Chapter 9 Flashcards
- What is the purpose behind ‘part 1: personal details’ of an adviser’s fact-find?
A. To gather general information about a client and their circumstances
B. To allow the adviser to ask straightforward questions to help build rapport
C. To understand if the client is able to proceed with the meeting
D. To establish whether the client is suitable for the intermediary
A - The personal details section of the fact-find is important to gather general information about a client and their circumstances. This would include basic details (like name,
address and age), family details and employments details. Answers b), c) and d) are not relevant to gathering this information.
- You’re in the process of conducting a fact-find for Charles and Meghan. How do you go about calculating their net worth?
A. Deduct the clients’ total liabilities from their total assets
B. Value of house less mortgage
C. Total expenditure deducted from total income
D. Value of non-essential expenditure
A - A client’s net worth is calculated by deducting their total liabilities (e.g. mortgage and other debts) from their total assets (this includes usable assets such as a house and
invested assets). It does not take into account income and expenditure. Income less expenditure is surplus income.
- Which of the following does NOT fall into one of the five key demands and needs broadly related to key life stages?
A. Protection and income protection
B. Investment
C. Estate planning
D. Pensions and savings
C - There are five key ‘demands and needs’ these are Protection, Income Protection,
Pensions, Savings and Investments (PIPSI). Estate planning is an important requirement for those with potential IHT issues but is not one of the five key demands related to key life stages.
- Which of the following would you NOT expect to find in a client’s suitability report?
A. A full reproduction of the fact find
B. The client’s needs and demands which are not being met
C. Reasons why a particular investment/provider was selected
D. The process used to determine any asset allocation
A - A full reproduction of initial fact-find is not normally required. Answers b), c) and d) would normally appear in a suitability report, as they all relate to why a particular
recommendation is suitable.
