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Unformatted text preview: tired or are about to retire and who possess large amounts of money. During their time with the bank, the two $RU partners have built lasting relationships with these clients. The same holds true for the other two planners that are about to join the business from other banks, bringing in about the same amount of clients with them. So, how does financial planning at $RU work? The first contact with a new (prospective) client is an intensive face‐to‐face meeting, in which the planner receives all the information needed from the client to put together a fi‐
nancial strategy. At the end of this initial planning procedure the client receives the so‐called statement of advice in exchange for a one‐off fee. At this point clients often enter into a re‐
lationship by signing a contract, which is called a retainer. The implications of this contract are 1) that $RU implements the recommendations made in the statement of advice, 2) that the partners look after the clients’ portfolios, 3) monitor the markets and 4) meet with each client at least once per year or in case of any upcoming event (e.g. the client buying real es‐
tate, making an inheritance or having a sum of money to invest). That is when they become part of the $RU client base. By having this relationship, $RU is able to generate recurring revenues from their client base. This is important, as $RU operates solely on a fee‐for‐service model; it does not receive any commissions from any of the product vendors. What are typical investments? The $RU planners do not buy or sell shares, investments made for the clients are normally investment products such as managed funds. These funds are run by funds management business and based on an active management philosophy – the funds managers carry out market research and then buy or sell shares of business, which they perceive as under‐ Faculty of Economics & Business
Discipline of Business Information Systems Page 2 $RU Teaching Case (INFS1000) by Dr. Kai Riemer valued. The aim is to perform better than the reference market. Investors essentially can buy stakes in these funds either directly, via brokers or via the stock exchange. At $RU, the concrete choice of funds for a particular client strategy is driv...
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