Role of the mutual fund representative PDF

Preview

Summary

Role of the mutual fund representative Chapter 1...

Description

1. Describe the evolution of the mutual fund industry and the impact mutual funds have had on the financial services marketplace. ◦ The growth in the demand for mutual funds can be tied to their design: investors who have minimal funds to invest have access to a product that offers a professionally managed and diversified portfolio of securities at a relatively low cost. ◦ The mutual fund industry in Canada grew dramatically in the 1980s and 1990s, spurred by a declining interest rate market, the chartered banks entering the fund industry, and a proliferation of choice in the number of funds available. ◦ Assets under management in Canada was more than $1.4 trillion by the end November 2018. 2. Explain the value of becoming a licensed mutual fund sales representative and how it prepares you to deal more confidently with clients to protect their interests and provide quality advice. ◦ Individuals who sell financial products such as mutual funds are required to meet educational, employment and work experience criteria in order to be licensed. ◦ Meeting client needs is the focal point of any relationship and the beter informed you are the greater the likelihood of successful client relationships. 3. Discuss the importance of providing excellent client service. ◦ Client service means fully understanding client needs and identifying the right solutions to satisfy those needs. ◦ The rewards for providing excellent client service include repeat business and the potential for expanding your client base. 4. Identify the legal, ethical and professional responsibilities of a mutual fund sales representative. ◦ Your legal responsibility ensures that any investment you recommend is suitable for the client. ◦ Your ethical responsibility ensures that client interests are placed ahead of your own needs and those of your dealer. ◦ Your professional responsibility is to provide the best client service possible. 5.List and describe the five components of knowing your client. ◦ Knowing clients means knowing their financial goals and objectives, financial circumstances, personal circumstances, investment knowledge, and ability to tolerate risk. ◦ Knowing your product is a question of understanding all the characteristics of the funds you are recommending to clients.

5. Describe the important role a mutual fund sales representative plays in the client relationship and how this role differs from that of a financial planner. ◦ The mutual fund sales representative plays the important role of ensuring that client mutual fund purchases are suitable. ◦ Depending on the investing experience of clients, you will also play the role of educator. ◦ It is also important to recognize what services you cannot provide, for example financial planning. ◦ In situations where clients require planning to atain those goals, your role is to refer the client to persons qualified to give advice in the appropriate specialist area....