401K

Today at Ameriprise Financial my task was to go through the client database and check to see which of these client had already had appointment meetings, which were currently booked in and which needed them. The financial advisor needs to assess and review clients’ portfolio in order to move their assets to a higher yielding investment base. There are two types of advisors, ones that get paid on the percentage of the profits made making them potentially wanting to take higher risk for greater gain and those which take a fixed payment for their services each year.

            I learnt more about what a 401(k) is as I’m including this in my retirement plan for “The Smiths”. A 401K is a retirement plan is set up by an employer to allow employees to make salary contributions on a post-tax and/or pretax basis. Some employers offering a 401(k) plan may make matching or non-elective contributions to the plan on behalf of the employees and may also add a profit-sharing feature to the plan. Earnings increase on a tax-deferred basis from interest, dividends or capital gains.

            If I were to get into the financial business I would have to take the series 7 test.

The test is broken up in a few parts:

1) Seeks Business for the Broker-Dealer through Customers and Potential Customers

2) Evaluates Customers’ Other Security Holdings, Financial Situation and Needs, Financial Status, Tax Status, and Investment Objectives

3) Opens Accounts, Transfers Assets, and Maintains Appropriate Account Records

4) Provides Customers with Information on Investments and Makes Suitable Recommendations

5) Obtains and Verifies Customer’s Purchase and Sales Instructions, Enters Orders, and Follows U

Of this exam there is a 72% pass mark with only 66% of takers passing it first time. Another intern in the office will be taking the exam in the summer. It will be interesting to hear from him how he finds it.