General Principles Flashcards
Mental Accounting
viewing money from different sources in different ways. Attached to something so view it in a different way than something else.
What to do when client has unrealistic return assumptions
use conventionally accepted return assumptions.
Qualitative Data
no numbers, information, subjective
Disclosure of material conflicts of interest
written OR orally given
Fee based
fees AND commissions
Net worth increases
investment growth and investments in accounts
Insured investments
securities in brokerage accounts, cash accounts up to $250k
FDIC insurance stipulations
$250k per depositor, per INSURED, for each category.
Regulatory body of brokerage companies
SEC through FINRA
QTPs vs. UTMAs
BOTH present interest gifts.
QTP owner controls when money used.
UTMA custodian loses control @ age of majority.
QTP CAN change bene
UTMA CANNOT change bene
Am. Opp Credit
100% of first $2k + 25% of next $2k.
NO FELONIES
only covers first 4 years.
Lifetime Learning Credit
PER PERIOD
$2k max
undergrad AND grad school
Recession
2 consecutive Qs of down markets
Depression
6 Qs of negative GDP
Punitive Damage taxability
taxable EXCPET with wrongful death claims
Compensatory Damage taxability
physical injuries: tax free
non physical: taxable
medical expenses: tax free
Ways to access home equity
reverse mortgage
home equity loan
sell home
refinance mortgage
Registration process to sell equity based products
- Associate with B/D
- Register with FINRA on U4 form
- Pass exams
- CRD makes registration with FINRA uniform across states
registration with FINRA/as inv. advisor
no commissions: only Inv. advisor
commissions: FINRA
liability for credit cards
$50 per credit card
Tort law
when agreement creates contract exposure
Home equity interest deductibility
ONLY for improvements on home
$750k MFJ & Single
$375k MFS
Commingled funds
CANNOT comingle in a firm’s general accounts.
Attorney registration as inv. advisors: exceptions
ONLY if incidental to practice
