Financial Options Counseling Improvement Suggestions

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This presentation includes the scenerios of three investors, their encounters, education and training required by financial advisors, and suggested improvement options.

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Financial Options Counseling Improvement Suggestions

  1. 1. FINANCIAL OPTIONS COUNSELING:<br />Existing Methods and Improvement Suggestions<br />Prepared by:<br />Tonya Morris<br />
  2. 2. Report Outline<br />Introduction<br />Purpose<br />Consumer scenarios<br />Collaboration failure<br />Various investment opportunities<br />Overcoming financial setbacks<br />Educational requirements<br />Conclusions<br />Recommendations<br />March 8, 2011<br />2<br />Financial Options Counseling Methods and Improvement Suggestions<br />
  3. 3. Introduction:Many consumers are unaware of the financial options available to them. <br />Without this knowledge:<br />Consumers fail to take advantage of potentially beneficial investment opportunities.<br />March 8, 2011<br />Financial Options Counseling Methods and Improvement Suggestions<br />3<br />
  4. 4. March 8, 2011<br />Financial Options Counseling Methods and Improvement Suggestions<br />4<br />Introduction:Some consumers have received poor financial advice.<br />Effect:<br />Financial devastation<br />Negative return on investments<br />Empty pockets and bank accounts<br />Depleted “nest eggs”<br />
  5. 5. March 8, 2011<br />Financial Options Counseling Methods and Improvement Suggestions<br />5<br />Purpose:To investigate the existing methods of financial options counseling as experienced by three separate consumers and any problems they incurred while making investment decisions.<br />Lindy<br />Gail<br />Jessica<br />Collaboration Failure<br />Various Investment Opportunities<br />Overcoming Financial Setbacks <br />
  6. 6. Meet Gail, an employee, who becamea victim of collaboration failure.<br /><ul><li>While employed with Company X, an optimal financial plan was discussed and agreed upon.
  7. 7. Gail began making regular investments into a 401K plan.
  8. 8. When her employment ceased, her 401K funds were transferred to Firm W.
  9. 9. Standard procedure, but there was a glitch.</li></ul>Collaboration Failure<br />March 8, 2011<br />Financial Options Counseling Methods and Improvement Suggestions<br />6<br />Gail<br />
  10. 10. March 8, 2011<br />Financial Options Counseling Methods and Improvement Suggestions<br />7<br />Collaboration Failure<br /><ul><li>The transferred funds were below Firm W’s threshold (minimum investment level).
  11. 11. Company X was not informed of Firm W’sinvestment threshold.
  12. 12. Firm W’s personnel did not discuss alternative investment options with Gail.
  13. 13. Gail withdrew her funds and deposited them into her regular bank account.</li></ul>Gail<br />
  14. 14. March 8, 2011<br />Financial Options Counseling Methods and Improvement Suggestions<br />8<br />Collaboration Failure<br />Consequences:<br /><ul><li>Consumer dissatisfaction
  15. 15. Consumer distrust
  16. 16. No investment opportunity
  17. 17. Negative feedback</li></ul>Gail<br />
  18. 18. March 8, 2011<br />Financial Options Counseling Methods and Improvement Suggestions<br />9<br />Various Investment Opportunities<br />Jessica, a private investor, was privyto various investment opportunities.<br /><ul><li>Jessica wanted to save a lump sum for her upcoming vacation through her personal bank.
  19. 19. She was advised of three investment options:
  20. 20. Place the funds in a regular savings account.
  21. 21. Purchase a 6-month CD.
  22. 22. Purchase a CD with no predetermined expiration date.</li></ul>Jessica<br />
  23. 23. March 8, 2011<br />Financial Options Counseling Methods and Improvement Suggestions<br />10<br />Various Investment Opportunities<br />Investment option dilemmas:<br /><ul><li>A regular savings account:
  24. 24. Funds could be withdrawn
  25. 25. For any reason
  26. 26. At any time
  27. 27. A 6-month CD :
  28. 28. Funds could not be withdrawn for six months.
  29. 29. Vacation was in four months.</li></ul>Jessica<br />
  30. 30. March 8, 2011<br />Financial Options Counseling Methods and Improvement Suggestions<br />11<br />Various Investment Opportunities<br />Investment option chosen:<br /><ul><li>A CD with a variable expiration date:
  31. 31. Expiration date could be manually set to coincide with Jessica’s vacation date
  32. 32. On date of expiration, funds would be automatically deposited into her regular checking account
  33. 33. Additional stipulation:
  34. 34. 24-hours prior to expiration date, Jessica could decide against the automatic deposit option and return the funds to a 6-month CD.</li></ul>Jessica<br />
  35. 35. March 8, 2011<br />Financial Options Counseling Methods and Improvement Suggestions<br />12<br />Various Investment Opportunities<br />Advantages:<br /><ul><li>Consumer satisfaction
  36. 36. Consumer confidence
  37. 37. Optimal investment opportunity
  38. 38. Positive feedback</li></ul>Jessica<br />
  39. 39. March 8, 2011<br />Financial Options Counseling Methods and Improvement Suggestions<br />13<br />OvercomingFinancial Setbacks <br />Meet Lindy, a long-time investor, who overcame the financial setback of 9-11.<br /><ul><li>Substantial losses on September 11, 2001 as a result of the terrorist attack on the U.S. World Trade Center.
  40. 40. Through diversified investments:
  41. 41. She followed her financial counselor’s advice.
  42. 42. Didn’t put “all [her] eggs in one basket”.
  43. 43. Has recovered her losses incurred from 9-11.</li></ul>Lindy<br />
  44. 44. March 8, 2011<br />Financial Options Counseling Methods and Improvement Suggestions<br />14<br />OvercomingFinancial Setbacks <br />Consequences:<br /><ul><li>Can never recover benefits of original investment
  45. 45. Forced to come out of retirement to help recoup losses
  46. 46. Looks more closely at guaranteed funds</li></ul>Lindy<br />
  47. 47. March 8, 2011<br />Financial Options Counseling Methods and Improvement Suggestions<br />15<br />OvercomingFinancial Setbacks <br />Overcame financial setbacks through:<br /><ul><li>Trustworthy financial counselors
  48. 48. Financial counselors’ proper financial training
  49. 49. Investment firms’ standard practices
  50. 50. Stable client-advisor relations</li></ul>Lindy<br />
  51. 51. March 8, 2011<br />Financial Options Counseling Methods and Improvement Suggestions<br />16<br />OvercomingFinancial Setbacks <br />Advantages:<br /><ul><li>Consumer confidence in financial advisor’s management skills
  52. 52. Overall consumer satisfaction
  53. 53. Good consumer-advisor relations</li></ul>Lindy<br />
  54. 54. March 8, 2011<br />Financial Options Counseling Methods and Improvement Suggestions<br />17<br />What does it take to become a successful financial advisor?<br />A financial advisor must have a keen understanding of:<br />
  55. 55. March 8, 2011<br />Financial Options Counseling Methods and Improvement Suggestions<br />18<br />What does it take to become a successful financial advisor?<br />A successful financial advisor should have . . .<br />a Master’s Degree in finance<br />or<br />a Bachelor’s Degreein finance<br />
  56. 56. March 8, 2011<br />Financial Options Counseling Methods and Improvement Suggestions<br />19<br />What does it take to become a successful financial advisor?<br />In addition to college education, a financial advisor must complete financial courses and advising programs that include:<br /><ul><li> Investing tactics
  57. 57. Retirement planning
  58. 58. Insurance</li></li></ul><li>March 8, 2011<br />Financial Options Counseling Methods and Improvement Suggestions<br />20<br />What does it take to become a successful financial advisor?<br />Financial advisors are well educated and have the financial knowledge necessary to give sound financial advice.<br />With all this education and training,why would there be a need for improvement?<br />
  59. 59. March 8, 2011<br />Financial Options Counseling Methods and Improvement Suggestions<br />21<br />What does it take to become a successful financial advisor?<br />In addition to education and training,successful financial advisors must:<br /><ul><li> Develop their counseling skills.
  60. 60. Exhibit an interest in consumer needs.
  61. 61. Willingly seek other investment options.
  62. 62. Be attentive of consumer investments.</li></li></ul><li>March 8, 2011<br />Financial Options Counseling Methods and Improvement Suggestions<br />22<br />Conclusions<br />Consumers seeking financialoptions counseling need to:<br />Be made aware of financial options available that will produce optimal results.<br />Be treated equally; receive the most advantageous advice for their financial needs.<br />Be able to rely on the advice of their financial advisors.<br />
  63. 63. March 8, 2011<br />Financial Options Counseling Methods and Improvement Suggestions<br />23<br />Conclusions<br />Consumers seeking financialoptions counseling need to:<br /><ul><li>Be made aware of financial options available that will produce optimal results.
  64. 64. Be treated equally; receive the most advantageous advice for their financial needs.
  65. 65. Be able to rely on the advice of their financial advisors.</li></li></ul><li>March 8, 2011<br />Financial Options Counseling Methods and Improvement Suggestions<br />24<br />Recommendation: Improvement #1<br />Standardized investment process with defined principles <br />
  66. 66. March 8, 2011<br />Financial Options Counseling Methods and Improvement Suggestions<br />25<br />Recommendation: Improvement #2<br />A uniform scope of practice for all investment firms and financial institutions<br />
  67. 67. March 8, 2011<br />Financial Options Counseling Methods and Improvement Suggestions<br />26<br />Recommendation: Improvement #3<br />Consistent training methods and standardized curriculum<br />
  68. 68. March 8, 2011<br />Financial Options Counseling Methods and Improvement Suggestions<br />27<br />Recommendation: Improvement #4<br />Every investment firm, financial institution, financial advisor and benefit-offering employer should collaborate(work together).<br />
  69. 69. March 8, 2011<br />Financial Options Counseling Methods and Improvement Suggestions<br />28<br />Recommendation:<br />These improvements will help:<br />Alleviate confusion<br />Simplify the investment process<br />Strengthen client relations<br />
  70. 70. March 8, 2011<br />Financial Options Counseling Methods and Improvement Suggestions<br />29<br />A happy client is a repeat client.<br />
  71. 71. March 8, 2011<br />Financial Options Counseling Methods and Improvement Suggestions<br />30<br />Financial Options Counseling<br />Taking steps to improve the investment process, business practices, and financial training programswill help consumers make sound financial investmentswith optimal results.<br />
  72. 72. March 8, 2011<br />Financial Options Counseling Methods and Improvement Suggestions<br />31<br />

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