Textbook Notes (368,432)
Canada (161,877)
RSM230H1 (34)
Chapter 26

CSC_Chapter 26 Working with the Retail Client.pdf

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Rotman Commerce
Laurence Booth

Chapter 26: Working with the Retail Client December-13-11 3:01 AM Financial Planning ○ Financial planning approach to managing wealth has benefits for both clients and IAs. IAs call on specialists and integrates their expert analysis, findings and recommendations into a coherent wealth plan to meet client's needs ○ Involves the analysis of client's age, wealth, career, marital status, taxation status, estate considerations, risk tolerance, investment objectives, legal concerns ○ Four objectives must be considered for a plan to be created:  Must be achievable  Must accommodate changes in lifestyle and level of income  Should not be intimidating  Should provide for not only the necessities but also some luxuries or rewards Financial Planning Process 1. Interview the client - establish the Client-Advisor engagement ○ Determine issues and problems and the solution through a financial plan ○ Formalize the relationship with a letter of engagement or formal contract 2. Data gathering and determining goals and objectives ○ Current financial and personal status ○ Investment goals and preferences ○ Risk tolerance ○ Communicate with and educate the client 3. Identify financial problems and constraints ○ Personal strengths and weaknesses ○ Review of career potential and earnings potential 4. Develop a written financial plan ○ Input from other professionals (prepare a list of instructions: constraints, objectives) 5. Implement or co-ordinate the implementation of the recommendations ○ Client should review plan, goals, objectives and risk tolerance levels ○ IA must ensure that the client understands each product and potential risks/rewards 6. Periodically review and revise the plan and make new recommendations ○ Annual review is the minimum required ○ The financial plan should never remain static; should change with economic conditions, lifestyle changes, am
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