Page 251 - DMGT515_PERSONAL_FINANCIAL_PLANNING

Personal Financial Planning

Notes Self Assessment

State True or False:
6. The benchmark portfolios are constructed to satisfy the needs of persons with differing
attitudes to risk and reward and differing income requirements.

7. Growth portfolio provides a balanced exposure to a range of asset classes and aims to
produce an appropriate mix of both income and capital growth over the medium to long
term.
8. Balanced portfolio has an emphasis on growth in asset value rather than producing income
for expenditure requirements.
9. Aggressive growth portfolio aims to maximise total returns over a period of more than
five years, preferably closer to 10 years.

10. Asset Allocation is a personal planning tool that helps assure that an investment portfolio
is tuned into the goals, objectives, and relevant time frames of each individual investor.
11. A financial planner has two main methods of file/record keeping.

13.4 Summary

We have stressed the importance of the written plan for the person, financial planner, and
licensee. Framing the recommendations in writing meets your compliance obligations
under the FPSB Code, and best serves the person.
Whilst the format of written plans may vary, there are core elements that must be included
for compliance reasons (such as disclosure of interests).

Of paramount importance is that the document be structured and presented in such a way
to facilitate person understanding of the recommendations and the reasons for them, the
total costs of implementing those recommendations, and any limitations or other material
matters relevant to the advice given.

Examples of best practice in plan presentation, letters/forms and record keeping have
been presented, and it would be instructive on your part to evaluate your own organisation’s
practices in these areas.

13.5 Keywords

Aggressive growth: This portfolio aims to maximise total returns over a period of more than five
years, preferably closer to 10 years.
Asset Allocation: Asset Allocation is a personal planning tool that helps assure that an investment
portfolio is tuned into the goals, objectives, and relevant time frames of each individual investor.
Balanced: This portfolio provides a balanced exposure to a range of asset classes and aims to
produce an appropriate mix of both income and capital growth over the medium to long-term.
Benchmark Portfolios: The benchmark portfolios are constructed to satisfy the needs of persons
with differing attitudes to risk and reward and differing income requirements.

Conservative Balanced: This portfolio has a strong focus on secure income. There is also the
expectation of a modest level of capital growth over the medium to long term.
Growth: This portfolio has an emphasis on growth in asset value rather than producing income
for expenditure requirements.

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