26 - Working with Retail Client Flashcards
What are the 6 steps of the financial planning process?
- Establish Client-Advisor relnshp
- Collect data & info
- Analyze data & info
- Recommend strats to meet goal
- Implement recommendations
- Conduct periodic review
What are the four objectives of a retail client’s financial plan?
- Must be achievable
- Must accommodate changes in lifestyle and income level
- Shouldn’t be intimidating
- Should provide for some luxuries or rewards
What 3 key pieces of info does an advisor need to know about their client?
- Current financials and personal status
- Client’s investment goals and prefs
- Risk tolerance
What are the four stages of the Life Cycle Hypothesis?
- Early earning years >35
- Mid-earning 35-55
- Peak earning 55-retirement
- Retirement years
According to the financial planning pyramid, what are examples of very aggressive investments?
Art, IPOs, OTC Securities, Real Estate, Precious Metals
According to the financial planning pyramid, how are stocks and mutual funds categorized?
Moderate
According to the financial planning pyramid, how are tax shelters, commodities, and derivatives classified?
Aggressive
According to the financial planning pyramid, what category do Debt Elimination, House, RRSP, emergency fund fall under?
Independence
According to the financial planning pyramid, what is the “base” category and what is in it?
Security
Insurance, Will
What are the 5 primary ethical values / standards of conduct?
A. Must use proper care and independent pro judgement (KYC, Due diligence)
B. Trustworthiness & integrity
C. Encourage others to conduct business professionally
D. Must act in accordance with securities acts and SRO rules
E. Client info is confidential
What is the advisor’s responsibility when it comes to Unsolicited Orders?
Must provide client with cautionary advice, and be aware of the client’s objective. (Must take safeguarding precautions when taking unsolicited, unsuitable orders)
