Question

Amy Choi became the legal guardian for her five-year-old niece, Emily Tam, when her sister and brother-in-law died in a tragic accident. Emily received a $100,000 death benefit. Until Emily reaches 25 years of age, Amy is her sole trustee, responsible for all investment decisions. Amy has approached her investment advisor, Loreen Liang, for advice. Amy and Loreen both agree that a growth-oriented portfolio is most suitable for Emily, given her long time horizon. She and Loreen will monitor the portfolio on an ongoing basis to ensure that the investments continue to match Emily’s objectives. Loreen gathers all the necessary information for the New Account Application Form and analyzes Emily’s situation in order to devise a suitable investment proposal. She feels that the following portfolio is the most appropriate for Emily. • Opus Balanced Fund 40% • Trustco Canadian Large Cap Equity Fund 30% • Hastings International Equity Fund 30% Amy agrees to follow Loreen’s recommendations, and arranges with the insurance company to forward the funds directly to Loreen’s mutual fund dealer. At what point are Loreen and Amy in the Financial Planning process?

1. Clarify Client Status, Problems and Opportunities 2. Implement the Plan 3. Gather Client Data and Identify Objectives or 4. Identify Strategies and Present the Plan

Answer 1

2. Implement the Plan is the correct option.

They are at the point of implementing the plan :

• Gather Client Data and Identify Objectives is completed
• Identifying the Client Status, Problems and Opportunities is completed
• Identify Strategies and Present the Plan is completed

They have agreed on the objectives and the asset allocation. Amy agrees to follow Loreen’s recommendations, and arranges with the insurance company to forward the funds directly to Loreen’s mutual fund dealer. Therefore, the plan is ready to be implemented.