Question

according to the cfp board code and standards, which of the following is considered a relevant element of financial planning?

Answer 1

According to the CFP Board Code and Standards, relevant elements of financial planning include current financial well-being estimation, goal identification and selection, information analysis, strategy development, plan implementation, and plan maintenance.

Step-by-step explanation:

The relevant elements of financial planning, according to the CFP Board Code and Standards, can be categorized into six key areas:

1. Estimating Current Financial Well-being: This involves assessing the client's current financial situation, including their assets, liabilities, income, and expenses.
2. Identifying and Selecting Goals: Financial planning requires setting specific and measurable goals that align with the client's values and objectives. These goals could be short-term (e.g., buying a car) or long-term (e.g., retirement planning).
3. Analyzing Information: Gathering relevant information about the client, their financial situation, and their goals is crucial for creating an effective financial plan. This includes assessing risk tolerance, time horizons, tax considerations, and more.
4. Developing a Financial Planning Strategy: Based on the information gathered, a financial planner should devise a suitable strategy that outlines the steps and recommendations to achieve the client's goals. This strategy should consider asset allocation, investment selection, risk management, and tax planning strategies.
5. Implementing the Financial Plan: After crafting the plan, it needs to be put into action. This involves executing investment decisions, modifying insurance coverage, creating an estate plan, and other financial actions.
6. Maintaining the Financial Plan: Financial planning is an ongoing process that requires regular monitoring and adjustment. The client's circumstances and goals may change over time, necessitating periodic reviews and modifications to the plan.

In summary, the relevant elements of financial planning, as per the CFP Board Code and Standards, include estimating current financial well-being, goal identification and selection, information analysis, strategy development, plan implementation, and plan maintenance.