Economic planning insurance case study composition

Allison has recently been marketed by her employer, Ideal Marketing, and now earns $135, 000 p. a. doing work full time. This wounderful woman has commenced earnings sacrificing thirty percent of this amount into superannuation, and her employer contributes Superannuation Guarantee Contributions of 9% of her outstanding cash salary. The account is a well-balanced growth retail superannuation fund, MM Superannuation. Her current balance can be $160, 000 and earns on average seven percent p. a. after charges and taxation. She also provides $100, 1000 in term life insurance and TPD insurance cover inside her superannuation fund.

The girl drives a 4-year outdated Land Cruiser that is fully paid for.

It has low kilometres and the girl expects to keep it until your woman retires. She could then need $30, 500 to purchase a new car along with the transact in the lady expects to receive from the Terrain Cruiser. Claire works to get Newbold’s Pty Ltd, a firm which makes custom furniture. He earns around $45, 000 p. a. and expects doing this improve the near future. He is provided with a work motor vehicle and his company pays his SGC depending on his, 500 salary.

Simon has $47, 000 in superannuation financial savings, held within the PP Superannuation Fund. The funds are invested in a balanced/ conventional portfolio having a low allocation to progress assets that earns around 4% p. a. following fees and taxes. They can be living on the semi-rural property which is appreciated at about $750, 500, but they already have a mortgage of $150, 500 as a personal credit line. They are spending approximately $1, 000 monthly as interest-only payments. All their other personal expenses are around $40, 1000 p. a. and they use an additional $15, 000 l. a. in holidays.

Apart from private health cover, car, and property and material insurance, the sole personal insurance they have may be the coverage supplied in Allison’s superannuation fund. They do not include a is going to or any forces of legal professional but they desire to ensure they may have sufficient money for their grandchildren (now outdated 6 and 4 years) to attend school. They estimate they will need to accumulate around $120, 500 (in present dollars) in the next more than a decade to pay for this kind of. Allison really wants to work for 5 to 6 more years and they would like to pay off the rest of the mortgage loan over time.

She also would like to increase the amount of cash in equally her and Simon’s superannuation. When your woman retires she believes they are going to need $40, 000 (in today’s dollars) for their bills in retirement living, but Simon intends to carry on working part time and estimates he will make $20, 500 p. a. They intend to use Simon’s income to fund any holiday seasons. Aside from all their superannuation possessions, they have $9, 000 in a bank account intended for emergencies earning 4% l. a., $15, 000 within a term pay in earning 5% p. a. and $12, 000 within a cash managing account getting 5. five per cent p.. They can be not happy with all the taxation implications of these accounts, as any interest earned for the term deposit and funds management accounts seems to use tax. You ascertain that they can both have well-balanced risk information. Required: You are required to provide drafted responses towards the following scenarios and concerns, either in short answer type or employing bullet points (or both). The following parts are included: ¢ Sample Financial Services Guide (Personal Advice) ¢ Sample Fact Person and Risk Profile Customer survey ¢ Sample Ongoing Assistance Options ” Establish Romance with Customer You will be preparing for a preliminary interview with Simon and Allison Callahan. a) Consider the sort of things you could cover. Incorporate any legal requirements and other documents which may be attractive the interview. For the first interview together with the clients I would personally cover what Azza finance stands for, their particular commitment to the customer and virtually any legal effects, go over the financial services guidebook (send away with page before hand) and online privacy policy and conformity.

I would likewise make the consumers aware that the knowledge they are rendering is to be employed solely for the reasons of determining their situation to help them reach a better financial position. I would allow the customers to accomplish most of the speaking, recording their responses within a fact finder, and ask your customer to develop a risk profile questionnaire to acquire a feel so that their budget is at the current, what kind of expectations they have on Azza financial services, just how much risk they can be willing to take on and if there is anything about their very own situation that might prevent Azza financial coming from providing advice to the consumer. )How may well you ask the consumer to prepare pertaining to the 1st meeting? By simply sending a confirmation notice indicating how much time the interview will likely be, the objective of the interview and precisely what is the outcome intended, advising the customer if you will find to be any kind of fees paid out, providing your customer with a list of documents to create (eg current insurance policies, very statements, current investment strategies, income and expenses, most current tax returns, valuations of resources such as home, bank and credit card claims. ) To ascertain a romantic relationship with Claire and Allison, what approaches might you use to build relationship during the interview process? ¢ offer meals or beverage (eg caffeine, biscuits, tea, water) ¢ monitor customer body language and engage in identical movements to create them experience more comfortable ¢ ask wide open ended inquiries to show clients you are interested in the personally and want to hear the actual have to say. d)What are the several points you need to cover once presenting economic Services Information? Fees and charges = explain what fees could possibly be applicable, which include benefits and commissions which can be received simply by 3rd parties/referrers or product providers due to the plan being implemented ¢ Products = outline the features of the product or service being recommended ¢ Problems Policies and Procedures = make sure to entirely explain the procedures to get handling consumer complaints ¢ Relationships = explain any relationships which might influence which in turn products are recommended or provided e)List the type of service fees you could impose the consumers. What are the key benefits of explaining these fees to the Callahans?

Types of fees which could end up being charged to the clients if they tend to implement the prepared plan are: strategy fees (often charged whether or not plan can be accepted), commissions, entry charges, management fees, account keeping fees. The key benefits of explaining these kinds of fees towards the clients are that it will have no bad surprises and they’ll know what they are getting themselves into in the first place. It also delivers protection pertaining to the advisor in the event that your customer deems some thing unreasonable. Basically, there will be zero misunderstandings regarding the likely cost of tips. )Nominate the product range of financial services and products you will be rendering advice in. Name the key benefits of explaining these to your consumers. The financial services and items which I could possibly be providing suggestions on vary from simplistic things such as bank deposit accounts to general and life insurance, sophisticated and simple expense schemes, basic and particular superannuation plans, estate planning issues (although a lot will probably be directed to a solicitor basically am certainly not qualified to provide advice on that particular place, the same complements taxation).

The advantage of explaining these types of to the client is that they will be more aware of what Azza finance can help them with, and if they may need to be including any third parties to full their requirements (eg accountant or solicitor). It also takes away any myths as to the outcome of the advice provided and puts everybody on the same level expectation wise. The clients also may not need been aware of particular products and services offered which when explained may well change the requirements and requirements which might have never previously recently been considered by the client. )Outline the three steps your clients should take if they have a issue or question prior to contacting the ASIC. ¢ Clients should 1st contact all their advisor to make sure that their disatisfaction is not due to a misunderstanding or perhaps something which could be ammended for their satisfaction. We would endeavour to resolve their complaint within a few working days. ¢ If the consumers are still disappointed, they should lodge a formal problem with the liscensees internal problems process and enable appropriate moment for this to become acted upon. If the clients are still unsatisfied together with the outcome they may then get in touch with the Financial Industry Ombudsman Service (FOS) for complaints involving deficits of below $500, 000. FOS first trys to negociate and outcome between involved get-togethers, if this is not possible the matter is passed for formal assesemnt by a panel. FOS can be free to clients and the decisions it makes are regulation to the liscensee. 2-Identify Client Objectives and Financial Situation a) What techniques or tools could you use to gather more information about your client’s goals, aims and finances? Fact finder ¢ Economical documentation ” tax returns, statements, scheme overviews etc ¢ Use of wide open ended inquiries ¢ Diagnostic questionnaires ¢ Risk profiling b)Using your case study, full the fastened Fact Person with as much information since you can. Remember that this document is used to collect current information along with identify virtually any issues, concerns or limitations that may be relevant in developing your tips. See Fact Finder i)From the circumstance in your case study, write down more than one specific financial goals intended for the general needs presented. Wealth creation for a particular purpose |Start increasing Allison and Simons Super balances ($160K and $47K) | | |Pay for grandchildren’s university in 12 years ” estimated necessary | | |$120K in today’s dollars | |Wealth protection |Take out Personal insurance coverages to avoid eroding savings in the event something | | |unforeseen happens ” income protection, trauma, analysis of current | | life and TPD | |Debt lowering |Pay away IO home loan of $150K in a few years | |Tax minimization |Save on tax on bank accounts/term deposits | | |Possibly downsize family home and push mortgage to investment property| | |to save on duty | |Superannuation |Start elevating Allison and Simons Extremely balances ($160K and $47K) | | |and assess suitability of current cash | |Investment Planning |Possibly purchase Investment property to produce another income stream| | |and save on current tax | | |Look into other investment choices to diversify current wealth | |Estate Planning |Establish will and power of attorney with solicitor | c)Write down a brand of questioning that you just would use in the initial interview to increase knowing about it and obtain additional clarification from the client’s goals and objectives.

Use open-ended questions beginning with What, Just how, When, So why and Exactly where. ¢ Besides what we have previously discussed, show me about any other goals, long or short term which you may have. ¢ What do you want to do as you retire? ¢ What is your current state of health? Eg do you smoke, are you aware of any kind of issues that may affect the ability to function? ¢ Claire, what sort of duties do you conduct at work? (- for insurance purposes we should ascertain what sort of work Sue is doing to be able to now which category this individual fits, A/B/C? ) ¢ What are the contact details of the accountant? (- Financials) ¢ If you have a solicitor, exactly what are their particulars? power of attorney, will) ¢ Are these the best plans/goals in relation to the planning of your estate? ¢ Tell me what other possible economic details you could have overlooked in filling out the truth finder? (- no bank cards? No stocks and shares or any purchases outside of very and regular bank accounts? ) ¢ What level of money reserve will you feel comfortable keeping liquid intended for emergencies, and they are you seeking to receive a lump sum of money in the future? ¢ Exactly what are the superior details of your existing life and general insurance policies? ¢ When are you considering downsizing the family house, if at all? d) What actions would you consider immediately after the first getting together with?

Immediately after the first interview I would Plainly write down every thing which has to be investigated or perhaps researched, with regards to what types of items, tax problems, possible tactics, the options for information and a fb timeline for finalization. This is in order that I can show I have been up to date with the corporations Acts dependence on investigating the ‘subject couple of the advice’. I would request the clientele to signal an specialist accepting the preparation and research of drawing up a financial plan and agreeing to pay virtually any fee which can be incurred as a result of this advice. e) Simon and Allison have a ‘balanced’ risk account. Complete the sample Risk Profile Questionnaire to reflect this. Find risk account 3- Evaluate Client Aims & Financial circumstances

Will Sue and Allison’s current note buyer and other issues meet their objectives with out your assistance? a) Why/why not? Simply no, Simon and Allison’s current financial build is not adequate to enable them to meet their particular goals and objectives. The reason is , they are take note contributing enough in their superannuation to achieve their desired balances, they do not have got any estate plans in place, their current bank accounts are leaving all of them paying extra tax, they may be not sure the right way to structure all their expenses in order to reach a comfortable position after retirement in 5 years time, and their personal insurance are grossly insufficient to keep them within their current way of life and satisfy expenses should certainly something eventually one of them. ) List the assumptions you made. ¢ Allison and Simon do not have current lawyer whom they may have talked about creating a will or perhaps power of attorney with ¢ Allison and Bob are of average intelligence and have not had very much to do with Economic planning providers in the past. ¢ Allison and Simon have no idea much about investment techniques, Superannuation rules, Life insurance or Taxation ¢ Allison and Simon possess used a los angeles accountant in the past to organize their every year tax returns ¢ The average expected rate of return is usually 6% ¢ Expected CPI is 3% and current tax costs have been employed. c) Research information sources that you have depended on in forming your view. RG146 training Sydney DFS course material and circumstance ¢ Aussie Taxation Workplace website (www. ato. gov. au) ¢ Financial Planning association web page (www. fpa. asn. au) ¢ Westpac and BT Financial group case studies (internal) 4 ” Develop Appropriate Strategies & Alternatives a) Illustrate two exploration processes you can utilize to gather info on products and services you recommend to your clients. ¢ Independent study houses (eg Standard and Poors and Morning Star) ¢ Internet searches for example ASX, AFPA, ATO etc ¢ Item disclosures, search positions, past efficiency of companies, Financial review newspaper and so forth Refer to your case study, Simple fact Finder and Risk Profile

Develop a strategy for each of the following points pertaining to Simon and Allison. Identify each of the strategies in terms of key features, advantages and disadvantages. b) Please treat Allison’s insurance requirements. The response includes a brief description of each type of cover and actual amounts recommended. Include calculations and explanations of amounts. ¢ Term Life: ” term life insurance gives a bulk payment to the beneificiaries of a person upon all their death, or in some cases once disgnosed using a terminal condition the person insured can also received the repayment. ” offered to people by 16-75 and can renewed till age 99. Can be paid via stepped premiums (where premium improves with era, you pay much more in the long run) or perhaps level monthly premiums (same quantity througout plan, 30% more affordable than stepped in long manage, and found to CPI) ” Advantages of having life insurance are that this gives the insured peace of mind understanding that they are not really leaving themselves in poor financial positions upon their particular death and ensures they are looked after ” Disadvatanges are that there are a number of exclusions to the policy just like suicide within just first 13 months, War, pre-existing conditions, aids, and terminal illness/disease where this can be a direct result from an action which has been self-inflicited. ” Currenlty Allison has $22.99, 000 worth of lifestyle and TPD insurance inside her superannuation. In regards to a life insurance policy this is sadly inadequate because the estimated living costs for Allison and Sue are $67, 000 every anum. To ensure Simon to stay meeting these kinds of expenses (whilst still working) if allison were to becomed deceased, the insured amount would need to be close to $475, 000.

This is because if spent at an normal fixed first deposit rate of 6% it would provide an profits stream of $28, five-hundred per anum to Simon. [(475000/100) x 6th = twenty eight, 500] ” this along with his current net wage of $38490 come to a per anum income strem of $66, 990 to satisfy expenses. Yet another $270K should also be added to cover all their existing mortgage debt and to have funds left over to be able to pay for the grandchildrens university education, bringing the total life benefit to $745, 000. ¢ Cash flow protection: ” A fortnightly or payment paid to the insured in case they suffer and harm or health issues which leaves them unable to work ” Maximum of 74% of income can be covered and person must be applied at least 25 hours per week. Waiting periods of 14-720 dys apply and benefits periods can be 1-65 years (longer the beenfit period the bigger the premium) ” 2 types of policies happen to be agreed value (specified worth to be paid regardless of big difference between insureds current and former incomes) indemnity (benefit based on covered by insurance income for time of state. ” Advantages are that the insurance supplies peace of mind realizing that if the covered was to have problems with an injury or perhaps illness and therefore are unable to generate an income that the benfit will be paid as if that were their regular income, giving them peace of mind that they may stay on top of most their financial commitments and goals although healing. Disadvantges are that as salary protection can be linked to job, those who are jobless or even individuals with occupations which are considered also risky is unable to obtain income proteciton insurance. Also, because the benefit is only 75% of income, the insured will be 25% worse off and definitely will need to make sure this will not influence any economic commitments or perhaps goals they may have. ” Allison at the moment does not have income safeguard insurance in place which could end diasterously since she earns 75% in the couples revenues. [(180, 000/100) x 75 = 135, 000)]. Allison is going to take out an income protection plan with a $101, 250 profit (135, 000-25%) which would then provide both her and Simon satisfaction knowing that if anything was to happen that they could continue paying their particular expenses ¢ Total and Permanent Disability: TPD insurance provides a one time to the covered by insurance after a qualifying period (usually six months) when selected criteria is met. ” Criteria can be lack of ability to perform individual occupation, virtually any occupation, residence duties or perhaps all obligations; these are based on the type of operate the covered by insurance is in (rated AAA-E) ” Immediate certification for TPD payout in the event that insured looses sight or possibly a limb ” Advantages of having TPD is that if the covered suffers a debiltating personal injury that recognizes them unable to return to function that they can even now meet their expenses ” Disadvantages happen to be that it is not available to everybody; a new insurance plan cannot be removed after sixty and procedures already set up automatically cease when covered by insurance reaches sixty-five.

Also except if rated category E, the conventional level of cover criteria is definitely ‘any occupation’, meaning that the insured just might perform within a role considerably less stimulating, difficult and financilally rewarding which in turn would make all of them ineglibly to get a payout even if that they suffer an overall total and long term diability. ” As Allison and Simons expenses are $67, 00 p/a and Allisons income protection benefit is $101, 250, while Allisons continue to working a stand alone TPD policy would be good for having a lump sum to pay off the exisiting mortgage loan debt of $150K, have enough money to pay for the grandchildrens university ($120K) and possible medical expenses (another $150K) ” totalling a $420K TPD. Another sum for Bills should also be considered for the 6 years right up until retirement ($67, 000 x 6 years sama dengan $402, 000).

This provides the total suggested TPD advantage to $822K which could become bundled being a rider on Allisons life insurance to avoid overinsurrance. ¢ Shock: ” Injury insurance supplies the insured which has a bulk payment when they suffer from an illness specified in the policy ” Could be bundled with life insurance and a pay out will decrease the life coverage by the same amount ” Available to people aged 16-55, or trauma for children outdated 1-12 years ( waiting periods and age limit criteria apply) ” Positive aspects are that as injury insurance is usually not associated with employment, people who have uninsurable occuppations can still generally take out trauma insurance.

As well the insurance provides peace of mind understanding that if the isured was to experience a specified illness and are not able to generate an income the sum paid out will cover their very own expenses and ease the financial pressure ” Disadvanages are that you have exclusions such as death within 3 to 30 days of trauma celebration, trauma caused by an ntentional self induced injury or perhaps attempted suicide and functions of warfare. ” To avoid overinsurance Allison should take away around $250K trauma insurance to cover $150K exisiting mortage debt and any medical expenses associated with the big event. Allisons Cash flow protection will even most likely manage to contribute towards the benefit quantity should a defined event happen. c)Does Simon require personal insurance? If so , what types and just how much? Please include reasons and calculations Simon can take out the pursuing polices to supply stability and peace of mind intended for Allison in the case something should happen to him. ¢ Term Life, Trauma, TPD: As Allisons income (or insurance gain if anything were to happen to her simultaneously) alone support the lovers expenses of $67, 000, I would recommend a combined insurance coverage, TPD and Trauma plan, of $690K for Claire [(salary of $45, 000 by 6 years sama dengan $27, 000) + $150K mortgage debts + $150K possible medical espenses + $120K grandchildrens education sama dengan $690, 000), so that the home loan can be paid out, the grandchildrens education could be paid for, any kind of medical expenses which might be received can be paid out, and a better income stream for sue is created going out of allison free of debt if something were to occur to Simon. ¢ Income safeguard: It is my view that Income safeguard is not required for bob as allisons income is somewhat more than enough to support the couple with money left over, however if they did not want to attract on this, money protection plan could be applied for 74% of his income. [$45, 000 x 73% = $33750 ($33750 as well as 12 sama dengan $2812. 5]. this would imply Simons month-to-month benefit ‘ be $2812. 5 (75% of his monthly income). D) What is the most useful way for Sue to contribute to superannuation and why? Simply how much should Simon contribute? As Simon is on the lower end of the income tax scale, it truly is beneficial for him to make non-concessional contributions into his superannuation as he is eligible for authorities co-contributions for each and every $1 he puts in up to 1000 dollar.

As Allison is over a higher MRT than Simon, if the girl were to income sacrifice a larger portion of her income into both their superannuation accounts (shes presently Sacrificing $40, 000 in to her individual, however this can be brought up to $70, 1000 and then the lady could sacrifice another $20, 000 every anum into Simons in accordance with their goals of increasing all their super balances) they would be paying less tax (as Allison in on the top MRT and super efforts are at 15%) and they can use Simons profits (on reduce MRT) to set towards their very own expenses, therefore Simon should not contribute as well from his salary over a SG of 9% and non-concessional advantages past $1000 (as his super will probably be paid in by Allison to achieve the above stated tax advantages).

Bob should also swap his expense strategy to a well-balanced mix as it is too old-fashioned to his risk profile at the present. e)Is Allison adding to sufficient money to superannuation at this time in order to meet their retirement objectives? Please explain. In order to meet their targets of having $40, 000 every anum to live off in retirement, Allison is certainly not contributing enough to her superannuation at this point on time. Allowing for the consequence of compounding curiosity, after 5 years Allison’s superannuation equilibrium would have accumulated to $224, 400 (at 7%). To supply an income stream of $40, 000 Allison will need to provide her harmony up to $580, 000 by the time she retires in 5 years.

This implies Allison will need to make up the big difference ($580, 000 ” $224, 400 sama dengan $355, 600) in the next five years. Allison will need to bring about another $30, 000 p/a [($355, 600/5 sama dengan $71, 120) ” her current Income Sacrifice of $40, five-hundred = $30, 000] to her superannuation to achieve this stability and their pension objectives. Allisons current total superannuation advantages per anum are $40, 500 in salary sacrifice (30% of salary of $135, 000) along with a Superannuation guarantee of 9% of her staying salary ($135, 000 ” $40, five-hundred = $94, 500, $94, 500 by 9% = $8505) taking her total contribution to $49, 005. f) Happen to be their additional benefits accessible to Simon or Allison due to your strategies above?

By simply Allison salary sacrificing really her cash flow she is saving astronomical amounts on tax as the contributions duty is only 15% as opposed to her MRT. As stated previously, Simon will also be entitled to the government co-contributions with his non-concessional contributions. Allison’s income safety policy (and Simons in the event taken out) are also tax deductible. Claire is also qualified to receive the low tax offset of $804 via a maximum of $1350 for income earners of under $30, 000. To get Simon his amount is worked out with all the following measurements: 1 . [$1350 ” ($45, 000 taxable salary -$30, 000 threshold) by 4% sama dengan 546] and then 2 . $1350 ” 546 = $804) g)What is the recommendation with regards to an investment for the grandchildren’s university education? What are the key benefits of this investment?

For the grandchildren’s education I would recommend buying a balanced education savings plan (they will need to contribute $7000 p/a (at approx 7%, and with the effects of compounding interest) to reach their particular goal of $120, 000 in 12 years) since the amount invested in taxed by a flat inner company price of thirty percent however after 10 years the amounts could be withdrawn intended for non education purposes taxes free, and as the investment is to be above 12 years Allison and Bob could take advantage of this. If it was to end up being withdrawn previous, they are continue to in a great position as the money will be invested having a bit more risk than those of an everyday savings account and the taxation benefits even now outweigh different methods, especially with the low cash flow offset which is still said to be elevating. h) Happen to be their bank/cash investments (total $36, 000) meeting all their requirements? Why/why not? So what do you suggest? No, at the moment these opportunities are not meeting Allison and Simons requirements as they are saved in both brands and are for that reason subject to Allison’s higher MRT.

If Allison and Sue decided to make use of the advantages furnished by income splitting (that is usually, transferring term deposits and interest bearing accounts in Simons name) then they will save on tax as Bob has a lower MRT. Allison and Claire could also think of putting this money in their particular Superannuation to capitalize on the 15% contributions tax or putting that into the mortgage loan as they are paying out less interest, however this may depend on whether they would be needing to keep this kind of money the liquid for day-to-day use and emergencies. i) How do you address their particular goals of paying out their home loan and purchasing the new car upon retirement living? In order to spend their home loan in a few years time, Allison and Simon might eed to set around $40, 000 P/A towards because of interest payable. After Allison’s extra wage sacrificing to get both their Super accounts, the couple have about $45, 000 surplus disposable income per anum. $40, 000 may be used to make these extra payments on the mortgage loan and the different $5000 can be put into a substantial interest savings account for the 5 years (which in the event invested on the average pay in rate of 6% will certainly leave them with $29576. 15 after 5 years while using effects of increasing interest) that can leave them with enough money to purchase the new car. j) Are their particular estate planning preparations sufficient? Why/why not really? Currently Allison and Sue have no estate plan, so that it being insufficient.

I would recommend to Allison and Simon to make contact with their solicitor to discuss a will/power of attorney using their information we have uncovered through analyzing their particular financial situation in this article today. k)What alternative tactics did you consider? Why performed you reject them? Insurance ” providing insurances intended for Simon as well; This would be more than insuring and wasting cash for Allison and Sue as Simons income in relatively small in comparison to Allison’s, and she’s able to cover all costs if some thing we to happen to Bob. Superannuation ” Simon adding more to his superannuation; the taxes benefits of Allison’s salary sacrifice through lowering her MRT far surpass that of Simons and it absolutely was therefore better to prioritise with Allison’s DURE and utilize Simon’s profits for bills.

Investments ” For the grandchildren’s college or university education, probably investing in something more risky (eg shares) or much less risky (eg Term deposits) however the tax advantages and return within the educations personal savings plan in contrast would drop them off in a better position. 5 ” Present Strategies and Negotiate Alternatives Prior to Presentation a)Describe what preparations you should undertake to present your tactics in step four to Simon and Allison. After comprehensive research allowing me to form my tips, I would make a Statement of Advice with my results, make sure to collect all item disclosure transactions which are relevant, and details to back up my advice. I would also make certain there was monetary services information within the data I would be taking to the interview.

I would then call the clients to set up a time which will suits. b) What backing up information or documentation may you need? I would need to regress to something easier the overall performance of particular products/services I recommend (this could be provided in the form of company reviews, asx information, PDS, articles or blog posts, academic research etc) very simple to follow malfunction of any kind of calculations produced so the consumer can see precisely how the strategy will benfit them. FSG and Online privacy policy to assure the customer of the businesses principles and policies in the instance of a dispute. During the Display c) Describe the disclosure principles and presentation requirements you must stick to for this documents:? Statement of Suggestions

The declaration of guidance must have “statement of advice written over the front of computer, it must be in non sophisticated wording (“clear, concise and effective manner), must have a “generic explanation of the selection of financial products or perhaps strategies considered and investigated¦. The customer must receive a replicate, along with PDS and FSG and must have signed and had the SOA offered to them BEFORE any kind of implementation of strategies can be put in place. A disclaimer is likewise usually located at the bottom of the SOA to shield the financial planner and affiliated companies against the operating of circumstance law ” althogh this is simply not required by corporations take action.? Product Disclosure Statement ” The PDS needs to accompany the SOA so the customers have all the knowledge in relation to conceivable products they can be signing up to. Other activities which need to be in the PDS include: Fees and fees = describe what charges might be appropriate, including benefits and commissions that could be received by 3rd parties/referrers or product companies as a result of the plan being executed? Products = outline the features of the products and services being recommended? Complaints Guidelines and Methods = make sure you completely make clear the procedures for handling customer grievances? Relationships sama dengan explain any relationships that might influence which products will be recommended or provided d)List 2 objections or issues your customer might raise. How will you address those inside order to gain agreement? 1 . How do I know that what you suggest will work to me over time? ” We have based these types of recommendations on previous performance of such products and services, all of which you have sighted with your sight.

We cannot 100% make sure these potential outcomes shown will occur, however monetary planning is what we focus on and we make it the duty to look after your financial overall health. If we observe that the study course which we now have mapped out for yourself is certainly not heading in the direction we now have anticipated, you will be the first to know, and we will review your situation in order to alter your plan to best fit your needs, provided you would like us to provide you with this ongoing assistance. 2 . This plan of action fee seems overly expensive ” so why do I have to pay it? ” It takes plenty of time, research, investigation and preparation for all of us to put together an agenda that is customized entirely in respect to your personal needs.

There are no generics or presumptions made with whatever we are presenting you and the cost savings and income you will produce as a result of the guidance can far surpass the cost of this info. 6 ” Implement Arranged Plan Claire and Allison have agreed to your prepare. a) What transactional documents/authorities need to be agreed upon by Sue and Allison? ¢ Authority to continue / SOA and please note ¢ Application forms along with PDS attached ¢ A cheque to get written to accompany application form b) Finish an Execution Plan, in order, that details your designed actions now that Callahan’s decided to move forward with your advice in step four, providing a sign of when each should be completed. A ” Mechanic C ” Client | No . Action |Who |When | | |Sign Specialist to Proceed |C |Now | | |Provide third parties with adequate notification of actions needed to be considered eg solicitor, accountant |A |ASAP | | |Complete application forms looking forward to client to sign |A |ASAP | | |Present application forms to client with PDS attached to be signed. |A & C |When ready | | |Photocopy, keep one and give other with PDS to client. | | | |Obtain Cheque from Customer and adhere to application form being sent to dealer group |A |With step 4 | | |Welcome notice from dealer is released |A /Dealer |- | | |Secure client record established (maintained for six years) |A |- | | |Confirm with clients that they have received welcome notice and they have heard from any 3rd parties. |A |- | | |Speak to clients about Review Services |A |When everything| | | | |is resolved | 7 ” Provide ongoing service You now have to address a defieicency of providing constant advice to Allison and Simon. )What environmental (economic, market, regulatory) changes, or perhaps changes to all their personal or financial situation would cause a report on their plan? ¢ Interest changed might affect taxes advantages, expenditure earnings ¢ New regulatory changes might grandfather or perhaps completely take away current tactics in place ¢ Market booms and busts may cause profile mix being outdated as well as underperforming ¢ Clients may well have suffered a reduction, or damage causing those to claim as well as need to reflect on the financial commitments they will keep up with ¢ Clients may possibly have come to a considerable amount of cash unexpectedly allowing for more space to move in current technique (e. g. inheritance, lotto) Change of advisor may bring upon new light on their circumstance, may include a better technique in mind. b)Describe 2 activities you regularly undertake to hold up-to-date with current legal, ethical and regulatory requirements of the financing sector. ¢ Read economical review/finance news, current business legal improvements ¢ Look at the AFPA reports issued and newsletter from BT economical and liaise with current financial planners c)What level of ongoing assistance would you recommend for these clientele? ( “No service ( “Portfolio valuation ( “Portfolio review ( “Financial Strategy review ( “Other ” Describe d)Describe the option advised for your client, and how come you have recommended this option.

Illustrate the level of services you will give and the connected fees. I would suggest an annual profile review pertaining to Allison and Simon to make sure that they are on the right track to achieving their goals. This would require checking balances and finance mixes to make sure adequate earnings have been made and that items are performing as anticipated. I would prepare a letter to deliver out depending on my locating advising whether or not a change may benefit all of them. As the strategies suggested for Allison and Simone are pretty basic a different fee will not be necessary as this kind of service would be considered to be purchased under the path commissions. Test Fact Locater & Risk Questionnaire 1 ) PERSONAL SPECIFICS |CLIENT 1 |CLIENT two | |Title: |Mrs |Mr | |Given Name: |Allison |Simon | |Preferred Identity: |Allison |Simon | |Surname: |Callahan |Callahan | |Date of Labor and birth: |1956 |1958 | |Marital Status: |M |M | | | | | Home Address: |Address: Great deal 3 Wattle Road | | | | | |Suburb/Town: Hurstbridge | | |State: VIC Postcode: | |Home Telephone No . | | |Preferred Contact Number | | | | | | | | CHILD as well as DEPENDENT SPECIFICS Name: |Megan | | | | |Relationship: |Daughter | | | | |Date of Birth: |1981 | | | | |Current Grow older: |29 | | | | |Financially Dependent: |NO | | | | HEALTH PARTICULARS Do you Smoking: |Yes / No |Yes / Not any | |State of Well being: |Poor / Good as well as Excellent |Poor / Very good / Exceptional | |Are you aware of any health concerns that may| | | |impact the ability to earn an income? | | | |(please provide details) | | | |Notes: | installment payments on your EMPLOYMENT INFORMATION |CLIENT 1 |CLIENT two | |Employment Status: |( Unemployed |( Unemployed | | |( Full Time Employed |( Regular Employed | | |( Self Employed |( Self Employed | | |( Part-time |( Part-time | | |( Retired |( Retired | | |( Other |( Other | |Employer Identity: |Best Marketing |Newbolds Pty Ltd | |Position Subject: |Marketing |Employee | |Primary Duties: |Marketing |Custom Furniture | |Work Address: | | | |Current Function Phone Number: | | | |Employment Security: |Secure ” simply promoted |Secure ” objective to stay permanent | |Are you Thinking about leaving your employer? |In 5-6 years |Not in the foreseeable future | |Do you anticipate any substantial change in |Planned retirement in 5-6 years, possible |In 5-6 years will lessen hours to part time | |your income in the next 2-5 years? lowering of take home spend in the business lead up to|” income will probably be approx $20K p/a | | |this | | |Notes: | | | OTHER ADVISER DETAILS Documentalist |Name: | | |Company: | | |Contact Detail: | | Do we have got authority to make contact with? ( Yes ( No Solicitor Identity: | | |Company: | | |Contact Detail: | | Can we have authority to contact? ( Yes( Zero ESTATE PREPARING DETAILS | |CLIENT one particular |CLIENT a couple of | |Do you have an up-to-date Will? |No |No | |Date of Will / Last Examined: | | | |Power of attorney |No |No | |Type / Name of Lawyer? | | |Do you could have Funeral Plans? |No |No | |Do you have any specific intentions |Intention to purchase grandchildren’s |Intention to pay for grandchildren’s | |regarding your house distribution? |university in the approx 12 years (approx |university inside the approx more than a decade (approx | | |$120K in today’s dollars) |$120K in the current dollars) | 3. UPCOMING NEEDS GOAL AND DESIRED GOALS |E. g.

Current cash flow needs, old age income requirements, diversification, duty minimisation, capital growth, investment security, prosperity creation, | |eliminate mortgage etc | |Reasons intended for seeking economical advice | |Gain help with making the transition to retirement and planning another five years | | | | | |Short Term (1 to 3 years) | |Save on duty on financial institution accounts/term build up through perhaps restructure | |Start increasing Allison and Simons Very balances ($160K and $47K) | |Look into various other investment options to mix up current riches | |Medium Term (4 to six years) | |Pay off IO home loan of $150K in your five years | |Buy new car (through trade in 9 year old land cruiser) worth $30K In your five years | |Have a $40K (today’s dollars) p/a retirement cash flow stream in 5 years | |Long Term (7 year plus) | |Pay for grandchildren’s university in 12 years ” estimated needed $120K in | |today’s dollars | | | | | RETIREMENT PLANNING Old age Details |CLIENT 1 |CLIENT 2 | |Planned Retirement: |59/60 |undetermined | |Retirement Income required: |$40K (today’s dollar) |$40K (today’s dollar) | |After retirement, do you really intend to work |NO |Expected Income= | |again possibly on a full-time or or perhaps | |$20K | |basis? |Till age: undetermined | |What capital expenses are you going to have in |$ |$ | |retirement? (Please point out expense and | | | |value) | | | |Would you like a lot of assets still left to your |$ |$ | |estate? You should detail) | | | |Notes: | | | | | 4. MONETARY DETAILS PERSONAL BALANCE SHEET Life-style Assets | |Owner |Date Acquired |Value |Associated Debt | |Principal Residence: |Allison and Simon | |$750, 000 |$150, 000 | Contents: | | | | | |Motor Vehicle/s: |Allison |2006 |Land Cruiser |No personal debt | |Caravan / Fishing boat / Truck: | | | | | |Investment Property: | | | | | |Other: | | | | | | | | | | | | | | | | | | | | | | | |Total | | | | | Investment Possessions Investment | | | | | | | | | | | INCOME PARTICULARS | |CLIENT 1 |CLIENT 2 | |Income: |$135, 000 |$45, 000 | |Investment Salary: |$1770 p/a interest (bank accounts) |$1770 p/a interest (bank accounts) | |Centrelink Income: | | |Pension/Annuity Income | | | |Other Profits: | | | | Less Income Tax |$38554 |$7580 | | Less Medicare Levy |$2050 |$700 | |Total Net Income |$94426 |$38490 | |Combined Net Income |$132, 916 | EXPENSE SPECIFICS |COMBINED | | |Food: | | | |Entertainment: |$15, 1000 | | |Transport/Vehicle: | | | |Council Rates: | | | |Amenities: | | | |Rent: | | | |Mortgage Repayments: |$12, 000 | | |Other |$40, 000 | | |Total |$67, 000 | | EXCESS DISPOSABLE CASH FLOW | |COMBINED | | |Annual: |$65, 916 | | |Monthly: |$5, 493 | | PLANNED KEY EXPENSES |Nature of Charge |Approx.

Expenditure Amount |Expected Date | |Grandchildren’s school |$120, 500 in today’s dollars |12 years | |Purchase new car |$30, 1000 |5/6 years | | | | | | | | | |What cash arrange do you need for | | | |emergencies or perhaps unforeseen expenses? | | | |Are you anticipating a future lump sum or | | | |inheritance? | | | |If therefore , how much? | | |Notes | | | a few. SUPERANNUATION & INSURANCE SUPERANNUATION |Company |Policy No . |Employer/ Personal | |Are the above plans preserved? | |No | |Has a tax deductions been claimed for part/all? |Yes |No | |Are there any exit charges applicable? |Yes |No | LEAVE PAYMENTS Type |Expected Receipt Particular date |Anticipated Quantity | |Annual: | | | |Long Service: | | | |Other: | | | |Have you recently received a redundancy package? |Yes |No | |If you have recently received a redundancy package, make sure you provide see of payments. | STANDARD INSURANCE Insurance Description |Policy Number |Owner |Date Commenced |Sum Insured |Premium Payable | |Term Life and TPD |Allison |$100, 000 | | | | | | | | | | | | | | | | | | | | | | | | | |Notes: | | | 6. INVESTOR RISK PROFILE

The attitude to risk is just about the most important factor to consider before investing. To attain higher results, you will have to be ready to accept a higher risk of capital loss. This is due to the cash and property that offer high returns are often more unstable than those producing lower results. It is what we call ‘risk/return operate off’. All of us will suggest investment ways to match your investments on your risk account. Investing throughout the various expense sectors in accordance to your risk profile is named diversification. For example , instead of investment only in property, or only in shares, you could invest a proportion in both, or even include cash or set interest to create a balanced portfolio.

You are a well balanced investor who would like a diversified portfolio to work towards method to long-term financial goals. You require an investment strategy that will cope with the effects of tax and inflation. Determined risks will be accepted to help you achieve great returns. 17 ” 23 Moderately Conventional ” A decreased Risk Taker You are a relatively conservative investor seeking much better than basic earnings, but risk must be low. Typically a mature investor wanting to protect prosperity that you have accrued, you may be prepared to consider fewer aggressive expansion investments. on the lookout for ” of sixteen Conservative ” A Very Low Risk Taker You are a conventional investor. Risk must be suprisingly low and you are willing to accept lower returns to shield capital.

The negative effects of tax and inflation will never concern you, provided your initial purchase is safeguarded. 7. CONSUMER STATEMENT / AUTHORISATION |I/We herby declare that the information set out in this form is valid and correct towards the best of my/our knowledge. | |I/We are not aware of any other information and have nondisclosure to the person to whom this type is given any other information | |which would be relevant to the making of a recommendation with a Mentor Economic Planning Consultant. | |I/We give permission for this data to be used for the prep of my/our financial strategy and I/we understand that the | |investment recommendations depends solely on the information supplied in this kind. | | |I/We also acknowledge that: | |( |I/we have obtained, read and understood the Financial Services Information before any advisory companies were provided; | |( |I/we grant this doc to be handed in self-confidence to any person in Mentor Monetary Planning Pty Ltd; | |( |Limited Information Supplied | | |I/We have provided limited financial data.

I/We possess limited the product(s) or objective(s) which can be advised about | | |to: | | |If you are seeking limited advice of a particular nature you must make this known at the time of the interview and you | | |should identify that the advice will only relate to that limited advice staying sought and could not end up being appropriate | | |considering your overall circumstance and aims. | |( |Tax File Number Authorization | | |I/We give permission to get my/our tax file number(s) as provided, being held just by Instructor Financial Planning and be | | |forwarded to finance institutions as asked or as required. |( |Engagement Application | | |I/We request that Mentor Financial Planning check out research and provide suitable choices to the economical objectives | | |outlined in this customer survey. | | | | | |I/We understand that the preparation fee of 500 usd is payable to get the work to get undertaken. This fee can be credited | | |against my organization fee will need to I/We check out implement the recommendations furnished by Mentor Financial | | |Planning. | | |Client 1 | |Client 2 | | | | | |Signature: | | | | | | | | | |Date: | | | | |8. Adviser’s Declaration | I declare that: a) the information contained in the Fact Locater is an exact and complete record of the info obtained from the client(s); b) The client(s) was supplied with a copy with the Financial Services Manuals before any advisory providers were offered. |Adviser’s Personal | |Date | | | |Additional Important Information for the Client(s) | |If incomplete or limited financial information has been provided: | | | |I, or if you Adviser, will not be able to undertake a full demands analysis of your individual expenditure objectives, financial circumstances | |and particular demands; | |There is a probability that any recommendation given to you may not become fully ideal to your individual objectives and desires, | |especially those which We, as the Adviser, have no idea of; and | |You as the client need to carefully ssess the appropriateness of the suggestions to your own individual investment aims, | |financial situation and particular demands before working on them. | To Whom It may well Concern Please accept this letter because my/our expert to provide any information requested and documentation in the event required to Azza Financial Preparing (or all their representative). Please accept a photocopy or perhaps facsimile of the letter, factory-like will remain in file at the offices of Mentor Financial Planning. Messages should be sent to Level 2, 349 Collins Street Melbourne VIC 3 thousands This authority should continue in force right up until withdrawn on paper by me/us. Thankyou. |Allison Callahan | | | |Client 1 Name | |Signature | | | |Simon Callahan | | | | | |Signature | | |Client a couple of Name | | | | | | | | | |Client 1 D. U. B. | |Client a couple of D. U. B. | | | |___/___/___ | |___/___/___ | | | | | |Lot a few, wattle road, Hurstbridge, VIC | |Address | | | | | Ongoing Service Choices 1 . The “No service option

This kind of generally relates to a one off investment positioning based on the agreed expense strategy inside the financial prepare. In picking this option, not any ongoing services or review of the economical plan plus the investment profile is presented to the client unless particularly requested by client or upon the recommendation with the planner. 2 . The “Portfolio valuation option This service provides reports on the worth of your investment portfolio simply. The cost charged would depend on the regularity of the reviews. In deciding on this option, simply no ongoing services or review of the economical plan is definitely provided for the client unless of course specifically requested by the consumer or upon the suggestion of the planner. 3. The “Portfolio review option

This service delivers reports on the value of your investment profile. The payment to be recharged will depend on the frequency of the reviews increase in agreed at that time. The minimum fee is definitely $N/A although this may be higher depending on the complexity in the review. This kind of service contains: An annual/half yearly/quarterly overview of your existing investment profile and its performance looking at further more investment options, if ideal establishing in the event that there have been virtually any changes in legal guidelines, the economic environment and condition of the economic markets that may impact on your recommended expense portfolio In choosing this choice, o ongoing service or review of the financial prepare is supplied to the consumer unless particularly requested by client or upon the recommendation with the planner. four. The “Financial Plan review option This service offers an annual/half yearly/quarterly overview of the overall economic plan strategy and the investment portfolio advised. Each assessment will be presented in the manner of the written report and advice. The fee to be incurred will depend on the frequency with the reviews increase in agreed at the time. The minimal fee can be $__500________, nevertheless this may be larger depending on the complexity of the review. This kind of service includes: roviding reports on the value of your expenditure portfolio; a great annual/half yearly/quarterly review (including comments) of your existing purchase portfolio as well as performance; taking a look at further purchase opportunities, if perhaps appropriate; creating if there are any within legislation, the economic environment and state with the financial marketplaces that may impact on your advised investment profile and the overall financial program strategy; establish if there have been any changes to your personal circumstances or monetary goals and objectives; determine if the overall financial strategy and the expenditure portfolio is definitely continuing in order to meet your financial objectives (including an insurance review); and making any new recommendations (if necessary).

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