FINS2643 Study Guide - Final Guide: Wealth Management, Financial Planner, Tax Advisor
13 Oct 2018
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Document Summary
Up-to-date, relevant and reliable information ~ tax, financial and insurance products. Technical expertise ~ to interpret information, create appropriate strategies, and coach individuals to be more rational in making financial decisions. Planner must be aware of the impact of the economic environment(cid:495)s impact on investment market and client psychology. Cyclical behaviours have implications for asset allocation and security selection strategies. Market cycle: future, complicated by the flow of funds across institutions. Changes in investor expectations and risk tolerance, expressed by buys and sells. After major downturn: risk capital of individuals and institutions is in short supply. After significant market downturn: aggregate risk aversion is likely to be higher. Growth prospects and asset valuation ratios fluctuate over market cycles. (low) propensity to save suboptimal saving levels chosen. Limited attention focus on attention grabbing assets. Disposition effect ride on losses and cut profit. ~ financial advisors may be able to reduce the impact of these biases on clients.
