Series 65

By Investopedia AAA

Analyzing Your Client's Financial Profile - Capital and Current Investments


Capital and Other Needs
The client's specific goals should be discussed in detail. While retirement and college funding are nearly universal, be sure to probe for other goals, such as starting a business, helping other family members or buying a vacation home.


A key consideration for any of these goals is the time horizon, which affects both the choice of investment strategy and the amount of annual savings needed to reach the goal. Other needs must be discussed and planned for as well, including:

  • Emergency reserves - while three to six months of living expenses is considered standard, other factors could dictate a larger or smaller need for liquid savings.

  • Life insurance - if the client has a family whose income needs cannot be met through current assets, life insurance is needed. The total amount and type of insurance would depend on client circumstances.

  • Other insurance - the IA should review the client's disability and health insurance coverage, since any investment or estate plans could be disrupted if this coverage is inadequate.

Current Investments
Before making investment recommendations, it's important for the IA to understand the client's current holdings and what strategies were used to create them. The client may wish to liquidate some or all of these holdings and reinvest in a new portfolio, or he/she may want to retain all current holdings. The IA must take these choices into consideration before making recommendations.

Risk Tolerance and Non-Financial Considerations
Related Articles
  1. FHA loans are often a good alternative for those who have trouble obtaining a conventional mortgage, although you do have to pay an insurance premium.
    Home & Auto

    Mortgage For A Manufactured Home? Try ...

  2. Retirees seeking a rich cultural mix, temperate climate, low living costs, good healthcare, beaches and even skiing will find Spain an appealing option.
    Retirement

    Retiring In Spain: 5 Best Cities For ...

  3. These days, those attending college have plenty of ways to get affordable medical insurance, from student health plans to those sold on an exchange.
    Insurance

    4 Smart Ways To Get Health Insurance ...

  4. Before you sign up for a car title loan, investigate these 8 alternate strategies.
    Credit & Loans

    8 Top Alternatives to Car Title Loans

  5. Follow these 5 strategies and set yourself up for a sane and comfortable retirement. Starting early is best, but it's never too late to help your future.
    Retirement

    The 5 Top Rules Of Thumb For Retirement ...

Trading Center