section 1 - The American College Online Learning Center

(b) Net worth statements that identify assets and liabilities(5) Planning Point: Gather enough information to competently advise theclient. Suitability requires the planner to dig deeper and get all thenecessary information to give informed advice.(6) Use fact-finders(a) Quantitative—to gather financial information(b) Qualitative—to determine goals and objectives3. Step 3: Analyze and evaluate the financial status.a. Retirement planning is not a standalone discipline. It requires knowledge aboutthe client’s:(1) Tax situation(2) Insurance situation(3) Spending, cash flow, savings(4) Education planning for their kids(5) Housing and job situations(6) Estate plansb. Can the client meet their financial goals?c. Performing an adequate analysis based on information provided by the client.(1) Trust but verify.(a) Trust what is on the financial statements.(b) But verify with the client that the balances are accurate and upto date.(2) If using a financial planning software tool, make sure to start with accuratedata and appropriate assumptions. Without good data in the tool, theprojections will be meaningless.(3) Challenges(a) May not know answers to tax questions(b) May be a distinct feature of the pension plan of the client that youdo not know how to handle(4) May bring in outside experts when analyzing data(a) Attorney(b) Accountant(c) Confidentiality rules require the permission of the client to disclosedata to a third party. Meetings with other advisors should includethe client if possible.(5) Be respectful of a client’s time4. Step 4: Develop recommendations.a. After going through the analysis process, this may lead back to reevaluating thegoals and objectives. Clients cannot always meet their initially stated goals.b. Develop recommendations(1) End result of the analysis you have done1.17