Wealth Management Exam with all Correct & 100%
Verified Answers |Actual Complete Update |Already
Graded A+
steps of wealth management? ✔Correct Answer-1. define your needs and objectives
2. develop investment sections
3. regularly monitor your portfolio
4. validation
define needs step of wealth management ✔Correct Answer-define investor profile and
liquidity needs over time
identify the proportion of each section in line with your risk profile
investor profile
asset allocation
develop investment sections step of wealth management ✔Correct Answer-take account of
the bank's strategy, product, recommendations, ideas and investment themes
apply allocation rules
investment proposal
monitor step of wealth management ✔Correct Answer-precise and regular review of each
investment section
risk management/ volatility check
arbitration proposals
continuous control
validation step of wealth management ✔Correct Answer-check compliance with
concentration rules and diversification in the portfolio
validate the proposal or develop a new asset allocation
revision
wealth management positions ✔Correct Answer-private banker
financial advisor
insurance agent
research analyst
portfolio manager
mutual fund manager/ marketer
hedge fun manager
family office
fund of funds manager
private equity manager/ analyst
,financial consultant
who is suited for wealth management career? ✔Correct Answer-high ethical standards
communication skills
quantitative and analytical skills
attention to detail
work independently
current events, financial matters, client interests
chartered financial analyst ✔Correct Answer-4 yrs qualified investment work experience
completion of cfa program
3 6hr exams
2-5 yrs to complete
certified financial planner ✔Correct Answer-3 yrs qualified work experience
complete cfp courses and exams
financial planning
employee benefits planning
investment planning
risk management
retirement planning
who offers these services? ✔Correct Answer-brokerages
investment banks
commercial banks
trust departments
large comprehensive accounting firms
independent financial planners
insurance companies
who governs these services? ✔Correct Answer-broker/dealer- FINRA, SEC
bank exemption- fed and state regulators
employers
industry associations
uniform prudent investor act ✔Correct Answer-assumption of trustee for assets
standard of prudence applied to whole portfolio rather than individual asset
tradeoff between risk and return
trustee can invest in anything that plays an appropriate role in risk/return profile
diversification is prudent
can delegate specific management mandates to third parties
iowa trust code requires the trustee to consider ✔Correct Answer-general economic
conditions
,tax consequences of change
role of asset w/ in total portfolio
total return including income and principal
other resources
need for liquidity, income, preservation or appreciation of principal
where do wealthy clients get their money? ✔Correct Answer-accumulate wealth over time by
spending less than they earn
invest 20% of income per year
incomes are about average
advanced degrees
who else will you serve? ✔Correct Answer-inherited wealth
suddenly wealthy
endowments and foundations
commission ✔Correct Answer-paid per transaction for your idea
best client suited for commission based ✔Correct Answer-who wants significant input on
investment selections or who has very few transactions and very little change in circumstances
who uses commissions model? ✔Correct Answer-brokerages, insurance companies
fee ✔Correct Answer-paid as percentage of assets under management for your advice
best client suited for fee based ✔Correct Answer-who wants ongoing service over financial
affairs; should align interests insofar as the WM professional wants to see the portfolio grow as
much as the client
who used fee based model? ✔Correct Answer-private banks, mutual funds, hedge funds,
trust companies, brokerages
salary ✔Correct Answer-in a fee based environment
base salary typically has a sig. variable component in the form of commissions or bonuses
variable compensation determined by quantitative and qualitative factors
similar to fee arrangement for client
who used salary based model? ✔Correct Answer-private banks, mutual funds, retail
brokerages, hedge/private equity funds
hourly ✔Correct Answer-get paid on hourly basis for advice
, who is best suited for hourly wm? ✔Correct Answer-who wants objective advice, does not
need ongoing attention, or who just wants a second opinion on what they are doing with no
strings attached
who uses hourly? ✔Correct Answer-investment banks, financial consultants
how to choose where to work? ✔Correct Answer-culture/philosophy
money
risk/reward
career trajectory
other support roles
working at brokerage ✔Correct Answer-high income upside potential
low base salary
greater requirement to sell in many cases, including cold call
cutting edge investment thinking, products, and support
sec licensing required
potential long term commitment required
working at community bank ✔Correct Answer-more stability, higher salary
less upside potential for income
may need fiduciary skill
more focus on client service, less on asset gathering
sec licensing likely not required
call primarily on bank customers
working at large national bank ✔Correct Answer-focus on integrated services/ cross selling
may be less pressure to sell than brokerage but more than community bank
blurring lines between brokerage and trust areas
calculating expected return ✔Correct Answer-weighted average of the expected returns of its
components
drivers of return ✔Correct Answer-bonds: coupon income + changes in price due to changes
in interest rates
stocks: dividend yield + growth in earnings + change in p/e
risk ✔Correct Answer-measure of uncertainty about the future payoff to an investment
measured over some time horizon and relative to a benchmark
risk-free investment ✔Correct Answer-the theoretical rate of return of an investment with no
risk of financial loss
i.e. short dated domestic govt bond (default benchmark)
Verified Answers |Actual Complete Update |Already
Graded A+
steps of wealth management? ✔Correct Answer-1. define your needs and objectives
2. develop investment sections
3. regularly monitor your portfolio
4. validation
define needs step of wealth management ✔Correct Answer-define investor profile and
liquidity needs over time
identify the proportion of each section in line with your risk profile
investor profile
asset allocation
develop investment sections step of wealth management ✔Correct Answer-take account of
the bank's strategy, product, recommendations, ideas and investment themes
apply allocation rules
investment proposal
monitor step of wealth management ✔Correct Answer-precise and regular review of each
investment section
risk management/ volatility check
arbitration proposals
continuous control
validation step of wealth management ✔Correct Answer-check compliance with
concentration rules and diversification in the portfolio
validate the proposal or develop a new asset allocation
revision
wealth management positions ✔Correct Answer-private banker
financial advisor
insurance agent
research analyst
portfolio manager
mutual fund manager/ marketer
hedge fun manager
family office
fund of funds manager
private equity manager/ analyst
,financial consultant
who is suited for wealth management career? ✔Correct Answer-high ethical standards
communication skills
quantitative and analytical skills
attention to detail
work independently
current events, financial matters, client interests
chartered financial analyst ✔Correct Answer-4 yrs qualified investment work experience
completion of cfa program
3 6hr exams
2-5 yrs to complete
certified financial planner ✔Correct Answer-3 yrs qualified work experience
complete cfp courses and exams
financial planning
employee benefits planning
investment planning
risk management
retirement planning
who offers these services? ✔Correct Answer-brokerages
investment banks
commercial banks
trust departments
large comprehensive accounting firms
independent financial planners
insurance companies
who governs these services? ✔Correct Answer-broker/dealer- FINRA, SEC
bank exemption- fed and state regulators
employers
industry associations
uniform prudent investor act ✔Correct Answer-assumption of trustee for assets
standard of prudence applied to whole portfolio rather than individual asset
tradeoff between risk and return
trustee can invest in anything that plays an appropriate role in risk/return profile
diversification is prudent
can delegate specific management mandates to third parties
iowa trust code requires the trustee to consider ✔Correct Answer-general economic
conditions
,tax consequences of change
role of asset w/ in total portfolio
total return including income and principal
other resources
need for liquidity, income, preservation or appreciation of principal
where do wealthy clients get their money? ✔Correct Answer-accumulate wealth over time by
spending less than they earn
invest 20% of income per year
incomes are about average
advanced degrees
who else will you serve? ✔Correct Answer-inherited wealth
suddenly wealthy
endowments and foundations
commission ✔Correct Answer-paid per transaction for your idea
best client suited for commission based ✔Correct Answer-who wants significant input on
investment selections or who has very few transactions and very little change in circumstances
who uses commissions model? ✔Correct Answer-brokerages, insurance companies
fee ✔Correct Answer-paid as percentage of assets under management for your advice
best client suited for fee based ✔Correct Answer-who wants ongoing service over financial
affairs; should align interests insofar as the WM professional wants to see the portfolio grow as
much as the client
who used fee based model? ✔Correct Answer-private banks, mutual funds, hedge funds,
trust companies, brokerages
salary ✔Correct Answer-in a fee based environment
base salary typically has a sig. variable component in the form of commissions or bonuses
variable compensation determined by quantitative and qualitative factors
similar to fee arrangement for client
who used salary based model? ✔Correct Answer-private banks, mutual funds, retail
brokerages, hedge/private equity funds
hourly ✔Correct Answer-get paid on hourly basis for advice
, who is best suited for hourly wm? ✔Correct Answer-who wants objective advice, does not
need ongoing attention, or who just wants a second opinion on what they are doing with no
strings attached
who uses hourly? ✔Correct Answer-investment banks, financial consultants
how to choose where to work? ✔Correct Answer-culture/philosophy
money
risk/reward
career trajectory
other support roles
working at brokerage ✔Correct Answer-high income upside potential
low base salary
greater requirement to sell in many cases, including cold call
cutting edge investment thinking, products, and support
sec licensing required
potential long term commitment required
working at community bank ✔Correct Answer-more stability, higher salary
less upside potential for income
may need fiduciary skill
more focus on client service, less on asset gathering
sec licensing likely not required
call primarily on bank customers
working at large national bank ✔Correct Answer-focus on integrated services/ cross selling
may be less pressure to sell than brokerage but more than community bank
blurring lines between brokerage and trust areas
calculating expected return ✔Correct Answer-weighted average of the expected returns of its
components
drivers of return ✔Correct Answer-bonds: coupon income + changes in price due to changes
in interest rates
stocks: dividend yield + growth in earnings + change in p/e
risk ✔Correct Answer-measure of uncertainty about the future payoff to an investment
measured over some time horizon and relative to a benchmark
risk-free investment ✔Correct Answer-the theoretical rate of return of an investment with no
risk of financial loss
i.e. short dated domestic govt bond (default benchmark)
