When working with a client to build a policy statement a lot of the constraints seem to be subjective (Willingness to take risk, ability, liquidity constraint etc. ) how do you get a round the subjectivity when classifying clients constraints? Example, while working on the BSAS exam, in the morning section their was a question where the client wanted to buy an expensive car ( not a ferrari/lambo but a car that is relatively expensive), trying not to copy the question word for word. Does that make his liquidy constraint high?
it would depend on his net worth. IMO
Is their a general rule? If you make x amount of money then spending y amount a year would put you in a certain risk/liquidity category