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

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