Risk_Management_Steps_and_Strategies_Flashcards
(7 cards)
Why is client involvement important in the decision-making process?
Client involvement reduces the chance of surprises and helps them take ownership of the decisions.
What is the purpose of Step 5: Communicate the Recommendations?
To communicate the risk management plan to clients, either as part of a comprehensive financial plan or on its own.
What should be done in Step 6: Implement the Recommendations?
Help clients take action based on the recommendations and guide them through the decision-making process.
Why is it important to monitor recommendations for needed changes?
Because the client’s situation and available options change over time, and it allows you to catch new risks or correct previous mistakes.
What are the two main groups of risk management strategies?
Risk control and risk financing.
What is risk control?
Risk control seeks to minimize the risk of loss through methods like avoidance and reduction.
What is risk financing?
Risk financing involves methods like retention and transfer to manage the financial impact of risks.
