Client Investment Recommendations and Strategies

The largest Series 66 section (about 30%). This is portfolio construction, not product trivia.

IPS first

An investment policy statement writes down goals, constraints, and a strategic mix before the first trade. It is the document you return to when markets yell.

Modern portfolio ideas (plain language)

Diversification reduces the risk that is unique to one name. Systematic risk (the market) remains. Beta is how much a holding tends to move with the market. Standard deviation is how bumpy returns have been. Correlation near +1 means two holdings move together; near 0 they do not.

Asset allocation

Stocks, bonds, cash, and maybe alternatives, sized to the client's horizon and capacity. Strategic allocation is the long-term mix. Tactical tilts are short-term bets; they need a reason and a review date. Rebalancing sells winners and buys laggards to get back to the mix.

Tax-aware advice

Prefer tax-exempt bonds in taxable accounts when the client's bracket makes the math work. Prefer growth or index funds in taxable accounts if they throw off less ordinary income. Use IRAs and 401(k)s for ordinary-income generators when the plan allows.

Behavioral traps

Clients chase last year's winner, panic at the bottom, and overweight the company they work for. The adviser's job is to name the bias and bring the IPS back to the table.

ERISA and retirement

A 401(k) adviser who is an ERISA fiduciary must act solely in the participants' interest. Share classes, revenue sharing, and proprietary funds are conflict zones. Document why the menu is there.