Risk_Management_Process_Flashcards
(7 cards)
Why is it important to have a focused and well-organized risk management process in financial planning?
A focused and well-organized process reduces the likelihood of missing important risks or being sidetracked.
What is the first step in the risk management process?
Identify and establish risk management goals.
What should clients consider regarding the amount of loss they could tolerate?
Clients should assess how much loss they could tolerate in different financial scenarios, such as repairs, deductibles, or medical expenses.
What types of risks are more difficult to quantify in the risk management process?
Life insurance and longevity issues are more difficult to quantify than property loss or deductibles.
Why should planners explore lifestyle boundaries with their clients?
To ensure that the client’s financial plan aligns with the lifestyle they want to protect.
What general and specific risks might clients who own boats, motorcycles, or jet skis face?
They may face accident and liability risks due to the use of these motorized vehicles.
What risks might clients who are less physically active face?
They might face increased health risks.
