Korea Associate Financial Planner cheat sheet

Financial planning process (KFP standard sequence): establish relationship → collect client data and goals → analyze current position → develop plan → present and implement → monitor and review.

Fiduciary standard requires acting in the client's best interest, disclosing conflicts of interest, and prioritizing client interest over the planner's compensation.

Suitability standard is weaker than fiduciary: the recommendation must fit the client's goals and situation but need not be the lowest-cost or best available option.

Six-step planning cycle is iterative, not linear; a material change in income, family status, or market conditions triggers re-analysis.

Know-your-client rule: collect personal, financial, and risk-tolerance data before any recommendation; document the basis for the risk profile.

Compensation models: fee-only (commission-free), fee-based (fee plus commission), commission-only; the model must be disclosed in writing before engagement.

Confidentiality duty: client data may be shared only with consent or where law requires; third-party service providers need a confidentiality agreement.

Planner competence boundary: refer out on tax, legal, or specialized insurance matters when outside the planner's qualification; document the referral.

Net cash flow = total income − total expenditure (including debt service); a negative figure means the household is drawing down savings or borrowing.

Emergency fund target: 3–6 months of essential living expenses; 6–12 months for single-income, variable-income, or self-employed households.

Savings ratio = savings / gross income; a rising ratio with flat income indicates genuine expense control rather than accounting shifts.

Debt service ratio (DSR) = annual debt repayment / annual income; Korean lenders commonly cap total DSR at 40% for mortgage approvals.

Debt avalanche (highest interest rate first) minimizes total interest paid; debt snowball (smallest balance first) maximizes psychological momentum.

Prepayment penalty on Korean mortgages is typically a percentage of the prepaid principal declining over the fixed-rate period; compare against the interest saved.

Revolving credit card debt: interest accrues from the transaction date, not the statement date, so early repayment saves more than the nominal APR suggests.

Jeonse deposit loans are secured by the deposit return claim; the loan-to-deposit ratio and deposit-return guarantee (보증) determine the effective risk.

Expected portfolio return = Σ (weight × expected return of each asset); portfolio variance includes covariance terms, so diversification reduces risk below the weighted average.

Sharpe ratio = (portfolio return − risk-free rate) / portfolio standard deviation; it measures excess return per unit of total risk.

Beta measures sensitivity to market movements; a portfolio beta is the weighted average of component betas.

Correlation below +1 produces diversification benefit; the lower the correlation, the greater the variance reduction for the same expected return.

Asset allocation drives most return variability over time; security selection and market timing contribute comparatively little.

Rule of 72: years to double ≈ 72 / annual return percentage; at 6% a sum doubles in roughly 12 years.

Real return ≈ nominal return − inflation; use real return when projecting long-horizon goals such as retirement.

Korean tax-advantaged accounts: ISA offers a tax-free allowance with a separate allowance above it, and pension savings accounts defer tax until withdrawal.

Human life value approach: present value of the insured's future earnings net of self-maintenance, used to size death benefit need.

Needs approach: death benefit = final expenses + debt repayment + education fund + income replacement − existing assets and existing coverage.

Indemnity principle: property insurance pays actual loss up to the sum insured, not a profit; life insurance is not bound by indemnity because life is not valued in money.

Coinsurance clause: claim = (sum insured / required sum insured) × loss, when the sum insured is below the required amount at loss time.

Deductible reduces premium and eliminates small claims; the insured bears the deductible before the insurer pays.

Insurance contract disclosure duty: the applicant must disclose material facts asked about; omission or misrepresentation can allow the insurer to cancel within the statutory period.

Term life covers a fixed period with no cash value; whole life and endowment policies combine death cover with savings and carry surrender values.

Third-party liability cover (e.g., automobile mandatory liability) is legally required; voluntary cover adds limits above the statutory minimum.

Retirement funding gap = required annual retirement income − expected public pension and other guaranteed income, discounted to the retirement date.

Replacement ratio: target retirement income is commonly set at 60–70% of pre-retirement gross income, adjusted for lower commuting and savings costs.

Accumulation phase uses future value of annuity formulas; decumulation phase uses present value of an annuity to convert the lump sum into income.

Korean public pension (National Pension) benefit depends on insured period and average lifetime earnings; full benefit requires 20 years of contributions for the basic old-age pension.

Retirement pension accounts (IRP, pension savings) receive tax credits on contributions and are taxed on withdrawal; early withdrawal outside statutory grounds incurs penalty tax.

Sequence-of-returns risk: poor returns early in retirement permanently reduce the sustainable withdrawal amount even if later returns recover.

Inflation erodes fixed retirement income; model retirement income in real terms or escalate it annually.

Longevity risk: plan for a horizon beyond life expectancy, since a couple has a meaningful probability that at least one spouse survives to an advanced age.

Korean income tax is progressive; the marginal rate applies to the next unit of income while the effective rate is total tax / total income.

Comprehensive income tax base includes interest, dividends, business income, and other income; capital gains on qualifying assets are taxed separately.

Financial income threshold: interest and dividends below the annual threshold are taxed at a low withholding rate, with excess taxed at the comprehensive rate or by election.

Tax-advantaged savings: ISA and pension accounts provide allowances or deferral; contributions above limits lose the benefit.

Deductions reduce the tax base (e.g., personal, pension, insurance, medical, education); tax credits reduce the computed tax directly.

Capital gains on a single home held for the statutory period may be exempt up to a value ceiling; multi-home owners face higher rates and surcharges.

Gift tax uses progressive rates with a deduction per relationship (spouse, lineal descendant, other relative) and a 10-year aggregation rule for prior gifts.

Timing rules: income and deductions belong to the year the right is settled; shifting income between years changes the marginal rate applied.

Korean inheritance tax is levied on the estate (estate tax type), with progressive rates applied to the net estate after debts, funeral expenses, and deductions.

Spouse deduction is capped and requires the spouse to actually inherit; the deduction is limited to the spouse's statutory share of the estate.

Financial asset deduction and lump-sum deduction thresholds apply per estate; the family deduction combines personal deductions by relationship.

Inheritance tax is due within the statutory filing period after the death; late filing adds penalty tax on the unpaid amount.

Lifetime gift planning reduces the estate but triggers gift tax; the 10-year aggregation rule means earlier gifts are added to later ones for rate determination.

Valuation rules: listed shares use a period average market price; unlisted shares use net asset value or comparable-company methods; real estate uses standard assessed value.

Inheritance order under Korean law: spouse and lineal descendants jointly inherit in the first rank; the spouse's statutory share differs when descendants exist.

Trusts and life insurance can provide liquidity for estate tax; death benefits paid to a named beneficiary are generally included in the taxable estate if the deceased paid premiums.

Risk tolerance assessment combines willingness (attitude questions) and ability (horizon, income stability, liquidity needs); the plan must respect the lower of the two.

Client data collection should cover goals, time horizon, liquidity needs, tax situation, existing contracts, and family obligations.

Written engagement scope defines services, fees, and responsibilities; work outside the scope requires a new agreement.

Documentation standard: record recommendations, alternatives considered, client decisions, and the date; contemporaneous notes support compliance reviews.

Behavioral biases to identify: loss aversion, anchoring, overconfidence, recency bias, and herd behavior; frame corrections with data rather than judgment.

Review cadence: at least an annual review plus event-driven reviews after marriage, birth, job change, inheritance, or major market moves.

Conflict-of-interest disclosure must be specific and in writing; generic statements do not satisfy the disclosure duty.

Complaint handling: log the complaint, respond within a defined period, escalate per firm policy, and retain records for the statutory retention period.

Client segmentation by assets or fee revenue determines service frequency; document the service model for each segment.

Key performance indicators for a practice: client retention rate, revenue per client, referral rate, and planning-fee versus commission mix.

Succession planning for the practice itself: identify a successor, value the book, and document client consent requirements for transfer.

Regulatory recordkeeping: retain client agreements, suitability documentation, and complaint records for the period required by the applicable regime.

Technology controls: client data must be encrypted in transit and at rest; access should follow least-privilege principles.

Fee disclosure must state the basis (flat, hourly, percentage of assets) and any third-party compensation before the client engages.

Professional development: maintain continuing education hours and track regulatory changes affecting advice delivery.

Engagement letters should state the scope, deliverables, fee schedule, termination terms, and the planner's qualifications.

Ethical decision framework: identify the conflict, consider affected parties, evaluate alternatives against the fiduciary duty, document the decision, and disclose.

Planner must distinguish advice from information; general education without a client relationship does not create a fiduciary duty.

Referral fees and commissions from third parties must be disclosed to the client and may require written consent.

Client records belong to the practice, but clients have a right to copies of their own data on request.

Professional liability: errors and omissions cover negligent advice; the policy typically excludes fraud and intentional misconduct.

Competence includes technical knowledge plus the ability to communicate it; a planner should decline engagements outside their expertise.

Conflicts arising from product manufacturing (e.g., in-house funds) require heightened disclosure and a documented best-interest comparison.

Budget categories: fixed commitments (rent, insurance), variable essentials (food, utilities), discretionary spending, and debt service.

Cash flow statement distinguishes operating inflow (salary, business income) from non-operating inflow (asset sales, gifts, tax refunds).

Liquidity ratio = liquid assets / monthly expenses; a ratio below 3 signals vulnerability to income interruption.

Debt-to-asset ratio = total liabilities / total assets; a rising ratio with flat net worth indicates consumption funded by borrowing.

Net worth = total assets − total liabilities; track it quarterly to separate market effects from saving behavior.

Refinancing decision rule: refinance when the present value of interest savings exceeds prepayment penalties plus new loan costs.

Credit score management: payment history and utilization ratio dominate scoring; closing old accounts can shorten credit history and lower the score.

Loan structure: fixed-rate loans protect against rate rises; variable-rate loans reduce initial cost but raise payment risk.

Strategic asset allocation sets long-term weights; tactical allocation makes short-term deviations within policy limits.

Rebalancing to target weights enforces buy-low/sell-high discipline; threshold or calendar rules should be written into the policy statement.

Investment policy statement records objectives, risk tolerance, constraints (liquidity, time horizon, tax, legal, unique), and review procedures.

Standard deviation measures total risk; a two-asset portfolio's risk depends on weights, individual volatilities, and covariance.

Duration measures bond price sensitivity to interest rate changes; a 1% rate rise reduces price by roughly duration percent.

Expense ratios compound: a 1% higher annual fee reduces a 30-year terminal value by roughly a quarter, all else equal.

Dollar-cost averaging reduces timing risk but does not guarantee a lower average cost than a lump sum in rising markets.

Behavioral trap: performance chasing buys after gains and sells after losses, converting volatility into realized losses.

Premium components: pure risk premium (expected claims) + loading (expenses, profit) + savings element in cash-value policies.

Cash-value policy: surrender value = accumulated reserve − surrender charges; early surrender often returns less than premiums paid.

Policy loan: borrowing against cash value reduces the death benefit if unpaid; interest accrues and compounds.

Riders: waiver of premium, critical illness, disability income, and term conversion options add cost and should be matched to needs.

Underwriting classes (standard, preferred, substandard) determine premium; health and occupation are primary rating factors.

Claim documentation: policy number, insured identity, cause and date of loss, and supporting evidence; the insurer's investigation period is statutory.

Insurance contract reinstatement after lapse usually requires evidence of insurability and payment of overdue premiums with interest.

Overinsurance of indemnity policies is wasteful because payment is capped at actual loss; review sums insured against current replacement cost.

Sustainable withdrawal rate: a 4% initial withdrawal with inflation adjustment is a common planning benchmark, not a guarantee.

Monte Carlo simulation reports the probability of funding the goal; a 70–80% success rate is a common planning target, with the trade-off disclosed.

Bucket strategy: short-term bucket holds cash and short bonds, medium-term holds bonds, long-term holds equities, reducing forced selling in downturns.

Annuity purchase converts a lump sum into guaranteed income and transfers longevity risk to the insurer at the cost of liquidity and flexibility.

Required minimum distributions from retirement accounts begin at the statutory age; failing to withdraw triggers penalty tax on the shortfall.

Public pension claiming: delaying the start increases the monthly benefit; the break-even age compares the cumulative totals.

Healthcare costs rise faster than general inflation; model them as a separate, escalating expense line.

Tax-efficient withdrawal order: taxable accounts first, then tax-deferred, then tax-free, subject to bracket management and required distributions.

Tax bracket management: realizing income up to the top of the current bracket uses the lower marginal rate before stepping up.

Deduction versus credit: a deduction reduces taxable income by the amount, saving tax at the marginal rate; a credit reduces tax directly.

Tax deferral is valuable because tax on the deferred amount compounds; deferral is not exemption and the tax is paid later.

Loss harvesting: realizing losses offsets gains; wash-sale rules restrict repurchase of substantially identical assets within the statutory window.

Income splitting between spouses or family members shifts income to lower brackets but is limited by attribution rules.

Charitable giving: donations qualify for tax credits within limits; donating appreciated assets can avoid capital gains tax.

Timing of asset sales across tax years: splitting a large gain over two years can keep each year in a lower bracket.

Record retention: keep receipts for deductions and credits for the statutory period in case of audit.

Estate liquidity analysis: compare estate tax and settlement costs against liquid assets; illiquid real estate or family business may force a sale.

Life insurance for estate liquidity: the death benefit provides cash to pay tax without selling assets, if ownership and beneficiary are structured correctly.

Gift-and-leaseback and gradual gifting reduce the taxable estate but must be at fair value to avoid deemed-gift or tax-avoidance challenges.

Business succession: valuation discounts for minority interests and lack of marketability are limited by tax authority rules; document the rationale.

Will versus intestacy: a valid will controls distribution; without one, statutory inheritance shares apply.

Inheritance waiver and agreement among heirs (협의분할) can reallocate inherited assets after death, subject to creditor and tax rules.

Cross-border estates: situs rules determine which country taxes which asset; double taxation may be relieved by treaty or foreign tax credit.

Charitable bequests reduce the taxable estate and can be structured as a trust or direct bequest.

Active listening techniques: paraphrase, reflect feeling, summarize, and ask open questions before offering recommendations.

Risk-profile questionnaires should be validated against actual behavior in past downturns; stated tolerance often exceeds revealed tolerance.

Explaining risk: use both a probability statement and a monetary example; avoid technical jargon unless the client uses it first.

Goal prioritization: rank goals by importance and urgency, then fund in order; disclose the trade-offs when goals conflict.

Client education on fees: show the cumulative effect of a 1% fee on a 20-year projection to make the cost concrete.

Handling disagreement: restate the client's position, present evidence, and document the client's final decision if it differs from the recommendation.

Vulnerable clients: identify diminished capacity or undue influence and involve a trusted contact or escalate per firm policy.

Meeting follow-up: send a written summary of decisions and next actions within a defined period after each review.

Advertising rules: performance claims must be accurate, balanced, and not misleading; past performance requires the standard disclaimer.

Referral arrangements must be disclosed and documented; undisclosed compensation violates the fiduciary duty.

Client onboarding checklist: identity verification, risk profile, engagement letter, fee disclosure, and data consent.

Practice valuation methods: multiple of recurring revenue, discounted cash flow of future fees, and comparable transactions.

Capacity management: track hours per client type to price services and avoid overcommitment.

Cybersecurity: multi-factor authentication, encrypted backups, and an incident response plan for data breaches.

Continuing education should cover regulatory updates, tax law changes, and product changes relevant to the client base.

Client satisfaction measurement: periodic surveys and retention analysis identify service gaps before clients leave.

Korean financial investment services are regulated by the Financial Services Commission and supervised by the Financial Supervisory Service.

Investment solicitation requires registration; unregistered solicitation or guaranteed-return claims are prohibited.

Know-your-product and know-your-customer rules require matching product risk to client suitability before sale.

Explanation duty: the seller must explain key product risks and obtain the client's written confirmation for high-risk products.

Mis-selling remedies include cancellation of the contract and compensation for losses caused by inadequate explanation.

Planner must not receive undisclosed inducements from product providers; all compensation must be transparent to the client.

Anti-money-laundering: verify client identity, monitor unusual transactions, and report suspicious activity.

Recordkeeping supports supervision; incomplete records weaken the planner's position in a dispute.

Korean mortgage types: fixed-rate, variable-rate, and mixed; the mixed type resets after a fixed initial period.

DSR calculation includes all loans; stress DSR adds a margin to the contract rate to test affordability.

Jeonse return guarantee protects the tenant's deposit if the landlord defaults; the tenant pays a guarantee fee.

Credit card installment converts a purchase into monthly payments with fees; the effective annual cost exceeds the stated installment fee.

Debt restructuring options: maturity extension, interest rate reduction, and principal deferral; each affects the credit record.

Overdraft and revolving credit carry the highest rates; prioritize repayment before investing surplus cash.

Loan prepayment: check whether the penalty applies only within the fixed-rate period and whether partial prepayment is allowed.

Household debt ratio = household debt / disposable income; a rising ratio raises vulnerability to income shocks.

Risk-return trade-off: higher expected return requires accepting higher uncertainty; a guaranteed high return is a red flag for fraud.

Nominal versus real return: the real return is what preserves purchasing power; inflation erodes fixed-income returns.

Systematic risk cannot be diversified away; unsystematic risk can be reduced by holding many securities.

Standard deviation of a two-asset portfolio: σp² = w1²σ1² + w2²σ2² + 2w1w2ρσ1σ2.

Coefficient of variation = standard deviation / expected return; it compares risk per unit of return across assets.

Liquidity risk: assets that cannot be sold quickly at fair value require a liquidity premium.

Credit risk: bond yield spread over the risk-free rate compensates for default probability and recovery.

Behavioral finance: loss aversion makes investors hold losers too long and sell winners too early.

Death benefit need = income replacement + debt + education + final expenses − existing assets − existing coverage.

Term life is the lowest-cost way to cover a temporary need such as dependent children or a mortgage.

Critical illness cover pays a lump sum on diagnosis; it complements rather than replaces medical expense insurance.

Medical expense insurance reimburses actual costs; indemnity limits and deductibles determine the payout.

Disability income insurance replaces a percentage of income; the definition of disability and the waiting period drive the premium.

Long-term care insurance covers custodial care costs; benefit triggers are usually inability to perform activities of daily living.

Premium payment term affects total cost: a shorter payment term raises the annual premium but reduces total premiums.

Policy review triggers: income change, new dependents, mortgage, divorce, or business ownership change.

Future value of an annuity: FV = PMT × [((1+r)^n − 1) / r]; use it for annual retirement contributions.

Required annual saving = funding gap / future value annuity factor at the assumed return and horizon.

Contribution limits on tax-advantaged retirement accounts cap the annual tax credit; excess contributions lose the benefit.

Employer retirement plans may match contributions; an unmatched contribution is forgone compensation.

Asset allocation should shift toward lower volatility as the retirement date approaches, but not to zero equity if the horizon is long.

Inflation assumption: use a long-run inflation estimate and keep it consistent with the return assumption.

Fees reduce the accumulation: a 1% fee on a 25-year horizon reduces the terminal value materially.

Review the plan annually and after market moves of a defined magnitude; rebalance to target weights.

Progressive rate structure: each bracket applies only to income within that bracket; the top marginal rate applies only to the top slice.

Personal deductions depend on dependents and household status; documentation is required.

Pension and insurance premium deductions are capped; contributions above the cap receive no further deduction.

Medical expense deduction requires a threshold; only expenses above the threshold are deductible.

Education expense deduction covers tuition and qualifying fees within limits.

Housing savings and mortgage interest deductions have separate caps and eligibility conditions.

Tax credits for pension and retirement accounts are limited by income level; higher earners may receive a reduced credit.

Year-end planning: prepay deductible expenses or defer income to shift the tax base between years.

Inheritance tax rates are progressive; the top rate applies to the estate value above the highest threshold.

Spouse deduction is limited to the spouse's statutory share and requires actual inheritance.

Gift tax deduction per relationship: spouse, lineal descendant, and other relative each have separate thresholds.

Ten-year aggregation: gifts within ten years are summed for rate determination, so earlier gifts raise the rate on later ones.

Annual gift exclusion does not exist in the same form as in some jurisdictions; the deduction is relationship-based and cumulative.

Valuation date is generally the date of death for inheritance and the date of gift for gift tax.

Filing deadlines: inheritance tax within the statutory months after death; gift tax by the end of the month following the gift month.

Penalty tax applies to late filing and underreporting; voluntary correction before audit reduces the penalty.

First meeting objectives: establish rapport, explain the process, clarify fees, and confirm the client's goals and expectations.

Discovery questions should cover values, goals, constraints, and prior financial experiences, including past losses.

Communication style adaptation: some clients want detail, others want summaries; confirm the preferred format.

Expectation management: state what the plan can and cannot control, and define the review process.

Conflict escalation: document the issue, involve a supervisor if required, and follow the firm's complaint procedure.

Client consent for sharing information with third parties must be specific and recorded.

Feedback loop: ask for feedback after plan delivery and after each review to improve service.

Termination: return client documents, confirm the final fee, and document the handover.

Revenue models: flat fee, hourly, assets under management, retainer, and commission; each creates different incentives.

AUM fee = assets × fee rate; it grows with assets, so market gains raise planner revenue without extra work.

Flat and hourly fees align with advice delivery and are less sensitive to market movements.

Client acquisition: referrals from existing clients and centers of influence are the most cost-effective channels.

Marketing compliance: testimonials and performance claims must be accurate and not misleading.

Staffing model: paraplanners handle data and analysis, planners handle advice and relationships, and compliance reviews documentation.

Technology stack: CRM, planning software, portfolio reporting, and secure document sharing.

Business continuity: a documented plan for the planner's absence, including client notification and data access.

Duty of loyalty requires avoiding conflicts where possible and managing them where unavoidable; disclosure alone does not cure a material conflict.

Duty of care requires the planner to gather sufficient information and to base recommendations on a reasonable analysis.

Duty of confidentiality survives the end of the engagement; it does not expire with the contract.

Planner must not borrow from or lend to clients; such arrangements create conflicts and are restricted.

Planner must not use client assets for personal purposes; client funds must be held separately from the planner's own funds.

Testimonial and endorsement rules: any statement must be genuine and not misleading; paid endorsements require disclosure.

Supervision: a planner responsible for junior staff must review their client-facing work.

Ethical grey areas should be escalated to a compliance officer and documented before acting.

Goal funding: compute the future cost of the goal, then the required monthly saving using the future value of an annuity formula.

Education cost inflation often exceeds general inflation; use a separate escalation rate.

Sinking fund: set aside a fixed amount each period so the lump sum is available at the goal date.

Opportunity cost of holding excess cash: compare the after-tax deposit rate against the after-tax cost of debt.

Pay yourself first: automate saving at the start of the month before discretionary spending.

Windfall allocation rule: repay high-interest debt first, then fund the emergency reserve, then invest.

Budget variance analysis: compare actual to planned spending monthly and adjust the plan, not just the numbers.

Track net worth quarterly; separate saving contributions from investment returns in the change.

Equity returns come from dividends plus capital gains; bond returns come from coupons plus price changes.

Fund fees: total expense ratio includes management, custody, and administrative costs; it reduces net return.

ETF trades on an exchange at market price; the price can deviate from net asset value.

Tax on financial income: interest and dividends are subject to withholding; the comprehensive settlement may apply above the threshold.

Capital gains tax applies to qualifying securities; holding period and account type affect the rate.

Derivatives carry leverage and counterparty risk; suitability requires a higher risk profile.

Diversification across asset classes, regions, and currencies reduces concentration risk.

Rebalancing frequency: too frequent raises costs and taxes; too infrequent allows drift from the target risk.

Insurable interest must exist at the time of contract for property insurance and at the time of contract for life insurance on another person.

Utmost good faith: both parties must disclose material facts; the insurer must explain the policy terms.

Warranty and condition: breach of a condition may allow the insurer to deny the claim.

Subrogation: after paying a claim, the insurer acquires the insured's right to recover from the third party at fault.

Contribution: when multiple policies cover the same loss, each pays its rateable share up to the loss.

Proximate cause: the nearest effective cause of loss determines whether the policy responds.

Grace period: premiums paid within the grace period keep the policy in force; beyond it, the policy may lapse.

Free-look period: the applicant may cancel within the statutory period and receive a refund.

National Pension: benefit depends on insured period and average earnings; a minimum insured period is required for the old-age pension.

Early claiming reduces the monthly benefit; deferred claiming increases it.

Employer retirement pension (퇴직연금): defined benefit guarantees a formula benefit, defined contribution credits contributions to the employee's account.

IRP: contributions receive a tax credit; withdrawals are taxed as pension income if taken as an annuity within limits.

Pension income tax: annuity withdrawals receive a lower tax rate than lump-sum withdrawals within the statutory conditions.

Contribution limits: combined pension account contributions are capped annually for the tax credit.

Portfolio in retirement accounts should match the withdrawal horizon; near-retirement accounts should reduce volatility.

Beneficiary designation: confirm the beneficiary for each retirement account and update after life events.

Comprehensive financial income: interest and dividends above the threshold are aggregated and taxed at progressive rates, with an election option.

Capital gains on shares: listed shares below the ownership threshold may be exempt; large shareholders are taxed.

Real estate capital gains: holding period and residence requirements determine exemption; multi-home owners face surcharges.

Transfer tax versus income tax: acquiring real estate triggers acquisition tax; holding triggers property tax.

Business income versus employment income: classification affects deductions and rates.

Tax treaties: foreign-source income may be taxed in both countries; a foreign tax credit or treaty exemption relieves double taxation.

Penalty tax: underreporting and late payment add penalties on the unpaid tax.

Record retention: keep contracts and receipts for the statutory period to support the return.

Statutory inheritance shares: with a spouse and one child, the spouse receives 1.5 times the child's share; with multiple children, the spouse's share is 1.5 times a child's share divided accordingly.

Reserved portion (유류분): heirs are entitled to a minimum share; gifts that infringe it can be reclaimed.

Will forms: holograph, notarial, and sealed; each has formal requirements for validity.

Executor: appointed in the will or by the court; the executor administers the estate and files the tax return.

Inheritance limitation: heirs may accept, waive, or accept with reservation within the statutory period after learning of the death.

Debts of the deceased pass to heirs unless waived; a qualified acceptance limits liability to the inherited assets.

Family business succession: special deductions and deferral may apply to qualifying family businesses.

Trusts: a trust can manage assets for beneficiaries and may reduce probate friction, subject to tax rules.

Do not guarantee returns or use language that implies certainty; describe outcomes as probabilities or ranges.

Disclose the basis of any comparison to benchmarks and the period used.

Avoid conflicts in recommendations; if a product pays the planner more, disclose it and justify the recommendation.

Respect client autonomy: the client makes the final decision after being informed; document a refusal of advice.

Confidentiality in communication: use secure channels for sensitive data and avoid discussing client matters in public.

Cultural and language sensitivity: confirm the client understands the language of the documents; provide interpretation when needed.

Complaint response should acknowledge, investigate, and respond in writing within the stated period.

Continuing education on communication skills supports better client outcomes and retention.

Operational risk: errors in processing, data entry, and trade execution; controls include dual review and reconciliation.

Compliance monitoring: sample client files periodically for suitability and disclosure documentation.

Outsourcing: third-party providers must meet confidentiality and security standards; the planner remains responsible.

Business insurance: professional indemnity, cyber liability, and key-person cover protect the practice.

Fee billing: invoice on the agreed schedule, reconcile assets, and provide a clear statement of services.

Client onboarding time affects capacity; standardize templates to reduce cost per client.

Succession: document the client book, fee history, and service model to support a sale or transfer.

Regulatory change management: assign responsibility for monitoring rule changes and updating procedures.

Engagement scope should state the services, the period, the fee, and the client's responsibilities.

Planner must confirm the client's identity and authority (e.g., power of attorney) before acting.

Third-party authorization: obtain written consent before contacting a client's accountant or lawyer.

Conflict check at onboarding: identify existing relationships with product providers or competing clients.

Data collection should include existing contracts, so the planner can identify gaps and overlaps.

Plan presentation should state assumptions (inflation, return, tax) so the client can evaluate the projections.

Implementation: the planner coordinates but the client executes contracts; document who does what.

Monitoring: define review triggers and the review frequency in the engagement letter.

Housing cost ratio = monthly housing cost / monthly income; a high ratio reduces capacity for other goals.

Jeonse versus monthly rent: compare the opportunity cost of the deposit against the monthly rent.

Mortgage affordability: lenders use DSR and stress rates; a higher stress rate reduces the maximum loan.

Loan-to-value ratio = loan / property value; a higher LTV raises risk and may raise the rate.

Property tax and acquisition tax are holding and transaction costs that affect the rent-versus-buy decision.

Maintenance and repair costs are often underestimated; include them in the housing budget.

Rent increase risk: a monthly rent contract with renewal rights limits sudden increases.

Deposit return risk: verify the landlord's debt and the guarantee coverage before signing.

Time horizon: longer horizons allow more equity, but the horizon must match the goal date, not the investor's age alone.

Liquidity constraint: funds needed within a year belong in cash or short-term deposits.

Tax constraint: taxable accounts favor tax-efficient assets; tax-deferred accounts favor high-turnover assets.

Legal constraint: some clients (e.g., trusts) have investment restrictions in the governing document.

Unique constraint: ethical or religious screens may exclude certain sectors.

Rebalancing bands: a common rule is to rebalance when an asset drifts more than 5 percentage points from target.

Benchmark selection: the benchmark should match the asset class and the mandate.

Performance evaluation: compare return to the benchmark and to the policy target, and attribute the difference.

Key-person insurance covers the loss of a critical employee; the business owns the policy and is the beneficiary.

Buy-sell agreement funded by insurance provides liquidity for a departing owner's shares.

Business liability cover: general liability, product liability, and professional indemnity cover different exposures.

Workers' compensation is statutory; employers must cover workplace injuries.

Property insurance for a business should reflect replacement cost, not book value.

Business interruption cover replaces lost profit during a shutdown; the indemnity period must match the recovery time.

Directors and officers liability covers management decisions; it excludes fraud.

Review sums insured annually; underinsurance triggers the coinsurance clause.

Withdrawal sequencing should consider the tax bracket in each year and the required distribution rules.

Pension income tax: annuity payments receive a lower rate within limits; lump sums are taxed at a higher rate.

Early withdrawal from a retirement account outside statutory grounds triggers penalty tax plus ordinary income tax.

Required distributions: missing a required withdrawal triggers a penalty on the shortfall.

Roth-type accounts: contributions are taxed, withdrawals are tax-free within the rules.

Social security coordination: public pension income may affect other benefits; check the interaction.

Healthcare in retirement: medical costs are a major expense line; model them separately.

Legacy goal: if assets remain, the beneficiary designation and tax treatment of inherited accounts matter.

Business expense deduction requires a business purpose and documentation; personal expenses are not deductible.

Depreciation spreads the cost of an asset over its useful life; the method affects the annual deduction.

Capital gains versus ordinary income: the holding period and asset type determine the rate.

Investment expense deduction: fees may be deductible within limits; confirm the rule.

Tax-loss harvesting: realized losses offset gains of the same type, then a limited amount of ordinary income.

Estimated tax payments: underpayment triggers penalties; pay quarterly based on expected income.

Entity choice: sole proprietor, partnership, and corporation have different tax treatments.

Recordkeeping: keep receipts and contracts to support deductions and credits.

Taxable estate = gross estate − debts − funeral expenses − deductions; the rate schedule applies to the taxable estate.

Gross estate includes real estate, financial assets, business interests, and certain lifetime gifts.

Valuation of unlisted shares: net asset value or comparable-company method; document the method.

Filing: the inheritance tax return is due within the statutory months after the death; payment can be in installments within limits.

Installment payment: available for qualifying estates; interest applies to the deferred amount.

Payment in kind: real estate or securities may be accepted in payment within limits.

Gift tax credit: gift tax paid on prior gifts within the aggregation period may be credited against inheritance tax.

Penalty: late filing and underreporting add penalties; voluntary correction reduces them.

Loss aversion: losses feel roughly twice as painful as equivalent gains; frame decisions in terms of goals.

Anchoring: clients fix on a purchase price or past high; redirect to forward-looking fundamentals.

Overconfidence: clients overestimate their skill; use historical data and scenario analysis.

Recency bias: recent market performance is extrapolated; show long-run returns.

Herd behavior: clients follow crowds; emphasize the plan and the policy statement.

Mental accounting: clients treat money differently by source; show the total balance sheet.

Framing effect: present both gain and loss frames to reduce bias.

Commitment device: automatic contributions and written plans reduce impulsive decisions.

Written supervisory procedures: define who reviews what, how often, and how issues are escalated.

Training: annual compliance training on conflicts, confidentiality, and suitability.

Testing: periodic reviews of client files and trade records to detect exceptions.

Recordkeeping: retain records for the statutory period and make them available to regulators on request.

Complaint log: record the date, issue, resolution, and any remediation.

Incident response: a documented plan for data breaches, including notification duties.

Vendor management: review third-party security and confidentiality commitments.

Annual compliance review: assess the program against regulatory changes and update procedures.

Planner role: educator, analyst, and coordinator; the client retains decision authority.

Scope of advice: limited to the engagement; do not stray into legal or tax advice without qualification.

Referral network: maintain relationships with accountants, lawyers, and insurance specialists.

Professional standards: follow the code of ethics of the relevant professional body and the regulatory rules.

Continuing education: maintain the required hours and stay current on tax and product changes.

Documentation: record the analysis, alternatives, and the client's decision.

Client consent: obtain written consent for any conflict or third-party compensation.

Review: monitor the plan and update it when circumstances change.

Emergency fund size: 3–6 months of essential expenses; more for variable income or single earners.

Keep the emergency fund in liquid, low-volatility accounts; do not invest it in equities.

Insurance premiums are a fixed cash flow item; review them annually for overlap and gaps.

Deductibles and co-payments are out-of-pocket costs; include them in the budget.

Debt repayment versus investing: compare the after-tax loan rate to the expected after-tax return.

Credit utilization: keep utilization below a threshold to protect the credit score.

Automatic payment: set up automatic payments to avoid late fees and penalty interest.

Annual review: reassess the emergency fund after income or family changes.

Investment policy statement: written objectives, constraints, and review rules reduce impulsive changes.

Rebalancing: a mechanical rule removes emotion from buy and sell decisions.

Diversification: spreading across assets reduces the impact of any single loss.

Cost control: low-cost, broad funds reduce the drag on returns.

Tax awareness: place tax-inefficient assets in tax-deferred accounts.

Time in the market: missing the best days reduces long-run returns; avoid market timing.

Record keeping: track contributions and returns to evaluate performance.

Review: assess the plan annually and after major life events.

Claim notification: notify the insurer promptly and provide the required documents.

Insurer investigation: the insurer may request medical or police records; cooperate within the policy terms.

Denial: the insurer must state the reason; the insured may object through the dispute process.

Dispute resolution: the Financial Supervisory Service and the courts handle insurance disputes.

Misrepresentation: if the applicant concealed a material fact, the insurer may cancel within the statutory period.

Explanation duty: the insurer must explain key terms; failure can limit the insurer's defense.

Subrogation: the insurer may recover from the third party at fault after paying the claim.

Record keeping: keep the policy, receipts, and claim documents.

Annual review: compare actual contributions and returns to the plan assumptions.

Assumption check: update inflation, return, and life expectancy assumptions.

Contribution adjustment: increase contributions when income rises or returns fall short.

Risk review: reduce volatility as the retirement date approaches, but keep growth assets for a long horizon.

Withdrawal plan: define the withdrawal rate and the sequence of account withdrawals.

Healthcare: update the healthcare cost estimate annually.

Beneficiary: confirm and update the beneficiary designations.

Documentation: record the review and the client's decisions.

Filing deadline: file the annual return within the statutory period; late filing adds penalties.

Withholding: employers withhold tax; the year-end settlement reconciles the liability.

Deduction documentation: keep receipts for medical, education, and donation deductions.

Electronic filing: use the official system and keep the confirmation.

Amended return: correct errors voluntarily to reduce penalties.

Audit: respond within the deadline and provide the requested documents.

Penalty: underreporting and late payment add penalties on the unpaid tax.

Record retention: keep records for the statutory period.

Family meeting: discuss the estate plan with heirs to reduce disputes.

Documentation: keep the will, trust, and insurance policies in a secure, accessible place.

Beneficiary review: update designations after marriage, divorce, or birth.

Professional coordination: involve a lawyer and tax adviser for complex estates.

Liquidity: confirm that liquid assets cover the expected tax and costs.

Business succession: document the plan and the valuation method.

Charitable intent: confirm the client's wishes and the tax treatment.

Review: update the plan after major life events or tax law changes.

Service tiers: define the review frequency and services for each client segment.

Response time: state the expected response time for client inquiries.

Meeting agenda: send an agenda before the meeting and a summary after.

Client portal: provide secure access to documents and reports.

Feedback: survey clients periodically and act on the results.

Retention: track retention and identify at-risk clients.

Referral: ask satisfied clients for referrals within the disclosure rules.

Termination: document the handover and return client documents.

Growth: referrals and centers of influence are the most cost-effective channels.

Marketing compliance: performance claims must be accurate and not misleading.

Fee transparency: disclose the fee basis and any third-party compensation.

Conflicts: identify and disclose conflicts before accepting the engagement.

Capacity: track hours per client to price services and avoid overcommitment.

Technology: use secure systems for client data and communications.

Succession: document the client book and service model for a sale or transfer.

Continuing education: stay current on regulatory and tax changes.