1. A financial planner analyzes and evaluates a client’s current financial status during the financial planning process. Which of the following tasks are completed in this stage?
1. Identifying alternative investment vehicles
2. Identifying financial strengths and weaknesses
3. Recommending specific tax strategies
4. Assessing a client’s insurance coverage
1 and 3
2 and 4
1, 2 and 3
2, 3 and 4
2. Client-planner relationship is established and defined, the financial planner does which of the following?
1. Fully explains how the planner will be compensated
2. Advises the client that the planner will determine how the recommendations will be implemented
3. Discusses expectations regarding the roles of each party
4. Discusses the duration of the relationship
1 and 4
2 and 3
1, 3 and 4
1, 2, 3 and 4
3. Regarding the identification of financial strengths and weaknesses is(are) CORRECT?
I. This process is primarily objective.
II. A planner may rely on financial ratios to assist in making this determination.
I only
II only
Both I and II
Neither I nor II
4. A and B, both age 56, plan to retire at age 62. They have 3 children: X, age 34, an assistant; Y, age 32, a chemist; and Z, age 22, a Teacher. They also have 5 grandchildren. Most likely, in what stage in the financial lifecycle are A and B?
Gifting
Distribution
Conservation
Asset accumulation
5. Following are considered financial weaknesses
1. Low risk tolerance level
2. Insufficient insurance coverage
3. Inarticulate financial goals
4. Weak cash flow management skills
1 and 4
3 and 4
2, 3 and 4
1, 2, 3 and 4
5. Which of the following activities would be appropriate if you were establishing and defining the client-planner relationships or gathering information necessary to fulfill the engagement?
1. Determining which stocks to purchase for an investment portfolio
2. Inquiring about the number of dependents
3. Collecting personal financial statement information
4. Inquiring about the age or dates of birth of dependents
1 only
1 and 3
2 and 4
2, 3 and 4
6. Sara is with clients, Sam and Eli, to define their goals. Sam tells Sara one of his goals is purchasing a camp in 2 years, and Eli rolls her eyes. What is the best action for Sara to take next?
Ask Sam and Eli if they have any other goals.
Get more details regarding the purchase of the camp.
Recommend how Sam and Eli can pay for the camp.
Ask Eli if the camp is a mutually agreed-upon goal.
7. - Financial planning process is(are)?
I. As the client-planner relationship is established and developed, the financial planner fully explains theservices to be provided, compensation, and the source of compensation.
II. Financial plan recommendations should always be monitored on a monthly basis as circumstances maychange over time.
I only
II only
Both I and II
Neither I nor II