1 Faculty of Business and Law School of Business FIN10003 Assignment: Statement of Advice Principles of Financial Planning 2 Before you begin Read everything in this document before you start your...

Final Assessment: Statement of Advice (SOA)

1 Faculty of Business and Law School of Business FIN10003 Assignment: Statement of Advice Principles of Financial Planning 2 Before you begin Read everything in this document before you start your assignment. About this Assessment This assessment includes: • Case study- included in this document) • Statement of advice (SoA) template- available in Canvas site `Completing the assignment • You will use Xplan for all related analysis and modelling. • You may use the given template to generate Statement of advice or generate SoA from Xplan. Instructions for completing Statement of Advice from template • • This means you may delete certain sections in the template as you deem not applicable for the purpose of your advice. • Type your name in spaces provided for signature. Required research and assumption • There will be external research required as part of completion of the SoA. All research need to be completed within Xplan. No external research is required. • List any assumptions and related sources (e.g. links) in the appendix. 3 Sequence of work needs to be completed in Xplan Step Task Related tool in Xplan Expected completion 1 Create client and complete Fact find Client focus (My Hub)> Fact find wizard Week-3 2 Create current client scenario Client Focus> Xtools+> Xtools+>CALM>Scenario Week-4 3 Create recommended client scenario Client Focus> Xtools+> Xtools+>CALM>Scenario Week-5 4 Review consolidated cashflow within recommended scenario to find if clients objective met Client Focus> Xtools+> Xtools+>CALM>Scenario>Display>individual >Consolidated Week-6 5 Prepare and edit SoA Client Focus> Wizard> SoA Week 7 Xplan resources Step Resource 1 http://support.iress.com.au/xplan/2.0%20tutorials/Articulate/NewUserTraining/story_html5.html 2,3,4 http://support.iress.com.au/xplan/2.0%20tutorials/articulate/XtoolsPlus%20WealthCreation/story_html5.html Assignment submission • You must submit your completed assignment in a PDF document. http://support.iress.com.au/xplan/2.0%20tutorials/Articulate/NewUserTraining/story_html5.html http://support.iress.com.au/xplan/2.0%20tutorials/articulate/XtoolsPlus%20WealthCreation/story_html5.html 4 Information collected at the fact-finding meeting You are an authorised representative of Fresh Planning Pty Ltd. Rahat and Reece [your last name] have come in to see you plan out their lifestyle. Rahat (aged 45, at the date you are to prepare SoA) and Reece (aged 40, at the date you are preparing SoA) have been married for many years and live at 5 Square Court, Richmond, Victoria. They have one child Raymond, aged 12 (at the date you are to prepare SoA). From the discussion, you found out that Raymond goes to a public school, Rahat is a regular smoker and, both Rahat and Reece are in excellent health and have standard private hospital cover. Reece works for I-Design Pty Ltd as a content writer and earns $50,000 pa part-time. Reece has heard about salary sacrifice and thinks this might be a good idea to help build funds for her retirement. The only contributions currently made to her superannuation is her minimum Superannuation Guarantee Contributions (SGC). Reece likes to take a year off is possible anytime in the next few years to after her elderly parents. Rahat works as a tiler. He paid himself $100,000 in the last financial year. Rahat had been very busy building the business and never had time to plan retirement. Rahat and Reece usually like to go on holiday once a year. The trip last year was at Fiji for two weeks, and it cost around $9,000. You found out that they are quite sure how much they spend and has no savings plan. It turns out that the approximate living style expense, excluding mortgage repayment is $45,000/year. They like to keep their current lifestyle. However, likes to plan for retirement. The list below summarises your understanding of clients’ objectives: 1. They both like to retire when Rahat is at age 65 if possible and expect to spend $45,000/year 2. They hope that they will be able to pay off the mortgage before retirement. They need your advice to find out whether they can achieve these objectives. 5 Personal balance sheet - Rahat You had requested Rahat and Reece to bring personal information to the meeting. The below form was provided to you to help you complete a factfinder. Amount in $ Ownership structure Comment Asset Outside Super Residential property 650,000 Joint Savings account 10,000 Joint Asset inside Super Australian Super 150,000 Industry Superannuation APIR FC43606AU Lifestyle assets Car 40,000 Joint Home content 115,000 Joint Insurance inside Super Life cover 300,000 Cover within Super Default cover Insurance outside Super 0 No cover outside superannuation was considered. Personal loans Credit card 15,000 Personal Always pay off the balance every month. Mortgage 300,000 Joint National Australia Bank. The remaining term is 15 years. The mortgage is at a fixed rate. Personal balance sheet- Reece Asset inside Super MLC MasterKey Super FS Horizon 4 160,000 Retail Superannuation APIR MLC0434AU Insurance inside Super Life cover 300,000 Cover within Super Personal loans Credit card 10,000 Personal Always pay off the balance every month. Note: Joint ownership assets are listed once. Advice related assumptions 1. Credit card interest rate is 15%. 2. The fixed mortgage rate is 3.99%. 3. Clients will receive no age pension.