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During the Information Gathering & Goal Setting step in the financial planning process, the Financial Planner _____. If you had a budget surplus, which of the following choices would best increase that surplus? The budget that shows nonrecurring events that are usually associated with long-term financial goals, Income remaining after the deduction of living expenses and debt obligations that is available for capital expenditures or investment. When you identify the product you want to buy, you should first identify __________. False The financial plan is essentially a chapter or section of a business plan. Obtain information from client through interview/questionnaire regarding financial resources and obligations, personal and financial goals, needs, and priorities and encourage prioritization, Assess client's values, attitudes, expectations, and experience with financial matters - the planner should not allow his own values, attitudes, and expectations to influence his assessment of those of the client. A person is usually in this phase from approximately 45 to 60 or immedi- ately preceding the client's planned retirement date, a.) Goals of the Budgeting Process. A summary of income and expenses over a period of time is called __________. Financial planning will help you to do this and the financial planning process follows the Six Steps approach. They invest internationally in local businesses and nonprofit organizations that are effectively addressing the problem. The costs of operating a car include all the following EXCEPT __________. Real estate prices fell across the board because the market was glutted with surplus pre-owned homes for sale. Conduct surveys — Using a complete census of a given area, or sample surveys that focus on problems/concerns 2. A budget that focuses on one particular financial asset, actvity, or goal. Retirement planning how your estate will be distributed after you die. Once such opportunities get recognized the managers can recognize the actions that need to be taken to realize them. Dylan __________. Effective estate planning can protect your wealth against unnecessary taxes and ensure that your wealth is distributed to your family in the manner that you desire. An important part of the planning process is to be aware of the business opportunities in the firm’s external environment as well as within the firm. Everyone needs a personal financial plan. Following a 5 step financial planning process should significantly increase the potential of developing a winning financial plan. The budget process begins with a thorough understanding of your __________. Leveraged funds are riskier than funds that do not use leverage because they __________. Measuring results, taking corrective action C. Measuring past performance, targeting future performance D. Setting objectives, deciding how to accomplish them. On a cash flow statement, each cash flow is shown as a percentage of total __________. The financial planning process Part 3 What Are the Activities Involved in the Process of Personal Financial Planning? They are easy to create and the advantages of having a financial plan to follow will completely change your financial life. Conduct interviews — With others who are involved or concerned such as other government agencies, non-government organizations, and community groups 4. Begins when a person realizes that he can afford to spend on things he may have never believed possible, Risk tolerance: investor's willingness to accept risk (e.g., declines in the value of his investments), a.) The financial decision making process is complicated by all of the following factors EXCEPT _____. The beginning of this phase is characterized by the following: a.) It's called "financial planning" for a reason: Plans evolve and change just like life. Learn process financial planning with free interactive flashcards. In order to prepare for your future, you will need to find a way that you can manage your finances to achieve your life goals. A group created to buy and manage commercial property is called a __________. Individual factors may affect all the following financial situations EXCEPT __________. d. the complexity of relationships among factors. Methods of investing in commodities include __________. Becky graduated with a master's degree in Personal Financial Planning. Understanding the Financial Pyramid is an essential part of understanding the financial planning process. A budget for long-term goals involving non-recurring items is called a/an __________. C. analyze your current personal and financial situation. You should read a fund's prospectus to __________. Discuss the financial planning process 3.) 2. Mutual funds that own shares in other mutual funds rather than in securities per se, are called __________. The most commonly noted spreads are those between Treasury and corporate securities of the same maturity. a. The first step of the financial planning process is to: A. develop financial goals. Sources of information about your recurring incomes and expenditures include __________. C. financial goals. Choose from 500 different sets of financial planning flashcards on Quizlet. Examples of recurring incomes are __________. Which kind of financial statement does she need? Personal financial planning requires you to engage in a variety of different planning activities, including asset acquisition planning; liability and insurance planning; savings, investment, and tax planning; employee benefit and retirement planning; and estate planning. This is an example of __________. Choose from 500 different sets of personal financial planning process flashcards on Quizlet. Retirement planning involves determining how much money you should set aside each year for retirement. At the beginning of the planning-controlling process, planning a. plays a major role in shaping the control process. The strategic planning process is broader—it helps you create a roadmap for which strategic objectives you should put effort into achieving and which initiatives will be less helpful to the business. A loan structured such that money can be borrowed as needed, up to a limit, and paid down as desired, and interest is paid regularly but only on the outstanding balance. Assess and communicate ability to meet the client's needs and expectations 5.) I will try to outline the basic concept of the Financial Pyramid as it applies to personal financial planning.. c. is shaped by the control system requirements. Budgeting is a critical process for any business in several ways. Commodities include all the following EXCEPT __________. In financial planning, effective goals are __________. Dylan earns $24,500 a year as an office worker. After working two years in a small financial planning firm, Becky earns $60,000 annually and saves $10,000 a year. Choose from 500 different sets of process financial planning flashcards on Quizlet. Steps of the financial planning process The definition of financial planning The term for determining if a project's potential revenue exceeds its expected costs Financial controls Types of budgets Hold community, village or town meetings — Identify key problems and issues 3. 2.) Start studying ch. b) All the non-financial information about a firm researched and analyzed for a minimum of 2 years c) A combination of financial information and relevant non-financial information d) a detailed report outlining how management currently handles all of a company's costs, and the changes it … Investments in gold, silver, and other precious metals __________. A difference between two interest rates, quoted in basis points. The value of assets is equal to the value of liabilities plus the value of __________. Start studying 1: Personal Financial Planning Process. Having the proper insurance coverage and policies in place can provide peace of mind for you and your loved ones.. Investment: A proper financial plan considers your personal circumstances, objectives and risk tolerance. The strategic planning process steps are outlined below. c. the use of information in planning. Budgets can be prepared conservatively by __________. An alternative to a promise of "satisfaction guaranteed" on a product is __________. This is where are a financial planning-focused financial advisor can come in handy. Personal financial management is important because it a. controls inflation b. lessens economic differences among individuals c. uses money as an end d. makes personal financial goals easier to achieve ANS: D 2. Monitor the financial planning recommendations. a. it will be easier for buyers to borrow. Recession and inflation have decreased the value of your investments. A budget that includes the operating budget and the capital budget, that is, it is designed to show all aspects of financial activities. What are the Material Elements of Financial Planning. 1). Passively managed funds designed to mirror the performance of an representative asset class are called __________. Identify the client (individual, family, business, organization). A mortgage in which you borrow a monthly income via a loan against your home equity that you don't have to pay back for as long as you live there is called a/an __________. a number only apply when a CFP professional is engaged in financial planning or material elements of the financial planning process, a. Once you have selected a good, your purchase options may include any of the following EXCEPT __________. The budget that shows recurring income and expenses, usually living expenses and incomes from wages, interest, and dividends, usually related to short-term financial goals. Begins between ages 20 and 25 and lasts until approximately age 45 or later if the client's children are not yet independent. B. implement the financial plan. Select one: a. uncertainty and risk. Periods of contraction in the economy often lead to __________. Learn vocabulary, terms, and more with flashcards, games, and other study tools. Learn financial planning with free interactive flashcards. Storing wealth, creating income, and reducing future expenses are all uses of __________. Identify and disclose conflicts of interest in client relationships 6.) 5. 14 assignment. If an asset is worth more when you re-sell it than when you bought it, then you have __________. Strategic Planning Process. b. is temporarily unrelated to the control process. Financial Planning Process Step 6: Monitor the Plan . a. project the effects of your financial choices. At this stage, the planner(s) and community leaders collect information to assess problems and needs. A fund of real estate holdings that can be privately held or publicly traded on an exchange is a __________. D. evaluate and revise your actions. 2). If interest rates and inflation are low and there is liquidity in the credit markets, __________. Serena wants to see how her money from all sources came in and went out for all uses during each month of the past year. The uncertainty associated with decision making is referred to as: A. opportunity cost. Step 1: Defining the Client-Planner Relationship. A realistic look must be taken at the prospect of these new opportunities and SWOT analysisshould be done. While it’s certainly possible to craft a financial plan on your own, it’s an exceptionally difficult process. Your financial planning should reflect the realities of your career choice because your choice of career affects your __________. This is an example of __________. The financial decision making process is complicated by all of the following factors EXCEPT __________. Strategic planning process steps 1. Even though you’re both the client and the planner, you should still make sure to identify roles for other people involved. a.) Once the plan is created, it's essentially a piece of history. defined in CFP Board's Standards of Professional Conduct as "the process of determining whether and how an individual can meet life goals through the proper management of financial resources. Mutual funds provide investors with __________. When you invest in stocks you __________. e. the relative importance of consequences. How would you classify these activities in your cash flow statement? The risk that actual returns will not match or exceed expected returns is called __________. Family Security: Providing for your family's financial security is an important part of the financial planning process. Discuss and evaluate changes in client's personal circumstances (e.g., birth/death. Financial advisors may assist through all the following services EXCEPT __________. Developing premises about the future, evaluating them B. Investment risks include all the following EXCEPT __________. A factor to consider in calculating your mortgage affordability includes __________. b. the number of factors to consider. Before settling on a plan of action and then determining how to strategically implement it, executives may consider many possible options. d. decreases organizational flexibility. Because of inflation, the school supplies you bought for $20 last year now cost __________. Seeing the effect of each financial transaction or event on your current situation is the purpose of __________. The relationship between your financial statements and your budget is that together they allow you to __________. 64. - Access to current criteria for evaluation including the use of Counter Threat Finance resources to ensure that when funds are allocated, they are not falling into the hands of individuals aiding and abetting the enemy. Follow this six-step process and you’re well on your way to financial success. Planning is the process of _____ and _____. Categories for housing structures with different attributes include __________. c. your ability or willingness to take chances. Synthesize (incorporate) all findings from the analysis of the client's financial status into the recommendations. Financial statement preparation and analysis (including cash flow analysis/planning and budgeting), B. An investment policy statement is __________. Recurring incomes and expenses __________. Perfect Lawn Inc.'s stock price has fallen because it was not able to meet its production deadlines. Discuss the responsibilities of the client, CFP® professional, and other parties involved 7.) Online Quiz #1: Chapter 1 — Understanding the Financial Planning Process ACE 240 Online MULTIPLE CHOICE: CHOOSE THE BEST ANSWER 1. Characteristics of financial advisors to look for include __________. In January you made your final payment on your car loan and in July you got a small home equity loan to replace windows and add a deck. Being able to realise our plans requires objectives, information, organisation and compromise. ", a. Advantages of renting a home include all the following EXCEPT __________. This process forms part of our ongoing planning discussions with you to ensure that we are always working towards the achievement of your financial and lifestyle objectives. Funds structured to increase return through active management with the expectation of a down market are called __________. Your prime directive as a consumer is to __________. Learn how personal financial planning will impact your money management skills. 1.) - Common metrics and a process or guidelines that enable effective assessment. CFP Board requires a written agreement by the CFP® certificant or his employer after the scope of the engagement has been mutually defined by the CFP® professional and the client, and prior to the professional providing financial planning or material elements of financial planning to a client. Financial planning is the process of projecting a company's financial statement into the future, and is separate and distinct from a the broader activity of business planning. Determine your strategic position Learn vocabulary, terms, and more with flashcards, games, and other study tools. The following information and disclosures must be in writing: The requirement that information be disclosed in writing depends upon whether an agreement to provide financial planning services has been entered into by the planner and the client. Start studying Financial Planning - Chapter 1. B. selection of alternatives. Your risk tolerance represents __________. Learn vocabulary, terms, and more with flashcards, games, and other study tools. This is an example of __________. Learn personal financial planning process with free interactive flashcards. A variety of techniques may be used: 1. This is why the plan needs to be monitored and tweaked from time to time. e. increases … Their strategy is an example of __________. Say for example the government plans on promoting cottage in… a. an investor's return objectives, risk preferences, and constraints. All of the following assets or activities would be appropriate for developing a specialized budget EXCEPT __________. The Joneses believe it is important to try to reduce poverty and hunger globally by aiding local communities. An effect of deflation is that your money __________. Explain the scope of services offered 4.) Controlling your money is the first step to financial … Financial Planning With a Financial Advisor. A. Present a financial plan to the client reviewing: includes the ability to recognize emotional expressions in oneself and the client, as well as selecting socially appro- priate responses to both the circumstances and the client's emotions, paying full attention to what the client is saying and responding by paraphrasing the client's comments, guide the client to give more detail, making a "meet- ing of the minds" more likely, nonverbal messages involving facial expressions, gestures, and body posture, 1. create prioritized implementation plan. The strategic planning process requires considerable thought and planning on the part of a company’s upper-level management. Recommends short and long term investment strategies. He pays $1,000 a month for rent, $300 a month toward his car, and his other expenses come to around $1,200 a month. The process gets managers to consider how conditions may change and what steps they need to take, while also allowing managers to understand how to address problems when they arise. You can actually do (most) of it at home. A difference between the actual results of your financial activity and your expected, budgeted results. A. Your time horizon for financial planning is __________. Successful plans will also require a significant degree of financial planning. Completing paperwork to open a brokerage account, Defines the legal relationship between the financial planner and the client, Domain 1 - Establishing and defining the client-planner relationship, Establishing and Defining the Client-Planner Relationship (Domain 1), Gathering Information Necessary to Fulfill the Engagement (Job Task Domain 2), Analyzing and Evaluating the Client's Current Financial Status (Job Task Domain 3), Developing and Communicating the Recommendations (Job Task Domains 4 & 5), Implementing the Recommendations (Job Task Domain 6), Monitoring the Recommendations (Job Task Domain 7), 1.) overestimate expenses, losses, and the value of liabilities and. Between low premiums and high deductibles/low coverage or higher pre- miums with greater coverage (for insurance considerations), the client's assessment of the magnitude of the risks being traded off, the degree to which a client's financial resources can cushion risks, this theory involves clients valuing gains and losses differently and as a result making decisions based on perceived gains rather than perceived losses, assets, liabilities, cash flow, budgeting, and debt, current insurance coverage, retained risks, asset protection, and client liquidity, availability, participation, and coverage levels, asset allocation, investment strategies, types of investments, income, estate, and gift tax issues; current tax strategies; tax compliance status, current retirement plans and strategies, accumulation and distribution planning, documents, estate tax liabilities, asset ownership, beneficiary designations, gifting strategies, business form, employer benefits, succession planning and exit strategy, risk management, divorce/remarriage considerations, nontraditional family planning, charitable planning, dependent adult needs, disabled child needs, and terminal illness planning, Creating client-specific recommendations tailored to meet the goals and objectives. Aids in the planning of actual operations. Reviews Assets, Liabilities, Current and Projected Income, Insurance Coverage and Investments. B. On a regular basis we will review the performance of your plans to assess the levels of volatility and return. 1. Examples of non-recurring expenditures are __________. The Financial Planning Process & Ethics Learn with flashcards, games, and more — for free. must be followed by any person allowed to use the CFP® marks, regardless of his nature of employment, title, role, or compensation structure. What is financial planning? Client relationships 6. graduated with a thorough understanding of your career choice because your of... Approximately age 45 or later if the client and the value of __________ 6... That your money is the first step of the budgeting process impact money! Answer 1 created to buy and manage commercial property is called __________ an! Including cash flow statement, each cash flow statement you want to buy and manage property. 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