to demonstrate the skills and knowledge required to analyse a client’s financial data, use portfolio management techniques, recommend investments suitable for the client and produce an effective...

to demonstrate the skills and knowledge required to analyse a client’s financial data, use portfolio management techniques, recommend investments suitable for the client and produce an effective advice document.
Assessment description
For this simulated financial advice scenario, you are required to assume the role of a financial advisor who has just been asked for some investment recommendations from your client, Sam. Sam has inherited $200,000 and would like you to advise him on the best way to invest this money considering his current portfolio and objectives.
There are three stages to this assessment: (1) analyse and measure, (2) analyse and develop, and (3) communicate advice.



Assessment Task 1 (BSBRSK501) Qualification: 10597NAT Graduate Diploma of Financial Planning & Advice Unit of Competence: GDFIPM803 Provide Investment Advice Please complete this form and attach it with the Assessment Summary Student Name : Date : AIBT Student ID No : Assessor Name : Assessment Task and Assessment Checklist You must complete the assessment to demonstrate the skills and knowledge required to analyse a client’s financial data, use portfolio management techniques, recommend investments suitable for the client and produce an effective advice document. This assessment must be completed and submitted to AIBT within 3 weeks after completing the class (or deadline set by your trainer / assessor). You can submit it via either · Email to your assessor, OR · Email to [email protected] Please make sure you have a backup copy or hard copy before submitting this assessment. · The results of this assessment will be available within 4 weeks after submission. The Report must be word processed If you believe you require support or flexible adjustment to successfully complete this assessment, you should speak with the Trainer/Assessor before you start. In case of RPL (Recognition of Prior Learning), this assessment tool can be in conjunction with a third party report and / or a portfolio of evidence to confirm /support competence in this unit. Late assessments may result in a Not Yet Competent outcome and you will have to negotiate the completion of another assessment with your Trainer/Assessor. Special Support or Flexible Adjustment Assessor discretion is used in relation to adjustment for assessment for students with special needs The methodology used for this assessment was : Assessor Signature ( Student written response only ( Written response with clarifying questions, documented by Assessor ( Oral response only, documented by Assessor Assessment Format & Plagiarism Policy · Plagiarism is defined as the copying of sections of any published work without acknowledgement of the source. · Cheating is defined as handing in someone else’s work as your own or allowing someone else to hand up your work, several people writing one computer copy and handling up multiple copies, all represented as individual work and using any part of someone else’s work without proper acknowledgement · AIBT maintains Zero Tolerance in relation to plagiarism and / or cheating. Any student found to have plagiarised work or cheated or assisted another person to plagiarise or cheat will automatically be disqualified from the assessment, receive a Not Yet Competent result and may be subject to expulsion from the course / program. I confirm that I am prepared to undertake this assessment, and I understand the above policy and declare the attached assessment is all my own original work. Student Signature : __________________________ Date : _________________________ I confirm that the Assessment was conducted as per the minimum standards required by RTO, AQF and ESOS, that no favouritism or special dispensation has been applied, that support and flexible adjustment has been applied rationally and that feedback has been provided to the student. Assessor Feedback Assessor Signature Date : Assessment Outcome ( Competent Achieved ( Not Yet Competent ( Re – Assessment Required · This assessment is 50% of the total marks for overall unit assessment · Total marks for this assessment is 100 and you must achieve 50 marks to be assessed as competent · Portfolio & Advice Submission Details: Candidate’s Name Phone No Assessor’s Name Phone No Assessment Sites Assessment Date/s Time/s The assessment task is due on the date specified by your assessor. Any variations to this arrangement must be approved in writing by your assessor. Submit this document with any required evidence attached. See specifications below for details. Performance objective For this task you are required to demonstrate the skills and knowledge required to analyse a client’s financial data, use portfolio management techniques, recommend investments suitable for the client and produce an effective advice document. Assessment description For this simulated financial advice scenario, you are required to assume the role of a financial advisor who has just been asked for some investment recommendations from your client, Sam. Sam has inherited $200,000 and would like you to advise him on the best way to invest this money considering his current portfolio and objectives. There are three stages to this assessment: (1) analyse and measure, (2) analyse and develop, and (3) communicate advice. Part 1 This project is in three parts, with Part 1 as follows: SHAPE \* MERGEFORMAT For this assessment task, you will need to review Sam’s current financial situation using the case study material in the Appendix. Once you have gathered this information, you are to use portfolio management techniques to measure the performance of his current investments. You will formulate a simulated dialogue between the client Sam, and yourself, to gather any further information you may need. Then, you will develop an outline of Sam’s investment needs. Procedure 1. Review Sam’s current portfolio in the Appendix 2. Complete the table (greyed data will need to be sourced online) a. Historical share prices can be found at Yahoo Finance for each stock (1) When setting the start date, use the date from one year ago and select monthly results (2) Locate the adjusted close price from one year ago (3) Add this to your current portfolio table b. Annual dividends per share can be found on the company website or from the ASX website http://www.asx.com.au/asx/markets/dividends.do (1) If you use the ASX website, you can search for all stocks at once (2) In the search box, list your stocks using the ASX code separated by a space (3) Add up the dividend amounts for each company (where the ex-dividend date falls in the past year) and add to table c. Current market prices can be found online d. Current value is the current market price multiplied by number of shares held e. See the Appendix for a guide to completing the managed fund portion of Sam’s current holdings f. You must include references to your information sources 3. Measure the portfolio’s performance over the past year by calculating the Holding Period Return (HPR) a. Reference any information obtained from sources other than the Appendix and your completed current holdings table b. Compare your HPR with an appropriate market index (use an accumulation index which includes dividends) c. Discuss your results 4. Measure the portfolio’s risk characteristics using Beta a. To calculate the portfolio Beta: (1) Use the individual stocks’ Betas from Yahoo Finance (2) Use the individual funds’ Betas from Morningstar (3) Use excel to create a table showing the weight and Beta of each asset (4) Calculate the portfolio Beta by summing the weighted Betas of all individual assets b. Show all calculations c. Reference any information obtained from sources other than the Appendix d. Compare your results to the market e. Discuss what the portfolio Beta means for your client Sam 5. You and Sam have already discussed quite a lot about his current situation, as shown in the Appendix. However, for you to give accurate advice, you will need to be clear on his investment goals. Create a simulated discussion between you and Sam to obtain any necessary information a. Use the scaled advice examples in the ASIC Regulatory Guide (RG244) as a guide b. Present your dialogue in a similar format as advice examples in RG244 6. Based on the information in the Appendix and what you have discussed with Sam, develop an outline of Sam’s investment goals a. This can be presented as dot points b. See RG 90, page 30, for suggested inclusions Specifications You must provide: · One report discussing the performance and risk characteristics of Sam’s portfolio, a copy of any dialogue you had with your client and a summary of his investment goals · One excel workbook showing your calculations for Sam’s portfolio performance and risk Your assessor will be looking for: · A 3 to 6 A4 page report including all information identified in the procedure above · A copy of your excel workbook with sheets labelled appropriately and showing all formulae used in calculations · Evidence that you can analyse client financial information · Ability to collect client information · Evidence that you can form realistic investment objectives with a client · Communication skills that include listening and questioning to establish the goals of clients · Development of a document that is well-structured, clear and concise and uses tables, figures or diagrams appropriately Part 2 This project is in three parts, with Part 2 as follows: SHAPE \* MERGEFORMAT For this assessment task, you are required to analyse the securities market, macroeconomic and industry factors that may affect your client Sam’s portfolio. Once you have gathered this information, you are to use security analysis techniques to compare different options for Sam to invest his $200,000. Then, you will develop a working file that includes your proposed investment options and how these recommendations will maximise portfolio performance. This will form the foundation for your advice document. Procedure 1. Produce a macroeconomic outlook a. Consider important factors both domestically and globally such as: (1) Monetary and fiscal policy (2) Sovereign debt (3) Treasury bonds and the bond market (4) Governments and elections (5) Gross domestic product (GDP) (6) Employment (7) Inflation and interest rates (8) Currencies and commodities (9) Emerging markets 2. Review Sam’s current portfolio a. Discuss how factors from your macroeconomic analysis may affect his portfolio b. Explain ways that Sam could adjust his portfolio to minimise these risks c. Discuss potential opportunities 3. Review Sam’s current portfolio asset allocation a. Discuss his current portfolio in terms of diversification (1) Consider the holdings within the managed funds also b. Discuss his current portfolio in terms of asset allocation (1) Decide whether or not to include his house equity as part of his property allocation (2) You must justify your choice c. Discuss the asset allocation that best suits his current risk profile d. Explain any changes that are required to align with his risk profile 4. Select at least one equity investment to be added to Sam’s portfolio a. Provide a comparison table with a minimum of five alternate equities for consideration b. Use security analysis techniques to compare the alternatives including industry, sector and fundamental analysis c. Explain how your chosen equity or equities will maximise portfolio performance and balance risk d. Outline how Sam should fund this investment from either: (1) Inheritance money (2) Sale of current holdings (3) Other 5. Select at least one managed fund or ETF to be added to Sam’s portfolio a. Provide a comparison table with a minimum of five alternate funds for consideration b. Try the Morningstar fund screener to assist with selection at http://www.morningstar.com.au/Tools/NewFundScreener c. Use security analysis techniques to compare the alternatives d. Possible selection criteria