Identify the Step of the Financial Planning Process

Emily, a CFP® professional, has her first meeting with a new client, David. During the meeting, Emily asks David about his financial goals, current assets, liabilities, and personal circumstances. She also explains the financial planning process, the services she provides, and the fees associated with her work.

Which step of the 7-Step Financial Planning Process is Emily primarily engaging in during this meeting?

1. Identifying and selecting goals.
2. Developing financial planning recommendations.
3. Understanding the client’s personal and financial circumstances.
4. Defining the scope of the engagement.