Question of the Week

Tina and Mary are sisters seeking to save enough money to contribute to their eight-year-old nephew's college education. They enlist the assistance of Jayne, their financial advisor, who will get them on track with their goal. Jayne is committed to devising a suitable strategy for Tina and Mary. Which of the following is NOT a factor in developing their profile?

a) Risk Tolerance
b) Wrap account fees
c) Tax situation
d) Target financial goal
e) Time horizon

Answer:

The correct answer is b).

Wrap account programs are designed for those who trade often within their accounts and want to avoid paying commissions on every transaction. Instead, they pay a set fee, usually based on percentage of assets under management. All of the other choices are completely relevant to developing a profile for Mary and Tina's objective.