financial planning is a process to ensure that quizlet

Developing premises about the future, evaluating them B. The financial decision making process is complicated by all of the following factors EXCEPT _____. I will try to outline the basic concept of the Financial Pyramid as it applies to personal financial planning.. a. an investor's return objectives, risk preferences, and constraints. Financial Planning Process Step 6: Monitor the Plan . The beginning of this phase is characterized by the following: a.) Choose from 500 different sets of financial planning flashcards on Quizlet. Funds structured to increase return through active management with the expectation of a down market are called __________. They invest internationally in local businesses and nonprofit organizations that are effectively addressing the problem. Begins between ages 20 and 25 and lasts until approximately age 45 or later if the client's children are not yet independent. Aids in the planning of actual operations. Once the plan is created, it's essentially a piece of history. When you identify the product you want to buy, you should first identify __________. 2.) C. analyze your current personal and financial situation. What is financial planning? Choose from 500 different sets of personal financial planning process flashcards on Quizlet. 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. The first step of the financial planning process is to: A. develop financial goals. The financial decision making process is complicated by all of the following factors EXCEPT __________. - Common metrics and a process or guidelines that enable effective assessment. At this stage, the planner(s) and community leaders collect information to assess problems and needs. 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. Learn how personal financial planning will impact your money management skills. Strategic planning process steps 1. Goals of the Budgeting Process. Passively managed funds designed to mirror the performance of an representative asset class are called __________. a. Strategic Planning Process. Advantages of renting a home include all the following EXCEPT __________. 14 assignment. Storing wealth, creating income, and reducing future expenses are all uses of __________. Online Quiz #1: Chapter 1 — Understanding the Financial Planning Process ACE 240 Online MULTIPLE CHOICE: CHOOSE THE BEST ANSWER 1. Identify the client (individual, family, business, organization). Planning is the process of _____ and _____. On a cash flow statement, each cash flow is shown as a percentage of total __________. Learn vocabulary, terms, and more with flashcards, games, and other study tools. 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.) You should read a fund's prospectus to __________. B. selection of alternatives. After working two years in a small financial planning firm, Becky earns $60,000 annually and saves $10,000 a year. This is an example of __________. Step 1: Defining the Client-Planner Relationship. Financial statement preparation and analysis (including cash flow analysis/planning and budgeting), B. Retirement planning how your estate will be distributed after you die. A realistic look must be taken at the prospect of these new opportunities and SWOT analysisshould be done. Monitor the financial planning recommendations. Learn vocabulary, terms, and more with flashcards, games, and other study tools. A factor to consider in calculating your mortgage affordability includes __________. Start studying ch. e. the relative importance of consequences. 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. Real estate prices fell across the board because the market was glutted with surplus pre-owned homes for sale. How would you classify these activities in your cash flow statement? The value of assets is equal to the value of liabilities plus the value of __________. If interest rates and inflation are low and there is liquidity in the credit markets, __________. d. decreases organizational flexibility. Budgeting is a critical process for any business in several ways. The risk that actual returns will not match or exceed expected returns is called __________. 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. Reviews Assets, Liabilities, Current and Projected Income, Insurance Coverage and Investments. Categories for housing structures with different attributes include __________. False The financial plan is essentially a chapter or section of a business plan. Following a 5 step financial planning process should significantly increase the potential of developing a winning financial plan. 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 __________. C. financial goals. b. the number of factors to consider. ", a. 1.) must be followed by any person allowed to use the CFP® marks, regardless of his nature of employment, title, role, or compensation structure. Your prime directive as a consumer is to __________. Methods of investing in commodities include __________. Determine your strategic position The Joneses believe it is important to try to reduce poverty and hunger globally by aiding local communities. Understanding the Financial Pyramid is an essential part of understanding the financial planning process. Hold community, village or town meetings — Identify key problems and issues 3. A budget that includes the operating budget and the capital budget, that is, it is designed to show all aspects of financial activities. They are easy to create and the advantages of having a financial plan to follow will completely change your financial life. 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 budget that shows recurring income and expenses, usually living expenses and incomes from wages, interest, and dividends, usually related to short-term financial goals. Identify and disclose conflicts of interest in client relationships 6.) The budget process begins with a thorough understanding of your __________. This is why the plan needs to be monitored and tweaked from time to time. While it’s certainly possible to craft a financial plan on your own, it’s an exceptionally difficult process. Recession and inflation have decreased the value of your investments. 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. 1. Retirement planning involves determining how much money you should set aside each year for retirement. 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. Commodities include all the following EXCEPT __________. b. is temporarily unrelated to the control process. a. project the effects of your financial choices. The most commonly noted spreads are those between Treasury and corporate securities of the same maturity. The uncertainty associated with decision making is referred to as: A. opportunity cost. Investment risks include all the following EXCEPT __________. 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 This is an example of __________. 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. On a regular basis we will review the performance of your plans to assess the levels of volatility and return. Which kind of financial statement does she need? 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. This is an example of __________. If you had a budget surplus, which of the following choices would best increase that surplus? This is where are a financial planning-focused financial advisor can come in handy. Once you have selected a good, your purchase options may include any of the following EXCEPT __________. Your risk tolerance represents __________. 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. A difference between the actual results of your financial activity and your expected, budgeted results. Investments in gold, silver, and other precious metals __________. A. overestimate expenses, losses, and the value of liabilities and. A. 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 … A person is usually in this phase from approximately 45 to 60 or immedi- ately preceding the client's planned retirement date, a.) 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. Examples of non-recurring expenditures are __________. Being able to realise our plans requires objectives, information, organisation and compromise. d. the complexity of relationships among factors. Synthesize (incorporate) all findings from the analysis of the client's financial status into the recommendations. In financial planning, effective goals are __________. A variety of techniques may be used: 1. Because of inflation, the school supplies you bought for $20 last year now cost __________. All of the following assets or activities would be appropriate for developing a specialized budget EXCEPT __________. What are the Material Elements of Financial Planning. A budget that focuses on one particular financial asset, actvity, or goal. You can actually do (most) of it at home. c. your ability or willingness to take chances. An investment policy statement is __________. A difference between two interest rates, quoted in basis points. 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. Dylan earns $24,500 a year as an office worker. Learn vocabulary, terms, and more with flashcards, games, and other study tools. Once such opportunities get recognized the managers can recognize the actions that need to be taken to realize them. Their strategy is an example of __________. Recommends short and long term investment strategies. Even though you’re both the client and the planner, you should still make sure to identify roles for other people involved. - 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. Conduct interviews — With others who are involved or concerned such as other government agencies, non-government organizations, and community groups 4. a. it will be easier for buyers to borrow. 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. c. is shaped by the control system requirements. 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. A fund of real estate holdings that can be privately held or publicly traded on an exchange is a __________. Discuss the responsibilities of the client, CFP® professional, and other parties involved 7.) 64. Seeing the effect of each financial transaction or event on your current situation is the purpose of __________. a.) Financial advisors may assist through all the following services EXCEPT __________. 2. The strategic planning process requires considerable thought and planning on the part of a company’s upper-level management. Say for example the government plans on promoting cottage in… The strategic planning process steps are outlined below. c. the use of information in planning. Before settling on a plan of action and then determining how to strategically implement it, executives may consider many possible options. Periods of contraction in the economy often lead to __________. 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. Learn financial planning with free interactive flashcards. Examples of recurring incomes are __________. At the beginning of the planning-controlling process, planning a. plays a major role in shaping the control process. During the Information Gathering & Goal Setting step in the financial planning process, the Financial Planner _____. Recurring incomes and expenses __________. Your financial planning should reflect the realities of your career choice because your choice of career affects your __________. A summary of income and expenses over a period of time is called __________. Budgets can be prepared conservatively by __________. Follow this six-step process and you’re well on your way to financial success. Controlling your money is the first step to financial … If an asset is worth more when you re-sell it than when you bought it, then you have __________. a number only apply when a CFP professional is engaged in financial planning or material elements of the financial planning process, a. D. evaluate and revise your actions. Mutual funds that own shares in other mutual funds rather than in securities per se, are called __________. The financial planning process Part 3 What Are the Activities Involved in the Process of Personal Financial Planning? Successful plans will also require a significant degree of financial planning. 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. 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. 1). The relationship between your financial statements and your budget is that together they allow you to __________. 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. Start studying 1: Personal Financial Planning Process. 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