Question

Question 1: All of the following are types of change that clients may experience and where the financial planner can help them to effectively adapt. 1. Environmental Change. 2. Volitional Change. 3. Climate Change. 4. Life-Cycle Change. Select one: a. 1 and 3 b. 2 and 4 c. 3 only d. 1, 2, and 4

Question 2: Which of the following Financial Planning Strategy Mode(s) is / are the most important in terms of fostering Client Trust and Relationship Commitment?

1. Planner-Driven Mode.

2. Data-Driven Mode.

3. Policy-Driven Mode.

4. Relationship-Driven Mode.

5. Client-Driven Mode.

Select one:

a. 4 only

b. 1 and 4

c. 2 and 4

d. 2, 3, and 4

Question 3: All of the following are elements of "choice architecture," per Thaler and Sunstein, EXCEPT:

1. Incentives

2. Understand Mapping

3. Motivate Change

4. Defaults

5. Give Feedback

6. Expect Error

7. Structure Complex Choices

Select one:

a. 6

b. 4 and 6

c. 3

d. 1 and 3

Question 4: What are the characteristics of a good financial planning policy?

Select one:

a. It must always have two parts.

b. It should should change as external circumstances change and it should be open to interpretation.

c. It should be broad enough to encompass any external change while also being specific enough to always return an unambiguous answer.

d. It should be narrow enough to apply to very specific external circumstances while also being broad enough for planner interpretation.

Answer 1

1. (A) Environmental Change : Due to rapid globalisation, there is a constant change in the environment suffered by the entrepreneurs and the clients. Environmental Change occurs when there is a mismanagement caused in human activities or disruption of natural ecological balances which have a direct adverse effect on the business and its stakeholders. Thus, to adapt to such adverse situations, both the entrepreneurs and the clients require the aid from a Financial Planner.

(B) Volitinal Change : Volition means will, thus a volitional change is the one wherein an individual decides on a particular course of action depending on the purpose to be served. This kind of a change is as per the wishes of the clients hence, the clients do not require any aid from a Financial Planner to deal with the same.

(C) Climate Change : Climate change is any specific change that occurs in the particular weather of a region due to malpractices for a considerabe period of time. Due to various climatic changes occurring, entities and its stakeholders undergo a lot of adverse and unexpected changes for which the Financial Planners provide help to deal with the same in an efficient and effective manner.

(D) Life Cycle Change : Life Cycle of a clients includes the various stages of considering a particular product, purchasing it, using it, and maintaining loyalty towards a particular product or brand. Any change in the clients life cycle is as per the wishes of the client wherein the Financial Planners discretion is of no use.

ANSWER : 1 and 3

2. (A) Planner Driven Strategy : the one which is executed and handled as per the planners and managerial personnel.

   (B) Data Driven Strategy : it is framed after defining, collecting, analyzing and organizing the available data.

   (C) Policy Driven : framed as per the guideines and goals of an entity.

   (D) Relationship Driven : prime focus of such a strategy is the entities relationship with its clients.

   (E) Client Driven : based on the needs and desires of the clients.

ANSWER : 4 only

3. ANSWER : c, 3 Motivate Change

4. ANSWER : b, It should change as the external circumstance change and it should be open to interpretations.