Ideally, clients will qualify for and can afford life, disability, health and long-term care insurance policies that will cover the financial cost of potential sickness and death. 

But that’s not always possible, especially if the clients have already endured an ailment that makes the corresponding insurance coverage expensive or impossible to obtain and maintain.

It could be a financial and emotional disaster if clients need to spend their own money to cover a medical emergency or loss of income. 

Clients eligible for a monthly pension payment in retirement generally have no knowledge or control over how the pension assets are invested. 

If the pension is ineligible to be taken as a lump sum, the recipient must make a one-time choice about when to initiate payments and, perhaps, create a beneficiary or survivorship payment option.

Even when the payment distributions have begun, future income can be jeopardized by the financial health or priorities of the pension’s sponsoring corporation or government body.

Whether the pension is the responsibility of a public or private organization, if there's a deficit down the road, it’s likely that the recipients are going to bear the brunt of the cost.

Residential, commercial and recreational properties can provide both intrinsic and financial reward to owners. 

But unlike “paper” assets, real estate can incur high costs in annual taxes and debt service, as well as for ongoing maintenance and renovations.

Plus, the properties are usually difficult to value and harder to sell quickly, especially if the owner needs to net a certain price to pay off the corresponding property loan.

Unfortunately, the conditions that make it difficult to get a good price for a property quickly might also negatively affect the potential proceeds from selling a client’s stock, bond and mutual fund investments.

Even an act as simple as buying, building and/or selling a primary residential property could force clients to tap their investments in a hurry, rather than liquidating the accounts slowly or at a later, more profitable time.

When a client has a sizable portion of his portfolio invested in just one company or industry, it can add higher highs and lower lows to the swings in his net worth. 

Selling some of the position will certainly help diversify the client’s investments. But a large potential tax bill or the client’s affinity for the company may prevent him from liquidating the position. 

Of course, the dangers are exacerbated when the client has a substantial portion of his net worth invested in shares or stock options in his employer’s company. 

Trouble for the employer means that not only may your client's employment (and benefits) be jeopardized, but it could also negatively affect the value of his investments, when he can least afford the decline. 

Sudden diagnosis of a serious health issue or debilitating condition may mean a client is unable to work. Or, if the illness strikes a family member, the client may want or need to take time off to provide care for the sick relative.

It’s not just normal living expenses that may need to be covered by liquidated investments. Depending on the situation, the client may need to pay for home health care, a nursing home, or treatment and medication that aren't covered by private health insurance or Medicare.

Finally, a terminal prognosis might motivate the client to spend money sooner on things that provide him with the most enjoyment possible over whatever time he has left. 

Speaking of the loss of a job and income, if your client is concerned that her employment will be ending before retirement or before she’s ready, you should make sure there's enough “safe” money available to cover her living expenses, as well as any private health insurance costs she may soon be forced to bear. 

Don’t forget about the assets in her retirement plan, as those may be invested for the long term but might be needed in the short term. 

Easy access to cash becomes especially urgent if she has any loan outstanding against her retirement account and then gets terminated. Unless she can repay the loan immediately, it will be counted as a distribution and may be subject to taxes and penalties that she likely won’t be able to (or want to) pay.

Last, but certainly not least, is the “dilemma” faced by clients who have enough money to do whatever they want and to pay for any potential cost or obligation that may arise in the future.

Certainly, this status gives them the option to invest in a moderately aggressive manner, in the hopes of extending their already significant net worth. 

But losses incurred while reaching for unnecessary reward can become extra painful if a subsequent decline threatens their financial security.