8. Client Advising Skills

Question 1

What is included in a suitability report?

Answer 1

Risk warnings
Ethical risk
Social security
Tax
Affordability
Term of product
Ethical preferences
Demands and needs
Objectives
Investment Risk

Question 2

What is general advice?

Answer 2

Off the shelf. Found on the internet, newspapers, banks, etc.

Question 3

What is covered in the fact find - personal details?

Answer 3

basic information,
family details,
employment details

Question 4

What is financial advice?

Answer 4

Personal circumstances > Recommend financial advice > Recommendation in writing

Question 5

What should you discuss when talking about demands and needs?

Answer 5

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?

Question 6

How should information on recommended products be passed?

Answer 6

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.

Question 7

What process should be undertaken to determine demands and needs?

Answer 7

Identify,
Discuss,
Quantify,
Prioritise

Question 8

What are the 5 key demands and needs?

Answer 8

Protection,
Income protection,
Pensions,
Savings,
Investment

Question 9

How can an advisor be sure a client can afford a recommendation?

Answer 9

Income and expenditure section of the fact find

Question 10

How do you collect the demands and needs?

Answer 10

Questionnaire (hard facts and soft facts)

Question 11

How will an advisor prioritise needs and demands of a client?

Answer 11

Make a list,
Prioritise the order
Make a refined list
Analysis of the final list

Question 12

What are the sections of the Suitability report?

Answer 12

1. Names
2. specify the demands and needs
3. needs identified but not resolved
4. formal recommendations
5. reasons why a product was recommended
6. client\s risk profile
7. a summary

Question 13

How should a suitability report start?

Answer 13

With the clients names

Question 14

What are the guidelines for an oral presentation?

Answer 14

Should be two way communication

Both open and closed questions

Question 15

What is covered in the fact find - financial details?

Answer 15

assets,
liabilities,
life assurance and other regular savings,
pension agreements,
monthly income and outcome

Question 16

How do you quantify demands and needs of a client?

Answer 16

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?

Question 17

What is covered in the fact find - planning and objectives?

Answer 17

existing arrangements
financial objectives
other advisors

Question 18

How is investments information presented?

Answer 18

Aim,
Client commitment,
How payments are invested,
Risks,
Tax position,
Fees and charges.

Question 19

What is effective Communication?

Answer 19

Fair, clear and not misleading

Question 20

How is general insurance presented?

Answer 20

Policy covers,
policy doesn’t cover,
Restrictions,
Other important info.

Question 21

What is a suitability report?

Answer 21

Information regarding affordability and suitability

Question 22

What are the guidelines for a written report?

Answer 22

Without jargon
sentences and paragraphs are short
Logical sections
a balanced view is presented

Question 23

What should you do if a client refuses to answer information on the fact find?

Answer 23

Should be recorded on the fact find

Question 24

How is information on mortgages presented?

Answer 24

Key features

European standardised information sheet

Question 25

How do you evaluate attitude to risk?

Answer 25

Understanding of risk,
Ability and willingness,
Understanding of investment types
Capacity for loss