Investments  

Four ways to measure capacity for loss in drawdown

  • Describe some of the challenges over assessing capacity for loss
  • Identify ways to make it more successful
  • Explain the significance of annuities
CPD
Approx.30min

Overall, there is a reason why nobody has come up with the holy grail of a single capacity for loss calculation; because no one measure can deal with all situations. Instead, there has to be a combination of approaches, which gives you the provable, documented capacity for loss answer you need at the end. 

Andrew Storey is proposition director at EV

Article continues after advert

CPD
Approx.30min

Please answer the six multiple choice questions below in order to bank your CPD. Multiple attempts are available until all questions are correctly answered.

  1. Assessing capacity for loss does not appear anywhere in the FCA's rulebook, true or false?

  2. Which of the following is NOT one of the main ways of assessing capacity for loss, according to the author?

  3. In which set of circumstances does it help to ask the client about their capacity for loss?

  4. Dynamic correlation is when different assets move in the opposite direction, true or false?

  5. What is the drawback of getting a cash flow outcome on a single scenario?

  6. It is not always the case that an annuity will cover all of a client’s income target, true or false?

Nearly There…

You have successfully answered all the questions correctly, well done!

You should now know…

  • Describe some of the challenges over assessing capacity for loss
  • Identify ways to make it more successful
  • Explain the significance of annuities

I completed this CPD in

To bank your CPD please complete the form below.

Were the stated learning objectives met?

Why weren't they met?

What did you learn from undertaking this CPD exercise?

Why did you undertake this piece of learning?

Any comments about this article or FTAdviser's CPD in general?

Banked!

Congratulations, you have successfully completed and banked this piece of CPD

Already Banked!

You have already banked for this article.

To bank your CPD you must sign in or

Register

One or more questions have been incorrectly answered,
 please review your answers and try again.

Please complete all the above text fields to bank your CPD.

More Investments CPDSee my completed CPDSee all CPD