In the financial planning process, what is the first step with a new client?

In the financial planning process, what is the first step with a new client?

• A. Prepare the plan
• B. Explain the services you provide, the process, and the documents required to do a complete financial plan
• C. Decline the client
• D. Gather all client financial information from other planners

Answer: (B)

Opening a relationship with a new client starts with clarifying what will be provided and how the process will unfold. Explaining the services, the steps of the financial planning process, and the documents required creates a shared understanding and secures the client’s consent to the engagement. This establishes the scope, responsibilities, fees, confidentiality, and expectations so both sides know what to expect before any data is gathered or a plan is drafted. Only after this agreement is in place do you move on to gathering information, followed by analysis and plan development. Preparing the plan, declining the client, or pulling information from other planners would skip this essential first step and could lead to misunderstandings or ethical issues.

Opening a relationship with a new client starts with clarifying what will be provided and how the process will unfold. Explaining the services, the steps of the financial planning process, and the documents required creates a shared understanding and secures the client’s consent to the engagement. This establishes the scope, responsibilities, fees, confidentiality, and expectations so both sides know what to expect before any data is gathered or a plan is drafted. Only after this agreement is in place do you move on to gathering information, followed by analysis and plan development. Preparing the plan, declining the client, or pulling information from other planners would skip this essential first step and could lead to misunderstandings or ethical issues.