I am late on this post, but I want to provide you a course review of HS 300 Financial Planning: Process and Environment that I completed end of November 2019. It was the first course I took as part of the Chartered Financial Consultant (ChFC) program at The American College of Financial Services. It was the first course of seven needed to meet the education requirements for the Certified Financial Planner (CFP) and ChFC designations.
If youâ€™re unsure why I am doing a review, I recommend reading my first post regarding my pathway to becoming a Financial Planner.
â€œThose people who develop the ability to continuously acquire new and better forms of knowledge that they can apply to their work and to their lives will be the movers and shakers in our society for the indefinite future.â€ â€“ Brian Tracy
HS 300 Financial Planning: Process and Environment
According to the American College website, the course provides an overview of the financial planning process, including the role and responsibilities of a financial planner along with analytical tools to aid in financial decision-making. Topics include:
- Communication techniques
- Education planning and funding
- Time-value-of-money concepts
- Financial planning applications
- Regulatory issues
- Legal and economic environment for financial planning
I took the self-paced online version of the course which allowed me four months to complete the material and take the final exam (which is 100 multiple questions). Each chapter had a true/false quiz at the end of the material to see how well I understood it. Once I completed the reading and quizzes, I took two 100-question practice exams designed to be similar to the final exam. I took the quizzes and practice exams multiple times until I felt comfortable with the material.
The coursebook consisted of ten chapters as of the 6th edition. I was able to complete the material and final exam within six weeks. Depending on your schedule and ability to memorize the material, you could complete it sooner.
The HS 300 course painted in broad strokes the basic functions, processes, and responsibilities of a financial planner. It gave me a better understanding of why people and families need financial planners. Their expertise is paramount to a convoluted stream of information, regulation, and changes within the realm of money.
People arenâ€™t taught about retirement, 401(k)s, life insurance, taxes and more. You can try researching but are often overwhelmed with the amount of information available â€“ what is true and what is false? Financial planners are the experts that bridge the gap, assisting individuals and families with their financial goals to meet their personal ones.
I am going to touch on a few things that I found useful from the course, helping to make me a proficient financial planner.
Having served in the military for 12 years thus far, there is one thing I learned quickly â€“ know the lingo. Itâ€™s mildly frustrating to be lost in the sauce meeting after meeting because you donâ€™t understand whatâ€™s being said. The military is the king of acronyms. Whatâ€™s even crazier, the same acronym can mean hundreds of things depending on which branch youâ€™re serving with â€“ even the various units within a battalion will use the same acronym that means completely different things!
With all that said, the course exposed me to the financial planning terminology and definitions, opening my vocab to the industry lingo. It even helped me better understand and comprehend the Financial Planning Podcasts I listen to on a weekly basis.
Any career in finance requires math. But holy cow, there was a lot in HS 300 Financial Planning: Process and Environment â€“ even having 20+ questions requiring math on the final exam. Â Luckily, the math problems are scenario-based and require a finance calculator thatâ€™s authorized for the final exam. I bought an HP 10bII+ from Amazon, which is one of the calculators recommended by the instructor. The coursework also explains how to do each calculation using that specific calculator.
Now, are you going to need a calculator as a financial planner? Probably not because most of the programs or software youâ€™ll use, perform the calculations for you. I found myself frustrated having to use a calculator but understood the necessity of learning the process. Knowing the numbers behind the calculation, gave me an appreciation for the result â€“ one that could severely affect my future clientâ€™s retirement or savings.
The math problems ranged from â€œeasyâ€ to complicated. Some problems only required a few inputs on the calculator while others required many.
An example of an easy problem:
If Bob deposits $8,000 today in an account that pays 3 percent compound annual interest, how long will it take for the account to reach $10,000?
HP-10BII keystrokes:Â C ALL; 8000, +/-, PV; 10000, FV; 3, I/YR; N. Answer displayed: 7.55
An example of a complicated problem:
At the end of year 5, what is the future value of the following series of deposits to a savings account that earns 6 percent compound annual interest?
- End of year 1:Â $1,000
- End of year 2: $1,000
- End of year 3:Â $0
- End of year 4: $2,000
- End of year 5:Â $2,000
HP-10BII Part 1 keystrokes: orange button, C ALL; 0, CFj; 1000, CFj, 2, orange button, Nj; 0, CFj; 2000, CFj, 2, orange button, Nj; 6, I/YR; orange button, NPV. Answer displayed: 4,912.10. Part 2 keystrokes: +/-, PV; 5, N; FV. Answer displayed: 6,573.49.
In the end, no matter how complicated the situation â€“ I felt I had the tools to find the answer and give a recommendation.
Financial Planning Process
One theme that was consistent throughout the course was the financial planning process.
- Establishing and Defining the Client-Planner Relationship
- Gathering Information Necessary to Fulfill the Engagement
- Analyzing and Evaluating the Clientâ€™s Current Financial Status
- Developing the Recommendation(s)
- Communicating the Recommendation(s)
- Implementing the Recommendation(s)
- Monitoring the Recommendation(s)
- Practicing within Professional and Regulatory Standards
As topics, calculations, and scenarios were discussed â€“ the book would reference the step in the financial planning process. This would help me develop what I needed to do with the information to produce the intended result.
If a client were to ask me about investing in a bond â€“ I could calculate the potential return, analyze if it fell within their financial goals, develop the recommendation, communicate my recommendation and then implements it. By utilizing the planning process, you provide a comprehensive approach, helping the client reach their financial goals. The process provides constraints, necessary to prevent the client or me as the financial planner, from completely deviating from their end goal â€“ unless they wanted to.
HS 300 Financial Planning: Process and Environment provided me the foundation to be a financial planner. As I progress further in the program, I will be able to utilize the principles and processes learned to further my understanding of financial planning â€“ and better yet, to serve my clients and help them achieve their financial goals.
I definitely recommend the program, even after one course. As a servicemember remember, they do offer full-ride scholarships and are always looking for applicants.