Tutorial 2 - Week 2 Notes Learning objective Understand the...

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Week 2 Notes Learning objective Understand the 6 steps of the Financial Planning Cycle Understand the 5 steps of the Client Life Cycle Know how to calculate RATIOS Understand “Know your Client” Rule Know your Client Rule The provisions of s 945A of the   Corporations Act 2001   (Corporations Act) require financial advisers to have a reasonable basis for advice. In doing this, they must demonstrate compliance with two key rules: 1. Know your client 2. Know your product. Financial planning cycle 1. Collect financial & non-financial information Initial meeting/interview takes place FSG is provided to clients FSG contains: fees, disclaimers & disclosures, business number/name, licence number, services/products provided FP collects both financial and non-financial information about the clients Risk tolerance: Risk Profiling Questionnaire, financial literacy assessment, longevity analysis (life expectancy -> affect -> investment horizon & life cycle stage of the client) & interview
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