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Financial Planning > Financial Planning Fundamentals > Flashcards

Financial Planning Fundamentals Flashcards

1
Q

What is financial planning?

A

A cyclical process which constantly evolves

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2
Q

What is six step process of FP?

A
  1. Establish relationship
  2. Collect relevant information
  3. Analyse financial situation
  4. Develop plan/recommendation and present
  5. Implement recommendations
  6. Review
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3
Q

When should appendix be used in financial plan?

A

When discussing clients income tax position

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4
Q

What does KYC stand for?

A

Know your customer

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5
Q

What taxes will be impacted by marital status?

A

Income, CGT and IHT

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6
Q

Appetite for risk

A

Subjective - Amount of risk an investor is willing to take to meet objectives

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7
Q

Risk tolerance

A

Subjective - Amount an investor is prepared take to sleep at night

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8
Q

Capacity for loss

A

Objective - ability of an investor to accept falls in value of investments

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9
Q

How does ESG scale work?

A

Light green = loosest
Dark green = strictest

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10
Q

Streamlined advice

A

Limited to one or more areas and does not involve analysis of clients circumstances

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11
Q

Focused advice

A

Limitations set by clients

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12
Q

Simplified advice

A

Specific areas not full plan - boundaries set by company

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13
Q

What is the allowance for all bands receiving dividend?

A

£2000

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14
Q

What % do each band payer pay for dividend?

A

BR - 8.75%
HR - 33.75%
AR - 39.35%

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15
Q

What is basic nill band?

A

£12,570

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16
Q

What happens to nill band if your income is above £100k

A

Every £2 over nill band reduces by £1

17
Q

Savings allowances for all bands

A

BR - £1000
HR - £500
AR - £0

18
Q

How to make a client tax efficient?

A

Transfer assets/allowances between spouse

19
Q

How much allowance can a spouse transfer?

A

Upto £1250

20
Q

Correct order to calculate tax liability

A

Non savings, savings and dividends

21
Q

What are 4 main categories of financial planning?

A

Pensions
Savings and investments
Estate planning
Protection

Financial Planning (1 decks)

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