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Westpac House Telephone: 0000 000 000 Facsimile: 00 0000 0000 Email: sample@westpac.com.au www.westpac.com.au 12 February 2013 Mr. Paul Tran 50A Burbank Avenue, Bedford Park, SA 5042
Dear Paul, I appreciate the time you have taken to discuss your financial position and goals with me, so I can provide advice to assist you now and in the future. Financial planning is about taking a long term view of your life and how you want to live it. A financial planner is essentially a coach, helping you to set your financial goals and putting a plan in place to help you achieve them. My advice is documented in the enclosed Statement of Advice (SoA) which should be read with the Westpac Financial Planning Financial Services Guide (FSG) dated 1 October, 2011. This document is more commonly referred to as your Financial Plan which is a map of your financial future. It includes strategies and recommended steps designed to help you meet your goals. To assist you to understand the technical concepts related to strategy and investing in your financial plan, I have included relevant Financial Advice Matters booklets. These booklets should be referred to as a tool to assist you to understand my advice and financial planning. My advice is designed to your individual financial situation and I look forward to an ongoing relationship with you to help you achieve your goals. Please contact me at any time if you have questions about your goals, my advice of financial planning.
Statement of Advice
Prepared for: Mr. Paul Tran
Advice Prepared by: Senior Financial Planner Westpac Banking Corporation GPO Box 3433, Sydney NSW 2001 Phone: 132 032 Website: www.westpac.com.au
This Statement of Advice (SoA) is an important document as it outlines my advice to you. This document is provided to assist you to make an informed decision about whether to act on our advice.
Contents
About this Statement of Advice ................................................................................................................. 4 How does it relate to you? ........................................................................................................................ 4 What do you need to do to action this? ..................................................................................................... 4 What are the costs? ................................................................................................................................... 4 Are you entitled to a free look period? ..................................................................................................... 5 Do I have a relationship with any professional bodies? ............................................................................ 5 How do you contact your planner? ........................................................................................................... 5 What You Have Told Me ........................................................................................................................... 6 What you want to achieve ......................................................................................................................... 6 Your Personal Details ............................................................................................................................... 7 Your Financial Situation ........................................................................................................................... 8 Your Approach to Investing .................................................................................................................... 10 My advice ................................................................................................................................................... 11 The advice I agree to provide .................................................................................................................. 11 My Analysis ............................................................................................................................................ 12 My Advice to you ................................................................................................................................... 13 Where Your Money is Invested .............................................................................................................. 27 How Your Money is Invested ................................................................................................................. 28 Future Strategies For Your Consideration .............................................................................................. 29 Ongoing Advice Service ......................................................................................................................... 30 What You Need To Know ........................................................................................................................ 31 The Costs of Advice................................................................................................................................ 31 How I am Remunerated .......................................................................................................................... 31 Financial Product Replacement Statement ............................................................................................. 35 Interests & Associations ......................................................................................................................... 37 What you need to know generally about the advice ............................................................................... 37 What you need to know generally about the products ............................................................................ 38 Your Acceptance of the Advice ................................................................................................................ 39
You can also contact Westpac Banking Corporation by: Telephone Mail Internet e-mail In person 132 032 (Westpac) from 8:00am to 6:00pm (Sydney time) Monday to Friday Westpac, GPO Box 3433, Sydney NSW 2001 www.westpac.com.au online@westpac.com.au Visit any Westpac branch
Not applicable
You have indicated that you are fluent in the English language. Will Does Will exist? Is Will current? Paul Yes Yes
Power of Attorney You do not have Power of Attorney or you have chosen not to disclose them.
8,000 13,500 40,000 600,000 3,000 664,500 4,700 4,700 205 13,521 214 2,321 1,664 15.962 449 34,336 703,536 180,600 10,000 13,000 203,600 203,600 499,936
0 0 0 0 0 0
0 Paul 0 205 13,521 214 2,321 1,664 15.962 449 34,336 34,336 Paul Paul Paul Paul Paul Paul Paul
Private Health Insurance Paul, you advised that you do not have Private Health Insurance.
Other Background Information Paul, you are currently working full time as a retail assistant in a lighting store whilst you also study full time at University. You live in a mortgaged property with your mum but you both have separate finances and you are seeking advice for your protection needs only, should these circumstances change you are encouraged to come back for a review of your protection needs. You currently have seven superannuation funds, some of these with a default level of Death and TPD cover. You have a number of non-deductible debts, two personal loans and two credit cards; you are working at playing them off as soon as possible. You have personal loan protection on both of your personal loans which has been funded into the loan for next 7 years.
My advice
The advice I agree to provide
My Analysis
My analysis has revealed: You current debt obligation are as follows: Loan Type Westpac Home Loan Westpac Personal Loan Westpac Investment Loan Total Secured against Principal residence Car Unsecured Loan Balance $180,600 $13,000 $10,000 $203,600 Loan Limit $180,600 $13,000 $10,000 $203,600
My advice also includes recommendations on the appropriate level of insurance required to cover these debts in the event of illness, injury and death. Please refer to the insurance recommendations section for further details. Paul, you currently have seven separate superannuation accounts. Both industry funds and personal accounts and some have the default level of insurance attached. This cover is age based and will decrease over time as the premiums will remain the same. You are currently over insured for death cover as you have cover in your super accounts as well as through your Westpac Future Cover. From our discussions we have established a large gap in your disability insurance needs. You currently have no income protection which is important for you to be able to maintain the lifestyle that you currently have. Cash flow is important to you and you want to fund as much of your insurance through superannuation so that your monthly cash flow is not greatly affected. The current difference between stepped and level premiums for insurance is not large and it is an ideal time to lock in your premiums based on your current income needs to ensure that the insurance remains affordable into future.
Objective
Strategy
Solutions
Reasons
Objective
Objective
You stated you are seeking advice to achieve the following: Objective You wish to consolidate your current superannuation accounts with the view to ease ongoing management, invest in accordance with your risk profile and provide a platform to fund comprehensive personal insurances Strategy Value $34,336 Your Instructions Meet goal now
Objective
Strategy
In order to achieve the above objective I recommend the following strategy: Paul, rollover the funds you currently hold within: o Tasplan, Super ($449), REST Super ($1,664), AXA Super ($13,521), BT Super for Life ($214), Ausfund Super($205), Mercer Super ($2,321). REST Super ($15,962) o And invest the total proceeds of $34,336 into a superannuation fund as per the section titled Solutions
Solutions
Objective Strategy Solutions
I recommend the above strategy be implemented as follows: Paul, rollover your funds listed in the table below:
Existing Superannuation Owner Amount Rollover Into Fund Tasplan Super Paul $449 BT Foundation Portfolio SuperWrap PSP REST Super Paul $1,664 BT Foundation Portfolio SuperWrap PSP AXA Super Paul $13,521 BT Foundation Portfolio SuperWrap PSP BT Super for Life Paul $214 BT Foundation Portfolio SuperWrap PSP Ausfund Super Paul $205 BT Foundation Portfolio SuperWrap PSP Mercer Super Paul $2,321 BT Foundation Portfolio SuperWrap PSP REST Super Paul $15,962 BT Foundation Portfolio SuperWrap PSP Paul, invest the net proceeds of $34,336 into a diversified portfolio according to your risk profile. I have tabled the complete product recommendation in the section titled Where Your Money Is Invested. These funds will be administered within the BT Foundation Portfolio SuperWrap PSP structure. Advance Wholesale High growth Multi-Blend The Funds objective is to provide superior total returns (before fees and taxes) over the long term through capital growth by investing in growing assets. The Fund aims to invest primarily in Australian and international shares with some exposure to property. The Funds exposure to these asset classes will be obtained primarily by investing into our sector specific funds. The Fund may also hold assets directly, including derivatives, currency and other unit trusts. For more information on this products please refer to BT Foundation Portfolio Wrap PDS.
Reasons
Objective Strategy Solutions Reason
I believe the advice is appropriate to you as: The recommended superannuation product best suits your needs as it offers flexi-linking for both life and TPD cover. This allows you to hold one insurance policy but hold each individual benefit where it is most tax effective. It also provide you with ease of cash flow, allowing you to structure your lump sum insurance covers and most of your income protection through your superannuation. By consolidating your superannuation into one fund you will have ease of management, one statement showing all of your retirement savings and a portfolio that is in line with your investment objectives.
Your superannuation will be easier to be manage due to simplified investment reporting, reduced paperwork and the potential to save money on fees. It will be easier to keep track of the level of funds you have available for retirement.
Investing in a diversification portfolio in accordance with the Risk Profile seeks to achieve: The correct banlance between income and growth assets to obtain long team capital growth Diversification across asset types to reduce volatility of capital values.
Investing though a Wrap Service will provide you: Ease in administration, allowing automated rebalancing. Simplified and streamlined reporting. Access to wide range of managed funds.
The benefits of investing though the recommended BT Foundation SuperWrap, as opposed to your existing Tasplan Super are as follows: The BT Foundation SuperWrap offers a greater selection of underlying investment options, which provides you with greater choice in constructing an investment portfolio that is consistent with your risk profile. The BT Foundation SuperWrap has lower ongoing product fees, compared to your Tasplan Super The BT Foundation SuperWrap provides the option to make a non-lapsing death benefit nomination. This ensures that your super balance is paid to your chosen beneficiary in the event f your death. The BT Foundation SuperWrap allows you to apply for insurance cover that meets your requirements. Your existing Tasplan Super does not offer sufficient insurance cover due to levels of life and TPD insurance reducing each year, CPI indexing not offered on insurances.
The benefits of investing through the recommended BT Foundation SuperWrap, as opposed to your existing REST Super are as follows: The BT Foundation SuperWrap has lower ongoing product fees, compared to your REST Super. The BT Foundation SuperWrap provides the option to make a non-lapsing death benefit nomination. This ensures that your super balance is paid to your chosen beneficiary in the event of your death. The BT Foundation SuperWrap allows you to apply for insurance cover that meets your requirement. Your existing REST does not offer sufficient insurance cover due to levels of life and TPD insurance reducing each year, and level premiums are not offered on insurances. TPD waiting period is 6 months.
The benefits of investing through the recommended The BT Foundation SuperWrap , as opposed to your existing AXA Super are as follows: The BT Foundation SuperWrap has lower ongoing product fees, compared to your Tasplan Super. The BT Foundation SuperWrap provides the option to make a non-lapsing death benefit nomination. This ensures that your super balance is paid to your chosen beneficiary in the event of your death. The BT Foundation SuperWrap allows you to apply for insurance cover that meets your requirement. Your existing AXA does not offer sufficient insurance cover due to levels of life and TPD insurance reducing each year, level premiums are not available.
The benefits of investing though the recommended BT Foundation SuperWrap, as opposed to your existing Mercer Super are as follows:
The BT Foundation SuperWrap offers a greater selection of underlying investment options, which provides you with greater choice in constructing an investment portfolio that is consistent with your risk profile. The BT Foundation SuperWrap provides the option to make a non-lapsing death benefit nomination. This ensures that your super balance is paid to your chosen beneficiary in the event f your death. The BT Foundation SuperWrap allows you to apply for insurance cover that meets your requirements. Your existing Mercer Super does not offer sufficient insurance cover due to levels of life and TPD insurance reducing each year, CPI indexing not offered on insurances. No income protection is provided and level premiums are not available.
The benefits of investing though the recommended BT Foundation SuperWrap, as opposed to your existing BT Super for Life Super are as follows: The BT Foundation SuperWrap offers a greater selection of underlying investment options, which provides you with greater choice in constructing an investment portfolio that is consistent with your risk profile. The BT Foundation SuperWrap provides the option to make a non-lapsing death benefit nomination. This ensures that your super balance is paid to your chosen beneficiary in the event f your death. The BT Foundation SuperWrap allows you to apply for insurance cover that meets your requirements. Your existing BTSFL Super does not offer sufficient insurance cover due to levels of life and TPD insurance reducing each year, no indexing of income protection benefits available and no level premiums.
The benefits of investing though the recommended BT Foundation SuperWrap, as opposed to your existing Ausfund Super are as follows: The BT Foundation SuperWrap offers a greater selection of underlying investment options, which provides you with greater choice in constructing an investment portfolio that is consistent with your risk profile. The BT Foundation SuperWrap provides the option to make a non-lapsing death benefit nomination. This ensures that your super balance is paid to your chosen beneficiary in the event f your death. The BT Foundation SuperWrap allows you to apply for insurance cover that meets your requirements. Your existing does not offer any insurance offers at all.
Other Factors
Objective Strategy Solutions Reasons Other Factors
As part of determining whether my advice is appropriate to you, you should also consider: You should note that you may lose any death. TPD and salary continuance cover you may have in the funds from which you are rolling out. Funds invested within superannuation are not accessible until you can meet a condition of release. Changing the underlying investments or redeeming from this investment prior to the estimated investment time frame may mean you are exposed to volatility risks and you may redeem the funds at a loss. For each of the products recommended, please refer to the Product Disclosure Statement for further information about the key product features and significant risks associated with investing in that product.
As a result of replacing your existing Mercer, AXA, Ausfund, Tasplan and BT Super for Life accounts with the recommended BT Foundation Portfolio Super Wrap PSP, you will experience the following loss of benefits and other significant consequences: Funds invested within superannuation are not accessible until you meet a condition of release. It can take time to exit your existing portfolio and enter into the recommended portfolio. During this time, your funds may be invested in cash. This will temporarily reduce your potential for capital growth, compared with investing in line with your risk profile. You should not cancel your existing insurance cover until you have been notified that the recommended replacement cover is in force. This will ensure that you are not exposed to a period of time with no cover. By replacing your existing Mercer Super you will forfeit life insurance cover of $210,120. By replacing your existing Mercer Super you will forfeit total and permanent disablement insurance cover of $210,120. By replacing your existing REST super you will forfeit life insurance cover of $517,000. By replacing your existing Tasplan Super you will forfeit life insurance cover of $10,800. Your existing superannuation fund offers members access to a range of discounts including banking and/or general insurance services. You will no longer have a access to these benefits. Your existing Mercer superannuation fund enables you to access 35 different investment options. The number of investment options available through the recommended fund is less than your existing investment. Your existing AXA superannuation fund enables you to access 17 different investment options. The number of investment options available through the recommended fund is less than your existing investment. Your existing REST superannuation fund enables you to access 13 different investment options. The number of investment options available through the recommended fund is less than your existing investment. The recommended investment aims to achieve capital growth over your desired investment horizon in line with your Risk Profile. Therefore, our recommendation increases the potential volatility of your investment, as compared to your Mercer, AXA, REST, Tasplan, Ausfund superannuation accounts. An exit fee of $80 is payable when exiting the Tasplan Super fund. An exit fee of $29 is payable when exiting the AXA Super fund. An exit fee of $148.65 is payable when exiting the Mercer Super fund.
Objective
Objective
You stated you are seeking advice to achieve the following: Objective You wish to consolidate your current superannuation accounts with the view to ease ongoing management, invest in accordance with your risk profile and provide a platform to fund comprehensive personal insurances Value $34,336 Your Instructions Meet goal now
Strategy
Objective
Strategy
In order to achieve the above objective I recommend the following strategy: Paul, take out a Term Life policy: o For an amount of $470,300 o This policy should be owned by you personally. o I recommend a level 65 premium structure. o You may also choose to nominate a beneficiary to receive the proceeds of the policy. o I recommend that you attach the TPD buy back benefit to your term life insurance. o I recommend that you attach the living reinstatement benefit to your living (or trauma) insurance. o I recommend you cancel your existing Term Life insurance of 210,120 with Mercer, $517,000 with REST (Twice), $100,800 with Tasplan and $426,163 with Westpac Future Cover, once the recommended Term Life Insurance is in place. Paul, take out a Total & Permanent Disability policy: o For an amount of $470,300. o This policy should be owned by you personally. o I recommend an any occupation policy. o I recommend a level 65 premium structure. o I recommend you cancel your existing TPD insurance of $210,120 with Mercer and $100,800 with Tasplan, once the recommended TPD insurance is in place. Paul, take out a Living (or Trauma) Insurance policy: o For an amount of $100,000. o This policy should be owned by you personally. o I recommend the Flexible Linking Plus option for your Living (or Trauma) insurance. o I recommend a level 65 premium structure. o I recommend that you attach the living reinstatement benefit to your living (or trauma) insurance.
o o o o o o o o
I recommend you take out the Income Protection (own occupation IP) feature for your income protection insurance cover. With a monthly benefit of $2,910. This policy will provide for 80.00% of your regular monthly income, including superannuation contributions. I recommend a waiting period of 14 days. I recommend a benefit period payable to age 65. I recommend a level 65 premium structure. I recommend an endorsed agrees value policy. I recommend that you add the superannuation contribution option to your income protection insurance cover. The benefit level above includes the allowable superannuation contribution benefit. I recommend that you attach the Accident Benefit to your income protection insurance.
Solutions
Objective Strategy Solutions
I recommend the above strategy be implemented as follows: I recommend the following policies: Contract Type Term Life /TPD/ Trauma Life Insured Sample, Paul Premium $98 Monthly Benefit Term Life $470,330 TPD $470,330 Trauma $100,000 $2,910 Waiting Period n/a Benefit Period n/a Benefit Frequency Lump Sum
BT Protection Income Sample, $108 14 days Up to Monthly Plans Protection Paul Monthly Age 65 * The Flexible Linking portion of the policy is owned by you personally. The remainder of the policy is owned by the superannuation fund trustee.
Reasons
Objective Strategy Solutions Reason
I believe the advice is appropriate to you as: Term life insurance provides a lump sum amount paid to beneficiaries on the death of the insured. The recommended level of cover is based on the amounts required to fund the following expenses: Term Life Insurance Income Replacement Extinguish Debt Funeral Costs Total Life Insurance Needs Less: Assets to realize upon death Less: Existing cover to be retained Life Insurance Cover Required Paul ($) $0 $203,600 $15,000 $218,600 $24,336 $0 $184,264
Total and permanent disability insurance provides a lump sum to the policy owner if the insured person becomes totally and permanently disabled. The recommended level of cover is based on the amounts required to fund the following expenses: TPD Insurance Income Replacement-provide of 25%of your income/salary until age 65 Extinguish Debt Medical/Lifestyle Expenses Total TPD Insurance Needs Less: Assets to realize upon disablement Less: Existing cover to be retained TPD Insurance Cover Required Pauls $201,065.38 $203,600 $100,000 $504,665.38 $34,336 $0 $470,329.38
Living (or Trauma) insurance provides a lump sum payment to the policy owner if the insured person suffers from one of the specified serious medical conditions. The recommended level of cover is based on the amount required to fund the following expenses:
Living (or Trauma) Insurance Income Replacement Extinguish Debt Medical/Lifestyle Expenses Total Living (or Trauma) Insurance Needs Less: Assets to realize upon death Less: Existing cover to be retained Living (or Trauma) Insurance Cover Required
Income protection insurance provides the following monthly benefits in the event that you are unable to work due to illness or injury: Income Protection Paul ($) 80.00% of salary (including superannuation $2,910 contributions) Income Protection Monthly Benefit Required $0
I have recommended that you take out additional life cover up to the same level as your TPD cover for the following reasons: The recommended product provider does not allow applications for TPD cover to exceed the level of life cover. It is more cost-effective to increase your life cover, compared to implementing standalone life and TPD insurance policies.
I have recommended the any occupation option to your TPD TPD insurance because: The any occupation option may provide a TPD benefit if the insured person is unable to ever perform any occupation for which they are reasonably suited by education, training or experience. As your TPD insurance is within superannuation, you may not be able to meet a condition of release and gain access to your benefits under an own occupation policy. Based on your occupation, you are not eligible for an own occupation TPD benefit.
I have recommended that you utilize the Flexible Linking Plus option for your Term Life/ TPD/Trauma insurance for the following reasons: By using the flexible linking plus option, you will hold your living (or trauma) insurance, together with any other benefits under the policies that may not meet a condition of release, outside of the superannuation. This means your living (or trauma) insurance benefit will be paid to you personally on claim. The living (or trauma) insurance is linked to your policies held within super under the flexible linking option, meaning the premiums are more cost efficient than if the living (or trauma) insurance were to be held as a standalone policy. The impact of insurance premiums on your personal cashflow is reduced, as some of your insurance cover is held within superannuation and funded by your superannuation balance. I have recommended the TPD buy back option on your life and TPD insurance because:
The TPD buy back feature allows you to reinstate your death benefit 14 days after a TPD benefit claim has been paid, by the amount that was paid. Reinstating the benefit will ensure that you continue to hold life insurance if you become totally and permanently disabled, without having to provide further evidence of health, occupation or pastimes.
I have recommended the Living Reinstatement option on your living (or trauma) insurance because: The living reinstatement benefit allows you reinstate your living benefit 12 months after a claim has been paid, by the mount that was paid. Reinstating the benefit will provide you ongoing living (or trauma) insurance cover, even after a claim has been made, without having to provide further evidence of health, occupation or pastimes. I have recommended a waiting period 14 days for your income protection because: You have confirmed that you can meet your living expenses for up to 6 weeks without your income. I have taken into account that policy benefits are generally paid monthly in arrears. I have recommended a benefit period of Up to Age 65 for your income protection because: The benefit period selected will provide sufficient income protection in the case that you are unable to work due to illness or injury, until your retirement at age 65. I have recommended take out the Income Protection (own occupation IP) feature for your income protection cover because: Income Protection (own occupation IP) will protect you against a loss of your income, should you become unable to work in your usual occupation. I have recommended the endorsed agreed value policy because: Full financial underwriting will be done at application stage, meaning no further financials will be requested or reviewed at claim time. The policy provides certainty in the amount payable, as the monthly benefit is agreed at the time the policy is commenced. The benefit payable will not be affected by any future reduction in income. The benefit payable under an endorsed agreed value policy is based on an amount agreed at commencement. The agreed amount may be adjusted for movements in the Consumer Price Index to take into account inflation. I have recommended that you select the Superannuation Contribution Option for your income protection insurance. This is appropriate because: In the event of total disability, your income protection policy will provide an additional benefit that is intended to replace your current employer superannuation guarantee contributions. The monthly insured amount is generally calculated as 75% of your monthly earnings, however with the Superannuation Contribution Option, you will be able to insure an additional flat 5% of your monthly earnings. You will be able to continue your superannuation contributions, even if you are unable to work due to total disability. The Superannuation Contribution Option allows you to have a monthly insured amount higher than usually available. I have recommended the Level 65 premium option for your term life, TPD, living (or trauma) and income protection insurance benefits because:
You have a long term view to protection and I have determined that the cost of the level premium option is less than the equivalent insurance with stepped premiums. You advised that you intent to retire at age 65, and intent to cancel your insurance at this time. You are seeking certainly in cost and have stated a preference for insurance premiums that do not increase significantly each year.
I have recommended the Accident Benefit for the following reasons: Your income will be covered during the waiting period in the event of an accident which causes you to become incapacitated. On cessation of the benefit, coverage can continue under your income protection policy.
The benefits of insuring though the recommended BT Protection Plans, as opposed to your existing Tasplan Life/TPD are as follows: The BT Protection Plans allows you to apply for insurance cover that meets your requirements. Your existing Tasplan Super does not offer sufficient insurance cover due to levels of life and TPD insurance reducing each year, CPI indexing not offered on insurance. By implementing more than one BT Protection Plan insurance policy, you will quality for a 5% multipolicy discount (excluding policy fee and stamp duty).
The benefits of insuring through the recommended BT Protection, as opposed to your existing REST Life are as follows:. The BT Protection Plans allows you to apply for insurance cover that meets your requirement. Your existing REST Super does not offer sufficient insurance cover due to levels of life and TPD insurance reducing each year , CPI indexing not offered on insurance. By implementing more than one BT Protection Plan insurance policy, you will quality for a 5% multipolicy discount (excluding policy fee and stamp duty).
The benefits of insuring through the recommended The BT Protection Plans, as opposed to your existing Mercer Life/TPD are as follows: The BT Foundation SuperWrap allows you to apply for insurance cover that meets your requirement. Your existing Mercer Super does not offer sufficient insurance cover due to levels of life and TPD insurance reducing each year, TPD waiting period 6 months compared to 3, CPT indexing not offered on insurances. No income protection is provided and level premiums are not available. By implementing more than one BT Protection Plan insurance policy, you will quality for a 5% multipolicy discount (excluding policy fee and stamp duty).
The benefits of insuring through the recommended The BT Protection Plans, as opposed to your existing Westpac Future Cover Life are as follows: The BT Protection Plans allows you to apply for insurance cover that meets your requirements. Your existing Westpac Future Super does not offer sufficient insurance cover due to levels of life cover is fixed at the current level, it can be decreased by application but only increased to a maximum of $750,000 upon application and underwriting. Level premiums are not offered. By implementing more than one BT Protection Plan insurance policy, you will quality for a 5% multipolicy discount (excluding policy fee and stamp duty).
Other Factors
Objective
Strategy
Solutions
Reasons
Other Factors
As part of determining whether my advice is appropriate to you, you should also consider: Before you enter into a contract for insurance, you have to disclose to the insurer every matter which you know, or could be reasonably expected to know, is relevant to the insurers decision to issue you with an insurance policy and if so, on what terms. You have the same duty to disclose those matters to the insurer before you renew, extend, vary or re-instate a contract of insurance. Your duty of disclosure applies to your application, personal statement and any other form requesting information and applies from the time you complete your application to the time the insurer accepts your application and issues a policy document. If any relevant information changes between the time that you application is submitted and the time the insurer issues the policy to you, you must notify the insurer. You should be aware that if you do not fully disclose all relevant and material information to the Insurer as required, the Insurer may be entitled to reduce their liability under your insurance contract in respect of a claim, or cancel your insurance contract. For electronic submission of insurance applications, you acknowledge that you will be required to provide declarations in your application for insurance and personal statement. You should carefully consider each declaration before signing and confirming to me that the declarations are correct. You should be aware that you are legally bound by all declarations are correct, before I submit your insurance documentation electronically. You may not be able to claim under the recommended policy in the event of death by suicide for a period of 13 months from the commencement of the policy. You will not be able to claim under the recommended policy in the event of becoming totally and permanently disabled due to a suicide attempt. You may not be able to claim under the recommended policy for any trauma of injury due to a suicide attempt. There may be exclusions for specific activities or illnesses depending upon your family history or personal situation. The premiums quoted in the fees and charges section may vary depending upon your family history or personal situation. The insurer will require you to complete a personal statement and to provide evidence of your income for underwriting purposes. The insurer may also request additional information once the personal statement and income details have been provided. Where I have recommended insurance within superannuation, the subsequent closure of your superannuation account could mean that your insurance cover will be lost, unless you are eligible, and wish to transfers, your insurance cover to a separate policy outside of the superannuation environment. For any insurance benefits paid into Superannuation, there may be assessments for superannuation environment. If a claim is made on your Term Life policy and the insurer agrees to pay the claim, the income will be paid either to i) your nominated beneficiary (and not form part of your estate) or ii) your estate and be distributed in accordance with the instructions in your Will. If a claim is made on your TPD policy and the insurer agrees to pay the claim, the benefit will be paid direct to you (i.e. it cannot be paid to a nominated beneficiary) You should understand that if you make a claim for TPD, access to the proceeds will be subject to meeting a condition of release. This may make it more difficult to access your benefits particularly if you are under retirement age. Any TPD benefit you receive may not be completely tax fee (compared to a TPD policy held outside of super). However it may receive concessional tax treatment if you receive the benefit in the form of either a lump sum or income stream.
The conditions to receive a claim under the TPD policy are based on an any occupation definition. Although any occupation cover is cheaper than an own occupation cover, it is also more restrictive as you have to meet the criteria of not being able to perform any job that you are reasonably qualified or trained for. The TPD cover I have recommended is linked to your Life Cover. This means that if you suffer a TPD event and receive a payout, your Life Cover will be automatically reduced may be covered by the amount of the TPD payout. Only up to 80% (with a Superannuation Contribution Option) of your income may be covered by an Income Protection or Temporary Salary Continuance policy. Income provided by an income replacement policy is treated as taxable income. The waiting period is the maximum amount of time that you will have to wait before you begin to receive payments under the policy. You should also note that some payments are made in arrears so this may extend your waiting period. This is why having cash in the bank or sick leave due from your employer can be beneficial The benefit period is the maximum amount of time that you will be paid under the policy (subject to policy conditions). You will lose any insurance cover you currently hold in an existing policy as soon as it is cancelled. You should wait to cancel the existing policy until you receive confirmation from the new insurer of acceptance of the application. Paying insurance premiums with your superannuation can deplete or reduce your balance over time. Levels of cover should be reviewed regularly and in cases where recommendations include the replacement of an existing policy(ies) with another, you should not cancel these policies until the replacement policy(ies) have been accepted. Your insurance does not commence until the insurer has completed their assessment and issued the insurance policy. Once the insurer has received your application, they will advise what other requirements they have of you. This can involve having a blood test or medical examination or they may write to your doctor for a report. We will let you know what these requirements are at the appropriate time. The costs of any medical reports, examinations or blood tests are met by the insurer. If a claim is made on your term life policy and insurer agrees to pay the claim, the income will be paid either to your nominated beneficiary (and not form part of your estate). The Accident Benefit is not payable in the event that you are eligible for the specified injury benefit, crisis benefit or nursing care benefit. For each product recommended, please refer to the Product Disclosure Statement for further information about key product features and significant risk associated with implementing the policy.
As a result of replacing your existing Mercer Life/TPD, REST Life, Tasplan Life/TPD and Westpac Future Cover with the recommended BT Protection Plans Life/TPD/Trauma, you will experience the following loss of benefits and other significant consequences: Paying insurance premiums with your superannuation can deplete or reduce your balance over time. You should not cancel your existing insurance cover until you have been notified that the recommended replacement cover is in force. This will ensure that you are not exposed to a period of time with no cover. Replacing your insurance cover means you may be subject to financial and/or medical underwriting by the new insurer. This may result in loadings and/or policy exclusions. As you are replacing your life insurance, your new product may have a 13 months suicide exclusion.
Investments Investment Assets Westpac Cash Total BT Foundation Portfolio Super Wrap PSP^ Advance High Growth Multi-Blend W BT Wrap Cash Account Total Combined Total ^Investment Amount is net of entry fee.
Status Retained
Owner
New New
N/A N/A
Paul Paul
Recommended Portfolio
Variation from Risk Profile Asset Allocation In developing my advice to satisfy your objectives it is necessary to vary the actual asset allocation from the benchmark asset allocation as set out in your risk profile. Within your risk profile there are acceptable ranges for each asset class. These ranges allow us to adjust the allocation to each asset class as part of satisfying your objectives, whilst still remaining within the overall risk/returns framework of the risk profile. However, your portfolio is outside of these acceptable ranges in Cash. This is due to the following reasons: We are required to keep sufficient cash reserves in your account to fund insurance premiums and related account fees and charges.
This allocation to Cash which sits outside of the acceptable ranges, means that the overall risk/return framework is outside of your agreed risk profile and by accepting this advice you are agreeing to this deviation. The implication of this deviation in term of risk and the effect on your risk profile (and asset allocation) are that your fund is not as aggressive as you initially anticipated and may provide more conservative long term returns. Recommended Portfolio (%) 19.64% 0.00% 19.64% Benchmark Portfolio (%) 3.00% 10.00% 13.00% Acceptable Ranges (%) 0-8% 5-15%
Investment Sector Income Assets Cash Fixed Interest Sub Total - Income Assets Growth Assets Property & Infrastructure Australia Equities International Equities Sub Total - Growth Assets Alternative Assets Alternatives Sub Total-Alternatives Total
5.19% 5.19%
5-15%
Please Note: Fund managers may, within limits, vary the asset allocation of their investment portfolios from time to time depending upon their views of the investment markets. As a result, the asset allocation of your investment portfolio may also vary from the figures shown. Given the above, please advise me as soon as possible if you are not comfortable with these variance.
How I am Remunerated
As I am an employee I am paid a salary (including superannuation) by Westpac. In addition I may also receive as remuneration from Westpac, a portion of the Product Commission and Advice Fees. From the Advice Fees and Product Commissions received by Westpac, the maximum share that I can receive as remuneration is 44.00%. This amount is shown in the tables below under the heading Maximum Planner Share of Total, however the actual mount I receive may be less. The calculation of the actual percentage I will receive is based on my overall performance in the year including meeting financial, compliance and other Westpac objectives. If any of Advice Fees payable have been discounted because you are entitled to a published discount, the maximum share of revenue that I may receive from these fees will be based on the non-discounted rate for that fee. 1. Strategy Recommendation: At our previous meeting you agreed to the preparation of a tailored financial plan. As part of this commitment, you agreed to pay a Plan Preparation Fee for the preparation of that financial plan. The Plan Preparation Fee is a one-off fee. This SoA fee will be rebated to you, should you implement with me, my recommendations. Advice Fees Plan Preparation Fee Total Payable to Westpac $1,320 Maximum Planner Share of Total $581
*We have agreed that you will pay this fee through your BT SuperWrap platform. This fee will be deducted from your Cash Account under the One-off advice fee form. Note: where there are insufficient funds in your cash account, your investment may be partially redeemed to cover this fee and you may therefore trigger a CGT event.
2. Strategy Implementation: after I present the advice to you and you agree to implement the recommendation set out in your financial plan. I charge a fee which covers the time and resources used to formulate the advice and manage all relevant parties to implement the advice through the investment and insurance portfolio. In addition, where there is a negotiable Product Commission paid by the product manufacturer, it will appear below as an Advice Fee. Total Payable to Maximum Planner Advice Fees Westpac Share of Total BT Foundation Portfolio $1,717 $755 SuperWrap PSP $34,336 5.00% 2.20% BT Foundation Portfolio SuperWrap PSP regular $0 $0 contribution $3,600 0.00% 0.00% Term Life with Disability and $1,170 $515 Living Benefit $1,064 110,00% 48.40% $1,255 $539 Income Protection $1,113 110.00% 48.40% Note: where you are making a regular investment or contribution these Advice Fees are payable with each contribution. *We have agreed that you will pay this fee through your BT SuperWrap platform. This fee will be deduced from your Cash Account under the One-off advice fee form. Note: where there are insufficient funds in your cash account, your investment may be partially redeemed to cover this fee and you may therefore trigger a CGT event. 3. Ongoing Services: Ongoing services will help ensure your financial plan is updated to respond to any changes in your circumstances and financial goals, changes in the economy, markets or legislation. You have chosen not to have your financial plan reviewed regularly. The following remuneration is paid by the product manufacturer for the life of the investment, service, loan or insurance policy. The amount shown is an estimate only. The actual product commission paid will vary based on your actual account balance. Producet Commissions BT Foundation Portfolio SuperWrap PSP Term Life with Disability and Living Benefit Income Protection Total Payable to Westpac 0% 0.00% $106 10,00% $111 10.00% Maximum Planner Share of Total $0 0.00% $47 4.40% $49 4.40%
Investment Manager Fees Amount Invested ($) ICR/MER Estimated Fund Buy/Sell Spread (%) 0.00 0.61
Underlying Investments (% pa) ($ pa) BT Wrap Cash Account 3,133 0.00 0 Advance High Growth Multi34,803 0.98 341 Blend W Total Investments 37,936 0.90 341 0.56 Note: The managed funds offered through BT Portfolio Wrap are managed by third parties that charge fees and charges for the management and administration of the managed funds. These can be referred to as Indirect Cost Ratio (ICR) or Management Expense Ratio (MER). These Investment Manager Fees are not an additional expense to you, as the investment returns for each managed fund are net of these fees and charges. Account Keeping Fee Account Keeping Fee Scale ($) 0 34, 803 Total: 34,803 Account Keeping Fee (% pa) 0.32 0.32 Account Keeping Fee ($ pa) 111 111
Note: The Account Keeping Fee is calculated on the average opening and closing balance of your BT Portfolio SuperSwap account for a month, or part of a month, and excludes the amount held in your Cash Account. It is deducted from your Cash Account on a monthly basis and is an additional expense to you.
As I have recommended you invest through BT Portfolio SuperWrap, you may qualify through the Advantage Investment Series for a rebate on your Account Keeping Fee. This rebate will be shown on your BT Portfolio Wrap Statement. Service Fees Investment Switching Fee There is a fixed transaction cost of $30.50 that will be applied to every acquisition or sale of a managed fund within your portfolio. This fee will be deducted from your Cash Account when the transaction is settled.
0 29 0 0 149 0 258 80 *Where a product contains more than one investment option, the fee shown is the weighted average based on the total portfolio . Cost of acquiring (or increasing) your interest There may be entry fees and other product costs payable when acquiring or increasing your interest in the new product that I have recommended. Please refer to the section titled ;How I am Remunerated for details of any initial product level costs and the section titled Product Fees and Charges for details of the buy/sell spread for each investment option. Comparison of ongoing fees The following section compares the ongoing fees of your existing Tasplan Super, REST Super, AXA Super, BT Super for Life, Ausfund Super, Mercer Super, REST Super with the recommended BT Foundation Portfolio SuperWrap PSP. As the fees are subject to change, these comparisons should be used as a guide only. For more information please refer to the relevant PDS or other disclosure document for each product. Comparison of ongoing fees investments The following table provides a comparison of ongoing management fees (MER/ICR) and other ongoing product costs. The fees shown are annual equivalents which have been estimated using an investment balance at a given point in time. When comparing investment management fees please note that altering the overall asset allocation of your investment portfolio could impact these fees. This is because funds invested in defensive assets such as cash or fixed interest typically incur a lower MER/ICR when compared to funds invested in growth assets such as shares or property.
Tasplan Super REST Super AXA Super BT Super for Life Ausfund Super Mercer Super REST Super Total
0 0 0 0 0 0 0 0
Amount
MER/ICR*^
($) Ausfund Super AXA Super BT Super for Life Mercer Super REST Super REST Super Tasplan Super Total Existing BT Foundation Portfolio SuperWrap PSP Total Recommended 205 13,521 214 2,321 1,664 15,962 449 34,336 34,336
Administration /Account Keeping Fee (%) ($) Flat fee 14 0.20 28 Flat fee 60 0.00 0 Flat fee 52 Flat fee 52 Flat fee 78 284 0.29 101
Ongoing Adviser Fee (%) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 ($) 0 0 0 0 0 0 0 0 0
Total
34,336
309
101
410
*Where a product contains more than one investment option, the fee shown on the weighted average based on the total portfolio. For a list of the ongoing fees that apply to each recommended underlying option, please refer to the section titled Product Fees and Charges. ^Performance fees may apply. These may not be included in the MER/ICR information disclosed in the table above.
Comparison of insurance benefits and fees The table below compares the costs of your existing and recommended insurance cover. All fees provided are based on an annual figure, and the recommended product fees are based on the insurers standard rates. After applying, there is a possibility that a loading or exclusion may be added to your premium. The insurer will advise you of their decision and any changes in premium before your insurance is implemented. Name of policy Type Level of cover ($) Premium & Policy fee ($) 487 65 281 281 117
Existing Future Cov Full 1st NFP Mercer Term Life/TPD REST Term Life REST Term Life Tasplan Term Life/TPD Recommended Term Life with Disability and Living Benefit
Term Life Term Life TPD Term Life Term Life Term Life TPD Term Life TPD Trauma
426,163 210,120 210,120 517,000 517,000 100,000 100,000 470,330 470,330 100,000
1,177
I provide the following authorization regarding the advice: [ ]I provide you authority to proceed with implementing the advice in full and submitting associated applications on my behalf. [ ]I provide you authority to proceed with implementing the advice and submitting associated applications on my behalf, with the following changes to my Planners recommendations (as per insert below):
[ ]I provide you authority to proceed with implementing your recommendations and submitting associated applications on my behalf in relation to the following products (as per insert below):
[ ]I do not provide you authority to proceed with any of the advice at this stage.
My Advice
Therefore, at your request, the advice has been prepared without taking into account all of your objectives nor your complete financial situation or needs. Because of this, you should, before acting on my advice, consider its appropriateness, having regard to your objectives, financial situation and needs. This advice is, or may be, based on incomplete or inaccurate information relating to your relevant personal circumstances. Because of this, you should, before acting on my advice, consider very carefully the appropriateness of my advice, having regard to your relevant personal circumstances.
Note: If you wish to act on some but not all of the recommendations which I have made (or if you want us to vary any of the recommendations), then I cannot confirm that the implementation of these recommendations is appropriate to your objectives, financial situation or needs without further analysis and the preparation of further advice. Before requesting us to implement varied recommendations, you should consider very carefully the appropriateness of doing so, having regard to your relevant personal circumstances.