Client Communication and Relationship Management Flashcards

What is the primary purpose of a client discovery meeting for a CPS professional?

Answer: To gather comprehensive information about the client's goals, needs, and risk tolerance

Discovery meetings gather comprehensive client information including goals, time horizon, financial situation, and risk tolerance before any portfolio recommendations.

What is 'risk profiling' in client relationship management?

Answer: Assessing a client's ability and willingness to tolerate investment risk

Risk profiling assesses both the client's financial ability to bear risk (risk capacity) and their psychological comfort with risk (risk tolerance).

What does 'know your client' (KYC) require of a CPS professional?

Answer: Understanding the client's full financial situation, goals, and investment experience

KYC requires thoroughly understanding the client's financial situation, objectives, risk tolerance, and investment experience to provide suitable advice.

How should a CPS professional handle a client who panics during a market downturn?

Answer: Acknowledge emotions, provide perspective, and review the long-term investment plan

A skilled portfolio specialist acknowledges the client's concerns, provides market context, and reinforces the long-term investment plan to prevent panic-driven decisions.

What should a portfolio review meeting with a client typically include?

Answer: Reviewing performance, discussing any life changes, and reassessing goals and allocation

Comprehensive portfolio reviews cover performance, any client life changes affecting goals, and whether the current allocation still aligns with objectives.

What is 'suitability' in the context of portfolio recommendations?

Answer: Ensuring recommended investments match the client's financial situation, goals, and risk tolerance

Suitability requires that all investment recommendations be appropriate for the specific client's situation, goals, time horizon, and risk tolerance.