Q3A - Problem Set 3 Solutions 1 Financial planning can be...

Info icon This preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Problem Set 3 - Solutions 1. Financial planning can be considered to be made up of four main phases, or stages. What are these? Give a brief outline of each one. The four major phases or stages of financial planning are: 1. Wealth creation (debt reduction, investment, saving, building up super 2. Asset protection (custody of assets, insurance of assets, including salary protection) 3. Retirement planning (accumulation phase, transition-to-retirement, pension phase) 4. Estate planning (retention and disposal of assets, business succession) 2. Discuss the “Know your client” rule. What does this mean in practice? The “Know your client” rule requires planners to provide plans for clients based on detailed information provided by clients, designed to meet client objectives, taking into account the client’s financial circumstances, risk preferences, investment preferences and other relevant information agreed with the client . To do so, FPs need to speak to clients, spend time with them, interview clients, get them to complete a questionnaire and risk profile, and check these with the client. 3. Discuss the “Know your product” rule. What does this mean in practice? The “Know your product” rule requires advisers to be competent in the advice they give. For instance if an adviser recommends investment in an index portfolio, the adviser must be able to provide the client with information about the fund, the fund
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern