IPS questions

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Would anyone have a ready reference of key pitfalls/things to remember for the IPS section? Somethings like,
1. select the more conservative of ability and willingness
2. make sure to compute after/pre-tax as required, and include inflation if asked for
3. Liquidity - Investment management fees often have to be included here
4. Time horizon - Infinite is still ‘single stage, long time horizon’
5. Tax - Include low basis stock

Any more to add please?

 

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Some others i can think of
- May be prudent to suggest seeking external tax / legal counsel advicee
- In Risk Tol for example, sometimes ability, could be a conflicting situation, one thing increases ability and other thing decreases ability (for ex: Schw prc exam vol 2, exam 1, qn 1B), but have to clearly mention both.
- Under ‘unique’ - may have to ‘play the role of educator / counselor if the client is irrational / has unrealistic expectations etc.

 

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bump

 

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return calcs
1. should be based on the qn stem for ex: for next year or for at retirement etc -
2. watch out for conditional liquidity arrangements (if dont retire now, company provides for educational assistance to kids etc)
3. pay attention to combo inflation components - say inc/exp both affected by infl - income shortfall exposes to more infl in case of future return requirements/objectives
4. when pretax lump sum retirement benefits are paid, dont adjust for taxes as taxes will be paid on the drawing the retirement income
Risk Tol:
If conflicting evidences re ability - AVERAGE