FPQP - MODULE 1 - THE FINANCIAL
PLANNING PROCESS QUESTIONS WITH
LATEST VERIFIED 100% CORRECT ANSWERS!!
LO 1-1: Definition of personal financial planning Answer - "a collaborative
process that helps maximize a Client's potential for meeting life goals through
Financial Advice that integrates relevant elements of the Client's personal and
financial circumstances."
LO 1-1: Areas of financial planning Answer - 1. developing goals
2. cash management
3. debt management
4. risk management planning
5. insurance planning
6. educational needs
7. group benefits planning
8. investment planning
9. retirement planning
10. income tax planning
11. philanthropic interests
12. estate planning
LO 1-1: Seven Steps of (personal) Financial Planning Answer - 1. Understanding
the client's personal and financial circumstances
2. Identifying and selecting goals
, 3. Analyzing the client's current course of action and potential alternate
course(s) of action
4. Developing the financial planning recommendations
5. Presenting the financial planning recommendations
6. Implementing the financial planning recommendations
7. Monitoring the progress and updating
LO 1-1: What is the difference between comprehensive and targeted planning?
Answer - 1. Comprehensive planning just about covers all aspects of a person's
financial situation including consideration of risk management, investment
planning, tax planning, retirement planning, and estate planning
2. Targeted planning typically addresses only a segment of an individual's
objectives such as trying to buy a first home, caring for an elderly parent, or
reducing tax burdens. Often times a targeted plan becomes the starting point
for a comprehensive plan.
LO 1-2: Steps to setting a financial goal Answer - 1. Potential goals should be
identified by the client
2. Time frame has to be established
3. Goal should be stated in quantifiable terms as far as amount (e.g., how much
money and beginning when)
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