Canadian Securities Course (CSC) Level 2 Practice Exam

What is the first step in the financial planning approach?

1. Later of engagement/service contract

2. Collect data

3. Establish relationship - identify issues

4. Analyze - be in-depth

The correct answer is: Establish relationship - identify issues

The first step in the financial planning approach is to establish a relationship and identify issues. This step is crucial as it sets the foundation for the entire financial planning process. By building rapport with the client, the financial planner can gain a deeper understanding of the client's goals, values, and financial situation. Identifying issues enables the planner to address specific areas of concern that may impact the client's financial journey. This stage is vital for creating a personalized plan that reflects the client's unique circumstances, needs, and objectives. Establishing trust and ensuring open communication at this early stage leads to a more effective planning process and enhances the likelihood of achieving the client’s long-term financial goals.