Preview Questions Wealth Manager | Role Specific Skill

Question 1: What role does a power of attorney play in estate planning?

Which action should you take?

Choose only one option

It allows an individual to designate someone to make financial and medical decisions on their behalf in case of incapacitation

It allows someone to transfer property without taxes

It designates the beneficiaries of the estate after death

It ensures that the estate is divided equally among heirs

Question 2: What is the impact of market volatility on portfolio risk management, and how should it be mitigated?

Which action should you take?

Choose only one option

Volatility increases risk, and it can be managed through diversification, hedging, and setting risk limits

Volatility only affects short-term investments and does not impact long-term planning

Volatility should be avoided by only investing in government bonds

Volatility has no significant impact, as long as the portfolio contains a mix of stocks

Question 3: What is the importance of retirement planning within the overall financial plan?

Which action should you take?

Choose only one option

Retirement planning is only needed for older clients nearing retirement

Retirement planning is irrelevant if the client is still young and actively earning

Retirement planning ensures that clients can maintain their desired lifestyle post-retirement, factoring in income needs and tax strategies

Retirement planning involves investing exclusively in low-risk assets

Question 4: How can a wealth manager assess the risk of systematic market risk in a diversified portfolio?

Which action should you take?

Choose only one option

Use beta to assess the portfolio's sensitivity to market movements

Allocate the entire portfolio to low-risk assets to avoid market risk

Ignore systematic risk if the portfolio is well-diversified

Focus on historical volatility to predict future performance

Question 5: What is the most effective approach to managing a portfolio during periods of high market uncertainty?

Which action should you take?

Choose only one option

Rebalance the portfolio regularly to maintain desired risk levels

Hold all investments and avoid making any changes

Increase the portfolio's exposure to speculative high-growth assets

Move to cash and avoid investing until the market stabilizes

Question 6: What is the importance of setting realistic financial goals with clients?

Which action should you take?

Choose only one option

It makes it easier to recommend standardized financial products to all clients

It ensures that clients are satisfied with unrealistic returns in the short term

It helps create a clear roadmap for action, ensures measurable progress, and keeps the client engaged

It avoids the need for frequent reviews of the financial plan