Unit 17: Client Profile Flashcards
Financial Profile
Current expenses, Debt, Tax status, Income, Balance sheet, Liabilities
-Family Balance sheet and Income statement
Nonfinancial considerations
Age, marital status, investment experience/attitudes, dependents, employment, demographics, current and future family needs.
Risk tolerance
two components- investor’s attitude towards risk, and their financial ability to sustain losses.
conservative, moderate, or aggressive
Investment goals, examples
saving for college, retirement, home, philanthropy, starting a business, legacy.
Investment objectives
capital preservation, income, growth
Best investment for capital preservation
bank-insured CD
-no interest rate risk, FDIC insured
Current Income recommendations
conservative= Treasuries/IG Corporates for risk averse
moderate= preferred stock/public utility for moderate
aggressive= junk bonds for those who want risk
Growth
common stock. growth stocks if long time horizon, large cap stocks if a little older.
Speculation
Large risk, but also potential for substantial returns.
-options, commodity futures, some junk bonds/stocks
OASDI (Social Security)
full benefits=40 quarters of employment
age 70=8% annual step-up, considered worth it if in good health
Social security for ex-wife
can get full benefits if:
-were married for 10+ years
-unmarried at time eligible to place a claim
-paid benefits will not affect current spouse (if applicable)
Medicare and SS
IRMAA has four tiers based on SS income amounts
Three options for disability
-Workers comp, if applicable
-SSD, must not be able to engage is SGA due to terminal injury, or one that will last over 12 months
-Disability insurance, can be denied if occupation is hazardous
Three tax strategies
-asset/income shifting, gifting to parents you’re caring for
-tax deferral, qualified retirement plans/TSA
-tax-free income, muni-bonds from resident state, and roth/529/coverdell
eligible adults under NASAA Model to Protect Vulnerable Adults
those 65+ who would be subject to adult protective services statute
Authority to delay disbursement
up to 15 days (and another 10 if investigated) if financial professional reasonably believes it would result in financial exploitation.
Asset is liquid if
you can get the current market value quickly. does not mean principal protection
Preferences
ESG. Tobacco company/parent died of lung cancer
Investment Constraints (TTLLU)
Time horizon
Taxes
Liquidity
Laws
Unique
(risk tolerance is an objective, not constraint)
