1202AFE Lecture Notes - Lecture 4: Foreign Exchange Risk, Reinvestment Risk, Risk Aversion
30 May 2018
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Week 4 Financial Planning Lecture Notes
Topic 4: Goal setting/ investment choices
Goal Setting
Best Interests duty and goal setting
• From topic 1: The Corporations Act requires advice providers to:
o Act in the best interests of their clients (s 961B)
o Provide appropriate advice (s 961G)
o Warn the client if advice is based on incomplete or inaccurate information (s
961H)
o Pioities the liets iteests s 96J
• Mai fous he poidig adie= liets ojeties, fiaial situatio ad eeds
• In terms of goal setting, the advice provider will satisfy the best interest duty if they
have:
o Identified the objectives, financial situation and needs of the client that were
disclosed to the provider by the client through instructions (s 961 (B)(2)(a))
The 6 steps of financial advice
SMART Goals
• Specific- clear, no ambiguity
• Measurable- know when achieved
• Achievable- possible? Realistic?
• Relevant- objective behind the goal- will this goal help achieve it?
• Time bound- deadline set
find more resources at oneclass.com
find more resources at oneclass.com
Timeframes
• Short-term [approx. 12 months]
o Buy a new car
o Go on a holiday
• Medium-term [approx. 2-5 years]
o Buy a house/ apartment
o Sae fo hildes eduatio
• Long-term [approx. 5+ years]
o Plan for retirement
o Buy a holiday home/ boat/ caravan etc.
Investment choices
The 6 steps of financial advice
Introduction
• 4 main investment classes
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
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