Introduction to Financial Planning Questions
Rightly Answered
Examples of _____data include:
Business finances, such as financial statements, shareholder agreements, stock
option plans, profit sharing plans and employee benefit plans - ✅✅ Quantitative
data
You may define and prioritize your clients by doing the following: - ✅✅
Encourage your clients to talk about their goals
Ask questions and probe to identify which goals are most important
Develop timelines to achieve the goals
List four characteristics of realistic & achievable financial goals? - ✅✅ 1.
Specific and measurable
2. Ordered in level of importance
3. Defined by time frame
4. Acceptable in level of risk
Once your clients' financial objectives have been clearly identified and prioritized,
the next step is to ______ in order to construct a financial profile. The financial
profile contains both qualitative and quantitative data. - ✅✅ assess their current
financial situation
During the information acquisition stage, the Advisor must be aware of the
following aspects of data collection (List 3) - ✅✅
1. Implicit Data
2. Two-Way Process
3. Confidentiality
One of the critical qualitative pieces of information that the Advisor needs to
gather is a client's attitude towards ______. ____ _____ has a direct bearing on
asset allocation within the investment portfolio which, in turn, affects the portfolio
return. - ✅✅ risk. Risk tolerance
Retiring at a specific age may turn out to be an unachievable goal for a client. List
4 alternative suggestions. - ✅✅ 1. Increase the time frame
2. Reduce desired retirement income
, 3. Increase investment return by assuming more risk
4. Reduce expenditures
If financing a child's post-secondary education to a specified amount is
unachievable give 3 alternative suggestions. - ✅✅ 1. Apply for a student loan
2. Child finds employment
3. Set up an RESP
List the 6 steps involved in financial planning. - ✅✅
1. Establishing the client/Advisor relationship
2. Collecting data and information
3. Analyzing data and information
4. Recommending strategies to meet goals
5. Implementing recommendations
6. Conducting a periodic review or follow-up
Clients expect financial plans to be both _____ and ____. An _____ plan produces
the best results for the least money, while an _____ plan delivers desired results. -
✅✅ Efficient and effective. Efficient, effective
The first step in the planning process is to _____to determine _____ and establish
how development of a financial plan might help. - ✅✅ interview your clients,
any issues or problems they have identified
List 4 areas of discussion in the initial interview? - ✅✅
1. The financial planning process and how it will help your clients meet their
objectives
2. Alternative strategies to choose from
3. Specialist expertise required for specific choices
4. Disclosure of possible conflicts of interest
What is the first step in the financial planning process? - ✅✅ Establishing the
Client/Advisor Relationship
If the initial interview is successful, formalize the relationship with either a _____
or a ____. - ✅✅ letter of engagement or a professional service contract.
Rightly Answered
Examples of _____data include:
Business finances, such as financial statements, shareholder agreements, stock
option plans, profit sharing plans and employee benefit plans - ✅✅ Quantitative
data
You may define and prioritize your clients by doing the following: - ✅✅
Encourage your clients to talk about their goals
Ask questions and probe to identify which goals are most important
Develop timelines to achieve the goals
List four characteristics of realistic & achievable financial goals? - ✅✅ 1.
Specific and measurable
2. Ordered in level of importance
3. Defined by time frame
4. Acceptable in level of risk
Once your clients' financial objectives have been clearly identified and prioritized,
the next step is to ______ in order to construct a financial profile. The financial
profile contains both qualitative and quantitative data. - ✅✅ assess their current
financial situation
During the information acquisition stage, the Advisor must be aware of the
following aspects of data collection (List 3) - ✅✅
1. Implicit Data
2. Two-Way Process
3. Confidentiality
One of the critical qualitative pieces of information that the Advisor needs to
gather is a client's attitude towards ______. ____ _____ has a direct bearing on
asset allocation within the investment portfolio which, in turn, affects the portfolio
return. - ✅✅ risk. Risk tolerance
Retiring at a specific age may turn out to be an unachievable goal for a client. List
4 alternative suggestions. - ✅✅ 1. Increase the time frame
2. Reduce desired retirement income
, 3. Increase investment return by assuming more risk
4. Reduce expenditures
If financing a child's post-secondary education to a specified amount is
unachievable give 3 alternative suggestions. - ✅✅ 1. Apply for a student loan
2. Child finds employment
3. Set up an RESP
List the 6 steps involved in financial planning. - ✅✅
1. Establishing the client/Advisor relationship
2. Collecting data and information
3. Analyzing data and information
4. Recommending strategies to meet goals
5. Implementing recommendations
6. Conducting a periodic review or follow-up
Clients expect financial plans to be both _____ and ____. An _____ plan produces
the best results for the least money, while an _____ plan delivers desired results. -
✅✅ Efficient and effective. Efficient, effective
The first step in the planning process is to _____to determine _____ and establish
how development of a financial plan might help. - ✅✅ interview your clients,
any issues or problems they have identified
List 4 areas of discussion in the initial interview? - ✅✅
1. The financial planning process and how it will help your clients meet their
objectives
2. Alternative strategies to choose from
3. Specialist expertise required for specific choices
4. Disclosure of possible conflicts of interest
What is the first step in the financial planning process? - ✅✅ Establishing the
Client/Advisor Relationship
If the initial interview is successful, formalize the relationship with either a _____
or a ____. - ✅✅ letter of engagement or a professional service contract.
