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PFP Practice Quality Control

Please note: This item is from our archives and was published in 1997. It is provided for historical reference. The content may be out of date and links may no longer function.

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PFP PRACTICE QUALITY CONTROL

This checklist for personal financial planning practices, developed by a task force of the American Institute of CPAs PFP executive committee, is a nonauthoritative practice aid to help CPAs evaluate their financial planning activities. The questions are not intended to represent minimum requirements and are not all-inclusive. A “no” answer should prompt a planner to give additional consideration to his or her current procedures.

  Yes   No   N/A

DESIGN AND EXECUTION OF ENGAGEMENT 		 
1. Do you use checklists to ensure that all aspects of a PFP engagement are considered (for example, insurance, retirement and budgeting)?    
2. Do you outline the scope of the engagement and confirm the client’s understanding of the engagement and of when it will be considered complete?    
3. When developing a basis for recommendations, do you  
  • Collect relevant qualitative and quantitative information?
   
  • Analyze the client’s current financial situation as it relates to his or her goals and objectives and identify strengths and weaknesses in the client’s existing financial situation?
   
  • Formulate, evaluate and recommend appropriate strategies and courses of action for achieving the client’s goals?
   
4. Do you integrate recommendations developed to achieve one financial planning goal with those developed to meet other goals?    

USE OF SOFTWARE 		 
5. Do you understand the planning software you use, the concepts underlying it and what the software does?    
6. Do you review the software’s output for reasonableness and relevance to the engagement objectives?    
7. Do you use a software-generated recommendation only when you understand and agree with it?    

CONSULTING APPROPRIATE INFORMATION SOURCES 		 
8. If you do not provide a service needed to complete an engagement, do you restrict the scope of the engagement and recommend the client engage another adviser who provides that service?    
9. When recommending another adviser, do you communicate to the client-in writing-the nature of the work to be performed by that adviser and the extent, if any, to which you will evaluate his or her work?    

IMPLEMENTING PFP PLANS 		 
10. When engaged to participate in the product selection and acquisition process (including insurance and investments), do you gather data that provide a reasonable basis for determining whether the alternatives meet established selection criteria?    
11. If engaged to establish product selection criteria, do you identify the attributes or other specifications required to accomplish the client’s objectives?    

MONITORING PFP PLANS 		 
12. In determining a client’s progress toward achieving established financial planning goals, do you  
  • Ascertain whether all recommended actions to achieve the goals were undertaken?
   
  • Measure and evaluate the actual progress toward achieving the goals?
   
  • Identify developments in the client’s circumstances and external factors that affect the financial plan?
   
13. Do you and the client agree on how frequently progress toward his or her financial planning goals should be monitored?    

UPDATING PFP PLANS 		 
14. Do you determine whether all criteria and assumptions used as a basis for existing financial planning recommendations are still valid before developing revised recommendations?    
15. Do you consider the integrated nature of financial planning and the effect of revising recommendations to achieve one goal on the client’s ability to achieve all other goals?    

Adapted from Personal Financial Planning Practice Quality Control Checklist . Copyright 1997 by the American Institute of CPAs.