Certified Financial Planner (CFP) Exam 2025 – 400 Free Practice Questions to Pass the Exam

In the context of a financial planning process, ensuring that the client is informed about the planning process is crucial. This means that the Certified Financial Planner® professional must communicate effectively with the client regarding the stages of the financial plan, the goals to be achieved, the strategies to be implemented, and any potential risks involved.

Client understanding promotes transparency and fosters trust between the planner and the client, allowing for better cooperation throughout the planning process. It is important for the client to grasp how their financial plan is developed, the rationale behind specific recommendations, and the overall objectives of the financial strategies being discussed. Being informed means the client can make educated decisions and provide genuine consent based on complete knowledge of what lies ahead, which is a core ethical obligation for financial planners.

While understanding product details, documenting financial history, and signing legal documents are important components of the overall financial planning process, they don't encompass the critical nature of ensuring that the client fully comprehends the entirety of the planning process. Consent should emanate from an informed position.