26 - Working with Retail Client

Question 0

What are the 6 steps of the financial planning process?

Answer 0

1. Establish Client-Advisor relnshp
2. Collect data & info
3. Analyze data & info
4. Recommend strats to meet goal
5. Implement recommendations
6. Conduct periodic review

Question 1

What are the four objectives of a retail client’s financial plan?

Answer 1

1. Must be achievable
2. Must accommodate changes in lifestyle and income level
3. Shouldn’t be intimidating
4. Should provide for some luxuries or rewards

Question 2

What 3 key pieces of info does an advisor need to know about their client?

Answer 2

1. Current financials and personal status
2. Client’s investment goals and prefs
3. Risk tolerance

Question 3

What are the four stages of the Life Cycle Hypothesis?

Answer 3

1. Early earning years >35
2. Mid-earning 35-55
3. Peak earning 55-retirement
4. Retirement years

Question 4

According to the financial planning pyramid, what are examples of very aggressive investments?

Answer 4

Art, IPOs, OTC Securities, Real Estate, Precious Metals

Question 5

According to the financial planning pyramid, how are stocks and mutual funds categorized?

Answer 5

Moderate

Question 6

According to the financial planning pyramid, how are tax shelters, commodities, and derivatives classified?

Answer 6

Aggressive

Question 7

According to the financial planning pyramid, what category do Debt Elimination, House, RRSP, emergency fund fall under?

Answer 7

Independence

Question 8

According to the financial planning pyramid, what is the “base” category and what is in it?

Answer 8

Security

Insurance, Will

Question 9

What are the 5 primary ethical values / standards of conduct?

Answer 9

A. Must use proper care and independent pro judgement (KYC, Due diligence)
B. Trustworthiness & integrity
C. Encourage others to conduct business professionally
D. Must act in accordance with securities acts and SRO rules
E. Client info is confidential

Question 10

What is the advisor’s responsibility when it comes to Unsolicited Orders?

Answer 10

Must provide client with cautionary advice, and be aware of the client’s objective. (Must take safeguarding precautions when taking unsolicited, unsuitable orders)