The Financial Planning Environment, Phenomenon and Process

Identify the third step in the six step financial planning process:

• Establishing goals and objectives

• Developing and presenting the plan.

• Implementation of the plan

• Analyzing the facts assembled

Comprehensive financial planning involves the following except:

• Taking the client’s interest as more important than the principal’s interest

• It involves the presentation of the best plan as provided by the principal.

• It studies the total financial position of the client

• It integrates all strategies and methodologies into a cohesive plan

The following are major components in financial planning covered by different RFP modules by MFPC, except:

• Personal financial management – Module 1

• Tax Planning – Module 3

• Retirement Planning – Module 6

• Estate Planning – Module 5

Following are reasons why people fail to achieve their financial objectives, except:

• People tend to procrastinate on non-urgent matters

• People tend not to confront unpleasant realities

• Many believe the future is best left to ‘God’ and fate

• Financial goals requires discipline which is God-given

Fact finding consists of both quantitative and qualitative data. Identify the wrong match.

• Income – quantitative

• Assets – quantitative

• Risk profile – always quantitative

• Net worth – quantitative

Which of the following statements is/are true?

1. I. It is usual for financial planners to use a comprehensive approach.

2. II. Knowing the financial position of a client is important to achieve multiple goals

• I only

• II only

• Neither

• Both

The concept of economic independence is reflected by which of the following statements:

I. Economic independence means your assets exceed your liabilities

II. Your active income is greater than your expenses

• I only

• II only

• Neither

• Both

The following are qualitative facts. Spot the wrong match.

• Goals and objectives – qualitative

• Dependents care – qualitative

• Risk tolerance - qualitative

• Investment returns – qualitative

Which of the following statement(s) is/are true?

I. Financial planners are increasingly required to act as coordinators with various financial services providers on behalf of their client

II. A successful financial planner is one who can sell well.

• I only

• II only

• Neither

• Both

Which of the following statement(s) is/are true?

I. All persons require insurance and investment and therefore the six step financial planning process is not necessary in such cases.

II. Inflation will affect all investors adversely.

• I only

• II only

• Neither

• Both