Fundamentals of Financial Planning

Introduction to Financial Planning: Chapter 1 1. Demonstrate the Financial Planning Process with an explanation of how each segment relates to the next. 2. Develop a letter of engagement that includes all information for a specified case or case study. 3. List the items you'll need to do a thorough financial plan for the client. 4. Explain the five stages of creating and maintaining a financial plan. 5. Identify the fiduciary standard and how that affects the planner-client relationship. Interpersonal Communication & Behavioral Finance: Chapter 2 1. Differentiate the various counseling theories and schools of thought regarding communications as well as the communication models and provide examples of how they might relate to scenarios with financial planning relationships. 2. Demonstrate and observe behavior and body language, active and passive listening, open and closed questions by clarifying and restating the client's statements and questions. 3. Explain how a financial planner can develop a relationship of honesty and trust with their client using these behavioral concepts. Financial Planning Approaches: Chapter 3 1. List and describe each of the approaches to financial planning analysis and recommendations. 2. Describe the lifecycle approach and its benefits. 3. Describe the pie chart approach and its benefits. 4. Describe the financial statement and ratio analysis approach. 5. Demonstrate the use of the two-step, three panel, and metrics approaches Personal Financial Statements: Chapter 4 1. Identify the types of transactions found on each of the personal financial statements 2. Identify each formula for presenting the Statement of Position and the Statement of Income and Expenses. 3. Using the parameters of a test case, calculate and present all the financial ratios and discuss the issues and options available to the client. 4. Demonstrate knowledge of how ratios fit together when providing a plan using this analytical approach 5. Identify steps clients can use to address shortfalls identified in the ratio analysis process Risk Management: Chapter 5 1. Describe common health insurance products and their application in financial planning. 2. Describe common life insurance products and their application in financial planning. 3. Describe common disability insurance products and their application in financial planning. 4. Describe common long-term care insurance products and their application in financial planning. 5. Describe common annuity products and their application in financial planning. 6. Describe common debt payoff strategies and how they are impacted by credit scores and types of debt. 7. Describe the Social Security and Medicare systems and their application in financial planning. Education & Education Funding: Chapter 8 1. Explain to his or her client what a Federal Application for Student Aid (FAFSA) is and how to initiate the process of applying for student aid 2. Differentiate between a Pell Grant, Stafford Loans, and Plus Loans including whether they are initiated on behalf of the parent or the student. 3. Explain the tax advantages and tax credits including contribution limits, advantages, disadvantages, and other requirements of 529 savings plans, Coverdell Educational Savings Accounts, UGMAs, and UTMAs. 4. Explain ownership of taxed advantaged accounts by ownership type and account type as well as limits and requirements. Investments: Chapter 9 1. Define risk and return in the investment planning context. 2. Describe influential portfolio theories and their application in financial planning. 3. Describe the asset allocation decision-making process, including the role of benchmark portfolios. 4. Describe common cognitive and emotional biases. 5. Define general rules for how investment securities are taxed. 6. Describe an investment policy statement. Retirement Planning: Chapter 11 1. Describe the retirement planning process, including the accumulation and decumulation phases. 2. Describe common retirement accounts and their application in financial planning. 3. Describe employees stock compensation and its application in financial planning. 4. Describe the role of Social Security in the retirement planning process. 5. Define common employee benefits. Income Tax Planning: Chapter 12 1. Describe the taxation of capital assets. 2. Describe nontaxable exchanges. 3. Describe passive activity rules. 4. Describe the alternative minimum tax (AMT). Business Entity Selection and Taxation: Chapter 13 1. Describe common business entity types. Estate Planning: Chapter 14 1. Describe the estate planning process. 2. Describe basic estate planning documents. 3. Define types of property interest. 4. Describe the probate process. 5. Describe gift and estate taxes and their impact on the estate planning process. 6. Describe transfers of assets during life and death, including the roles of trusts, charitable giving, and the unlimited marital deduction. 7. Describe the functions of life insurance in the estate planning process. 8. Describe generation skipping transfers and their impact on the estate planning process. Economics and the External Environment: Chapter 15 1. Differentiate between Gross National Product and Gross Domestic Product and explain what positive and negative GDP indicate about the US economy. 2. Identify and explain internal facing and external facing factors which provide information about the way pricing is moving as well as which United States agency controls the money supply that impacts inflation. 3. Compare and contrast the components of the Business Cycle. 4. Identify the US Agency that works to establish, along with the Chairman of the Federal Reserve, Monetary Policy and identify the Federal Reserve's three primary goals. Further, the learner will identify another governmental body for whom the fiscal policy is also a goal and describe their goals and the tools they use to attain those goals. 5. Graphically explain the laws of supply and demand and thereby explain price elasticity. 6. Identify the Consumer Protection Laws and the process and results of filing for bankruptcy under each chapter option. 7. Explain what the Federal Trade Commission does to protect consumers and how. 8. Compare and contrast FDIC and SPIC.