easy · Certified Financial Planner Professional Conduct
The Ruiz family has monthly non-discretionary expenses of 6,000. They have 10,000 in a checking account and 50,000 in a brokerage account invested in a volatile small-cap fund. They ask their planner to help them invest an additional 5,000 into a new cryptocurrency venture. Addressing risks and cash-flow needs before seeking return,
What is the most appropriate next step for the CFP® professional?
- Advise the Ruiz family to use the 5,000 to build their liquid emergency reserve.
- Liquidate 8,000 of the small-cap fund to reach the minimum 3-month emergency reserve.
- Recommend they invest only half of the 5,000 into the cryptocurrency to balance risk.
- Evaluate the risk-return profile of the cryptocurrency venture to see if it fits their tolerance.
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