Chapter Recaps: my notes to chapters of the financial planning coursework material through New York University’s CFP® Program (in conjunction with Dalton Education). Chapter 4: Personal Financial Statements: Preparation and Analysis Introduction Personal financial statements essential for evaluating and reviewing client’s financial position and performance. Use statements to engage in financial statement analysis – the process of calculating financial ratios and comparing the actual ratios to industry established benchmarks. Clients rarely have well-prepared statements. Two principal financial statements: The Balance Sheet (B/S), aka, the “Statement of Financial Position” or a “Statement of Assets, Liabilities, and Net Worth.” The Income Statement (I/S), aka, a “Statement of Income and Expenses.” Two supplementary financial statements (rarely prepared in practice): The…

Chapter Recaps: my notes to chapters of the financial planning coursework material through New York University’s CFP® Program (in conjunction with Dalton Education). Chapter 3: Financial Planning Approaches: Analysis and Recommendations Note: This chapter focuses on the third and fourth steps of the FP process: analyzing and evaluating the client’s financial status, and developing and presenting FP recommendations. Introduction Goals = more broad (example: enough assets to retire). Objectives = more narrow, defined/able to measure (example: $1M in investment assets by age 45). Reasonable Assumptions Advisor must work with client to determine reasonable assumptions – especially when projections used to evaluate whether a goal can be achieved. These assumptions include: adequate emergency…

Chapter Recaps: my notes to chapters of the financial planning coursework material through New York University’s CFP® Program (in conjunction with Dalton Education). Chapter 2: Interpersonal Communication & Behavioral Finance Note: Three main sections: Counseling Theories and Schools of Thought, Communication Tools & Techniques, and Behavioral Finance Counseling Theories and Schools of Thought Relevance: These 3 schools of thought can be a guide in identifying a style that fits the financial counselor best in order to make a more effective counselor. Depending on client’s style, may need to use a different school of thought or a combination. “Developmental” School of Thought: Theory: human development occurs in stages over time. Early life…

Chapter Recaps: my notes to chapters of the financial planning coursework material through New York University’s CFP® Program (in conjunction with Dalton Education). Chapter 1: Introduction to Financial Planning Note: Two main topics: Personal Financial Planning (the process) and the Financial Planning Profession Personal Financial Planning The Financial Planning Process: Acronym: EGADIM Establish and define the relationship. Gather client data. Analyze and evaluate client’s financial status. Develop and present financial plan recommendations. Implement financial plan recommendations. Monitor the plan. Contents of financial plan: Financial plan is a written document that generally sets out a list of recommendations to achieve a set of goals and objectives based on an understanding of a…