Você está na página 1de 40

Foundationsof FinancialPlanning

FP1B1SN12 Project ProjectCoverSheet

This document includes: Project instructions Submission instructions Project result, result summary and feedback Project checklist Project questions and suggested topics or bullet points that should be covered in responses (including fact finder templates, cash flow templates and managed funds calculations).

Studentidentification(student to complete)
Please complete the fields shaded grey.
Studentnumber Studentname Telephonenumber INT###### [name] [phone no.]

Page 1 of 40

Only Microsoft Office compatible projects submitted in the template file will be accepted for marking by Kaplan Professional Education (KPE). PDF projects will not be accepted. Do not delete/remove any sections of the template. The project must be COMPLETED before submitting it to KPE. The maximum file size is 5MB. Once you submit your project for marking you will be unable to make any further changes to it. You will have 12 weeks from the date of your enrolment in this subject to submit your project. Should your project be deemed not yet competent you will be give an additional 4 weeks to resubmit your project. Your project must be submitted to KPE on or before your project due date. Please check KapLearnfor the due date.

Please refer to the Projectsubmission/resubmissioninstructions(pdf) in the Assessment section of KapLearn for details on how to submit your project.

Page 2 of 40

Projectresult (assessorto complete)

Result first submission Not yet competent Questionsthat mustbe re-submitted:

Result re-submission(if applicable) Not yet competent

Resultsummary(assessorto complete)
First submission Section1 Re-submission(if required)

Not yet demonstrated Not yet demonstrated Not yet demonstrated Not yet demonstrated Not yet demonstrated Not yet demonstrated Not yet demonstrated Not yet demonstrated Not yet demonstrated

Not yet demonstrated Not yet demonstrated Not yet demonstrated Not yet demonstrated Not yet demonstrated Not yet demonstrated Not yet demonstrated Not yet demonstrated Not yet demonstrated









Feedback(assessorto complete)
[insert assessor feedback]

Page 3 of 40

Foundationsof FinancialPlanning
[FP1B1SN12] Project

This project contains nine sections based on the information provided on your clients, Ria and Adam Jacobs, and their family. Complete all sections. The following checklist is provided as a guide to ensure you have completed the project requirements.

Projectchecklist(studentto complete)
Step Action Prior to Commencingthe Project 1. Readthe StudyGuide Go to the What you need to know section and read the advice in the Study Guide on preparing your project. Familiariseyourselfwith the project Think about the project questions while reading your learning materials and completing the activities and review questions. Downloadthe SampleCaseStudy<insertlink> The Sample Case Study that accompanies your course notes provides a model to help you prepare your Statement of Advice. You should refer to the Case Study as you work through the learning materials, then download the worked Case Study and compare how the SOA matches with the goals and objectives identified in the case study, and consider what information has been included in the SOA and why. This will help to ensure that you include all the important information in this Project and that you address all of the clients goals. Completingthe Project 4. AnswerSections1 4 Ensure that you complete the fact finder and risk profile templates for Section 3 Part A and Section 3 Part C. AnswerSection5 Part A & B Part A Statementof Advice Complete the SOA using the Template provided. All sections of the template must be completed. You may add more information if you believe it is needed but you must not remove any section. You should ensure that your recommendations cover all of the clients goals and objectives. You may need more or less recommendations than the number provided in the template, it will depend upon you advice. Just remember to address all of the clients goals. You do not need to provide advice on insurance, but must cover your reasons in your SOA. You must recommend a product for a wealth accumulation strategy. You may use one of the products from Section 4 Part D. You do no need to obtain or create any PDS to go with the SOA You should complete the projections in Appendix 3 using an excel spreadsheet. AnswerSections6 to 9 Uploadyourcompletedproject. You must submit the following completed items in this template: the project cover sheet and completedstudent declaration
Page 4 of 40





6. 7.

answers to all nine project sections the completed Statement of Advice Preparation Checklist the completed Statement of Advice and appendices.

Page 5 of 40

CaseStudyBackground Ria & AdamJacobs

You have recently commenced your career in financial planning after completing your Diploma of Financial Services, and have now accepted a role as a junior financial planner in a small financial planning practice. The practice operates under the name Attain Financial Planning Pty Ltd and you are an authorised representative of Reach Financial Services who holds the AFS Licence. Thomas, the firms senior financial adviser, has agreed to mentor you while you gain experience in the industry. Attain Financial Planning Pty Ltd specialises in investment and insurance advice but does not provide stockbroking, real estate evaluations and advice, income tax preparation, superannuation fund accounting, superannuation fund administration or the preparation of legal documents such as Wills or trusts. Your first clients are Ria and Adam Jacobs who were recommended to Attain Financial Planning by a current client who is very happy with the service and advice she has been receiving. Six months ago Ria received a $450,000 inheritance from her late grandmother, and she and Adam would like to ensure these funds are invested wisely in order to secure their future, and provide for their children while they are at home. You have obtained the following information from discussions you have had with Ria and Adam so far:

Client 1 Name Salutation Age/Date of birth Status Home address Health Smoker Occupation Employer Work Arrangement Start date Retirement age Adam Jacobs Mr 1 July 1975 Married 10 Carlisle St., Martins Hill Good No Warehouse Manager Dalkeith International Permanent Full-time 2002 65 Ria Jacobs Mrs 17 August 1976 Married 10 Carlisle St., Martins Hill Good No Receptionist Medical Clinic Permanent Part-time 2011 63 Client2

Familyrelationshipsand dependants
Dependant Amy Nicholas Relationship Daughter Son Date of Birth 4-Mar-04 7-Jul-05 NumberyearsDependent 15 years (Ria and Adam hope she will go to university) 16 years (Ria and Adam hope he will go to university)

Page 6 of 40

Solicitor Time span of relationship Quality of relationship Carolyn Williams 10 years Good

Accountant Time span of relationship Quality of relationship

Julia Charters 7 years Excellent

Client1 Salary Interest Dividends (fully franked) $58,000 $197.50 $3,000 Client2 $20,000 $13,697.50 N/A

Notes: Adam and Rias salaries are excluding superannuation guarantee (SG) contributions, which are currently paid at 9% per annum. Adam is happy in his current role and does not foresee any changes to his employment circumstances at this stage. Ria has just returned to work part-time working 5 hours a day (10am to 2pm) 4 days per week. She expects to stay in this role for the foreseeable future.

Mortgage (Joint) General living expenses (Joint) Car Expenses (Adam) School fees (Joint) Donations (Joint) Annual holidays (Joint) $17,256.00 (Interest is 6.15% variable over 25 years) $45,000.00 (includes insurances, utilities etc.) $5,400.00 per annum $7,000.00 (for both children) $250.00 $3,000.00

Page 7 of 40

Principle residence $520,000.00 This is the estimated current value. There is a mortgage of $220,000 outstanding. The clients currently pay both principal and interest on the loan. The value of their contents is the replacement value for insurance purposes. The family car has an outstanding loan balance of $22,000. The monthly repayments are $450.00 currently paying interest only. This car was also left to Ria by her grandmother. They believe they can manage without the extra car and have agreed to sell it to their neighbour. This is Ria and Adams savings account for daily cash access. This account earns 1% per annum. These are the funds recently inherited from her grandmother and are currently held in a savings account earning 3% per annum. Earning 5.5% per annum. Both Accumulation funds. MERs 1.5%, 2% contribution fee, and $0 withdrawal fee. Invested in the balanced option. Eligible start date is 1 August 1996. Invested in the conservative option. Eligible start date is 1 July 1998. Earns 6% per annum fully franked dividends. Currently this is not being reinvested as dividends are required to enhance family cash flow. Does not wish to sell. All shares are liable for 50% CGT if sold. Cost base of entire portfolio is $45,000.

Home contents Motor vehicle

$50,000.00 $32,000.00

Motor vehicle


Bank Account (Joint) Bank Account (In Rias name) CMT (Joint) Superannuation: Adam: Ria: Share portfolio In Adams name




$110,000.00 $45,500.00 $50,000.00

Numberof shares 480 518 219 895 2,460 377 Company Bendigo and Adelaide Bank Ltd ANZ Banking Group Commonwealth Bank Qantas Telstra Westpac Bank ASXCode BEN ANZ CBA QAN TLS WBC

Adam has rated his investment objectives, using a scale ranging from 1 (not concerned) to 5 (very concerned).
Income to keep pace with inflation

2 1 3

Legal logical and appropriate tax relief

5 1 5

Easy access to your capital

Regular income from your investments

Easy to administer

Capital growth

Page 8 of 40


Ria has rated her investment objectives, using a scale ranging from 1 (not concerned) to 5 (very concerned).
Income to keep pace with inflation

3 4 3 4

Legal logical and appropriate tax relief

3 3 3

Easy access to your capital

Regular income from your investments

Easy to administer

Capital growth


Rias Will was last updated in 2000 and states that all her assets are to pass to Adam. Adams Will was last updated in 2001 and states that all his assets are to pass to Ria. They have not reviewed these Wills since the children were born. They have no powers of attorney (POA) of any kind, or guardianship arrangements for their children.

Insuranceandrisk management
Adam and Ria have private health insurance for the family (premiums are included in the living expenses above). Adam has life and total and permanent disability (TPD) insurance cover in his superannuation fund of $300,000 and income protection insurance, which will provide 75% of his monthly income if he is ever unable to work through illness or injury until age 65. Ria also has life and total and permanent disability (TPD) insurance cover in her superannuation fund of $300,000 and income protection insurance, which will provide 75% of her monthly income if she is ever unable to work through illness or injury until age 65. At this time they are not requesting any advice on their insurance cover. They have agreed that they will talk to your insurance advice specialist about this and you have diarised a meeting with your insurance specialist for them in one month. They also believe their general insurances are the correct amounts required. On this basis they have not provided any further details of their insurance situation.

Page 9 of 40

Ria has recently inherited $450,000 from her grandmother. Ria and Adam would like to maximise their income earning capacity and reduce debt. They are seeking a long-term tax effective investment plan which will provide for their future income needs and their childrens education. They expect school fees to remain at $7,000 per annum for both primary and secondary years. They would like to maintain $15,000 in cash for emergencies. They would like to help both children if they go to university, and expect that to cost at least $80,000 in total for both to complete their degrees. They would like to continue to have their annual family holiday to North Stradbroke Island. Ria and Adam would like to upgrade some of their home contents (e.g. white goods and furniture) and possibly their car in the future. They believe that this can be funded from their cash buffer. They would like to retire on approximately $50,000 per annum, in todays dollars, however they are not interested in contributing more to superannuation at the moment and do not wish to change their superannuation funds as they are happy with the returns, service and insurance. They would consider reducing or repaying their loans. As their financial planner, your task is to prepare a Statement of Advice (SoA) that will include strategies to meet Ria and Adams goals.

Page 10 of 40

TheProject(studentto complete)
Section1 Establishrelationshipwith client

Ria and Adam have not previously met with a financial planner, although they have heard good things about your company from the companys current client Julia. However, they have also seen a lot of bad publicity about the financial planning industry in the media.

Section1 Part A
Preparation by both the client and the planning team is essential to a successful client meeting. Describe the preparation that should be made to ensure the success of the initial interview, which will be held in your office. (250 words) [insert student response]

Section1 Part B
List the documents that will be used and/or provided to Ria and Adam during, or prior to, the initial meeting. Explain the contents of each document and why it is necessary. (200 words) [insert student response]

Section1 Part C
Outline how you would develop rapport with Ria and Adam during your first meeting. (200 words) [insert student response]

Section1 Part D
Explain to Ria and Adam the role of the adviser and the relationship with the licensee, Reach Financial Services. Ensure that you use language that Ria and Adam would understand. (250 words) [insert student response]

Section1 Part E
Explain to Ria and Adam how you maintain your knowledge of the industry and your obligations under the relevant legislation (150 words) [insert student response]

Section1 Part F
It is important that Ria and Adam understand your companys dispute resolution procedure. Explain, step-by-step, the internal and external complaints resolution processes available to them. (150 words)

Page 11 of 40

[insert student response]

Page 12 of 40


Identifyclient objectives,needsand financialsituation

Before you are able to make any recommendations to Ria and Adam, you must gather sufficient information to identify their objectives, needs and financial situation.

Section2 Part A
Explain why effective communication skills are important to a successful fact finding interview. Discuss the different skills that can be used to help ensure you understand what your client is saying. (350 words) [insert student response]

Section2 Part B
Identify three questions that you could ask Ria and Adam to encourage them to clarify and/or elaborate on the short, medium and long-term goals and objectives they would like to achieve. (100 words) [insert student response]

Section2 Part C
During the interview, Ria and Adam express concern about the personal information they are being asked to provide. Explain to Ria and Adam the difference between qualitative and quantitative information and justify the need to collect their personal and financial information. Ensure that you use language that Ria and Adam would understand. (250 words) [insert student response]

Section2 Part D
Identify two tools or techniques that you could use when determining Ria and Adams risk profile and outline what you perceive to be the advantages and disadvantages of each approach. (100 words) [insert student response]

Page 13 of 40


Analyseclientobjectives,needs,financialsituationandrisk profile

The initial meeting with Ria and Adam went well and you have collected the information provided above in the background information.

Section3 Part A
Record the information you have gathered from your clients in the fact finder below. [insert student response]

Section3 Part B
Identify any gaps in your data collection form as well as any other issues that would need to be followed up with Ria and Adam. Include any documentation you would ask the clients to supply. (200 words.) [insert student response]

Page 14 of 40

Personal and employment details

Personaldetails Client1 Title Surname Given & preferred names Home address Business address Contact phone Date of birth Age Sex Smoker Expected retirement age Dependants (children or other) Name Date of birth Sex School Occupation Male Yes Female No Male Yes Female No Client 2

Employmentdetails Client1 Occupation Employmentstatus Self employed Not employed Permanent Casual Other Employee Pensioner Part time Contractor Government Self employed Not employed Permanent Casual Other Employee Pensioner Part time Contractor Government Client2

Page 15 of 40


Sole proprietor Private company

Partnership Trust

Sole proprietor Private company

Partnership Trust

Notes Any other person to be contacted? E.g. accountant, bank, solicitor, etc.

Income, expenditure and net worth

Tax calculations Client1 Incomefromemployment Salary Salary sacrifice Salaryafter salarysacrifice Otherincome Rental income Interest Unfranked dividends Share dividends Imputation credits Other income liable for tax (e.g. taxable benefits) Capital gains < 1 year Not in case study Not in case study Not in case study $62,483 $125 $0 $62,358 $11,813 65 $935 Not in case study Not in case study Not in case study $33,698 $125 Donations to charity. $0 $33,573 $2,920 2012/13ratesused $445 Both qualify for LITO $503 $3,000 $1,285 (state % return if applicable $0 Fully franked $198 $13,698 (state % return if applicable) $58,000 $0 $58,000 $20,000 $0 (state % if applicable) $20,000 Client 2 Notes

Capital gains > 1 year

Tax-free component of capital gains

Total assessableincome Deductable expenses Rental expenses, repairs, etc Taxableincome Income tax on taxable income less tax offsets (e.g. LITO/SAPTO) plus Medicare levy

Page 16 of 40

plus Medicare levy surcharge less Imputation credits Less refundable tax offsets

$0 $1,285 Not in case study $11,398

$0 $0 Not in case study $2,978

Net tax payable

Page 17 of 40

Cashflowcalculation: Familycashflow Client 1 Salary less any salary sacrificed amount Interest income Dividends received (excluding franking credits) Other income Total incomereceivedbeforetax General living expenses Mortgage Car expenses School fees Donations Annual holidays Total expenses Total incomereceivedbeforetax less expenses Net tax payable from tax table above Total net cashflow $61,198 $22,500 $8,628 $5,400 $3,500 $125 $1,500 $41,653 $19,545 $33,698 $22,500 $8,628 $0 $3,500 $125 $1,500 $36,253 -$2,555 $94,896 $45,000 $17,256 Interest is 6.15% variable over 25 years. $5,400 $7,000 $250 $3,000 Joint $77,906 $16,990 $58,000 $198 $3,000 Client2 $20,000 $13,698 Combined $78,000 Comment

$13,896 $3,000

$11,398 $8,147

$2,978 -$5,533

$14,376 $2,614

Page 18 of 40

Assetsandliabilities Asset Owner Value Liabilities Net value Notes



Adam Ria

Invested in the balanced option. Eligible start date is 01 August 1996. Invested in the conservative option. Eligible start date is 01 July 1998



Total Net worth

Liabilities Loan Current debt Percentage deductible Interestonly Repayment

Mortgage Car Loan Total

Page 19 of 40

Goals and objectives

Details Comments

Estateplanning Do you have a Will? Yes No

When was it last updated: / /

Do you have Powers of Attorney?



Page 20 of 40

Current superannuation, insurances & investments





Policy number




Annual premium

Date of joiningfund Typeof fund Accumulation Defined benefit Pensioner By yourself No Accumulation Defined benefit Pensioner By yourself No

Pension Contribution (e.g. 5% of salary) Is there provision for you to top up or salary sacrifice? Non-concessional contributions By employer Yes

Pension By employer Yes

Amount Amount Amount Amount

Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year

Spouse contributions received

Amount Amount Amount Amount

Concessional contributions

Amount Amount Amount Amount

Any other contributions

Amount Amount Amount Amount

Page 21 of 40

Life insurancedetails Life insured R'shipto client Policytype Company Policynumber Deathbenefit Otherbenefit Annual premium

Generalinsurancedetails Itemcovered Owner Policytype Company Policynumber CoverAmount Otherbenefit Annual premium

Investmentdetails Investmenttype Company Purchasedate Unitsheld/fixed rate Currentvalue Owner

Page 22 of 40

Riskneeds Insuranceneeds life and TPD Client 1 Grossannualincome(beforetax) Less business expenses Number of years income required Property repayment Other debts Sub-total = (income years)+ debts Less existing realisable assets (Insurance/savings/super) Insured benefit shortfall (before tax) Gross income is the total of earned income, i.e. before tax earnings derived from personal exertion, including salary, fees, commission, bonuses, fringe benefits or similar payments that would cease on disablement. Business expenses are expenses incurred by you in the process of earning income from your profession, business or partnership. Insuranceneeds Incomeprotection/trauma Incomeprotection Gross annual income Employer superannuation contributions Other employer fringe benefits Maximum allowable benefit (75% of annual income) Monthly income Less existing insurance Monthly benefit required (pre-tax) Waiting period to be served Trauma Medical costs (to cover out-of-pocket health costs) Additional expenses of a permanent nature, wheelchairs, home alterations etc. Additional income: income protection only covers 75%, would you need extra? Total fundsrequired Lesscashavailableor assetsthat can be readilycashed Shortfall/surplus Client1 Client 2 Client 2

Page 23 of 40

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 Adviser may not be appropriate to my needs. I acknowledge that the Adviser has provided me with the completed financial fact finder, signed by me. Customer(s)signature(s) Adviser'sname Adviser'ssignature Date


Page 24 of 40

Section3 Part C
Now that you have determined the Jacobs needs and objectives you need to identify their likely risk profile based on the information they have provided. Complete the risk profile below.
Investmentattitudedetails Please answer the following questions regarding your attitude to financial issues.

Are you concerned about the amount of tax that you are paying? Why?


How important is liquidity (i.e. funds available) to you? Why?


If you had funds available for investing, how would you choose to invest them? Why?

Are there certain sorts of investment that you wish to avoid? Which ones?


Page 25 of 40

RISKPROFILE Determiningyour investorrisk 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 adviser, you can choose the investments that best match your financial objectives. Whichof the followingbest describesyour currentstageof life? Singlewithfewfinancialcommitments.You are keen to accumulate wealth for the future. Some funds must be kept available for enjoyment, such as cars, clothes, travel and entertainment. A couplewithoutchildren. 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. Youngfamily. 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. Maturefamily. 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. Preparingfor 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. 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. Whatreturndo you reasonablyexpectto achievefromyour investments? A return without losing any capital. 37% p.a. 812% p.a. 1315% p.a. Over 15% p.a. Client1 Client 2













Client 1 10 20 30 40 50

Client 2 10 20 30 40 50

If youdid not needyourcapitalfor morethan10 years,for howlongwouldyoube preparedto seeyourinvestmentperformingbelowyourexpectations beforeyoucashedit in? You would cash it in if there were any loss in value Less than 1 year Up to 3 years Up to 5 years Up to 7 years 10 20 30 40 45 10 20 30 40 45

Page 26 of 40

Up to 10 years Howfamiliar are you with investmentmarkets? Very little understanding or interest Not very familiar Have had enough experience to understand the importance of diversification Understand that markets may fluctuate and that different market sectors offer different income, growth and taxation characteristics Experienced with all investment sectors and understand the various factors that may influence performance If youcanonlyobtaingreatertax efficiencyfrommorevolatileinvestments,whichbalancewouldyoube most comfortablewith? Preferably guaranteed returns, before tax savings Stable, reliable returns, minimal tax savings Some variability in returns, some tax savings Moderate variability in returns, reasonable tax savings Unstable, but potentially higher returns, maximising tax savings



10 20 30 40

10 20 30 40



10 20 30 40 50

10 20 30 40 50

Six monthsafter placingyour investmentyou discoverthat yourportfoliohas decreasedin valueby 20%,whatwouldbe yourreaction? Horror. Security of capital is critical and you did not intend to take risks You would cut your losses and transfer your money into more secure investment sectors You would be concerned, but would wait to see if the investments improve This was a calculated risk and you would leave the investments in place, expecting performance to improve You would invest more funds to lower your average investment price, expecting future growth Whichof the followingbest describesyour purposefor investing? You want to invest for longer than five years, probably to the age of 5560. You are mainly investing for growth to accumulate long-term wealth You are not nearing retirement, have surplus funds to invest and you are aiming to accumulate longterm wealth from a balanced fund You have a lump sum, e.g. an inheritance or an employment termination payment from your employer, and you are uncertain about what secure investment alternatives are available You are nearing retirement and you are investing to ensure that you have sufficient funds available to enjoy retirement You have some specific objectives within the next five years for which you want to save enough 10 20 30 10 20 30














Page 27 of 40

money You want a regular income and/or totally protect the value of your savings Investorprofile total points 10 10


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. 51130 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. 131210 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. 211300 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. 301350 Highgrowth 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.

(Section 3 Part D commences on the next page)

Page 28 of 40

Section3 Part D
Assess Ria and Adams likely risk profiles and discuss what information in the background information led you to this conclusion. (250 words) [insert student response]

Section3 Part E
Prepare a statement of Ria and Adams goals, needs and objectives. These should be categorised into short, medium and long-term timeframes. They should be specific, measurable and have a nominated dollar value where possible. (250 words) [insert student response]

Section3 Part F
Given the information you have collected regarding Ria and Adams current situation and future requirements, identify the areas that need to be analysed in order to develop an appropriate strategy for them and any areas that require specialist advice. (150 words) [insert student response]

Page 29 of 40



Section4 Part A
Prepare strategies for Ria and Adam and provide a detailed explanation as to why you consider them to be appropriate. (400 words) [insert student response]

Section4 Part B
The following three products have been identified as potential investments that could be used to meet Ria and Adams objectives with regard to wealth accumulation. They are all on your Approved Product List. Provide a summary of your analysis of the three funds and in particular, their suitability to meet Rias objectives. Explain which product and option you would recommend for Ria and why. (250 words) [insert student response] Key Information for 3 Managed Funds
ManagedFundName: Investment Choices Manager Style MultiManager Conservative Fund 5 year Returns Balanced Fund Growth Fund Conservative Fund 1 year Returns Balanced Fund Growth Fund Conservative Fund AA (% Defensive/Growth) Balanced Fund Growth Fund Income Distribution Frequency All funds Conservative Fund Income Distribution Last 12 months (cents per unit) Balanced Fund Growth Fund Unit Price Conservative Fund GrowFast 5 Passive No 0.80% -0.55% -2.00% 6.00% 7.90% 7.00% 60/40 40/60 15/85 6 monthly 1.1 0.95 0.75 1.02212 Accumulator 12 Active Yes 2.17% -0.51% -1.98% 7.35% 8.15% 12.13% 70/30 50/50 30/70 Quarterly 2.4 1.6 2.0 1.1188 Builder 14 Active Yes 0.90% -0.60% -1.90% 6.3% 7.30% 7.70% 70/30 35/65 20/80 Quarterly 0.76 0.56 0.32 0.92544
Page 30 of 40

Balanced Fund Growth Fund Entry Fee Withdrawal Fee MER Switching Fee All funds Minimum Investment Minimum Additional Withdrawal Minimum Withdrawal time FundCommentary S&P Fund Manager Rating Lonsec Fund Manager Rating Chant West Fund Manager Rating Internal Research Team (at Reach Fin Services Pty Ltd)

1.04914 1.18736 0.0% 2.0% 1.30% 0% for 2 per year $50,000 $100 No 7days

1.2162 1.5310 1.5% 0.0% 1.25% 0% for 1 per year $100,000 $100 No 3 business days

0.88208 0.84372 1.0% 0.0% 1.25% 0% for 2 per year $50,000 $100 No 3 business days

3 stars Recommended 3 apples Hold

4 stars Highly recommended 4 apples Buy

4 stars Recommended 5 apples Buy

Page 31 of 40


Presentappropriatestrategiesand solutionsto client

Section5 Part A: Documentyouradvice(Preparea Statementof Advice)

Based on the information in the case study and your analysis of the clients objectives in Section 3 and the proposed recommendations in Section 4, use the template provided to produce your Statement of Advice (SOA). The SOA must be of a standard that is compliant and would be suitable to present to a client. Importantinstructions i. ii. Use the SOA and cash flow writable templates provided to answer this Question. SOA preparation software: The use of financial planning software and dealer templates to prepare your Statement of Advice is not permitted. Submissions that exhibit excessive reliance on SOA templates may be considered a case of plagiarism or collusion and may not be considered to be a reasonable attempt at the assessment. You must list the assumptions made in your SOA in your submission. These will generally include: assumptions you have made regarding missing background information on the clients assumptions you have used to calculate future income from your recommended investments assumptions you have used for fees relating to the products you have recommended. iv. You must provide strategy recommendations in the following areas: personal investment debt management v. You must also cover the following areas and, if you are not making recommendations, explain why: personal insurance superannuation estate planning vi. Product recommendations for any insurance, superannuation and estate planning recommendations are not required. However, you should recommend an appropriate investment product. You may use the fund you chose in Section 4 Part B if you wish, or a suitable alternative. It is not necessary to include Product Disclosure Statements in your response for any products you may recommend in your SOA. You must prepare an implementation schedule detailing all of the recommendations in the SOA. You must include detailed cash flow tables using the templates provided to show Rias and Adams situation before and after your recommendations. These should be submitted as part of your SOA.


vii. viii.

Page 32 of 40


You should use the Microsoft Excel spreadsheet template provided to project the balance of the clients investment portfolio for seven years before and after your recommendations. To show the effect of your strategy you should show the comparison between the investment growth for the current investment (e.g. the CMT) and the investment strategy that you recommend.

Page 33 of 40

Statementof Advice
SOAsection Overall structure Action Refer to the Case Study, particularly: the breakdown of an SOA, and the sample SOA and SOA appendices. i. Coversheet The following elements should appear on the cover sheet: the words Statement of Advice the clients name the authorised representatives name, AR number and contact details (if different to the licensee) a statement that the authorised representative is an authorised representative of the licensee the licensees name, ABN number, AFSL number, address and contact details the date of issue of the SOA a warning about the importance of the document ii. Tableof contents Check that the pages in the table of contents agree with the page numbers in the completed SOA. Headings should include: Summary of our recommendations Summary of expected outcomes if you implement our advice Risks in our advice Summary of our fees and commissions Your next steps iv.Presentposition informationaboutthe client Headings should include: Important information about you Your reasons for seeking advice What you would like to achieve Your personal and financial information Personal information Your existing insurance Your existing estate planning Financial information Current income and expense details Warnings v. Riskprofile Heading: Your risk profile vi.Strategy recommendations (analysisof the investmentstrategies) Headings may include: Recommended action: personal investment personal insurance superannuation estate planning Reasons for recommendations: Things you should consider (risks) Completed?


Page 34 of 40

SOAsection vii. Productselection

Action You are only required to provide a personal investment product recommendation do not provide product recommendations for personal insurance, superannuation or estate planning. You may use one of the products from Section 4 or develop, or source alternative products for your recommendations. Headings should include: Product recommendations Cooling off period advice


viii. Recommendedasset allocation

Headings should include: Recommended asset allocation Comments on proposed asset allocation versus your risk profile

ix.Disclosureof fees, commissionand/or benefits

Headings should include: How are we paid Commission and fees upfront, ongoing commissions and financial planning advice fees Product management and/or operational fees Other benefits


Ongoingserviceand review

Headings should include: Ongoing services Implementation (You must include an implementation schedule in your SOA)

xi.Authorityto proceed

Headings should include: Authority to proceed Consent to ongoing contact

xii. SOAAppendix1

Complete the family cash flow template included in the SOA template. Heading: Financial position before implementation of strategy

xiii. SOAAppendix2

Complete the family cash flow template included in the SOA template. Heading: Financial position after implementation of strategy

xiv. SOAAppendix3

Use an excel spreadsheet, to calculate your projections. Heading: Cash flow projections for personal investment recommendations include assumptions made in the projections

Page 35 of 40

Section5 Part B
The Statement of Advice has been completed and a meeting has been organised with Ria and Adam to present the recommendations and, if they agree, to implement them. Outline the steps that should be followed in presenting this advice to Ria and Adam. In your answer, you should address at least four relevant requirements regarding presentation of advice. (250 words) [insert student response]

Page 36 of 40


Negotiatefinancialplan/policy/transactionwith client

Section6 Part A
Identify two concerns that Ria and Adam may have with the advice that you have provided. Prepare responses to these concerns. Ensure that you use language that Ria and Adam would understand. (100 words) [insert student response]

Section6 Part B
Outline the techniques that could be used to ensure that Ria and Adam understand the advice being provided and to gain their agreement to implement the plan. (150 words) [insert student response]

Page 37 of 40


Coordinateimplementationof agreedplan/policy/transaction

Section7 Part A
According to organisation and legislative requirements explain how you would present your fee and cost structure to Ria and Adam. (100 words) [insert student response]

Page 38 of 40


Completeand maintainnecessarydocumentation

Section8 Part A
List the documentation, if any, that you need to present to Ria and Adam at this stage. (100 words) [insert student response]

Section8 Part B
Provide a summary of all the documentation that you need to keep in the clients file. (150 words) [insert student response]

Page 39 of 40


Provideongoingservicewhererequestedby client

Section9 Part A
Ria and Adam are not sure that they will have time for regular reviews of their financial plan. They express the opinion that the advice seems comprehensive and that they believe they could take a set and forget approach once it is implemented. Discuss how you would respond to Ria and Adam, highlighting why reviews are important. In addition, provide details of the type, form and frequency of the ongoing service that would ideally be provided and the fees/costs associated with this service. (500 words) [insert student response]

Page 40 of 40