Financial Advice - General

Question 1

What are the potential benefits of receiving and acting upon advice from a qualified financial adviser

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Answer 1

• Financial problems identified
• Benefit from adviser research
• Help with budgeting
• Assessment of suitability of existing arrangements
• Tax planning, use of tax wrappers
• ATR/CFL
• Receive recommendations/creating a financial plan
• Ongoing service/reviews
• Consumer protection/regulated advice

Question 2

Explain the additional actions a financial adviser should take when advising a vulnerable client

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Answer 2

• Inviting a friend or other relative to attend meetings
• Offer flexibility
• Set out explanations with extra care
• Add extra time
• Decisions should be flexible
• No “undue influence”
• Records noted that they are vulnearble

Question 3

Explain the process a financial advisor should follow to establish a client aim and objectives

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Answer 3

• Recognise needs and objectives
• Help client understand general aims and specific objectives
• Ask open and closed questions/ hard and soft facts
• Ensure objectives are SMART
• Identify what are short/long term of importance long term needs
• Establish views on family/dependents
• Establish timescales
• Quantify and qualify objectives
• Prioritisation to not achieve all goals

Question 4

An investment policy statement should sum up the investment strategy by setting out

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Answer 4

• The purpose of the investments
• The income or growth objectives
• The timescales
• A statement about the client risk profile(s)
• A statement about asset allocation
• Other issues such as ethical investment