Financial Planning Fundamentals Flashcards
(21 cards)
What is financial planning?
A cyclical process which constantly evolves
What is six step process of FP?
- Establish relationship
- Collect relevant information
- Analyse financial situation
- Develop plan/recommendation and present
- Implement recommendations
- Review
When should appendix be used in financial plan?
When discussing clients income tax position
What does KYC stand for?
Know your customer
What taxes will be impacted by marital status?
Income, CGT and IHT
Appetite for risk
Subjective - Amount of risk an investor is willing to take to meet objectives
Risk tolerance
Subjective - Amount an investor is prepared take to sleep at night
Capacity for loss
Objective - ability of an investor to accept falls in value of investments
How does ESG scale work?
Light green = loosest
Dark green = strictest
Streamlined advice
Limited to one or more areas and does not involve analysis of clients circumstances
Focused advice
Limitations set by clients
Simplified advice
Specific areas not full plan - boundaries set by company
What is the allowance for all bands receiving dividend?
£2000
What % do each band payer pay for dividend?
BR - 8.75%
HR - 33.75%
AR - 39.35%
What is basic nill band?
£12,570
What happens to nill band if your income is above £100k
Every £2 over nill band reduces by £1
Savings allowances for all bands
BR - £1000
HR - £500
AR - £0
How to make a client tax efficient?
Transfer assets/allowances between spouse
How much allowance can a spouse transfer?
Upto £1250
Correct order to calculate tax liability
Non savings, savings and dividends
What are 4 main categories of financial planning?
Pensions
Savings and investments
Estate planning
Protection
