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Financial Planning Competency Handbook, 2nd Edition by CFP Board

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CHAPTER 72 Gathering Information Necessary to Fulfill the Engagement

Elissa Buie, MBA, CFP®

Golden Gate University

Dave Yeske, DBA, CFP®

Golden Gate University

DEFINITION

This step in the financial planning process refers to the systematic collection of client information that will form the basis for the planner’s subsequent analysis and recommendations. It encompasses both qualitative and quantitative information that is unique to the client. Qualitative information will generally include the client’s life history, financial experience, personal values, preferences, and goals. Qualitative information may also include the client’s learning style, heuristics, and cognitive biases. Quantitative information will include such data as the client’s income and expenses, assets and liabilities, insurance coverage, employment benefits, estate arrangements, and other similar information.

PURPOSE

In order to prepare a financial plan that is demonstrably connected to a client’s needs, values, and goals, the financial planner must start with information that is unique to that client. There is an old saying that to a workman whose only tool is a hammer, everything begins to look like a nail. While true in much of the financial services world, it is the antithesis of true financial planning.

Beyond the need to develop financial planning strategies that are suited to a client’s financial circumstances, the planner must also choose from among the set of technically feasible solutions those ...

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