Ch6 S2 66

Front 1

Client inv goals

Back 1

IA should identify client goals as well as the priority, estimated cost and target dates of each goal

Front 2

T or F
Earning an advanced college degree would be considered a financial goal

Back 2

F

Front 3

Emergency fund

Back 3

Savings account containg funds which would cover 3-6m of living expenses

Front 4

The most important factors to consider when determining how to allocate a clients assets are:

Back 4

1.Current strategies
2.Investment objectives
3.Current holdings or inv

Front 5

Compontents or a a clients personal balance sheet:

Back 5

1.Assets
-Investments
-Personal property:does NOT include inv
2.Debts
3.Net worth(equity)

Aseets=Liabilities + Equity(NW)

Front 6

Compontents or a clients personal income statement

Back 6

Details all revenues and expenses and all forms of income

Front 7

Cash flow statement

Back 7

Tracks cash inflows and outflows.
-Does NOT itemize assets or liabilities

Front 8

Risk tolerance

Back 8

A SUBJECTIVE factor that varies from inv to inv

Front 9

Items NOT needed to be reviewed to develope an inv strategy:

Back 9

1.Letters testamentary - court order appointing someone as the rep of a decedents estate
2.Clients mtg rate
3.Prime rate
4.Inflation

Front 10

Non financial inv strategies

Back 10

Strategies based on beliefs or morals

Front 11

Specualtion

Back 11

2ndary obj
-Investing in high risk sec

Front 12

Protection

Back 12

2ndary obj
-Protect or hedge by purchasing stock options