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7 Cards in this Set

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  • Back
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What is personal financial planning?
Artistic & Scientific process of creating, implementing, tracking various multidirectional decisions in order to achieve the financial goals of an individual/family.
Through what activities is the personal financial planner expected to guide the client?
ID the financial mission
Setting financial goals
Developing financial objectives
Creating alternative strategies
Select the best strategy
Implementing, monitoring and controlling a financial plan.
MGOASIMC
What benefits can a client derive from the process of financial planning?
ID & prioritize goals.
Objective & rational view of choice/resource allocation.
Forward/proactive vs. backward reactive.
Systematic analysis of internal/external environment
Management of risk
Framework for feedback, eval, control
Positive view of change to accomplish goals,
Discipline and formality to financial affairs.
8
What does the Financial Planners Pyramid of Knowledge identify?
Identifies the skills/basic tools,
Knowledge of core topics
Understanding of profession of financial planning.
Why do people hire Financial Planners?
People lack:
time, knowledge or expertise to create their own financial plan.
Efficiency and effectiveness.
How does Financial Planning promote efficient allocation of a client's resources?
Provides a client with alternative options & opportunity cost of each alternative so rational, informed choice can be made.
Why is financial success a relative concept?
Means different things to different people because each person has own std of benchmarks/beliefs. If you had $1k in your pocket and your friend has $20k in their pocket, you may not feel as financially successful.