Fundamentals Of Financial Planning Flashcards
Information needed to prepare client’s statement of financial position?
Cost or basis, encumbrances, savings and investment allocations.
Most appropriate emergency fund investment vehicle for a family of $20,000 in annual discretionary income.
Money market mutual funds and laddered CDs to mature every 6 months.
Account to consider for emergency fund now.
One option is checking account.
Financial behavior in which clients are oblivious to their problems.
Denial
Under Securities Act of 1934, “sales” include what activities?
Entering into a contract to sell a security for value.
What can on an ESA plans do?
The funds can be held in a trust.
One advantage associated with an UTMA account.
The assets can be invested in any investment.
Technique question around an annual education costs payment for one individual.
Do not select any combination of the American opportunity credit, lifetime, covered ESA withdrawal, or qualified tuition distribution in any one year due to the coordination rules.
Slowing down of price increases.
Disinflation
Can advisors sign advisory contracts to another firm as long as the client consents?
Yes
Does bankruptcy law make it safer to roll over 401(k) funds into an Ira account or to leave the funds in the 401(k)?
401(k) is safer.
Learning about a clients’s health help the financial planner determine what?
Retirement needs, life insurance needs, disability needs, estate tax consequence.
What to do with a client’s unrealistic goals with high return assumptions?
run the projections with only conventionally accepted return assumptions.
What fund to go with for a client who want a 3-month emergency fund ($15,000) with 15% marginal income tax bracket?
Government money market fund.
Which investment product Federally insured?
Time deposit (CD)
