In keeping with my goal of finishing one course per month from the University of Georgia Self-Paced CFP education program, I wrapped up the first course “Fundamentals of Financial Planning” in February (barely). Here were the topics covered (source):
- The Personal Financial Planning Process
- Economic Concepts and Consumer Protection Laws
- Personal Financial Statements
- Managing Cash Flow and Debt
- Using the HP-12C Calculator
- Using the HP-10bII Calculator
- Educational Savings Techniques
- Educational Aid and Funding Calculation
- Regulation of Financial Planners
- CFP Board Regulatory Requirements
I previously covered the official 7-Step Financial Planning Process in Notes #1, which was enlightening. I ended up spending the most time overall on the HP-12C calculator section, as it took several reps to learn and memorize how to use all of the specialized buttons for the financial calculator.
I personally didn’t learn much new in the Educational Savings and Aid sections, given my previous research as a parent and owner of multiple 529 plans. It did provide a good generic overview for those that haven’t gone down that rabbit hole.
In terms of new practical information, I again found it helpful when they showed me the perspective of practicing advisors. The course wisely warns potential CFPs of the most common mistakes that have resulted in negligence lawsuits…
- Failure to address risk of disability.
- Failure to address risk of property loss and attached liability.
- Failure to timely process a client’s deposit check, resulting in the loss of potential investment gains.
- Recommending unsuitable investments.
- Recommending only those products which result in high fees to the planner.
- Failure to adequately educate the client regarding investment risks, costs, and benefits.
- Charging fees that were not first disclosed and agreed upon with the client.
- Failure to monitor investments on the schedule agreed upon in the engagement letter.
In turn, these items can be flipped to create a checklist for the individual client:
- Do you have adequate disability insurance?
- Do you have adequate homeowners/rental/landlord insurance, car/boat/vehicle insurance, umbrella liability insurance?
- After sending in money, did you follow-up to confirm that your funds were deposited and invested as promised?
- Do you feel that you fully understand the investments made on your behalf? Do you understand why they are better than other alternatives?
- Did you receive a clear list of all the fees charged?
- Are you receiving updates that your investments being monitored as promised?
Photo by Reba Spike on Unsplash
