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16 Cards in this Set
- Front
- Back
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Know your customer prior to making a recommendation. |
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Basic info required from customers (10) before recommendation. |
- Age - Time horizon - Employment status/Income - Customer balance sheet - Tax situation - Liquid assets (=cash reserves) - Insurance needs - Work benefits - Estate Planning - Investor's attitude |
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Investment stategies based on Age. |
Usually: Younger more aggressive Older more conservative |
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Time horizon |
Consideration due to the volatility of the market. Years, not month for investment. |
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Employment status / Income ♡ |
Total income- expenses = Discretionary income
Important things to know. Many years of work left? Retired? How much? Stable? Fluctuate? Bonuses? |
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Customer Balance sheet ♡ |
Assets - liabilities = Net worth |
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Tax situation ♡ |
Marginal rate of taxation is the amount paid on the last dollar amount. |
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Liquid assets (=cash reserve) |
Investor should not consider making long-term investment until they have established cash reserve to take care of emergency. |
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Insurance need |
Does the client have adequate insurance? |
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Work benefits |
Employer-sponsored plan make it the most attractive option before investment. |
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Investor attitude |
Most important. Must match the personality of the investor. |
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Estate planning |
Who is the customer investing for? (Themselves or future generation?)
The older investor may take on the investing profile of the expected beneficiary. |
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A client's investment goal is also known as his investment... |
Objective |
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Assets that can be quickly and easily converted into cash are referred to as being ... |
Liquid |
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According to the customer balance sheet equation, Asset - Liabilities = |
Net Worth |
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A customer's tax bracket is also known as his ... rate of taxation |
Marginal |
