ANSWERS TO CHAPTER QUESTIONS
Web Chapter D Career Basics
1) Because people have more money for discretionary expenditures and therefore to
pay financial planners, investments are growing more complex as is tax planning.
2) A business plan can:
a) compel you to think about each part of operations
3) It isn’t necessary but it is highly useful. A mission statement provides a simplified
core of what your goals are. In addition, it provides a structure from which all
actions may be compared with.
4) The alternative legal structures are individual proprietorship, partnership, limited
5) The three major forms of receiving planning compensation are:
a) Fee Only
i. Advantages
1. Broker
ii. Disadvantages
1. Dealer may do some of planner’s work including asset
2. Not perceived as objective.
c) Fee and Commission
i. Advantages
1. Can combine respectability that comes from fees with
ii. Disadvantages
1. Not perceived as objective
6) Policy statements indicate the way you run your business. They provide a
7) Types of software a planning firm may utilize may include:
a) Investment management
8) Because internal operations require many of the same inputs as communications.
9) Seminars, advertising, public relations, existing personal relationships,
10) The engagement letter sets out the term of the contract – the scope and role of the
parties. By doing so it will prevent misunderstandings and may provide a method
for termination prior to completion of the work.
11) Revenues by type, rent, labor, machinery and software, your own needs. You
12) Four planning styles could include:
a) Recent graduate fee and commission, work in own planning practice