlfows = loan payments, utility payments)
+/- cash flow likely affects an individual's net worth.
3 Asset categories - answer1. Cash/Cash equivalents
2. Invested assets
3. Use assets
Examples:
Cash/Cash eq. = checking account, credit union savings account.
Invested = stock portfolio, IRA, 401k
Use = Home, automobile, personal property
Assets are shown at ... ? - answerFair Market Value
Net Worth - answerIs the difference between assets and liabilities.
Areas most often bulk of individual's net worth is in home equity, personal property,
and/or retirement benefits.
Fixed Outflows - answerPredictable and reoccurring. (Indviduals have little to no conrol
over fixed outflow amounts).
Examples:
