8. Client Advising Skills Flashcards
What is included in a suitability report?
Risk warnings Ethical risk Social security Tax Affordability Term of product Ethical preferences Demands and needs Objectives Investment Risk
What is general advice?
Off the shelf. Found on the internet, newspapers, banks, etc.
What is covered in the fact find - personal details?
basic information,
family details,
employment details
What is financial advice?
Personal circumstances > Recommend financial advice > Recommendation in writing
What should you discuss when talking about demands and needs?
What would the financial impact be if there was a birth or death in the family?
How would they manage?
What cut backs can be made?
Will you be able to have a good life in retirement?
How should information on recommended products be passed?
Give the client Information on the product in writing,
The client should be satisfied,
It should give them the opportunity to shop around for the right deal.
What process should be undertaken to determine demands and needs?
Identify,
Discuss,
Quantify,
Prioritise
What are the 5 key demands and needs?
Protection, Income protection, Pensions, Savings, Investment
How can an advisor be sure a client can afford a recommendation?
Income and expenditure section of the fact find
How do you collect the demands and needs?
Questionnaire (hard facts and soft facts)
How will an advisor prioritise needs and demands of a client?
Make a list,
Prioritise the order
Make a refined list
Analysis of the final list
What are the sections of the Suitability report?
- Names
- specify the demands and needs
- needs identified but not resolved
- formal recommendations
- reasons why a product was recommended
- client\s risk profile
- a summary
How should a suitability report start?
With the clients names
What are the guidelines for an oral presentation?
Should be two way communication
Both open and closed questions
What is covered in the fact find - financial details?
assets, liabilities, life assurance and other regular savings, pension agreements, monthly income and outcome
How do you quantify demands and needs of a client?
How much will income decrease if unable to work?
How much lower will there income be if they retire?
How much capital will they need to buy a car in 5 years?
What is covered in the fact find - planning and objectives?
existing arrangements
financial objectives
other advisors
How is investments information presented?
Aim, Client commitment, How payments are invested, Risks, Tax position, Fees and charges.
What is effective Communication?
Fair, clear and not misleading
How is general insurance presented?
Policy covers,
policy doesn’t cover,
Restrictions,
Other important info.
What is a suitability report?
Information regarding affordability and suitability
What are the guidelines for a written report?
Without jargon
sentences and paragraphs are short
Logical sections
a balanced view is presented
What should you do if a client refuses to answer information on the fact find?
Should be recorded on the fact find
How is information on mortgages presented?
Key features
European standardised information sheet
How do you evaluate attitude to risk?
Understanding of risk,
Ability and willingness,
Understanding of investment types
Capacity for loss
