Skills Required when Advising Clients

Question 1

Fact-find good practice

Answer 1

1. Ascertain Risk Profile and explain risk vs reward
2. Objectives - discuss all objectives, not just one the client asks about
3. Interview all parties relevant (Family members etc)
4. Emergency Funds - good practice to work out if sufficient emergency funds
5. Mortgage details - can it be paid early, are there penalties for early repayment

Question 2

Recommendations good practice

Answer 2

1. Match to risk profile
2. Send Suitability report which clearly sets out the fact-find and the reasons for recommendations
3. Explain limitations of not receiving full wide ranging advice
4. Explain if the advice is suitable if the client’s circumstances change