Unit 17: Client Profiles, Objectives, & Risk Tolerance

Personal BS do not have …, it would be on the personal IS

income

Bank insured CDs are a strong choice for a client seeking … they are/are not traded, do/do not have IR risk, are/aren’t redeemable at face value, and are/aren’t backed by the FDIC

preservation of capital, not traded, do not have IR risk, are redeemable at face value, and backed by the FDIC

Following the death of an individual account owner…

cancel all open orders, freeze the account, await instructions

… determines how much life insurance and death benefit is needed to meet future financial needs

Capital needs analysis

… cannot be purchased on margin or used as collateral

options (except LEAPS 9+ more), stock rights, and variable insurance contracts

Options cannot be purchased on margin or used as collateral, except …, which can be bought on margin and used as collateral.

LEAPS with 9 months or more until expiration

LEAPS are Long‑Term Equity Anticipation Securities, options that behave like long‑dated securities because they have … so they qualify for

more than 9 months until expiration so they qualify for Reg T margin treatment

Mutual funds and IPO securities can/cannot be purchased on margin

cannot

Mutual funds and IPO securities can be used as margin collateral once owned for at least …

Mutual funds and IPO shares can be used as margin collateral once owned for 30 days

Government and municipal securities are/aren’t exempt for Regulation T, and can/can’t be purchased on margin

are exempt from reg t, can be purchased on margin

Government and municipal securities can/cannot be used as margin collateral

gov and munis can be used as margin collateral

Anchoring: clients overweight first impressions and are reluctant to change their mind (even in the face of new information)

yep

Regret aversion: clients seek to minimize potential risk, skewing their investments to an overly risk-adverse portfolio

yep

IRMAA is a … on part ..&.. premiums when … from X years prior exceeds IRS threshold, part … remains free, recalculated …

Medicare surcharge on part B and part D premiums when MAGI from two years prior exceeds IRS threshold, part A remains free, recalculated annually

Social security provides retirement, disability, and survivor benefits income, based on contributions made …

while working

Full benefit benefits from Social Security are available at age …, earlier benefit benefits from Social Security are available at …, and starting payout at … increases your monthly payout rate with a maximum of …%

Every year, a … increase is added based on inflation, whether you take Social Security early, on time, or late — but the … stays permanent.

67, earlier at a reduced rate (that stays fixed for the remainer of life), and starting at 70, maximum of 124%

cost of living adjustment added, early‑claiming reduction itself stays permanent.

Social Security eligibility is met when the person has worked for

40 quarters, 10 years

After a divorce, the working spouse must have had to worked for … years for their non-working spouse to receive Social Security benefits

working spouse must have had to worked for 10 years for their non-working spouse to receive Social Security benefits

If the non-working spouse remarries, they are still/no longer eligible for spousal Social Security benefit benefits

remarriage means no longer eligible

A non-working spouse can receive up to …% of the working spouse's benefit at full retirement age, with reduced benefits if claimed earlier

50

Our TIC account has … interest, a check or distribution requested by one party is … and … by all parties, and when one account owner dies, …

divided interest, a check or distribution requested by one party is payable in the account name and endorsed by all parties, and when one account owner dies, their portion goes through probate

Type of individual account that passes assets to a named beneficiary at death and avoids probate is

the transfer on death (TOD)

In a … distribution is when if a beneficiary predeceases the decedent, their share …

per stirpes, passes to their descendants rather than being redistributed among surviving beneficiaries

A Totten trust is an … titled 'in trust for' a beneficiary, and the owner …, then the … at death

informal revocable bank account, owner retains full control during life then the balance passes at death

… accounts are only offered in certain states, only offered to … couples, with … ownership of assets

Tenancy by the entirety