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More About This Title CFP Board Financial Planning Competency Handbook,Second Edition (U.S. Edition)
English
CFP Board Financial Planning Competency Handbook is the essential reference for those at any stage of CFP certification and a one-stop resource for practitioners looking to better serve their clients. This fully updated second edition includes brand new content on connections diagrams, new case studies, and new instructional videos, and a completely new section devoted to the interdisciplinary nature of financial planning. You'll gain insights from diverse fields like psychology, behavioral finance, communication, and marriage and family therapy to help you better connect with and guide your clients, alongside the detailed financial knowledge you need to perform to the highest expectations as a financial planner. The only official CFP Board handbook on the market, this book contains over ninety chapters that are essential for practitioners, students, and faculty.
Whether a practitioner, student, or faculty member, this guide is the invaluable reference you need at your fingertips. Comprehensive, clear, and detailed, this handbook forms the foundation of the smart financial planner's library.
Each jurisdiction has its own laws and regulations surrounding financial planning, but the information in this book represents the core body of knowledge the profession demands no matter where you practice. CFP Board Financial Planning Competency Handbook guides you from student to practitioner and far beyond, with the information you need when you need it.
English
Certified Financial Planner Board of Standards, Inc. (CFP Board) is a non-profit organization acting in the public interest by fostering professional standards in personal financial planning. CFP Board sets and enforces the standards for CFP certification, the recognized standard of excellence for personal financial planning. Individuals who successfully complete CFP Board's initial and ongoing certification requirements—including requirements related to education, examination, experience, and ethics—are awarded the right to use the CFP certification marks. CFP certification identifies financial planners who are true professionals in one of the fastest growing and exciting careers today, allowing the public to find professionals qualified to provide competent and ethical financial planning services delivered with a fiduciary standard of care, putting the client's best interests first. CFP Board is located in Washington, D.C.
English
Acknowledgments xiii
About the Book xv
Preface xvii
Charles R. Chaffin, EdD, CFP Board
About the Practice Questions xxiii
About the Contributors xxv
Part One Introduction 1
Charles R. Chaffin, EdD, CFP Board
1 Theory and Practice 5
Charles R. Chaffin, EdD, CFP Board
2 Function, Purpose, and Regulation of Financial Institutions 15
John E. Grable, PhD, CFP®, University of Georgia
Sonya L. Britt, PhD, CFP®, Kansas State University
3 Financial Services Regulations and Requirements 25
John E. Grable, PhD, CFP®, University of Georgia
Sonya L. Britt, PhD, CFP®, Kansas State University
4 Consumer Protection Laws 35
John E. Grable, PhD, CFP®, University of Georgia
Sonya L. Britt, PhD, CFP®, Kansas State University
5 Fiduciary 45
Martie Gillen, PhD, University of Florida
6 Financial Planning Process 51
John E. Grable, PhD, CFP®, University of Georgia
Ronald A. Sages, PhD, AEP®, CFP®, CTFA, EA, Kansas State University
7 Financial Statements 63
Thomas Warschauer, PhD, CFP®, San Diego State University
8 Cash Flow Management 73
Martie Gillen, PhD, University of Florida
Michael Gutter, PhD, University of Florida
9 Financing Strategies 81
Martie Gillen, PhD, University of Florida
Michael Gutter, PhD, University of Florida
Jorge Ruiz-Menjivar, University of Georgia
10 Economic Concepts 89
Dave Yeske, DBA, CFP®, Golden Gate University
11 Time Value of Money 97
Jorge Ruiz-Menjivar, University of Georgia
Martie Gillen, PhD, University of Florida
Michael Gutter, PhD, University of Florida
12 Client and Planner Attitudes, Values, Biases, and Behavioral Finance 107
Dave Yeske, DBA, CFP®, Golden Gate University
13 Principles of Communication and Counseling 115
John E. Grable, PhD, CFP®, University of Georgia
Kristy L. Archuleta, PhD, LMFT, Kansas State University
14 Debt Management 127
Joseph W. Goetz, PhD, University of Georgia
John E. Grable, PhD, CFP®, University of Georgia
15 Education Needs Analysis 137
Taylor Spangler, MS, University of Florida
Michael Gutter, PhD, University of Florida
Martie Gillen, PhD, University of Florida
Sailesh Acharya, University of Florida
16 Education Savings Vehicles 145
Michael Gutter, PhD, University of Florida
Martie Gillen, PhD, University of Florida
17 Financial Aid (Education) 153
Martie Gillen, PhD, University of Florida
Michael Gutter, PhD, University of Florida
18 Gift and Income Tax Strategies (Education) 159
Martie Gillen, PhD, University of Florida
Michael Gutter, PhD, University of Florida
19 Education Financing 165
Martie Gillen, PhD, University of Florida
Michael Gutter, PhD, University of Florida
20 Principles of Risk and Insurance 173
Dave Yeske, DBA, CFP®, Golden Gate University
21 Analysis and Evaluation of Risk Exposures 183
Dave Yeske, DBA, CFP®, Golden Gate University
22 Health Insurance and Health Care Cost Management 189
Andrew Head, MA, CFP®, Western Kentucky University
Sharon A. Burns, PhD, CPA (Inactive)
23 Disability Income Insurance (Individual) 197
Dave Yeske, DBA, CFP®, Golden Gate University
24 Long-Term Care Insurance 205
Andrew Head, MA, CFP®, Western Kentucky University
Sharon A. Burns, PhD, CPA (Inactive)
25 Annuities 213
Andrew Head, MA, CFP®, Western Kentucky University
John Gilliam, PhD, CFP®, Texas Tech University
26 Life Insurance (Individual) 225
Dave Yeske, DBA, CFP®, Golden Gate University
27 Business Uses of Insurance 233
L. Ann Coulson, PhD, CFP®, Kansas State University
John Gilliam, PhD, CFP®, Texas Tech University
28 Insurance Needs Analysis 245
Thomas Warschauer, PhD, CFP®, San Diego State University
29 Insurance Policy and Company Selection 253
Thomas Warschauer, PhD, CFP®, San Diego State University
Andrew Head, MA, CFP®, Western Kentucky University
30 Property and Casualty Insurance 263
Derek R. Lawson, MS, Sonas Financial Group, Inc. and Kansas State University
Sarah D. Asebedo, MS, CFP®, Virginia Tech
Martin C. Seay, PhD, CFP®, Kansas State University
31 Characteristics, Uses, and Taxation of Investment Vehicles 275
Swarn Chatterjee, PhD, University of Georgia
Lance Palmer, PhD, CPA, CFP®, University of Georgia
32 Types of Investment Risk 283
Thomas Warschauer, PhD, CFP®, San Diego State University
33 Quantitative Investment Concepts 291
Thomas Warschauer, PhD, CFP®, San Diego State University
34 Measures of Investment Returns 299
Thomas Warschauer, PhD, CFP®, San Diego State University
35 Asset Allocation and Portfolio Diversification 307
Dave Yeske, DBA, CFP®, Golden Gate University
36 Bond and Stock Valuation Concepts 315
Dave Yeske, DBA, CFP®, Golden Gate University
37 Portfolio Development and Analysis 325
Thomas Warschauer, PhD, CFP®, San Diego State University
38 Investment Strategies 335
Dave Yeske, DBA, CFP®, Golden Gate University
39 Alternative Investments 343
L. Michael Ladd, CFA, CAIA, CMT, CFP®
40 Fundamental Tax Law 353
Lance Palmer, PhD, CPA, CFP®, University of Georgia
41 Income Tax Fundamentals and Calculations 363
Lance Palmer, PhD, CPA, CFP®, University of Georgia
42 Characteristics and Income Taxation of Business Entities 373
Webster Hewitt, CPA, CFP®, University of Georgia
Lance Palmer, PhD, CPA, CFP®, University of Georgia
43 Income Taxation of Trusts and Estates 383
Martin C. Seay, PhD, CFP®, Kansas State University
Lance Palmer, PhD, CPA, CFP®, University of Georgia
44 Alternative Minimum Tax (AMT) 391
Webster Hewitt, CPA, CFP®, University of Georgia
Lance Palmer, PhD, CPA, CFP®, University of Georgia
45 Tax Reduction and Management Techniques 399
Lance Palmer, PhD, CPA, CFP®, University of Georgia
46 Tax Consequences of Property Transactions 409
Lance Palmer, PhD, CPA, CFP®, University of Georgia
Martin C. Seay, PhD, CFP®, Kansas State University
47 Passive Activity and At-Risk Rules 417
Lance Palmer, PhD, CPA, CFP®, University of Georgia
48 Tax Implications of Special Circumstances 423
Lance Palmer, PhD, CPA, CFP®, University of Georgia
49 Charitable/Philanthropic Contributions and Deductions 431
Webster Hewitt, CPA, CFP®, University of Georgia
Lance Palmer, PhD, CPA, CFP®, University of Georgia
50 Retirement Needs Analysis 439
Andrew Head, MA, CFP®, Western Kentucky University
Sharon A. Burns, PhD, CPA (Inactive)
51 Social Security and Medicare 447
Sarah D. Asebedo, MS, CFP®, Virginia Tech
Martin C. Seay, PhD, CFP®, Kansas State University
Thomas Warschauer, PhD, CFP®, San Diego State University
52 Medicaid 463
Katie Seay, CFP®, The Trust Company
Martin C. Seay, PhD, CFP®, Kansas State University
53 Types of Retirement Plans 471
John E. Grable, PhD, CFP®, University of Georgia
54 Qualified Plan Rules and Options 479
Andrew Head, MA, CFP®, Western Kentucky University
Sharon A. Burns, PhD, CPA (Inactive)
55 Other Tax-Advantaged Plans 485
Andrew Head, MA, CFP®, Western Kentucky University
Sharon A. Burns, PhD, CPA (Inactive)
56 Regulatory Considerations 491
Andrew Head, MA, CFP®, Western Kentucky University
Sharon A. Burns, PhD, CPA (Inactive)
57 Key Factors Affecting Plan Selection for Businesses 495
Andrew Head, MA, CFP®, Western Kentucky University
Sharon A. Burns, PhD, CPA (Inactive)
58 Distribution Rules and Taxation 501
Andrew Head, MA, CFP®, Western Kentucky University
Sharon A. Burns, PhD, CPA (Inactive)
59 Retirement Income and Distribution Strategies 509
Dave Yeske, DBA, CFP®, Golden Gate University
Elissa Buie, MBA, CFP®, Golden Gate University
60 Business Succession Planning 515
John E. Grable, PhD, CFP®, University of Georgia
Joseph W. Goetz, PhD, University of Georgia
Kevin Valentino, MS, University of Georgia
61 Characteristics and Consequences of Property Titling 527
Andrew Head, MA, CFP®, Western Kentucky University
Sharon A. Burns, PhD, CPA (Inactive)
62 Gifting Strategies 533
Elissa Buie, MBA, CFP®, Golden Gate University
63 Estate Planning Documents 541
Andrew Head, MA, CFP®, Western Kentucky University
Sharon A. Burns, PhD, CPA (Inactive)
64 Estate Tax Compliance and Tax Calculation 547
Elissa Buie, MBA, CFP®, Golden Gate University
65 Sources for Estate Liquidity 555
Elissa Buie, MBA, CFP®, Golden Gate University
66 Types, Features, and Taxation of Trusts 561
Elissa Buie, MBA, CFP®, Golden Gate University
67 Marital Deduction 569
Elissa Buie, MBA, CFP®, Golden Gate University
68 Intra-Family and Other Business Transfer Techniques 575
Elissa Buie, MBA, CFP®, Golden Gate University
69 Postmortem Estate Planning Techniques 585
Elissa Buie, MBA, CFP®, Golden Gate University
70 Estate Planning for Non-Traditional Relationships 591
Elissa Buie, MBA, CFP®, Golden Gate University
Supplement: CFP Board’s Code of Ethics and Professional Responsibility 601
Part Two Introduction 605
Charles R. Chaffin, EdD, CFP Board
Thomas Warschauer, PhD, CFP®, San Diego State University
71 Establishing and Defining the Client-Planner Relationship 609
Elissa Buie, MBA, CFP®, Golden Gate University
Dave Yeske, DBA, CFP®, Golden Gate University
72 Gathering Information Necessary to Fulfill the Engagement 617
Elissa Buie, MBA, CFP®, Golden Gate University
Dave Yeske, DBA, CFP®, Golden Gate University
73 Analyzing and Evaluating the Client’s Current Financial Status 625
Thomas Warschauer, PhD, CFP®, San Diego State University
Vickie Hampton, PhD, CFP®, Texas Tech University
Andrew Head, MA, CFP®, Western Kentucky University
74 Developing Financial Planning Recommendations 635
John E. Grable, PhD, CFP®, University of Georgia
Lance Palmer, PhD, CPA, CFP®, University of Georgia
75 Communicating the Financial Planning Recommendations 653
Dave Yeske, DBA, CFP®, Golden Gate University
John E. Grable, PhD, CFP®, University of Georgia
76 Implementing the Financial Planning Recommendations 665
Ronald A. Sages, PhD, AEP®, CFP®, CTFA, EA Kansas State University
77 Monitoring the Financial Planning Recommendations 677
Thomas Warschauer, PhD, CFP®, San Diego State University
Sharon A. Burns, PhD, CPA (Inactive)
Part Three Introduction 685
Charles R. Chaffin, EdD, CFP Board
78 Gathering Data from Clients: Insights from Cognitive Task Analysis and Requirements Engineering 687
Kelly S. Steelman, PhD, Michigan Technological University
Jason S. McCarley, PhD, Flinders University
John E. Grable, PhD, CFP®, University of Georgia
Lance Palmer, PhD, CPA, CFP®, University of Georgia
Dave Yeske, DBA, CFP®, Golden Gate University
Charles R. Chaffin, EdD, CFP Board
79 The Need for Education 703
Joyce Schnur, CFP®, MBA, ChFC, Kaplan University
Charles R. Chaffin, EdD, CFP Board
80 Financial Planning Standards Board 709
Michael Snowdon, CFP®, Financial Planning Standards Board
81 Behavioral Finance and Its Implications for Financial Advisors 737
Keith Redhead, PhD, Coventry University
82 Applications of Behavioral Economics in Personal Financial Planning 751
Swarn Chatterjee, PhD, University of Georgia
Joseph W. Goetz, PhD, University of Georgia
83 Marriage and Family Therapy Applications to Financial Planning 763
Kristy L. Archuleta, PhD, LMFT, Kansas State University
D. Bruce Ross III, MS, University of Georgia
84 Financial Therapy: The Integration of Financial Planning and Theory 779
Kristy L. Archuleta, PhD, LMFT, Kansas State University
Bradley T. Klontz, PsyD, CFP®, Kansas State University
Sonya L. Britt, PhD, CFP®, Kansas State University
85 Aging Clients: Special Considerations 795
Deanna L. Sharpe, PhD, CFP®, University of Missouri
86 Accounting for Time: Important Distinctions and Concepts for Financial Planners 829
John E. Grable, PhD, CFP®, University of Georgia
Robert Rodermund, MS, Lindenwood University
87 The Psychology of Decisions: A Short Tutorial 843
Jason S. McCarley, PhD, Flinders University
Kelly S. Steelman, PhD, Michigan Technological University
John E. Grable, PhD, CFP®, University of Georgia
Lance Palmer, PhD, CPA, CFP®, University of Georgia
Dave Yeske, DBA, CFP®, Golden Gate University
Charles R. Chaffin, EdD, CFP Board
Conclusion
88 Moving Forward 861
Charles R. Chaffin, EdD, CFP Board
Elissa Buie, MBA, CFP®, Golden Gate University
Sharon A. Burns, PhD, CPA (Inactive)
Vickie Hampton, PhD, CFP®, Texas Tech University
Lance Palmer, PhD, CPA, CFP®, University of Georgia
Thomas Warschauer, PhD, CFP®, San Diego State University
Dave Yeske, DBA, CFP®, Golden Gate University
Index 879
