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Needs Analysis Best Practices Client Onboarding
A representative is analysing a client's needs before advising on retirement savings. Which of these must the analysis take into account? i) The client's existing retirement savings. ii) The client's tolerance for investment risk. iii) Which of the available products pays the highest commission. iv) The age at which the client expects to retire.
RE5 practice question with a worked answer. This is one of hundreds of FSCA RE5 questions in the RegulatoryExams question bank.
- a) Statements ii, iii and iv
- b) Statements i and ii only
- c) Statements i, ii and ivCorrect
- d) All four statements
Why this is the answer
A needs analysis gathers the client's financial situation, needs, objectives and risk profile, so the advice can be shown to suit her: existing savings, risk tolerance and the expected retirement age all bear on that. The commission a product pays is the adviser's interest, not the client's need, and has no place in the analysis.
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