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Ch 8: Analyzing Customer Investment Profiles

About This Chapter

In this chapter, you can review analysis of customer investment profiles. Our experienced instructors prepare you to answer exam questions on topics ranging from building these profiles to the rules and regulations that bind them.

Analyzing Customer Investment Profiles - Chapter Summary

With the help of this chapter on analyzing customer investment profiles, you'll review how financial and/or personal factors can be used to assess investment profiles and how customer-specific factors impact investment choices. You'll look at definitions and formulas for both alpha and beta in finance. Additionally, by the end of this chapter you'll be able to:

  • Understand and identify investment objectives
  • Explain FINRA rule 2111
  • Talk about SEC regulations in regard to tender offers
  • Define CBOE Rule 9.9
  • Discuss how to verify investor accreditation and sophistication
  • Apply investment portfolio analysis to product selection
  • Describe the formula and advantages of Capital Asset Pricing Model
  • Provide investment strategies and recommendations to hold

The wealth of information contained in this chapter is presented in a concise manner that lets you quickly review for your exam. Use as little or as much of the information as you find necessary. You can skim pertinent definitions by looking for the keywords in bold font.

14 Lessons in Chapter 8: Analyzing Customer Investment Profiles
Test your knowledge with a 30-question chapter practice test
Building Customer Investment Profiles: Strategies & Importance

1. Building Customer Investment Profiles: Strategies & Importance

This lesson will explore the steps in building a customer investment profile. You'll learn about the regulatory standards that guide the practitioner. The lesson will also identify the obligations each financial professional must satisfy.

Using Financial Factors to Assess Investment Profiles

2. Using Financial Factors to Assess Investment Profiles

The first step of any successful financial plan is an accurate investment profile. Investors often have current assets and liabilities and face specific tax situations. This lesson covers the five factors critical to developing an investment profile.

Using Personal Factors to Assess Investment Profiles

3. Using Personal Factors to Assess Investment Profiles

In this lesson, you will learn the important information regarding personal factors to gather from clients in order to assess their investment profiles and meet the relevant regulations.

Understanding & Identifying Investment Objectives

4. Understanding & Identifying Investment Objectives

Imagine that you graduated from college, started a great job, and at 25 years old were ready to ride out the inevitable ups and downs of the stock market. Now you are 55 and far more aware of the reality of eventual retirement and asking yourself if you could afford another recession like the one in 2008. You are not alone. In this lesson, we will examine different investment objectives we face as we navigate life.

How Customer-Specific Factors Impact Investment Choices

5. How Customer-Specific Factors Impact Investment Choices

Financial plans should start by identifying factors that impact the selection of investment products. We will discuss the customer's investment profile, including risk tolerance, time horizon, investment objectives, and liquidity needs.

FINRA Rule 2111: Suitability Obligations

6. FINRA Rule 2111: Suitability Obligations

Financial professionals are required to invest customers' money in appropriate investments. But what does this mean? This lesson will look closely at FINRA Rule 2111, which covers suitability of investments.

Tender Offers: Definition & SEC Regulations

7. Tender Offers: Definition & SEC Regulations

In this lesson, we will learn about tender offers in the purview of corporate finance. We will also learn about the Securities and Exchange Commission regulations related to tender offers.

CBOE Rule 9.9: Definition & Importance

8. CBOE Rule 9.9: Definition & Importance

This lesson provides you with an overview of the Chicago Board Options Exchange's Rule 9.9 (Suitability of Recommendations), its application and its importance for the integrity of trade.

Verifying Investor Accreditation & Sophistication

9. Verifying Investor Accreditation & Sophistication

In this lesson, we will define what an accredited investor is. We will also review the qualification criteria and discuss the importance of this designation.

Applying Investment Portfolio Analysis to Product Selection

10. Applying Investment Portfolio Analysis to Product Selection

Portfolio analysis is the evaluation of asset combinations and other factors to maximize a portfolio's return. Learn about how portfolio analysis is applied to product selection in this lesson.

What is Alpha in Finance? - Definition & Formula

11. What is Alpha in Finance? - Definition & Formula

In this lesson, you will learn what alpha is in finance, how it is used to measure return based on risk, and its relationship with beta. You will also learn the formula for calculating alpha.

What is Beta in Finance? - Definition & Formula

12. What is Beta in Finance? - Definition & Formula

In this lesson, you will learn what beta is, how it is used in finance, the formula to calculate it, and how to best utilize it for success in investing.

Capital Asset Pricing Model (CAPM): Definition, Formula, Advantages & Example

13. Capital Asset Pricing Model (CAPM): Definition, Formula, Advantages & Example

Learn about the Capital Asset Pricing Model (CAPM), one of the foundational models in finance. We'll look at the underlying assumptions, how the model is calculated, and what it can do for you.

Providing Investment Strategies & Recommendations to Hold

14. Providing Investment Strategies & Recommendations to Hold

Investment professionals are required to engage in reasonable efforts to provide customers with investment strategies and recommendations to hold. FINRA Rule 2214 and Municipal Securities Rulemaking Board (MSRB) Rule G-19 provide key guidance.

Chapter Practice Exam
Test your knowledge of this chapter with a 30 question practice chapter exam.
Not Taken
Practice Final Exam
Test your knowledge of the entire course with a 50 question practice final exam.
Not Taken

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