Sarah and Kyle are a married couple. They are both 34 years of age and work as teachers. Their combined annual income is $130,000. They are able to…

The next logical step in the financial planning process is to clearly define the investment objective for the specific funds being discussed. While the couple has mentioned a desire for a sailboat, it is crucial to confirm that this $800 per month is specifically for that goal. Defining the objective involves clarifying the goal's priority, the exact time horizon (e.g., "in 5 years," "in 7 years"), and the total amount needed. This information is fundamental as it directly influences the required rate of return and the appropriate level of risk for the investment recommendation. All other considerations, such as risk tolerance, flow from this primary objective.

A. Their combined income and savings capacity are already known, making individual incomes less critical as the immediate next question for this specific goal.
B. Assessing risk tolerance is essential, but it should be done after the investment objective and time horizon are clearly established.
D. Their net worth can be calculated from the information provided ($340k home + $5k TFSA - $120k mortgage = $225k), so asking for it is redundant.

1. IFSE Institute, Canadian Investment Funds Course (CIFC), Part 2, Module 6: The Financial Planning Process, Chapter 22: The Financial Planning Process, Section 22.2 "Step 2: Identify and Prioritize Goals". This section emphasizes that clarifying and prioritizing client goals is a foundational step before developing strategies or recommending products.

2. FP Canada, Standards of Professional Responsibility, "Practice Standard: Financial Planning Process", Step 2: Identifying and Prioritizing Goals. This standard outlines that a planner must work with the client to identify, articulate, and prioritize their goals before proceeding to analysis.