Essentials of Personal Financial Planning
Essentials of Personal Financial Planning guide is a great resource for financial planners to help their clients take a more holistic approach to their finances and put together a game plan for their future.

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The bewildering array of financial choices facing people, and the hectic pace of life today, make financial decisions more difficult than ever. The prospect of living longer, the uncertainty of investment returns, and the changing economy are just a few of the factors that need to be considered. Financial planners can use the information in this publication to help their clients take a more holistic approach to their finances and together develop a game plan for their future.

Personal financial planning is a process, a series of purposeful and deliberate steps taken to achieve a personal financial plan for an individual or a family. In all, there are seven steps in the PFP process that are discussed in the book. The following four are required:

  1. Engage
  2. Discover
  3. Analyze
  4. Recommend

There are three main actions in the PFP process:

  1. Identify the client’s personal financial goals and resources.
  2. Design financial strategies.
  3. Make personalized recommendations that, when implemented, assist the client in achieving these goals.

This book discusses and encourages planners to take a holistic approach to life planning, a process that places the client and the client’s desires, dreams, and goals above the financial plan.

PFP services include the following:

  • Cash flow planning
  • Charitable planning
  • Education planning
  • Elder planning
  • Estate, gift, and wealth transfer planning
  • Investment planning
  • Retirement planning
  • Risk management and insurance planning
  • Tax planning

The first part of this book provides robust foundational concepts for all areas that must be covered before application concepts are discussed. These include the following:

  • The personal financial planning process, concepts, and regulatory environment
  • Professional responsibilities of a CPA personal financial planner and the requirements of the Statement on Standards in Personal Financial Planning Services
  • Time value of money concepts
  • Fundamentals of financial planning and estate planning

The second part of this book builds on the foundational concepts to provide a deeper understanding of the PFP body of knowledge and its application, with an emphasis on income tax planning and other PFP topics, including:

  • Estate and charitable planning
  • Risk management and insurance planning
  • Investment planning
  • Employee benefits planning
  • Executive compensation planning
Content preview

Gathering Data: Quantitative Versus Qualitative Data

All the behavioral techniques for listening, communicating, and moving the client forward in the PFP process are used in the discovery phase. The data gathered can be classified in two categories: quantitative and qualitative.

Quantitative Data

Quantitative data is a specific quantity (personal financial statement) or a material fact (life insurance contract). Quantitative data also includes the client’s specific goals and objectives. The personal financial planner should endeavor to have the client quantify the goals as precisely as possible. The goals should be dollar and time specific.


  • General goal: “I want to have a comfortable standard of living when I retire.”
  • Specific goal: “I want to retire in 12 years with net after-tax income of $72,000 per year in current dollars (3 percent annual increase for inflation), and I do not want to deplete principal (capital retention).

Exhibit 1-5 shows the quantitative data items and documents that should be collected for a PFP engagement. Keep in mind that the data requested by the personal financial planner should be appropriate to the scope of the engagement. For example, if the scope of the engagement is college funding for the client’s child, the personal financial planner would not ask for the client’s most recent will.

Reviewing quantitative data, such as insurance contracts and financial statements, reveals a great deal about the client’s values and decision-making process. The result of effective data gathering is the quantification and prioritization of the client’s goals and objectives.

Qualitative Data

The assessment of the quantitative data by the personal financial planner will generate additional questions, which in turn reveals the client’s feelings and values regarding financial planning decisions. These feelings and values are the client’s subjective data. This type of information is called qualitative data. Qualitative data is information about the client’s hopes, fears, values, preferences, and attitudes regarding financial and non-financial goals. Effective discovery of this type of subjective information may only be accomplished after a review of the quantitative data.


  • A will or revocable living trust (quantitative) will reveal the names and relationships of the beneficiaries to the client (qualitative).
  • Tax returns (quantitative) will reveal the client’s donative intent (qualitative) through charitable giving.
  • An analysis (quantitative) of investments will reveal the client’s risk tolerance (qualitative).

Client expectations and concerns should be addressed before the personal financial planner begins the data gathering step. The client should understand that they will have to invest a significant amount of time in the data gathering stage of the PFP engagement. The client should understand that confidential information will need to be shared. Some of this information may be sensitive or painful for the client to disclose: a spouse who is a secret spender, an out-of-wedlock child or a previous bankruptcy.

Qualitative data is expressed as an attitude, an opinion or a desire. Client goals are qualitative considerations. A client’s expectations for items such as lifestyle, education and retirement help form the foundation for goals that are specific and meaningful to the PFP process. Expectations can provide direction for goal prioritization. Clients will have competing goals: saving for retirement or saving for a child’s education. A personal financial planner must be able to help the client sort through their goals and develop a clear, specific list of priorities. Only after completing this will the planner be able to identify potential constraints to the client’s goals and financial objectives. Exhibit 1-6 provides sample questions to facilitate qualitative discussions with the client, and which illustrate potential PFP constraints.

Ratings and reviews

Susan M. Tillery, CPA/PFS

Susan M. Tillery, CPA/PFS, is President & CEO of Paraklete® Financial Inc. Paraklete® provides integrated fee-for-service financial planning without asset management or product sales. The firm acts as An Advocate in Financial Services® for its clients with a disciplined focus on independence and objectivity. Susan also is a co-founder and president of Financial Planning Advocate LLC, a provider of continuing education for CPAs, financial advisers, universities and colleges.

Ms. Tillery’s experience at Harris myCFO, a multi-family office where she was responsible for the development and delivery of comprehensive family office solutions to affluent families, together with her work at Arthur Andersen, Ronald Blue & Co and other financial firms, provides the framework for Paraklete.

Susan earned both her bachelor’s and master’s degrees in accounting from the University of Georgia. Susan is a member of the American Institute of CPAs (AICPA) and the Georgia Society of CPAs (GSCPA). In addition, she is chair of the AICPA Personal Financial Planning Credential Committee. Susan also serves on the Board for The National Center for Stewardship and Generosity.

Susan has over 30 years of experience in tax, philanthropy and financial planning, as well as in the administrative and compliance areas encountered by affluent individuals and families. Ms. Tillery speaks on the topics of: Financial Planning, CPAs and Financial Planning, Financial Issues Facing Women, Responsibilities of Wealth, Charitable Giving and Stewardship.

Thomas Neal Tillery, CFP®, AEP®, CLU®, ChFC®, CRPC®, LUTCF

Thomas Neal Tillery, CFP®, AEP®, CLU®, ChFC®, CRPC®, LUTCF is Vice President and Chief Compliance Officer of Paraklete® Financial Inc. Tom also is a co-founder and Vice President of Financial Planning Advocate LLC, a provider of continuing education for CPAs, financial advisers, universities and colleges.

Tom earned a M.S. in financial services from The American College and an M.A. in education from The Southern Baptist Theological Seminary. He is an active member of AICPA (Non-CPA Associate), the Atlanta Estate Planning Council and the Society of Financial Service Professionals. He also serves on the Board for The National Center for Stewardship and Generosity.

With more than 30 years of experience in personal financial planning, Tom is a frequent speaker and writer on all topics relating to personal financial planning. He has written personal financial planning curriculum for several universities and online providers. Tom has been a provider of continuing education for attorneys, CPAs and investment and insurance professionals for over 30 years.

Susan, Tom and their family reside in Kennesaw, GA.


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