Financial Planning Case Study-94347 – My Assignment Help : Samples & Case Study Review Sample

Part 1: Instructions for completing and submitting

Completing the assignment

The assignment

For this assignment you are required to complete the following tasks:

In your assessment workbook:

• answer the assignment questions as they relate to sections 1, 3, 4, 6 and 7 of the case study

• complete the template SOA for your client, using the data in the case study, the fact finder and risk profile

• complete the two (2) cash flow tables

• calculate the five year projections.

Part 2: The case study

Introduction

You are a financial planner for EANWB Financial Planning and authorised to provide financial product advice on a range of investments (excluding direct shares), superannuation and retirement planning, and insurance and risk protection.

Assignment

DFP1B-1v2.1 Financial Planning

Student identification (student to complete)

Please complete the fields shaded grey.

Student number	INT
Student name
Telephone number

Assignment result (assessor to complete)

Result — first submission (Details for each activity are shown in the table below)

Result — resubmission (if applicable)

Result summary (assessor to complete)

		First submission	Resubmission (if required)
Case study assignment questions	Section 1
	Section 3
	Section 4
	Section 6
	Section 7
	Statement of Advice
	Cash flow tables
	Five–year projections

Feedback (assessor to complete)

Before you begin

Read everything in this document before you start your assignment for Financial Planning.

About this document

This document includes the following parts:

• Part 1: Instructions for completing and submitting this assignment

• Part 2: The case study

• Appendix 1: Fact finder and risk profile

• Appendix 2: Financial planning questions (assessment workbook):

– Case study questions

– Statement of advice (SOA) template

– Cash flow tables (financial position after implementation of strategy)

– Five-year projection table

• Appendix 3: Assumptions.

Saving your work

Download this document to your desktop, type your answers in the spaces provided and save your
work regularly.

How to use the study plan

We recommend that you use the study plan for this subject to help you manage your time to complete the assignment within your enrolment period. Your study plan is in the KapLearn Financial Planning subject room.

How to use the sample case study and SOA in KapLearn

The sample case study provides a model to help you prepare your SOA for this assignment. The case study explains the process that is undertaken to develop the SOA with reference to an example and it is a very useful resource. Download the sample SOA and refer to it as you work through the learning materials for this subject.

Before you start work on this assignment, go back to the sample SOA and:

• compare how the SOA matches with the goals and objectives identified in the case study

• consider what information has been included in the SOA

• consider why this information has been included.

This exercise will help you prepare an SOA for this assignment that addresses your client’s goals. Please bear in mind that not all SOAs are exactly alike in their construction, but all have common heading topics within them. Accordingly, there may be minor differences between the sample SOA and the SOA template in this assignment. However, all the required compliance elements will be included in both formats.

Part 1: Instructions for completing and submitting
this assignment

Completing the assignment

The assignment

For this assignment you are required to complete the following tasks:

In your assessment workbook:

• answer the assignment questions as they relate to sections 1, 3, 4, 6 and 7 of the case study

• complete the template SOA for your client, using the data in the case study, the fact finder and risk profile

• complete the two (2) cash flow tables

• calculate the five year projections.

The information and resources that can assist you in answering the questions in this assignment can be primarily sourced from the Foundations of Financial Planning text and the sample case study. Some data will have to be externally sourced, but the assignment template will clearly indicate where this is necessary.

You are expected to analyse the 11 areas covered in the data analysis stage, explained in Topic 2, as well as review the sample case study and sample SOA. Additionally, you will need to weigh up the client’s opinion against your own analysis to determine the important areas that need to be addressed for the client.

Although the case study may indicate that the client does not wish to have advice provided about a specific area, you need still to evaluate the situation, provide clear reasons as to why, or why not, review the area, and make referrals to specialists if necessary in the relevant sections of the template.

You do not have to provide retirement planning calculations and recommendations.

However, you must consider the appropriateness of all the investments held by Jessica. If you recommend any change to her current asset allocation (including those in her superannuation fund), you must explain why this action is appropriate. That is, why there is a need to change the asset allocation, or to replace or sell an investment.

With regard to insurance, you are not expected to provide a detailed analysis of Jessica’s needs. However, this area still needs to be examined. If your analysis shows that she requires additional insurance and could benefit from a review, you should advise her of this. Alternatively, clearly explain why you believe her current cover is sufficient.

More information regarding requirements for providing advice is included throughout the assignment.

Word count

The word count shown with each question is purely indicative. You may exceed the word count by a minimal amount, however, please do not include additional information which is outside the scope of the question.

The Jessica Bigge case study

The case study steps you through the financial planning process, from initial contact with Jessica Bigge, to the development and documentation of a financial strategy as an SOA to meet her needs.

Fact finder and risk profile

The fact finder for Jessica and her risk profile are provided. You will find these in Appendix 1.
The data in these documents has been used to complete some of the sections in the SOA.
You will need to refer to these documents to complete the financial position tables for your client.

Additional research

You will be required to source additional information from other organisations in the financial services industry to find the appropriate product/s to meet Jessica’s requirements, and perhaps to calculate your service fees.

Submitting the assignment

You must submit your completed assignment in a compatible Microsoft Word document. You need to save and submit this entire document — not just Appendix 2: Financial planning questions (assessment workbook).

Do not remove any sections of the document.

Do not save your completed assignment as a PDF.

The assignment must be completed before submitting it to Kaplan Professional Education. Incomplete assignments will be returned to you unmarked.

The maximum file size is 5MB. Once you submit your assignment for marking you will be unable to make any further changes to it.

You are able to submit your assignment earlier than the deadline if you are confident you have completed all parts and have prepared a quality submission.

The assignment marking process

You have 12 weeks from the date of your enrolment in this subject to submit your completed assignment.

Your assessor will mark your assignment and return it to you in the Financial Planning subject room in KapLearn under the ‘Assessment’ tab.

‘Not yet competent’ and resubmissions

Should sections of your assignment be marked as ‘not yet competent’ you will be given additional opportunities to amend your responses so that you can demonstrate your competency to the required level.

You must address the assessor’s feedback in your amended responses. You only need amend those sections where the assessor has determined you are ‘not yet competent’.

Make changes to your original submission. Use a different text colour for your resubmission. Your assessor will be in a better position to gauge the quality and nature of your changes. Ensure you leave your first assessor’s comments in your assignment, so your second assessor can see the instructions that were originally provided for you. Do not change any comments made by a Kaplan assessor.

Units of competency

This assignment is your opportunity to demonstrate your competency against these units:

FNSASICZ503A	Provide advice in financial planning
FNSFPL501A	Comply with financial planning practice ethical and operational guidelines and regulations
FNSFPL502A	Conduct financial planning analysis and research
FNSFPL503A	Develop and prepare financial plan
FNSFPL504A	Implement financial plan
FNSFPL505A	Review financial plans and provide ongoing service
FNSFPL506A	Determine client requirements and expectations
FNSINC401A	Apply principles of professional practice to work in the financial services industry
BSBITU402A	Develop and use complex spreadsheets

We are here to help

If you have any questions about this assignment you can post your query on the ‘Ask your Tutor’ forum in your subject room under the ‘Help’ tab. You can expect an answer within 24 hours of your posting from one of our technical advisers or student support staff.

Part 2: The case study

Introduction

You are also able to provide taxation information that is incidental to the advice provided. In other words, you can provide information about any potential tax savings or tax benefits that could result from your recommendations, but you must refer the client to a tax professional for specific tax advice.

You do not have the authority to provide estate planning or property advice and you must refer clients to suitable professionals should you identify they need advice in areas for which you have not been appropriately authorised and trained. (Refer to the sample SOA and the wording used regarding tax, estate planning and real estate, as well as the summary of what advice areas are covered, and what are not, at the beginning of the sample SOA.)

Section 1: Meeting your client

The first phone call

Jessica Bigge has agreed to speak with you following a suggestion made to her by her bank’s personal lending officer who knows you and is respectful of the quality advice you provide to your clients. She was in the process of successfully organising a loan to purchase her car at the time.

Jessica is unsure of what is involved in personal financial planning, but concedes that planning for her future financial objectives could be of value. She agrees to have her contact details passed on to you by the bank’s lending officer so that you can tell her about what is involved in the financial planning process, what the possible benefits might be to her, and costs involved.

When you phone Jessica, you provide her with details about the financial planning process, and why you will need to ask her for certain types of financial information. You stress that you work for a licensee (a person authorised by the Government to deal in financial products) and any information she gives you will be treated confidentially. You let her know that this information will only be used to provide the financial advice you consider will meet her needs. You tell her all this information is in the Financial Services Guide (FSG) that you will send her.

Jessica is reassured by your introduction so you proceed. You explain you need her to contribute to the compilation of a financial profile in order to help you work out how she can best meet her financial goals. This means that she will need to tell you what she owns, what she owes, what she earns and her living expenses. She can record all this information in the fact finder you will send her with the FSG. You inform Jessica that the fact finder also includes a risk profile section and the information she provides you will give you sense of her appetite for different financial planning strategies.

You make a date and time with Jessica to come to your office and take down her address and phone numbers. You ask Jessica to bring along to the meeting her completed fact finder and as much financial information as she can, such as income details, expenses, superannuation, insurance details, etc.

When you have concluded the call, you make a file note about the conversation including the date, the potential client’s name, and the name of the person who referred her to you. This is the start of your paper trail. You also complete some of the initial details in your data collection form so that it looks like Table 1.

Finally you write to Jessica, as promised during your initial conversation, and include the fact finder, the FSG and a checklist of the information she needs to bring to the meeting.

Table 1 Personal details

	Client 1				Client 2
Title	Miss
Surname	Bigge
Given & preferred names	Jessica
Home address	18/43 Benton St, Rozelle, NSW.
Business address	n.a.
Contact phone	(02) 7766 5544
Date of birth	15 July 1986
Sex		Male	û	Female		Male	Female
Smoker		Yes	û	No		Yes	No
Expected retirement age	Haven’t really thought about it, but probably 66

The first meeting

Jessica arrives at your office for the meeting. After greeting her and offering her a glass of chilled water, she confirms that she received your package of documents and that she has filled in the fact finder and the risk profile.

You then take her through the key elements of the FSG, including your role and capacity to assist her with her planning needs and your company’s fees. You make sure that Jessica understands this information before you proceed to the next step.

Collecting the data

You learn the following information about Jessica through a process of thorough and polite questioning. From time to time she provides you with a relevant document to confirm her financial situation. You confirm the details in the fact finder as you proceed.

Jessica’s current situation

Jessica, born 15 July 1986, is single with no dependants, and lives in a rented flat for which she pays rent of $460 per week.

Jessica is a marketing manager for a mining engineering company and has been with that firm for six years.

Jessica earns $70,000 p.a. and receives superannuation guarantee (SG) contributions from her employer in addition to this.

Jessica owns a new Mazda CX5 that she recently borrowed $39,000 from the bank to purchase.

The loan is over five years at a fixed rate of 10% p.a. with the repayments being $850 per month. There is a prepayment fee of $175, though this fee is waived if the loan is refinanced to another product with the same bank. The car has full comprehensive insurance with an annual premium of $1500.

Jessica’s needs and objectives

During your conversation with Jessica it becomes apparent that her principal objective is to save for her own home. At this stage she is unsure of the location where she would like to buy but it would be a unit.

On her own calculations, based on what she feels comfortable in borrowing and with her savings, she could afford a unit up to a purchase price of $550,000. She also said that she would like to have saved at least 15% of the purchase price and if possible, be able to purchase her first home in no more than 5 years time.

She is also concerned about the debt she has incurred buying her car and would like to know the benefits and ramifications of paying it off early, particularly in terms of her primary objective of saving for, and purchasing, her first home.

Jessica admits that she knows very little about the sharemarket, how it works, or what it actually means to own shares. However, she is keen to learn more about it following her success with the purchase of Westpac Banking Corporation shares.

Jessica is in good health and believes the insurances within her superannuation fund provide adequate cover.

Jessica does not place superannuation and retirement planning as a priority at the moment, saying that retirement is a long way off and her employer looks after her superannuation anyway.

Jessica does not have a will or powers of attorney in place, and is not overly concerned about the adequacy of her estate planning.

Superannuation

Jessica has $32,000 in her employer’s default superannuation fund, the ABXY Super Fund, and is invested in a ‘balanced’ portfolio. Jessica joined the fund on 19 January 2007.

Jessica does not make any additional contributions to her superannuation fund.

The fund has returned the following, after fees and tax:

2007/08	2008/09	2009/10	2010/11	2011/12	2012/13
–4.5%	-9.5%	8.9%	10.2%	2.1%	8.3%

The investment objective of the fund is to achieve returns after tax and fees that exceed the inflation rate, as measured by the CPI, by at least 3% p.a. over rolling five-year periods.

The asset allocation for Jessica’s balanced growth in her superannuation fund is:

Cash	7%
Australian fixed interest	12%
International fixed interest	10%
Australian equities	30%
Property	18%
International equities	23%

Insurance

Jessica’s superannuation fund provides a death and total and permanent disability (TPD) benefit of $50,000 in addition to her accumulated superannuation value. The premium is $1.50 per week for this level of cover and is deducted from her fund.

Jessica has no other personal insurance cover.

Jessica’s car has full comprehensive insurance with an annual premium of $1500.

Jessica also has home contents insurance cover of $20,000 with an excess of $100 including legal liability cover of up to $20 million. Jessica pays $30 per month from her credit card for this policy.

Jessica has adequate private health insurance cover that she pays $110 per month for on her credit card. This premium includes the private health insurance rebate.

Jessica has advised you that she is comfortable with the insurances she has in place and does not believe that she requires any further advice at this time.

Investments

Jessica has $57,000 in a term deposit earning 4.15% p.a. that is due to mature shortly. She plans to use these funds and future savings towards the purchase of her own home in about 5 years time, or earlier if possible.

Following advice from her uncle at a family barbecue, Jessica purchased 59 Westpac Banking Corporation shares on 25 November 2008 at $16.93. The full dividend received for the year is $1.66 per share fully franked and dividends received are not reinvested.

Jessica also has a small transaction account where her pay is deposited. This account is used to pay various expenses and her credit card. The account, on average, would have $1000 and it does not receive any interest.

Other information

Jessica has a credit card with a limit of $5000 that she uses for all her general expenses and entertainment. However, she does not spend up to her limit and her average expenses are $900 per month, (including home contents and health insurance), which she repays within the interest free period.

Each year Jessica goes on a two-week cruise with a friend, which costs $2500.

In addition, she usually spends two weeks with her family during her employer’s Christmas leave period.

Jessica is very healthy and has taken very little sick leave and has accumulated 54 days sick leave.

Other expenses include a donation to the National Breast Cancer Foundation of $10 per week, tax deductible ‘bucket’ donations of $10 p.a. to disaster relief funds, and accountant’s expenses of $150 p.a.

Jessica does not have any dependants and both her parents are well, fit and active. She has an older brother who is married with two young children and a younger sister who still lives with her parents.

Risk profiling

Jessica completed the risk profile section in the fact finder prior to attending the meeting. The completed fact finder and risk profile are in Appendix 1 of the assignment.

Closing the interview

Prior to concluding your meeting with Jessica, you review the information provided to her to check that it is complete and accurate.

Jessica is naturally curious about the next step in the process. You answer some additional questions she has about what happens next. You explain that with her agreement you will prepare a written report, an SOA, based on the information she has just shared with you. The SOA will be a financial plan detailing a number of actions she could take to meet her financial goals

Jessica agrees to proceed to the next stage of the financial planning process, and you make an appointment with her to present the plan in a fortnight.

There is a series of questions relating to Section 1 in the assessment workbook that you need to answer. Your answers to these questions are your opportunity to demonstrate your ability to establish a relationship with a client.

Section 2: The fact finder and risk profile

After this meeting and when you are in professional practice you would normally take the time now to complete a fact finder.

However, this template has already been prepared for you based on the information given by Jessica. You will find that fact finder and risk profile in Appendix 1.

Take some time now to familiarise yourself with Jessica’s fact finder and risk profile to confirm that all the information recorded is correct. You will need to refer to this data when you are completing the SOA, the cash flow tables and the five–year projections.

Section 3: Analysing the data

The next step in the financial planning process is to analyse the data provided by Jessica. You do this to ensure that you can fully understand her financial situation and needs and are therefore in a position to design a plan that addresses her goals and objectives.

By analysing the data provided under the following headings you can now start thinking of the strategic options that may be appropriate for Jessica, leading you to then preparing a financial planning strategy that is designed to meet her needs:

• current position

• debt management

• risk/protection

• savings

• investment

• retirement funding

• future income stream

• social security issues (if any) and implications

• present and future taxation issues

• estate planning.

There is a series of questions relating to Section 3 in the assessment workbook that you need to answer. You will use your answers for Section 3 to help you decide on your recommendations for Jessica. Your answers to these questions are your opportunity to demonstrate your ability to analyse a client’s needs in preparation for developing a strategy that aligns with their requirements.

Section 4: The strategy

Now that you have analysed the data and selected strategies that could be appropriate, you are in a position to start drafting the preferred strategy you believe is appropriate for Jessica. You will then be able to research and select possible products that can support the implementation of that strategy. All of this information you will use in your SOA for Jessica.

There is a series of questions relating to Section 4 in the assessment workbook that you need to answer. You will use your answers for Section 4 to help you decide on your recommendations for Jessica. Your answers to these questions are your opportunity to demonstrate your ability to develop a strategy that aligns with her requirements.

Section 5: Completing the SOA

When you have determined the financial planning recommendations you believe are appropriate for Jessica’s needs, you then need to prepare her SOA. Use the SOA template provided in the assessment workbook.

Section 6: Presenting the SOA

You meet with Jessica as arranged to present her SOA. You take the time to outline the proposed strategies and recommendations, confirming throughout that Jessica understands the plan and how it has been designed to meet her needs.

Satisfied with your explanation of the plan and responses to each of her questions, Jessica agrees to go ahead with your recommendations.

There is a series of questions relating to Section 6 in the assessment workbook that you need to answer. Your answers to these questions are your opportunity to demonstrate your ability to continue to engage your client.

Section 7: Providing ongoing service

Jessica is not sure she will have time for regular reviews of her financial plan. She expresses the opinion that the advice seems comprehensive with no need at this stage to commit to scheduled reviews.

There is a series of questions relating to Section 7 in the assessment workbook that you need to answer. The questions are your opportunity to demonstrate your ability to work with a client to implement a plan over the longer term.

Appendix 1: Fact finder and risk profile — Jessica Bigge

Important notice to customers

Your planner must act in your best interest and provide appropriate advice when making an investment or insurance recommendation.

Before making a recommendation, the planner needs to ask you about your investment objectives, financial situation and your particular needs.

The information requested in this form will be used strictly for that purpose.

Warning

The planner could make inappropriate recommendations or give inappropriate advice if you fail to fully and accurately complete this form.

Personal and employment details

Personal details
	Client 1				Client 2
Title	Miss
Surname	Bigge
Given & preferred names	Jessica
Home address	18/43 Benton St, Rozelle, NSW
Business address	n.a.
Contact phone	(02) 7766 5544
Date of birth	15 July 1986
Sex		Male	û	Female		Male	Female
Smoker		Yes	û	No		Yes	No
Expected retirement age	Haven’t really thought about it, but probably 66

Dependants (children or other)
Name	Date of birth	Sex	School	Occupation
n.a.

Employment details
	Jessica Bigge
Occupation	Marketing manager
Employment status		Self-employed	û	Employee	Self-employed	Employee
		Not employed		Pensioner	Not employed	Pensioner
	û	Permanent		Part-time	Permanent	Part-time
		Casual		Contractor	Casual	Contractor
		Other		Government	Other	Government
Business status		Sole proprietor		Partnership	Sole proprietor	Partnership
		Private company		Trust	Private company	Trust
Notes
Any other person to be contacted? e.g. accountant, banker, solicitor, etc.

Income, tax and cash flow

Tax calculation	Client 1	Client 2	Combined	Comments
Income from employment
Salary	$70,000
Salary sacrifice	nil
Salary after salary sacrifice	$70,000
Rental income	n.a.
Unfranked dividends	n.a.
Franked dividends	$98			Westpac Banking Corporation dividends
Franking (imputation) credits	$42
Interest	$2,366			$57,000 at 4.15%
Other income (e.g. taxable benefits, trust income, investment income)	n.a.
Capital gains < 1 yr	n.a.
Capital gains > 1 yr	n.a.
Tax-free component of capital gains	n.a.
Assessable income	$72,506
Deductible expenses	$150			Accountant’s fees
Donations	$530			$520 National Breast Cancer Foundation $10 bucket donation
Other	nil
Taxable income	$71,826
Tax on taxable income	$14,890			FY 2013/14
Non-refundable tax offsets (e.g. LITO/SAPTO)	n.a.
Medicare levy	$1,077
Medicare levy surcharge	n.a.
Franking rebate	$42
Refundable rebates and offsets	n.a.
Total tax	$15,925

Cash flow	Client 1	Client 2	Combined	Comment
Cash flow
Salary less any salary sacrificed amount	$70,000
Non-taxable income	nil
Rental income	n.a.
Unfranked dividends received	n.a.
Franked dividends received	$98
Interest	$2,366
Other income (e.g. taxable benefits, trust income, investment income, social security benefits, etc.)	nil
Total income received before tax	$72,464
Investment expenses	nil
Expenses
Mortgage	n.a.
School fees	n.a.
Utilities	n.a.
Personal insurance	nil
Car insurance	$1,500			Paid from credit card
Home contents Insurance	$360			Paid from credit card Includes legal liability
Health insurance	$1,320			Paid from credit card
Living expenses	$9,120			Expenses through credit card
Holidays	$2,500
House maintenance	n.a.
Motor vehicle	Unknown			Paid as part of the expenses through credit card
Other	$23,920			Rent
	$10,200			Car repayments
	$530			Donations
	$150			Accountant’s fees
Total expenses	$49,600
Total income received before tax less total expenses	$22,864
Total tax payable from tax table above	$15,925
Total net cash flow	$6,939

Assets and liabilities

Asset	Owner	Value	Liabilities	Net value	Notes
Personal assets
Family home		n.a.	n.a.
Home contents	Jessica	$20,000	$0	$20,000	Insured value and includes legal liability cover
Car	Jessica	$39,000	$39,000	$0
Total		$59,000	$39,000	$20,000
Superannuation
Employer superannuation	Jessica	$32,000	n.a.	$32,000
Total		$32,000		$32,000
Other assets
Investment property	n.a.	n.a.	n.a.
Savings account	Jessica	$1,000	nil	$1,000	Transaction account
Term deposit	Jessica	$57,000	nil	$57,000
Shares	Jessica	$2,070	nil	$2,070	Westpac Banking Corporation current price $35.08
Total		$60,070	nil	$60,070
Net worth		$151,070	$39,000	$112,070

Liabilities
Loan	Current debt	Percentage tax deductible	Interest only	Repayment
Home loan	n.a.	n.a.
Investment property	n.a.	n.a.
Investment loan	n.a.	n.a.
Personal loan	$39,000	nil	No	$850 per month
Other	n.a.	n.a.
Total	$39,000	$0

Needs and objectives

Details	Comments
Save for her own home	Has been saving towards it using term deposits. Has estimated that she could afford purchase price of up to $550,000 using mortgage and savings. Would like to have saved at least 15% of the purchase price and be in a position to buy in no later than 5 years time
Decrease debt	Concerned about debt — interested in paying off early but requires guidance on the effect (if any) to her primary desire to purchase her first home
Cruise with friend	$2500 annually
Increase sharemarket knowledge	Current knowledge is low
Maintain lifestyle in the event of prolonged illness	To be reviewed
Other

Estate planning

Do you have a will?		Yes	û	No
When was it last updated:	/ /
Do you have powers of attorney?		Yes	û	No

Current superannuation, rollovers, insurances and investments

Superannuation
Member	Jessica
Fund name	ABXY Super Fund
Date of joining fund	19 January 2007
Type of fund	û	Accumulation	Defined benefit	Accumulation	Defined benefit
		Pension	Pensioner	Pension	Pensioner
Contribution (e.g. 5% of salary)	SG	By employer	By yourself	By employer	By yourself
Current value of your superannuation fund	$32,000
Amount of death and disability cover	$50,000
Is there provision for you to top up or salary sacrifice?	û	Yes	No	Yes	No

Superannuation taxation details
	Jessica
Current value	$32,000
Tax-free component	$0
Taxable component:
Taxed element	$32,000
Untaxed element	$0
Preservation:
Preserved	$32,000
Unrestricted non-preserved	$0
Restricted non-preserved	$0
Contributions:
Non-concessional contributions:
Year 1	$0
Year 2	$0
Year 3	$0
Year 4	$0
Concessional contributions:
Year 1	SG only
Year 2	SG only
Year 3	SG only
Year 4	SG only

Nominated beneficiaries:
Name	Binding		Non-binding (Yes/No)		Trustee discretion (Yes/No)
	Yes/No	Amount
None noted					Yes




Is there any current flags or splits on a superannuation benefit of yours following a marriage breakdown?		Yes/No	N	Details



Are you a beneficiary of any current flags or splits of a superannuation benefit following a marriage breakdown?		Yes/No	N	Details

Life insurance details
Life insured	Owner	Policy type	Company	Policy number	Death benefit	Comments	Annual premium
Jessica	Superannuation fund	Life	ABXY Super Fund	XTP1234	$50,000	Within superannuation	From superannuation

Disability insurance details
Life insured	Owner	Policy type	Company	Policy number	Death benefit	Comments	Annual premium
Jessica	Superannuation fund	TPD	ABXY Super Fund	XTP1234	$50,000	Within superannuation	From superannuation

Income protection insurance details
Life insured	Owner	Policy type	Company	Policy number	Benefit amount	Waiting period	Benefit payment period	Annual premium
Jessica	n.a.	nil	n.a.

General insurance details
Item covered	Owner	Policy type	Company	Combined policy number	Cover amount	Other benefit	Total annual premium
Car	Jessica	Comprehensive	Ourcover	234907MV	Market Value	nil	$1,500
Contents	Jessica	Contents	Ourcover	438129HC	$20,000	nil	$360 p.a. deducted monthly from credit card
Health	Jessica	Full health	Ourcover	6978/967PH			$1,320 p.a. deducted monthly from credit card

Investment details
Investment type	Company	Purchase date	Units held/fixed rate	Current value	Owner
Term deposit	East Antipodean National Wealth Bank	n.a.		$57,000	Jessica
Shares	Westpac Banking Corporation	25 November 2008	59 shares	$2,070	Jessica
Savings account	East Antipodean National Wealth Bank	n.a.		$1,000	Jessica

Note: An insurance needs analysis is not required for this assignment. These risk needs tables have been included to provide a realistic example of the fact-finder process.

Risk needs

Insurance needs — life
			Jessica
C	Clean-up fund	Settle all outstanding accounts, including credit cards, bills and funeral costs



I	Income fund	The lump sum required to produce a level of regular income that maintains the family’s living standard for a defined period



M	Mortgage fund	The amount necessary to discharge any existing mortgages



E	Education fund	Lump sum determined by calculating each child’s education costs and multiplying by the number of years of school and/or university remaining



R	Retirement fund	The lump sum necessary to provide adequate funding for retirement



less value of realisable assets

less existing life insurance cover
Recommended sum insured
Recommended sum insured (rounded up to the nearest $10,000)

Insurance needs — TPD
			Jessica
C	Clean-up fund	Settle all outstanding accounts, including credit cards, bills and funeral costs



I	Income fund	The lump sum required to produce a level of regular income that maintains the family’s living standard for a defined period



M	Mortgage fund	The amount necessary to discharge any existing mortgages



E	Education fund	Lump sum determined by calculating each child’s education costs and multiplying by the number of years of school and/or university remaining



R	Retirement fund	The lump sum necessary to provide adequate funding for retirement



less value of realisable assets

less existing life insurance cover
Recommended sum insured
Recommended sum insured (rounded up to the nearest $10,000)

Insurance needs — Trauma
	Jessica
Funds required to pay out home mortgage
Estimated medical and rehabilitation costs (including cover out-of-pocket health costs)
Other debts
Other expenses
less existing realisable assets
Recommended sum insured
Recommended sum insured (rounded up to the nearest $10,000)

Insurance needs — Income protection
	Jessica
Gross annual income
SG
Total insurable income
Monthly income (i.e. total insurable income / 12)
Recommended monthly benefit (i.e. 75% of total monthly insurable amount)
Benefit payment period
Waiting period to be served

Acknowledgment

The information provided in this financial fact finder is complete and accurate to the best of my knowledge.

I understand that a policy purchased without the completion of a fact finder, or following a partial or inaccurate completion, may not be appropriate to my needs. I also understand that a policy purchased that differs from that recommended by the planner may not be appropriate to my needs. I acknowledge that the planner has provided me with the completed financial fact finder, signed by me.

Customer(s) signature(s)

Planner’s name

Planner’s signature

Date

Investment attitude details
Please answer the following questions regarding your attitude to financial issues.
Are you concerned about the amount of tax that you are paying? Why?	Yes/No
I think that I should be able to structure things better to pay less tax like other people seem to do.
How important is liquidity (i.e. funds available) to you? Why?	Very/Moderately/Not
I would like the money available so I can buy a property in the future.
If you had funds available for investing, how would you choose to invest them? Why?
Term deposits, but don’t know what else is available or how it works.
Are there certain sorts of investment that you wish to avoid? Which ones?	Yes/No
I don’t really know.

Risk profile

Determining your investor risk profile	Points
This investor risk profile questionnaire has been designed to help you understand the type of investor you are, so that with the help of your planner, you can choose the investments that best match your financial objectives.
Which of the following best describes your current stage of life?
Single with few financial commitments: You are keen to accumulate wealth for the future. Some funds must be kept available for enjoyment, such as cars, clothes, travel and entertainment.	50P
A couple without children: You may be preparing for the future by establishing and furnishing a home. There are a lot of things you need to buy. You are probably better off financially now than you may be in the future.	40
Young family: This is the peak home purchasing stage. You have a mortgage and a very small amount of savings. Probably dissatisfied with your financial position and the amount of money saved.	35
Mature family: You are in your peak earning years and have got the mortgage under control. Many partners also work and any children are growing up and have either left home or require less supervision. You are starting to think about retirement, although it may be many years away.	30
Preparing for retirement: You probably own your own home and have few financial commitments, however, you want to ensure that you can afford a comfortable retirement. Interested in travel, recreation and self-education.	20
Retired: No longer working you must rely on existing funds and investments to maintain your lifestyle. You may be receiving the pension and are keen to enjoy life and maintain your health.	10
What return do you reasonably expect to achieve from your investments?
A return without losing any capital.	10
3–7% p.a.	20
8–12% p.a.	30P
13–15% p.a.	40
Over 15% p.a.	50

If you did not need your capital for more than 10 years, for how long would you be prepared to see your investment performing below your expectations before you cashed it in?
You would cash it in if there were any loss in value	10
Less than 1 year	20
Up to 3 years	30
Up to 5 years	40P
Up to 7 years	45
Up to 10 years	50
How familiar are you with investment markets?
Very little understanding or interest	10
Not very familiar *Would like to know more*	20
Have had enough experience to understand the importance of diversification	30P
Understand that markets may fluctuate and that different market sectors offer different income, growth and taxation characteristics	40
Experienced with all investment sectors and understand the various factors that may influence performance	50
If you can only get greater tax efficiency from more volatile investments, which balance would you be most comfortable with?
Preferably guaranteed returns, before tax savings	10
Stable, reliable returns, minimal tax savings	20P
Some variability in returns, some tax savings	30
Moderate variability in returns, reasonable tax savings	40
Unstable, but potentially higher returns, maximising tax savings	50
Six months after placing your investment you discover that your portfolio has decreased in value by 20%. What would be your reaction?
Horror. Security of capital is critical and you did not intend to take risks	10
You would cut your losses and transfer your money into more secure investment sectors	20
You would be concerned, but would wait to see if the investments improve	30P
This was a calculated risk and you would leave the investments in place, expecting performance to improve	40
You would invest more funds to lower your average investment price, expecting future growth	50
Which of the following best describes your purpose for investing?
You want to invest for longer than five years, probably to the age of 55–60. You are mainly investing for growth to accumulate long-term wealth	50
You are not nearing retirement, have surplus funds to invest and you are aiming to accumulate long-term wealth	40
You have a lump sum, e.g. an inheritance or an eligible termination payment from your employer, and you are uncertain about what secure investment alternatives are available	30
You are nearing retirement and you are investing to ensure that you have sufficient funds available to enjoy retirement	20
You have some specific objectives within the next five years for which you want to save enough money	20P
You want a regular income and/or totally protect the value of your savings	10
Investor profile total points	220

INVESTOR RISK PROFILE SUMMARY

0–70 Defensive

You are a conservative investor. Risk must be very low and you are prepared to accept lower returns to protect capital. The negative effects of tax and inflation will not concern you, provided that your initial investment is protected

71–150 Moderate

You are a cautious investor seeking better than basic returns, but risk must be low. Typically an older investor seeking to protect the wealth that you have accumulated, you may be prepared to consider less aggressive growth investments

151–230 Balanced

You are a prudent investor who wants a balanced portfolio to work towards medium to long-term financial goals. You require
an investment strategy that will cope with the effects of tax and inflation. Calculated risks will be acceptable to you to achieve
good returns

231–300 Growth

You are an assertive investor, probably earning sufficient income to invest most funds for capital growth. Prepared to accept higher volatility and moderate risks, your main concern is to accumulate assets over the medium to long term. You require a balanced portfolio, but more aggressive investment strategies may be included

301–350 High growth

You are an aggressive investor prepared to compromise portfolio balance to pursue potentially greater long-term returns.
Your investment choices are diverse, but carry with them a higher level of risk. Security of capital is secondary to the potential
for wealth accumulation

Appendix 2: Financial planning questions

Case study questions

Section 1: Questions — Establishing relationships with clients

Answer the following questions in the spaces provided. The questions are your opportunity to demonstrate your ability to establish a relationship with a client.

Section 1 Part A

Preparation by both the client and the planning team is essential to a successful client meeting. Describe the preparation that should be made to ensure the success of the initial interview held in your office. (250 words)

For meeting Jessica personally, a professional preparation is necessary. For that reason, i have studied her bio data carefully. Further, the collected information over the phone, we have decided to investigate more on her financial status. As an agent of a registered advice company, it is my sole duty to explain the fees and commissions for this advice process. In addition to this, in which category at what extent Jessica can get advices from our side is also prepared. Legal department authenticates the blue print of the advices. The assurance form of keeping the information of a client safe and confidential in the database of the company is also prepared.

Assessor feedback:

Section 1 Part B

List the documents that you would provide a client during, or prior to, the initial meeting. Explain the contents of each document and why they are necessary. (200 words)

the necessary documents are as follows –

Questionnaire form for personal data – the questions are about the personal data of the client that will provide us personal financial and social obligatory information to analyse the objectives of the client.

prospectus of the consultancy company – It contains the details fee structure, commissions and registration of the company

declaration form from client – it contains the declaration from the client about the truth of information provided by her

Declaration from the company – It encapsulates the confidentiality of the information from the client.

Assessor feedback:

Section 1 Part C

Outline how you would develop rapport with a client during your first meeting. (200 words)

The first meeting is the main chance for becoming intimacy with the client. Therefore, I will offer Jessica a glass of water at very first time will provide her some time to make the conversation serious. Some of the petty questions like about her health and journey to the office will be asked to make her comfortable during the session. After then, I will ask her about her objectives of life and will help her to refine those objectives as far as possible.

Assessor feedback:

Section 1 Part D

Explain to a client the role of the adviser and the relationship with the licensee. Ensure you use language that your client would understand. (250 words)

The role of the advisor is to provide the correct direction to invest. The investment will make your financial future solid. Our company will provide you proper financial planning for attaining your future objectives as well as ensuring you security of your investment.

Being a licensee of advisor, I am an agent of the company who is liable to represent the company for your service. I will provide you correct information and guidance to ensure your investment can reach your goal.

Assessor feedback:

Section 1 Part E

How do you/are you going to maintain your knowledge of the industry and your obligations under the relevant legislation? (150 words)

Our obligation is to provide you suitable instrument for investment to reach your goal in future financially. Therefore, I have to acquire the current information on the market situation. I will also maintain my knowledge on the securities and other investment plan in different funds and instruments to suggest you for your investment. I will keep myself updated to advise you for making investment decision.

Assessor feedback:

Section 1 Part E

It is important that your clients understand your company’s dispute resolution procedure. Explain, step-by-step, a typical internal and external complaints resolution processes available to a client. (150 words)

For resolving the disputes, we have two processes – internal and external. Therefore, internally you can try to acknowledge your grievance to us. There are two ways to acknowledge the management of the companies about your grievances. First method is to make a complaint in our 24×7 toll free number where you may lodge your complaints. Second one is to lodge your problem with our ombudsman – a para-legal cell within the advisory industry.

you also can take steps externally – lodge a official complaints against us in the court of NSW for resolving any financial disputes during the process.

Assessor feedback:

Section 2: The fact finder and risk profile

There are no questions for this section.

Section 3: Questions — Analysing the data

Answer the following questions in the spaces provided. The questions are your opportunity to demonstrate your ability to analyse a client’s needs in preparation for developing a strategy that aligns with their requirements.

Section 3 Part A

List what you understand to be Jessica’s goals, needs and objectives. Categorise them into short, medium and long-term time frames. They should be specific, measurable and have a nominated dollar value where possible. (250 words)

Goals/need/objectives	Time frame	Dollar value
Saving money for Home	Long term	$85,000 (15% of $550,000)
Decrease current debt ( Car Loan)	Medium/Long term	$39,000
More knowledge about share market	Short Term	N/A

Assessor feedback:

Section 3 Part B

Analyse the data provided by Jessica by answering the following questions. The questions are designed to help you think about the possible issues that any client may have and enable you to show your skill in analysing a case study across the 11 general headings in the data analysis section of the text, and strategy development steps of the financial planning process (refer to Topic 2 and the sample case study and sample SOA).

Think carefully about your responses and do not assume that you are in a position to provide detailed answers to every question. You may not have enough information, it may be outside of your licensee’s designated authority for this case study (i.e. the matter needs to be referred to a specialist adviser), or it is not one of Jessica’s goals or objectives. In addition, the question may not apply to Jessica’s current situation. Where any of the above apply, you still need to make a comment and explain why the question is not relevant at this time.

Make sure you constantly refer to the data you have on Jessica so your responses accurately reflect the information she has provided you.

	The questions	Your response	The assessors feedback
a.	Does Jessica need a debt management solution?	no
a.	If yes, why? If no, why not?	your borrowing list consists of car loan of the value of 39000. you have no dependant so she does not need any debt manager to control her debt.
b.	Jessica has stated that she is comfortable with her current insurance arrangements; however, does Jessica have adequate risk protection? Provide reasons for your answer.	Jessica does not have enough protection for her life coverage. You have only super contribution for her life. She does not have any life insurance policy on her name. it makes her position vulnerable and her successor to lose any contribution in future due to any uncertain situation arise. She needs health insurance [IP] for her health coverage.
c.	Does Jessica have sufficient savings to meet her goals?	You do not have money in her savings account or in securities to meet her goal.
c.	If yes, why/how? If not, how much does she need? And by when?	You need 124000 in hand after five years which seems not possible from current savings and income structure.
d.	Does Jessica have any investments currently, and what is her appetite for different types of investment?	You have shares of $2070 of Westpac and term deposit of $57000 in her account. She is eager to know about share market for knowing a different instrument for investment.
d.	What will this mean for any strategy you might recommend?	Your appetite is towards a risky investment decision that needs special skill. Therefore, we will recommend her to stay out of equity market until she gathers enough knowledge about it.
e.	Are there any present and/or anticipated future taxation issues?	You are paying tax as per the rules, so no issue.
e.	If yes, why and what are they? If no, why not?	You maintain your tax file properly.
f.	Has any provision been made for estate planning?	no
f.	What could be put in place now for any anticipated requirements?	You can draw a will for your future for succession after you of your assets and investments. This job must be undergone legally to finding a legal representative as your successor.

Section 4: Questions — Developing a strategy

Answer the following questions in the spaces provided. The questions are your opportunity to demonstrate your ability to analyse a client’s needs and develop a strategy that aligns with their requirements.

Section 4 Part A

Based on your analysis of the data, describe in general terms, the strategies you think will best meet Jessica’s needs and why. Include what other specialist advice Jessica should source so that her financial plan is comprehensive. (400 words)

The main objective is to provide you enough savings in her wallet after five years so that she can afford to buy your new home. Therefore, she needs to reduce her cost to meet the objectives. You need to invest in short term deposit where you might get a handful of interest monthly. The term deposit can be invested in short-term investment to increase her savings in the due course. She needs $85000 for initial investment for the home that will need more savings from her side during this five years.

Assessor feedback:

Section 4 Part B

You are now in a position to research some products that might meet Jessica’s needs. Information on different products are readily available on the internet. For example, for managed funds, <http://www.morningstar.com.au> provides a fund screener tool that you can use to select funds based on a number of different criteria, (located under ‘Tools’ on the homepage). For term deposits and other investments, go to <www.canstar.com.au>. To ensure the appropriate product(s) for your client, you are expected to research a number of products from different product issuers (more than two). The URL link should be supplied.

List the investment products you have researched here, and indicate why you think each investment you have researched may or may not be suitable for Jessica. At the conclusion of this process you will need to have found at least two (2) products to meet your client’s needs.

The product (name and URL link)	Why you think it may or may not be the ‘best fit’ for Jessica.	Indicate which product/s you will use in your plan
http://www.canstar.com.au/managed-investments/compare/seasoned-investor-australian-equities-small-cap/	She can invest in the small equities that helps to earn good return	Yes No
http://www.canstar.com.au/managed-investments/compare/regular-income-multisector-balanced/	Jessica can invest in the multi-sector balance funds to increase his return earned	Yes No
http://www.canstar.com.au/margin-loans/compare/managed-funds/	This is the best option to invest because of high rate of return and security of investment	Yes No
Answer here	Answer here	Yes No
Answer here	Answer here	Yes No
Answer here	Answer here	Yes No
Answer here	Answer here	Yes No

Section 5: Completing the SOA

When you have determined the financial planning recommendations you believe will meet Jessica’s needs then you need to prepare her SOA. Use the SOA template provided in this assignment to produce your SOA for Jessica.

Tip: The assessor is looking for an SOA that is of a professional standard and is suitable for presentation to a client. This means your spelling and grammar needs to be correct and that you have written your recommendations so the client can understand them. Remember: the SOA is an important communication tool you can use to engage your client. A hastily written and poorly presented SOA does not engender client trust or confidence in your expertise or professionalism.

Important instructions for completing the SOA

a. Use the SOA template provided.

SOA preparation software: The use of financial planning software and dealer templates to prepare your SOA is not permitted. Submissions that exhibit excessive reliance on SOA templates may be considered a case of plagiarism or collusion and may not be considered to be a reasonable attempt at the assessment.

b. Your SOA must include strategy recommendations for:

• debt management

• personal investment and savings

• asset allocation (including superannuation).

c. You must prepare an implementation schedule detailing all of the recommendations in the SOA and provide the details in the implementation schedule within the SOA.

d. You must also prepare, using an Excel spreadsheet, a table showing the projected balance of Jessica’s investment portfolio, over a five-year period, before and after your recommendations. This task will be important in showing how your strategies may satisfy Jessica’s primary financial objective.

d. List any assumptions you have made to complete your SOA on the assumptions page at the end of the SOA. Assumptions will generally be made:

• regarding missing background information on the clients

• in regards to calculations of future returns from your recommended investments

• for clarity in relation to any of your recommendations

• for fees relating to the products you have recommended.

e. While you are not required to provide specific recommendations in the following areas for this assignment, you will need to provide, in the ‘Things you need to consider’ section of your SOA, appropriate comments about any issues you have identified. Those areas are:

• personal insurance

• superannuation

• estate planning.

f. Your investment product recommendations will need to be based on the research you conducted in section 4 Part B. Please do not include any product disclosure statements (PDSs) with your assignment submission.

Section 6: Questions — Presenting the SOA

Answer the following questions in the spaces provided. The questions are your opportunity to demonstrate your ability to work with a client to present a financial plan, and then take the necessary steps to gain their consent to implement your recommendations.

Section 6 Part A

Identify two (2) concerns that Jessica may have with the advice that you have provided. Prepare responses to these concerns. Ensure that you use language Jessica would understand. (100 words)

You will face problem with selecting the securities and instruments for making investment as the condition becomes different by the time goes. The next problem will be selecting the proper company to invest her money.

Assessor feedback:

Section 6 Part B

Outline the techniques that could be used to ensure that your client understands the advice being provided and to gain their agreement to implement the plan. (150 words)

we will present to you our plan for you in a PowerPoint presentation. It will be easier for you to understand the schemes of investment as well as how the plan will attain your objectives. The presentation will show the comparison between different investment instruments and her desire to be met. Further, we will show the spreadsheet calculation to attain her desire.

Assessor feedback:

Section 6 Part C

According to legislative requirements, explain how you would present your fee and cost structure to Jessica. (100 words)

For meeting the legislation, I will show and convince you the fees and commission structure of our company to provide you advice. I will also present a prospectus at the time of our first meeting to understand our licensee agreement with you.

Assessor feedback:

Section 6 Part D

List the documentation, if any, that you need to present to your client at this stage of the financial planning process. (50 words)

financial status of Jessica and all the relevant investment schemes that will be advised to you – are the necessary documents will be presented at the time of meeting

Assessor feedback:

Section 6 Part E

Provide a summary of all the documentation that you need to keep in the client’s file. (150 words)

the documentation will be kept in the file are as follows –

personal information

investments

appetite of making investments

form filled up by Jessica

SOA made for you

Assessor feedback:

Section 7: Questions — Providing ongoing service

Answer the following questions in the spaces provided. The questions are your opportunity to demonstrate your ability to work with a client to implement a plan over the longer term.

Section 7 Part A

Jessica is not sure she will have time for regular reviews of her financial plan. She expresses the opinion that the advice seems comprehensive and she believes she could take a ‘set and forget’ approach once it is implemented. Describe how you would respond to Jessica, highlighting why reviews are important. In addition, provide details of the type, form and frequency of the ongoing service that would ideally be provided and the fees/costs associated with this service. (400 words)

you have to review the financial plan regularly. The financial market changes regularly so if you do not review it by time, the advised plan might not be suitable for meeting your goal in future to buy the home within five years if time. The change in taxation as well as interest rate of the investment instrument is the main reason for reviewing the plan for you we wish to provide. To meet the desire of buying after five years, you need to save at least $85000 to make initial investment [15 percent of the total sum]. Therefore, from your current obligation you do not have such fund in your savings or in other securities. It is the main reason to review your investment after three months alternatively. We will send you the update information in your e-mail id after every three months as well as indicate the changes in plan are made for you for these five years. The projection of financial investment for you for the last five years will be shown for every time when we will intimidate you by e-mail. Further, we will also contact you over the phone for any emergency – if any sudden changes in economy can change the plan massively. Jessica, you can contact our representative at office time also make query for different investment scheme. We will visit your place to show the changes in the plan physically upon special request made by you.

Assessor feedback:

The SOA template

An SOA has been commenced for Jessica Bigge, using the data collected in the interviews, her fact finder and risk profile. You will need to complete the remaining sections in the SOA as directed. The SOA starts on the following page. Please review the sample case study and the text as a guide to completing your SOA.

Statement of advice

Prepared for

Jessica Bigge

Prepared by

Authorised Representative Number: 66666

AR Address

AR contact details

Authorised Representative of

EANWB Financial Planning

ABN: 1010101010

Australian Financial Services Licensee

Licence No. 101010

Head office: 88 Money Lane, Accumulation.

You are entitled to receive a statement of advice (SOA) whenever we provide you with any personal financial advice. Personal financial advice is advice that takes into account any one or more of your objectives, financial situation and needs.

This SOA is a record of the personal financial advice provided to you and includes information on the basis on which this advice is given, information about fees and commissions and any interests or associations which might influence the advice.

If this advice includes a recommendation to you to acquire a particular financial product, other than securities, or an offer to issue or arrange the issue of a financial product to you, we will also provide you with a product disclosure statement containing information about the particular product to help you make an informed decision about that product.

Be aware that the advice contained in the following SOA is valid for a period of 30 days only. If the plan is not implemented within this time, it will need to be reviewed for accuracy.

Executive summary

In this section, you need to provide your client with a concise summary of:

• their situation

• their objectives

• your recommended strategy to achieve the objectives

• the outcomes your client can expect from adopting the strategy.

The client should be able to read this executive summary and understand the advice you are giving, the reason/s for underpinning the advice, and be able to determine whether or not their goals have been achieved. There should be sufficient detail to allow the client to make a decision, taking into account any risk/s involved and your fees. It should be written in clear, unambiguous language, without jargon and be appropriate to their level of financial understanding.

Your situation

This is where you need to summarise your client’s current situation.

from the case study, we can see that your current financial condition is good. however, it does not meet your desire of buying home after five years with an initial payment of $85000. She has term deposit in bank of $57000 and a loan of $39000. She has security of Westpac of $2070.

Assessor feedback:

Your objectives

This is where you need to list your client’s objectives (i.e. their financial and non-financial goals, objectives and needs).

Saving money for Home

Decrease current debt ( Car Loan)

More knowledge about share market

Assessor feedback:

Summary of our strategy and recommendations

For the short term — up to one year

This is where you need to summarise your short-term recommendations for your client.

Short-term recommendation is to reduce the monthly and household expenses to save more money and invest in the short-term investment plan for getting benefit of interest from those investments.

Assessor feedback:

For the medium term — one to five years

This is where you need to summarise your medium-term recommendations for your client.

We advise you to save money from your expenses as well as reduce the cost of tour in the cruise every year as it will provide you $12500 within five years. The target of saving an amount of $124000 at the end of fifth year, including the loan repayment of car you can achieve the target after reducing the expense of cruise holiday every year.

Assessor feedback:

Summary of expected outcomes if you implement our advice

For example:

Should you proceed with the recommendations contained within this report, we estimate that:

• You will reduce your debt by $XYZ and/or save $ABC.

• You will build wealth in non-superannuation assets through regular contribution of $X.

investment needs to be increased by $5000 per year by reducing the regular expenses providing $25000 of savings. The savings from cruise holiday will be $12500. Total savings will increase by 37500. Interest will be extra. It will help to make term deposit for the short-term to earn a better interest within time.

Assessor feedback:

Risks in our advice

The risk of the advice is the time duration of the investment as the time goes by – the situation of the market changes too. Therefore, risk posits with the advice of becoming backdated due to change in economy.

Assessor feedback:

Summary of our fees and commissions

annual charges are $3000 only while we charge commission of 2 percent of the invested sum by us as brokerage for every different investment.

Assessor feedback:

Your next steps

our next step is to find suitable instruments for making investment as well as monitoring the situation of the investment. The changes in the period will be given consent to you and also you will be advised for the changed situation from us.

Assessor feedback:

Body

While this section contains similar headings as the executive summary, the information provided is at a greater level of detail and supports the recommendations made. As with the executive summary, it should be written in clear, unambiguous language, without jargon and be appropriate to your client’s level of financial understanding.

Section 1: Important information about you

This section contains information about you that we used in preparing our advice, such as:

• your reasons for seeking advice

• what you would like to achieve

• your personal and financial information.

Present position

Your reasons for seeking advice

Outline why the client sought advice.

You need advice because you want to make sure about your future investment as well as security of your investment.

Assessor feedback:

What you would like to achieve

Summarise here what you understand to be your client’s main objectives.

Following our discussions, here is what I/we understand to be your main objectives and needs:

paying the loan of the car within five years

buy a new house with depositing the initial amount of $85000.

Assessor feedback:

Your personal and financial information

Listed below is a summary of your relevant personal and financial details that you have provided.

Personal information

Personal details

	Client 1	Client 2
First name(s)	Jessica
Surname	Bigge
Date of birth	15 July 1986
Marital status	Single
Health status
Smoker status	Non-smoker
Employment status	Permanent
Employer name
Occupation	Marketing manager
Annual salary	$70,000

Summarise the discussion points that could/need to be raised here.

Jessica has earnings from her service of $70000 while she makes savings of 6500. She has a TD of 57000 with a car loan of 39000. She is unmarried and she has no dependency.

Assessor feedback:

Children and dependant details

You currently have no dependants.

Your existing insurance

Personal insurance	$50,000 life/TPD inside superannuation
Car insurance	$1,500
Home contents Insurance	$360
Health insurance	$1,320

Your existing estate planning

Summarise the client’s existing estate planning provisions here.

you have no estate planning right now.

Assessor feedback:

Financial information

Current income and expense details

Income and expenses

	Client 1	Client 2	Total
Assessable income	$72,506
Income after tax	$55,901
Yearly expenses	$49,600
Estimated surplus	$6,939

Discussion points:

Summarise the discussion points that could/need to be raised here.

you are paying too much income tax from your earnings. You need to plan your tax accordingly. Therefore, visit a tax planner regarding this matter.

Assessor feedback:

Assets and liabilities

	Value	Liability	Net value
Home
Home contents	20,000
Motor vehicles	39,000	39,000
Personal assets
Employer superannuation	32,000
Savings account	1,000
Term deposit	57,000
Investment assets
Shares	2,070
Net worth	151,070

Discussion points:

Summarise the discussion points that could/need to be raised here.

Your deficit in this case is $40000 if everything goes as per the current situation.

Assessor feedback:

Incomplete and/or inaccurate information warning

Note that if, for any reason, the information on which our advice is based is incomplete or inaccurate, then it may not be appropriate and you should, before acting on the advice consider its appropriateness, in light of your particular circumstances, needs and objectives.

Your risk profile

In this section, you need to provide:

• an overview of the different risk profiles

• asset classes and risk and return

• the client’s risk profile including the appropriate mix of assets (the asset allocation) for the client’s risk profile, the appropriate investment return time horizon for that profile and any specific concerns.

Your investment of share is risky investment. The term deposit has almost no risk. Further, the insurance investment does not provide you any tax gain as well as risky due to investment for long duration.

Assessor feedback:

Strategy recommendations

This section tells you:

• what our advice is and why it is appropriate for you

• reasons for our recommendations

• what you need to consider and any risks associated with our advice.

Read this section carefully and ask me if you have any questions.

Recommended action — first year

You will use your findings from the analysis you did in Section 4 of the assignment above as the basis for the information you will need to provide in this section.

For each recommendation below; discuss the reasons, risks, advantages and disadvantages.

All recommendations should be listed here. They are to include investment and debt management recommendations. You are not required to provide specific advice to your client about her insurance, superannuation and estate planning needs. However, if after analysis of her situation you believe that advice is required, you need to explain what advice she should seek and why.

Note: Not all of the recommendation boxes below need to be completed. Alternatively, you can add more boxes if required.

Recommendation 1

reduction of house hold cost by $5000 annually

Assessor feedback:

Recommendation 2

increase savings for short-term by 7500

Assessor feedback:

Recommendation 3

reduce the cost of cruise holiday by $2500 annually

Assessor feedback:

Recommendation 4

making investment in the new scheme to earn a growth of 7 percent as interest

Assessor feedback:

Recommendation 5

invest the term deposit in a new short-term plan for getting better interest income

Assessor feedback:

Things you should consider

you must consider to sacrifice your tour of cruise

Assessor feedback:

Insurance

invest in health policy that will provide tax benefit every year

Assessor feedback:

Estate planning

you must consider to make a will

Assessor feedback:

Taxation issues

check a tax planner as you are paying huge tax

Assessor feedback:

Recommended asset allocation

Proposed asset allocation

Your investment assets are invested across various asset classes. The table below summarises:

• Weight: The proposed asset allocation resulting from our recommendations.

• Risk profile weight: The recommended asset allocation for your investment risk profile.

• Variance (weight): The variance between the recommended and proposed asset allocation.

Comments on proposed asset allocation versus your risk profile

Refer to Topic 4 in your subject notes to assist you in completing this section.

Asset allocation after implementation of recommendations

Asset allocation	Weight	Risk profile weight	Variance (weight)
Defensive assets
Australian cash	5	1	-4
Australian fixed interest	3	1	-2
International fixed interest	8	14	6
Total for defensive assets	16	16	0
Growth assets
Australian equities	20	35	15
Australian property	30	10	-20
International equities	35	40	5
International property	Answer here	Answer here	Answer here
Total for growth assets	84	84	0
Grand total	100	100	0

You need to explain the reason for any large, (greater than 10%) variances here. Refer to the sample SOA for a discussion on variances.

Assessor feedback:

Investment and insurance product recommendations

Product recommendations

Note that I can only recommend products on our recommended list, which have been approved by EANWB Financial Planning.

As part of this advice we are not providing any specific recommendations concerning your insurance requirements as you have requested that we do not review them at this time. However, as part of our analysis, we have made comments for your future action.

Use the space below to list the products that you are recommending Jessica invest in, and those that she already has that you are recommending she keep.

Jessica Bigge, following our investment strategy, we recommend that you invest in the
following products:

you have to invest in the mutual fund as well as in the growth fund to reach the goal within period of five years. The following products will be suitable for you –

ME term deposit, Asteron Life, Australian Leaders fund Limited etc.

Assessor feedback:

Relevant research material and PDSs are attached for your attention. It is important that you read these documents carefully and contact us should you have any questions or if there are areas of the document that you do not fully understand. All of these products are on our approved recommended list.

Note: You do not need to include these PDSs as part of your assignment. The above statement is a standard inclusion in an SOA.

Cooling-off period

Details on the cooling-off period for each product are provided in the PDS.

Disclosure of remunerations, commissions and other benefits

How are we paid?

Commissions and fees — upfront, ongoing and financial planning advice fees

If you are charging SOA preparation fees, implementation fees, on-going advice fees, or any other non-product related fees you must provide the details here. You may need to source information outside of the subject notes to complete this requirement. However, you can use the examples of how fees are shared between advisers and licensees from the sample SOA if needed.

If you are not charging these fees you may either delete the table below or fill it in with $0 as the fee charged to make it clear.

Fee type	Initial fee	Initial fee paid to licensee	Initial fee paid to adviser
SOA fee	$1500	$1000	$500
Implementation fee	$500	$500	$0
Ongoing advice fee*	$1000	$500	$500
Total	$3000	$2000	$1000

*If the ongoing service fee is charged as a percentage of the product(s) you may use the table below instead. If you are charging a flat fee, or an hourly fee you should use this table.

Investment recommendations

Summarise all of the products that you have recommended to the client here. Refer to the sample SOA for examples of what to include. You will need to source information outside of the subject notes to complete this table, based on the products you have used (or created).

If you wish to implement the products I have recommended, there may be initial and ongoing fees applicable as detailed below.

Product	Initial fee	Initial fee paid to licensee	Initial fee paid to adviser	Ongoing fees paid to licensee	Ongoing fees paid to adviser
Answer here	$1000	$500	$500	$250	$250
Answer here	$1500	$1000	$500	$750	$250
Total	$2500	$1500	$1000	$1000	$500

Note: Please see the sample SOA for directions on completing the answers in the paragraphs below.

Neither EANWB Financial Planning nor I will receive initial or ongoing commission for any investment or superannuation recommendations. Where applicable they will be rebated to you. However, you may also be charged fees for purchasing and investing in some products we recommend.

Product providers will also charge a fee for the management of the funds invested in their products. The annual management fee charged by Answer here is Answer here%. The amount you will be charged will depend on the funds you have invested.

For example, $Answer here invested with them will incur a $Answer here annual management cost.

All details regarding fees and costs are contained in the fund manager PDSs provided. There is no entry fee for depositing funds into this account and no withdrawal fee should you decide to withdraw funds.

Assessor feedback:

Other fees and benefits

EANWB Financial Planning and I may also receive additional benefits. Where the benefits received are greater than $300 in value, they will be recorded in a register that meets the requirements of the Financial Planning Association (FPA) Code of Practice on alternative forms of remuneration. A copy of the register for EANWB Financial Planning is publicly available and can be provided upon your request.

Ongoing services

You need to make sure that your client fully understands what you are offering in terms of ongoing service.

Use the space below to record the details of how you will manage this process.

we will provide you idea of investment and find out the suitable instrument for you. However, we deny to take any risk for the investment as the risk of the instruments are sole bearing of those products. Investing in financial products has risk of losing money as well as gain high momentum, in which we do not have any hand.

Assessor feedback:

Implementation schedule

In order to ensure that your recommendations will be implemented efficiently, you need to make sure that all tasks that need to be completed, both by the client and yourself, are itemised in the schedule. The schedule should highlight the priority of each task, as well as the order of completion. The time frame should be as specific as possible.

Jessica Bigge, in order to proceed with our recommendations, you will need to complete the
steps below:

Action	By who	By when
Read and sign the agreement to accept our advice	Jessica Biege	After understanding the all the terms and conditions and when you become agreed to take the advice.
Product Disclosure	Jessica Biege	After reading and signing the agreement.
Client Agreement- Ongoing Service	Jessica Biege	After reading the product brochures and becoming proper understanding of our product recommendation
Application forms	Jessica Biege	After reading and signing the agreement to receive our ongoing services.
Lodge applications	John	After filling and signing the form by client.
Call to confirm regarding that everything is implemented	Jessica Biege	After processing and approving of application.
Read and sign the agreement to accept our advice	Jessica Biege	After understanding the all the terms and conditions and when you become agreed to take the advice.
Answer here	Answer here	Answer here
Answer here	Answer here	Answer here

Note: The recommendations contained in this SOA are current for 30 days only. Please contact me for further discussion if you are unable to act on our recommendation within this time frame.

Assessor feedback:

Authority to proceed

By signing this authority to proceed, I/we Jessica Bigge acknowledge the following:

• I/We acknowledge that the information I provided in the financial needs analysis has been used to arrive at the recommendations contained in this SOA.

• I/We have read, understood and retained a copy of the SOA prepared by <Your name> dated <Date>. This document contains information which accurately summarises my/our current situation, investments and financial objectives.

• I/We have been provided with an EANWB Financial Planning FSG.

• I/We have read and understood the PDSs for the recommended products.

• Please note that a cooling-off period may apply to your initial investment or insurance policy. Refer to the PDS.

• I/We acknowledge that the product(s) listed in the table below are to be implemented in my/our name/s:

Product(s)	Amount
Answer here	Answer here
Answer here	Answer here
Answer here	Answer here

• I/We wish to make the following change/s to the recommendations within the SOA

Product(s)	Amount
Answer here	Answer here
Answer here	Answer here
Answer here	Answer here