HS 300 Financial planning process UPDATED ACTUAL
Questions and CORRECT Answers
Domain 4 CFP Board 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 Communicating the Recs
Plans for single goals (dom 5) often only verbal
Planner must make sure that what is available for plan cash flow
implementation? (dom 5)
Planners must ensure that clients know what 3 things understand what actions should be taken, what the cost (capital+time) theyll take,
(dom 5) consequences of inaction
Domain 5 CFP Board 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 Implementing the Recs
, Part of the advisors job is to make sure that... (dom 6) plan implementation is carried out properly and according to schedule agreed on
by client (motivate and assist the client in each of the steps necessary for full plan
completion)
Implementation requires what? (dom 6) the delineation of duties between the advisor and the client
Duties will vary based on what? (dom 6) business model- commission based will sell directly, fee based will outsource
product acquisition devices
Domain 6 CFP Board 1. Create a prioritized implementation plan with timeline.
2. Assign responsibilities (e.g., professional, client or other family
member duties).
3. Support the client directly or indirectly with implementation of the
recommendations.
4. Coordinate and share information, after being granted authorization,
with others.
5. Define monitoring responsibilities with the client
also- determine frequency of meetings
Domain 7 Monitoring the Recs
First part (domain 7) measuring the performance of the implementation vehicles
Second part (domain 7) updates should be obtained concerning changes in the client's personal and
financial situation
Third part (domain 7) changes that have occured in the economic, tax, financial environment should be
reviewed with client
3 types of meetings (domain 7) phone calls, informal visits, structured meetings
advisors should contact their clients (domain 7) at least as frequently as the client's other professional relationships
Questions and CORRECT Answers
Domain 4 CFP Board 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 Communicating the Recs
Plans for single goals (dom 5) often only verbal
Planner must make sure that what is available for plan cash flow
implementation? (dom 5)
Planners must ensure that clients know what 3 things understand what actions should be taken, what the cost (capital+time) theyll take,
(dom 5) consequences of inaction
Domain 5 CFP Board 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 Implementing the Recs
, Part of the advisors job is to make sure that... (dom 6) plan implementation is carried out properly and according to schedule agreed on
by client (motivate and assist the client in each of the steps necessary for full plan
completion)
Implementation requires what? (dom 6) the delineation of duties between the advisor and the client
Duties will vary based on what? (dom 6) business model- commission based will sell directly, fee based will outsource
product acquisition devices
Domain 6 CFP Board 1. Create a prioritized implementation plan with timeline.
2. Assign responsibilities (e.g., professional, client or other family
member duties).
3. Support the client directly or indirectly with implementation of the
recommendations.
4. Coordinate and share information, after being granted authorization,
with others.
5. Define monitoring responsibilities with the client
also- determine frequency of meetings
Domain 7 Monitoring the Recs
First part (domain 7) measuring the performance of the implementation vehicles
Second part (domain 7) updates should be obtained concerning changes in the client's personal and
financial situation
Third part (domain 7) changes that have occured in the economic, tax, financial environment should be
reviewed with client
3 types of meetings (domain 7) phone calls, informal visits, structured meetings
advisors should contact their clients (domain 7) at least as frequently as the client's other professional relationships
