TBD Assignment FIN320 Esther Rydbeck Nordén

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Indiana State University *

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320

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Finance

Date

Apr 3, 2024

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TBD Assignment FIN320 Esther Rydbeck Nordén Brief client information At the start of the semester, our client (in their 40’s) was in a crisis, since the client had a terminal illness which was extremely troublesome. In addition to the illness the client further had no assets, resulting in an unstable and unpredictable future. The client was working at Applebee’s where the client got good employee benefits, however, the client got bought out of the company. In addition to previous stated information, the client got kicked out of their house due to marriage problems and is now forced to live with other family members. H. 67 Sources of money conflicts Financial conflicts can develop from multiple sources, and it is vital to understand the root causes to solve them effectively. Some examples include the different attitudes the clients or couples have toward money, communication breakdowns and their role in financial conflict, and the influence of past experiences and childhood regarding money. Financial habits are additionally one of the hardest habits to break as mentioned above, it is a habit that has developed over a long period of time. When individuals enter a committed relationship, they have generally been in control of their own money, and therefore had been prioritizing personal goals. Putting another person into the equation can be challenging, and if action is not taken, low to no communication about money in the relationship will have severe consequences. Regarding the client there are marriage problems, and one major reason behind this is evidently the terminal illness the client was diagnosed with. Having a terminal illness not only comes with the stress and fear of the illness itself, but also with extreme costs that were

unaccounted for. If there is not a set plan for how the couple is going to resolve these issues, they are distinctly set to further difficulties. H. 68 Principles of counseling The principles of counseling place a premium on developing a close bond with clients by attentive listening and the provision of a secure space in which they may freely express their emotions. Clients who might be ashamed or anxious about sharing their financial past will be hesitant to share previous financial history with a financial advisor they do not know well or are uncomfortable with. Therefore, it is essential that the financial advisor crafts a supportive environment to quickly gain trust with their clientele. Clients are more likely to follow recommendations from an advisor they find trustworthy, and it can be a challenging accomplishment to build trust. Once the trust is broken, it can be nearly impossible to repair. It is extremely imperative that the client has the belief that their advisor is acting in the client’s best interests, and that the financial planner cares about what is important to the client. H. 70 Crisis events with severe consequences Lastly, a major negative event that could affect a person’s finances, such as a job loss or an illness, is not a pleasant experience. However, if you're well-prepared, the likelihood of something costly and uncontrollable happening decreases. Because of the situation the client is in, one thing that could be done is to maximize the client’s liquid savings. Even though the client’s assets are low, there is still action to be taken. Cash accounts such as checking, savings, and CDs, will be the most helpful in a crisis. Their values do not fluctuate with market conditions, unlike stocks, ETFs, and other financial instruments. This implies that you won't experience a loss of funds if you withdraw your money at any moment.

Additionally, the financial plan for someone that has a terminal illness drastically changes their priorities. Annuities and retirement funds are usually meant to give a reliable income after retirement, but they can also be used to boost the client’s financial reserves for unexpected medical costs in dire circumstances, such as terminal disease. When taking money out of a retirement account early for medical expenditures or because of disability, many retirement accounts waive penalty fees.

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Resources used: https://freedmarcroft.com/money-matters-in-marriage-understanding-the-root-causes-of- financial-conflict/ https://www.cfp.net/knowledge/industry-insights/2023/05/how-the-principles-of-counseling- can-strengthen-client-relationships https://www.investopedia.com/articles/pf/11/prepare-for-a-financial-crisis.asp