developing strategic advice Flashcards
describe the situation fo early accumulators
During their 20s and early 30s, a client’s income is often greater than their net worth. Fiscal fitness must be adopted at this early stage in order to move forward financially. In order to build a financial base, certain financial strategies must be adopted, ideally as a young adult.
what is the most crucial advice for early accumulators
budgeting/savings
Usually between 30 and 50, a client’s net worth exceeds their annual income, and they move into the phase of more rapid wealth accumulation. As this process continues, the income from investments begins to exceed a person’s annual savings, and net wealth is able to be accumulated exponentially. Often this is when individuals are at their peak earning capacity as employees. Children also may be either at school at this point, or moving towards independence from the family, allowing both parents to work, earning two incomes, not one, and possibly at the same time reducing expenditure on child-related areas of the budget. this is the life cycle of….
rapid accumulators
what advice is needed for rapic accumulators
Strategies to help pay off your home loan sooner.
Tax-effectively building long-term wealth outside super.
Managing debt and cash flow through budgeting.
Ensuring clients and their family are protected with the right type and amount of insurance cover.
What investments might be best for clients.
Consolidating super and helping clients better manage their investments
what advice is needed for rapid accumulators
Strategies to help pay off your home loan sooner.
Tax-effectively building long-term wealth outside super.
Managing debt and cash flow through budgeting.
Ensuring clients and their family are protected with the right type and amount of insurance cover.
What investments might be best for clients.
Consolidating super and helping clients better manage their investments
what advice is generally needed for retirees? (aged care and gifting)
Income stream for superannuation and/or age pension.
Gifting.
Long-term care.
Management of ongoing retirement income and capital needs.
Estate planning considerations to make sure assets go to the right people and in the most tax-effective way.
Centrelink benefits that clients may be entitled to.
for ______ age the focus tends to be on superannuation and the beginning of plans for how individuals will spend their retirement. At this stage, a client’s net worth may be 10–15 times their living expenses, and the earnings and any income from pensions might be sufficiently adequate to fund lifestyle requirements without them actually working.
conservation (pre-retirement)
what advice is needed for the conservation age
Becoming debt-free as clients approach their retirement years.
Accumulating wealth tax-effectively to meet future retirement income needs.
Estate planning so that clients’ assets go to the right people and in the most tax-effective way.
Ensuring clients and their family are protected with the right type and amount of insurance cover.
Consolidation of super ahead of accessing it in retirement.
Which of the following is a consideration if a client is seeking help to find out how long a given level of superannuation asset will last at retirement to provide the required level of income?
Client’s risk appetite needs to be reviewed.
what is the key for an adviser to prove steps have been taken to ensure advice is in a client’s best interest?
An adviser is required to consider the provision of a strategy.
