Adviser Engagement

Please submit in Microsoft Word format with filename: zID Adviser Engagement.docx University of New South Wales FINS5510 Personal Financial Planning 24T2 Adviser Engagement Assignment Student details: Student ID: Replace this text with your UNSW student zID Given name: Replace this text with your given name (UNSW student records) Family name: Replace this text with your family name (UNSW student records) Word counts: Question 1 1009 Question 2 923 Student declaration: ☒This assessment is my own work and has not been done in collaboration with anyone else. Question 1: Understanding the Client's Situation a) Effective Understanding Examples Tristan Scifo demonstrates a solid approach to evaluating a client’s financial goals, asking specific questions about both short-term and long-term objectives (Tristan Scifo 05:23). This method involves listening to the client and asking questions that would form a basis from which a good understanding of the client’s financial situation can be made. Thus, Tristan ensures that he addresses all the aspects of the client’s financial plans and wishes for the present and future. This approach makes it possible to establish a good financial plan that will align with the client’s vision and goals, thus creating a roadmap for the financial goals. Jeremy Chiel effectively discusses the client’s risk perceptions, inquiring about their comfort level with different investment options (Jeremy Chiel 12:15). As a result, it is crucial to point out that this approach of addressing risk perceptions assists in achieving the objectives of the financial plan about the client’s risk tolerance level. By asking questions that establish the client’s risk-taking ability, Jeremy can advise on investment products with which the client would be comfortable. This action makes it easier to address any anxiety or discomfort the client may have because of a variance in risk appetite, thus building the client’s confidence in the financial plan. Ineffective Understanding Examples Tristan fails to delve deeper into the client’s budget constraints, leading to a superficial understanding of their financial limitations (Tristan Scifo 09:45). Lack of detailed budget discussions leads to the formulation of a financial plan that is not feasible for the client. Budgeting is an important part of financial planning, and if this aspect is not well considered, then the plans developed are usually out of the client’s reach. According to Alexander Pan, going into the specifics of the client’s finances also means that all the information given is realistic and actionable’ (Alexander Pan, 10:20). This oversight can lead to a lot of stress and frustration for the clients since they may be forced to stick to a plan that they cannot afford. Jeremy overlooks the client’s insurance policies, which are crucial for a holistic financial plan (Jeremy Chiel 14:30). Failing to consider the existing financial structures can result in the duplication of services or suboptimal recommendations that affect the financial plan. Financial planning involves assessing all the existing financial instruments and insurance policies that are not exempted. By not factoring these, Jeremy stands a chance of offering advice that may not meet the client’s needs or may be repetitive, which may be costly to the client. b) Importance of Understanding the Client’s Situation Understanding the client’s financial capabilities, objectives, and attitudes toward risk is essential for developing an appropriate financial strategy. This way, the adviser can provide more specific and relevant information to the client, thus covering all the aspects of the client’s financial status. According to Hawkins and Zuiker (2019), this approach is useful in developing a sound financial plan that can handle various challenges and enhance the client’s financial position in the long run. The adviser-client relationship must be long-term; thus, demonstrating knowledge is a way of gaining the client’s trust. Hawkins and Zuiker (2019) argue that confidence in the advice is likely to be higher if the clients feel that the adviser understands their circumstances well. This way of gaining trust makes clients comfortable sharing their issues and goals with the financial planner, thus enhancing the quality of the plans and client satisfaction. It is crucial to correctly evaluate the client’s risk tolerance to guarantee that the proposed investments suit them. Failure to assess the clients’ risk tolerance means they may be exposed to investments that may cause them stress or, in the worst scenario, lose much money that could have been avoided (Hawkins & Zuiker, 2019). Therefore, by understanding the client’s attitude towards risk, the adviser can design an investment strategy that will yield the highest expected return for the least risk. The client’s financial goals should be discussed in clear and detailed talks to ensure that...