Assignment DFP1B-1v2.1 Financial Planning-100124

Student identification (student to complete)

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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
	Seven–year projections

Feedback (assessor to complete)

[insert assessor feedback]

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 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.

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.	20P
8–12% p.a.	30
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	20P
Have had enough experience to understand the importance of diversification	30
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	200

INVESTOR RISK PROFILE SUMMARY

0–50                        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

51–130                    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

131–210                  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

211–300                  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