After a client’s previous engagement involved selling a collection for $25 million, what should be the CFP professional's next step when re-engaging with the client for personal financial planning?

After a client’s previous engagement involved selling a collection for $25 million, what should be the CFP professional's next step when re-engaging with the client for personal financial planning?

• A. Find out what happened to the $25 million
• B. Allocate his investments to create a better marginal tax bracket
• C. Consider a charitable remainder trust
• D. Re-establish and define the client-planner relationship

Answer: (D)

When re-engaging with a client after a major financial event, the essential first step is to re-establish and clearly define the client-planner relationship. This means confirming the scope of services, the planner’s duties and fiduciary responsibilities, confidentiality, and the fee arrangement, and obtaining updated information about the client’s goals, circumstances, and preferences. This foundation ensures that any advice or planning work is aligned with the client’s current objectives and that both parties have a shared understanding of what will be provided and how decisions will be made. Once the engagement terms are in place, you gather current information and discuss goals, risk tolerance, liquidity needs, and tax considerations. Only then would you move into specific planning actions or strategy discussions, such as how to allocate investments or whether a vehicle like a charitable remainder trust fits the client’s objectives.

When re-engaging with a client after a major financial event, the essential first step is to re-establish and clearly define the client-planner relationship. This means confirming the scope of services, the planner’s duties and fiduciary responsibilities, confidentiality, and the fee arrangement, and obtaining updated information about the client’s goals, circumstances, and preferences. This foundation ensures that any advice or planning work is aligned with the client’s current objectives and that both parties have a shared understanding of what will be provided and how decisions will be made.

Once the engagement terms are in place, you gather current information and discuss goals, risk tolerance, liquidity needs, and tax considerations. Only then would you move into specific planning actions or strategy discussions, such as how to allocate investments or whether a vehicle like a charitable remainder trust fits the client’s objectives.