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时间：2024-04-11
FINS5537
Individual Assignment – Term 1 2023
Due to be submitted no later than 11.59 pm * Sunday the 23rd of April 2023 in a
soft copy format via the Turnitin link placed on the Moodle course website.
*Please allow a minimum of 20 to 30 minutes to upload your assignment.
Do not wait untill the due date to upload your assignment as the system can
become slow closer to the due date.
NO ASSIGNMENT WILL BE ACCEPTED VIA EMAIL OR ANY OTHER FORM/S
This assignment will comprise a total of 40% of the marks allocated for this unit.
The assignment consists of the preparation of an advice document in a form of a
professional & compliant Statement of Advice (SOA) in relation to the case study. The
SOA must adhere ASIC RG175 requirements in particular the “Clear, Concise and
effective” requirement.
Late submissions will be accepted; however, they will incur 25% penalty for every
24 hours after the due date. HOWEVER, Please Note: YOU CANNOT overwrite your
submission after the due date (No resubmission past the due date).
Submission details
The submission must include the following in ONE PDF document / file:
1. The assignment (SOA) in a PDF format, incorporating all the relevant elements
to ensure the prepared SOA is compliant with the relevant financial services
laws, technically accurate and professionally presented
2. In maximum of 500 word attached to the assignment, prepare a summary of
how you will be adhering the FASEA Code of Ethics’ 5 values and 12 standards
when dealing assisting your clients in this case. Give specific examples.
Use the submission Turnit link provided on Moodle. Only submissions via the
link will be accepted
VERY IMPORTANT _ Rules You Must adhere to
The aim of this task is to demonstrate competence in constructing a professioan
aand compliant SOA. The work therefore must be your own. Turnitin similarity
reporting is strictly applied. Copying from other students work or starting from a
template completed by a student who completed this course or a similar course at
other educational institutions previously is considered plagiarism and will be
penalised and likely lead to failing the assignment.
Your similarity result should be in low single digit (less than 10%). Systematic
plagiarism will be penalised regardless of the similarity score.
Plain and simple this work must be your own work in its entirety.
Similarity between 10 and 20% will be closely investigated
Similarity exceeding 20% will not be graded
You CANNOT use software or other licensees /companies’ templates. This
assignment must be entirely your work cover to cover.
2 of 12
Important Notes:
• The assignment must be typed (Font 11)
• Attempt ALL questions and issues raised in the case study assignment.
• Ensure your SOA contains all the relevant sections, to ensure your SOA is
compliant with the relevant financial services laws, technically accurate and
professionally presented in line with the industry best practice.
• Where appropriate, the use of tables, graphs, flowcharts, etc. is encouraged
to help illustrate your point clearly.
• Show workings and calculations where applicable.
• Clearly state your source references. Be clear in answering the questions and
or clients’ enquiry.
• Assumptions must be clearly stated, assumptions need to be reasonable and
logical and cannot conflict with the facts in the question/s
• Provide the excel spreadsheet projection/working in the appendix of the SOA
document.
Assumptions
o Inflation 2.5%
o AWOTE 3% (use for wages inflation)
o The investment growth rate is to be provided by you, however, you must apply
due diligence on the rate provided and provide your source or research
reference/s. This would be based largely off the investment and the asset
allocation of your investment portfolio
o Use 2022-2023 tax rates where applicable
Refer to the mark allocation and what is expected from you section below for
further details and tips
Important Note: You need to answer the question in a Statement of Advice (SOA) format
in accordance with ASIC guidelines (refer to RG 90 for examples only). The SOA must
have a 2 page “Executive Summary” section where you summarise the client’s current
situation, needs, concerns, goals, objectives and your recommended strategy.
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Case Study - The Marshal Family
John Marshal (aged 44) is married to Betty (aged 43). They are living in Sydney. They
have two children, Siena (aged 8), Leila (aged 6), they both attend a private school, and
they are in years 2 and kindergarten respectively.
John is a corporate Lawyer for a large financial institution. and Betty is a senior accountant.
for an investment firm.
John and Betty have been discussing the need for them to see a financial adviser to help
them put a plan in place to help achieve their goals and objectives.
They would like to ensure they have appropriate budget to allow them to maintain their
current lifestyle and help them save for their key goals, including their children’s
education, paying off their debt, while also making sure they have plans to ensure they
are saving well for their long-term retirement objectives.
Although John and Betty can see the need to focus their attention on their key immediate
priorities of paying off their debt and saving for their children’s education, however, they
also would like to make sure their superannuation is well invested to help them save for
their retirement.
Both John and Betty have reasonable experience when it comes to investment and
management of their financial affairs. Although in recent times John and Betty have been
too busy to pay attention to their financial affairs, they feel with the appropriate help from
the professionals in the field (financial adviser, accountant, etc.) they would be able take
control of their finances and investments and be directed towards achieving their goals
and objectives.
John and Lisa have made wills soon after they got married, however, they haven’t
updated them since.
John and Lisa have a home and contents insurance cover they established when they
purchased their current family home. They have their motor vehicle comprehensively
insured. They also have family private health insurance coverage. However, they are
unsure if their general insurance covers are adequate and appropriate.
Their personal life insurance is limited to what they have inside their respective
superannuation accounts.
John and Betty have met with you and left you with the information below after the first interview.
4 of 12
John Betty
Income salary & wages *
(excludes employer SG
contribution)
$280,000
$280,000
Home (principal residence)
Purchased in 2011
$2,200,000 (Joint tenancy)
Home loan, the current
loan interest rate is 6.2%
variable rate (current
schedule repayment is
$12,000 p.m.)
The current loan
balance
outstanding
$980,000
Home contents
$220,000
Motor Vehicle
$80,000
Bank Account (at call)
$24,000 (Joint)
Term deposit @ 1.9%
maturing in 2 weeks
$55,000 (Joint)
Employer superannuation
(retail funds)
$410,000
(Insurance inside the
superannuation fund of
$700k life and TPD)
Superannuation Fund
Investment: Growth Fund
(100% growth assets)
$340,000
(Insurance inside the
superannuation fund $450K
life and TPD)
Fund’s Investment: Moderate
(50 % Growth, 50%
Defensive assets)
Australian shares
managed funds (Acquired
in Sep 2018)
Market value $ 33,000
Cost Base $28,000
Living expenses (excludes
school fees and Mortgage
repayments )
$100,000 p.a
# John and Betty’s current living expenses will continue until
retirement.
Notes to the supplied information:
*The employer makes only the mandated employer contribution (SGC) to their
nominated superannuation fund.
5 of 12
You need to advise John and Betty on the issues below, taking into account the
following specific issues and concerns:
You need to clearly address the following issues: where you are providing advice
on each of the points below you need to ensure you highlight the benefits and the
risk of the advice relevant to the clients’ personal circumstances. You also need to
clearly demonstrate how your advice to the clients meets the best interest duty
Analyse and address the following goals, objectives, needs, and concerns and
whether they can achieve their objectives for John and Betty including their
retirement objectives and how. (Providing them with options and alternatives)
1. Retirement Planning:
John would like to retire once he reaches age 65. Betty is planning to retire
when she reaches age 60. However, they are happy to postpone retirement
for a few more years if this would help them achieve a more comfortable
retirement as John is happy to scale down his workload and stay working on
a consultancy basis for a few more years as a semi- retirement plan.
John and Betty think they need an after-tax income of $85,000 in today’s
dollars during their retirement as by then they think their debt will be paid out
(assume this income can be produced tax free at retirement). You need to
provide the calculation supporting your projections of their retirement needs.
2. Superannuation
John and Betty’s currently have their superannuation contributions go to an
employer nominated retail fund. They would like to know whether their
superannuation are invested appropriately, they also would like to know the
benefits and risks of establishing an SMSF relevant to their own specific and
personal circumstances. Be specific by relating to John and Betty specific
circumstances.
3. Gearing and debt Management:
John and Betty would like to pay off their current debt particularly their home loan as
soon as possible.
However, they are happy to consider the concept of borrowing to invest if they
feel it can help them achieve their retirement aim. Advice John and Betty and
the pros and Cons of such a strategy. Be specific on relating you advice to
John and Betty’s personal circumstances.
4. Investments
I. Managed Funds: John and Betty would like to get some advice on
the Australia shares managed funds they hold and to be provide
options on whether they should continue to hold this investment
currently held in John’s name. Advise John and Betty on the pros
and cons on holding this investment and explain, you also need to
elaborate on what can be done to make their investment more
diversified and potentially what other options available to them.
II. Term Deposit: the TD is maturing soon, and they would like some
advice on possible options available for them.
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5. Children education
John and Betty feel strongly about providing their children with good
education, They would like to continue to be able to provide a private school
education for their children. They feel they should have a budget of around
$30,000 p.a. in today’s per child for both primary and secondary school
6. Holiday
They would also like to take a family trip to Disney Land with the kids in the next 2- 4
years for which the expected cost is approximately $25,000 in today’s dollars.
7. Insurance
John and Betty would like to ensure they have adequate general and personal
insurance. For the personal insurance John and Betty only have the insurance
inside their employer superannuation fund, you are required to provide a clear
needs analysis to identify their different personal insurance needs (Life, TPD,
Trauma and income protection) and make appropriate recommendations on
the amount and type of covers required. You also need to provide insurance
product recommendations and supply quotes of premiums.
8. Estate Planning
They would like you to consider their estate planning and asset protection
needs. You need to provide a clear recommendation on all their estate
planning needs. (Avoid large generic contents in this section). Information
provided needs to be relevant and specific to the clients’ circumstances.
9. Risk Profiling - John and Betty’s attitude to risk:
o John likes owning shares as from his financial background he understands
that Australian shares and shares in general may have a higher volatility
than some other asset classes. However, he also understands shares
tend to perform well over the long term. John is comfortable with taking
risk if he can understand it and see that there are possible rewards.
o Betty on the other hand was brought up in a very conservative family
where her family had most of their money invested either in government
bonds or term deposits with one of the major banks. Betty’s family have
always talked in front of her that they dislike share investments as they
feel they can't sleep for worry about market events. However, they have
also said to Betty several times that she could never go wrong with
property investment and have always encouraged her and John to buy a
house when they first got married. Betty therefore is more conservative
than John when it comes to risky investments; however, as a result of
studying finance subjects at university she can see that sometimes there
could be some merit in taking calculated risks to achieve better returns.
o John and Betty have both indicated they wouldn’t mind taking some
calculated investment risks to help them achieve their objectives.
10. Projections
Projections should be made up to John & Betty’s life expectancy + 8 years.
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As part of your advice to the clients you need to address the following:
i. Get to know the clients by clearly analysing their goals and objectives needs and
concerns.
ii. Cash flow and net worth tables.
a) Establish their personal financial statements (balance sheet or net worth i.e. asset
less liability, cash flow analysis i.e. income less expenses to identify the client
surplus/deficit cash position). This needs to be done for both before your advice
(i.e. the current status quo) and post your advice incorporating your
recommendations
b) Prepare and present cash flow and asset projections (include projections of cash
flows for John and Betty, presenting both pre-tax and post-tax results).
iii. Risk profile and asset allocations
a) Establish their risk profile and as a result their appropriate asset allocations,
addressing their target asset allocations diversification for their different investment
including their superannuation. And their investment portfolio recommendations,
providing reasoning and justifications.
iv. Goals objectives funding
a) You need to illustrate a clear projected estimate of the financial target and the
source and method of funding the clients different goals and objectives , this
includes their retirement and other short-, medium- and long-term goals, etc. as
and where applicable)
v. Insurance needs analysis
a) Perform clear needs analysis of the insurance needs and establish their needs and
affordability of the insurance premium to justify your recommendations.
b) Provide appropriate and accurate insurance costing by obtain premium quotes and
estimates there are some websites that provide you with insurance quotes online).
vi. Provide assumptions used and justifications (cost, risk, suitability, etc.) where
required.
vii. Use visual aids like diagrams tables and charts to assist with your illustrations.
viii. Clear calculation and projections as needed.
Your task in summary is to prepare a complete and compliant Statement of Advice (SOA)
for John and Betty. The information provided in the client scenario is to be used in
preparing your calculations and advice. As the assignment is to be a SOA for clients, it
should be in a suitable format and use appropriate language. Clarity and conciseness are
important but full explanations are required.
Your SOA should clearly show the structure you recommend for their portfolio, how they
can achieve their goals and where the capital and income will be sourced. Your SOA
should address a long-term plan to provide income and should include projections.
8 of 12
Individual Assignment Rubrics and marking guidance
The rubric below is read conjunction of the assignment expectation listed below
Very Good to Excellent ( D – HD) Satisfactory (Pass to Credit) Unsatisfactory
• Clear and appropriate
SOA/assignment layout and
structure
• Clearly addressing and providing
in depth analysis of all the clients
goals, objectives, risks and
concerns
• Clear and thorough analysis in
determining the client risk
profile addressing different goals
and time horizon (i.e. utilizing
goal-based risk profiling)
• Clearly identify strategies to help
the clients achieve their
objectives, with addressing clear
alternatives/ scenario analysis
• Clear and concise and effective
articulation in addressing the
required contents requested in
the assignment question
• Good and efficient use of Visual aids
(table, graphs, headings, etc.) for
illustration
• The SOA is Professionally
presented flow nicely and reader
friendly
• Meeting the compliance
requirement of an SOA.
• Clearly demonstrating the advice
meets Best interest duty
• Highlighting the risk of the advice
and how they can mitigated
• Meeting best practice standard
• Providing clear cash flow
projections
• Regularly relating the advice to the
client personal circumstances and
facts in the case study
• Little or no generic information in
the body of the advice
• Professionally prepared and
presented PowerPoint slides with
detailed speakers notes
• Clear evidence of independent
research and analysis incorporated
throughout assignment as required
• Appropriate use of referencing where
necessary
• Thoroughly Addressing all the points of
what expected of you below
• Very Low Similarity (Turnitin
report)
• Adequate SOA/ assignment
layout and structure.
• Clearly addressing and analysing
the clients goals, objectives, risks
and concerns
• Clear and adequate analysis in
determining the client risk profile
addressing different goals and
time horizon (i.e. utilizing goal-
based risk profiling)
• Clearly identify strategies to help
the clients achieve their
objectives, with addressing clear
alternatives and scenario analysis
• Clear and somewhat concise and
effective articulation in
addressing the required contents
requested in the assignment
question
• Adequate use of Good and efficient
use of Visual aids (table, graphs,
headings, etc.) for illustration
• The SOA is reasonably Professionally
presented and reader friendly
• Meeting the compliance
requirement of an SOA.
• demonstrating the advice meets
Best interest duty
• Clearly highlighting the risks of the
advice and how they can mitigated
• Providing clear cash flow projections
• Adequately relating this advice to
the client personal circumstances
and facts in the case study
• Some generic information in the
body of the advice
• Clearly prepared and presented
PowerPoint slides with detailed
speakers notes
• Some evidence of independent research
and analysis as required
• Appropriate use of referencing as
required
• Covering the key points of what expected
of you below
• Low Similarity (Turnitin report)
• Poor assignment layout and/or structure
• No Adequately addressing or
analysing the clients goals,
objectives, risks and concerns
• No clear analysis in determining
the client risk profile addressing
different goals and time horizon
(i.e. utilizing goal-based risk
profiling)
• Vague or unclear strategies
• Failing certain compliance
requirement.
• Not adequately demonstrating the
advice meets Best interest duty
• Not highlighting the risks of the
advice and how they can mitigated
• No or unclear cash flow projections
• High use of generic information
• Poor presentation overall
• No demonstrated independent
research or analysis
• Little or no use of references
• Not adequately Covering the points of
what expected of you below
• High Similarity (Turnitin report)
9 of 12
Assignment mark allocation & what is expected from you
Mark Allocation
Marks breakdown (out of 100)
Overall Presentation, including executive summary tables charts, etc. 20
Marks.
Disclosure and compliance 15 marks
Analysing current situation, identifying the client goals, objectives needs and concerns
(including risk profile) 20marks
Projections and illustrations 15 marks
Strategy and recommendation 30 marks
What is expected from you (this has been collated from provided past guidance feedback
to students doing this assignment)
Deliver appropriate advice that address all the clients goals, objectives, needs, concerns
and special circumstances. The advice need to meet best interest duty and demonstrate
the client will be in a better position in following the advice and recommendation you have
presented. You need to clearly identify the risks of the advice and how they can be
mitigated.
Your SOA The SOA need to be professionally presented and reader friendly, aiming for
best practice and not for minimum standards. The statement of advice based entirely on
your own work. The SOA need to be compliant with all the financial services regulation
for the format, the advice itself and all appropriate and required disclosures. Providing a
compliant statement of Advice (i.e. disclosure, meeting the best interest duty, regulatory
etc.). The SOA must adhere ASIC RG175 requirements in particular the “Clear, Concise
and effective” requirement
Current situation: Building and structuring the client current situation (including pre
advice cash flow and net worth)
Clearly analysing the fact in the case study
Appropriately addressing all the client goals, objectives, needs, concerns and special
circumstances
Providing a client with strategy that addresses all the client goals, objectives and
concerns and aims to meet the client goals
Providing client with options and solutions – providing alternative strategies
Highlighting how the strategy is in the best interest of the client – i.e. meeting the best
interest duty
Highlighting the risk of the strategy (if any)
Addressing how risks can be mitigated.
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Providing post advice cash flow and net worth & the requested projections going
forward
Providing specific product recommendations to execute the strategy
Obtaining Authority from the client to proceed with the recommendation
Retirement Advice: you need to perform appropriate calculation to identify the amount
required to fund retirement income and other expenditures (if any) the clients intending
to undertake. You need to clearly demonstrate through both cash flow and net worth
projections how the clients is able (or unable if they don’t have sufficient resources) to
fund their retirement
Insurance Advice: you need to perform needs analysis based on the clients’ facts and
special circumstances listed in the case study. You need to identify needs and gaps and
provide clear recommendations of what insurance covers should be sought, increased or
upgraded, cover type, sum insured, etc . For Insurance quotes, you can make appropriate
and reasonable assumptions (i.e. client is in good health and is a non smoker, providing
there is no information to the contrary in the case study).
Estate Planning Advice: needs to be clear and non-generic recommendations. The
advice in this section must relate specifically to the client. You need to address more
issues than generic issues related to wills and Power of Attorney
Risk profile section – you are required to address the key issues and justify accordingly.
You therefore needed to make clear reference to how you determine the client risk profile
(Client risk tolerance, Time horizon, Goals and objective, Liquidity needs and investment
experience, etc.)
SMSF & Superannuation Advice: you need to avoid including generic information and
general pros and cons. Your advice related to SMSF (to set or not to set up, to keep and
not to keep, etc.) need to be specific to the client’s circumstances and facts listed in the
case study.
Other superannuation advice need to be provided with clear justification maintaining or
switching. All super switching advice need to refer to ASIC information sheet INFO182.
Switching Advice: All switching advice (superannuation, investment and insurance)
need to be clearly justified.
Projections Clear cash flow and net worth projection to be provided- you need reference
to your projection in the body of the SOA in relation to the specific goals (i.e retirement
funding, etc.) Cash flow projections and net worth projections to justify strategy and
demonstrate if financial goals and objectives are met.
Presentation – needs to be professionally presented and your SOA document must flow
nicely and need to be reader friendly
11 of 12
Disclosure & Compliance – Appropriate disclosure of fees and benefits and meeting the
regulatory requirement of advice documentation.
Technically accurate advice - It’s critically important to provide accurate advice for the
client to rely on
Again, always relate to the clients' specific circumstances throughout the SOA and ensure
you are specific when explaining concepts, rules, regulations, legislative changes in
terms of highlighting their impact on the clients specific and relevant.
Key sections you must include in the SOA:
• Covering letter
• Cover page
• Table of Content
• Executive summary (2-3 pages max)
• scope of advice
• Assumptions
• Current situation- information about the client
• Goals and objectives analysis including needs, concerns and special
circumstances.
• Risk profile analysis
• Your advice and recommendations
• Investment advice
• Retirement planning advice
• Insurance advice
• Estate planning advice
• Superannuation and SMSF advice
• Other advice related to specific goals and objectives (education funding,
specific questions, etc.)
• Meeting best interest duty
• Risks of the advice and how they are mitigated
• Disclosure sections – meeting all legal and best practice disclosure
requirements:
• The cost of the advice and how you are paid.
• All fees, commission and other benefits including soft dollar commissions
• Specific disclaimers.
• How to proceed. Authority to proceed and actions to proceed
• Implementation schedule
• Appendices
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SCHEDULE & MILESTONE TO ACHIEVE
Week one: Analyse all the facts in the case study including goals, objectives, needs,
concerns and special circumstances + cash flow and net worth pre advice – formulate
the current situation part of the SOA.
Week Two: Start Building the skeleton of the SOA, do your research including calculation
of all financial targets and commence projections.
Week Three: Finalise projections and final draft of strategy recommendations
Week Four: Product research and finalise strategy recommendations.
Week five: Bring it all together constructing and finalising the SOA for submission.
End of Assignment
Individual Assignment – Term 1 2023
Due to be submitted no later than 11.59 pm * Sunday the 23rd of April 2023 in a
soft copy format via the Turnitin link placed on the Moodle course website.
*Please allow a minimum of 20 to 30 minutes to upload your assignment.
Do not wait untill the due date to upload your assignment as the system can
become slow closer to the due date.
NO ASSIGNMENT WILL BE ACCEPTED VIA EMAIL OR ANY OTHER FORM/S
This assignment will comprise a total of 40% of the marks allocated for this unit.
The assignment consists of the preparation of an advice document in a form of a
professional & compliant Statement of Advice (SOA) in relation to the case study. The
SOA must adhere ASIC RG175 requirements in particular the “Clear, Concise and
effective” requirement.
Late submissions will be accepted; however, they will incur 25% penalty for every
24 hours after the due date. HOWEVER, Please Note: YOU CANNOT overwrite your
submission after the due date (No resubmission past the due date).
Submission details
The submission must include the following in ONE PDF document / file:
1. The assignment (SOA) in a PDF format, incorporating all the relevant elements
to ensure the prepared SOA is compliant with the relevant financial services
laws, technically accurate and professionally presented
2. In maximum of 500 word attached to the assignment, prepare a summary of
how you will be adhering the FASEA Code of Ethics’ 5 values and 12 standards
when dealing assisting your clients in this case. Give specific examples.
Use the submission Turnit link provided on Moodle. Only submissions via the
link will be accepted
VERY IMPORTANT _ Rules You Must adhere to
The aim of this task is to demonstrate competence in constructing a professioan
aand compliant SOA. The work therefore must be your own. Turnitin similarity
reporting is strictly applied. Copying from other students work or starting from a
template completed by a student who completed this course or a similar course at
other educational institutions previously is considered plagiarism and will be
penalised and likely lead to failing the assignment.
Your similarity result should be in low single digit (less than 10%). Systematic
plagiarism will be penalised regardless of the similarity score.
Plain and simple this work must be your own work in its entirety.
Similarity between 10 and 20% will be closely investigated
Similarity exceeding 20% will not be graded
You CANNOT use software or other licensees /companies’ templates. This
assignment must be entirely your work cover to cover.
2 of 12
Important Notes:
• The assignment must be typed (Font 11)
• Attempt ALL questions and issues raised in the case study assignment.
• Ensure your SOA contains all the relevant sections, to ensure your SOA is
compliant with the relevant financial services laws, technically accurate and
professionally presented in line with the industry best practice.
• Where appropriate, the use of tables, graphs, flowcharts, etc. is encouraged
to help illustrate your point clearly.
• Show workings and calculations where applicable.
• Clearly state your source references. Be clear in answering the questions and
or clients’ enquiry.
• Assumptions must be clearly stated, assumptions need to be reasonable and
logical and cannot conflict with the facts in the question/s
• Provide the excel spreadsheet projection/working in the appendix of the SOA
document.
Assumptions
o Inflation 2.5%
o AWOTE 3% (use for wages inflation)
o The investment growth rate is to be provided by you, however, you must apply
due diligence on the rate provided and provide your source or research
reference/s. This would be based largely off the investment and the asset
allocation of your investment portfolio
o Use 2022-2023 tax rates where applicable
Refer to the mark allocation and what is expected from you section below for
further details and tips
Important Note: You need to answer the question in a Statement of Advice (SOA) format
in accordance with ASIC guidelines (refer to RG 90 for examples only). The SOA must
have a 2 page “Executive Summary” section where you summarise the client’s current
situation, needs, concerns, goals, objectives and your recommended strategy.
3 of 12
Case Study - The Marshal Family
John Marshal (aged 44) is married to Betty (aged 43). They are living in Sydney. They
have two children, Siena (aged 8), Leila (aged 6), they both attend a private school, and
they are in years 2 and kindergarten respectively.
John is a corporate Lawyer for a large financial institution. and Betty is a senior accountant.
for an investment firm.
John and Betty have been discussing the need for them to see a financial adviser to help
them put a plan in place to help achieve their goals and objectives.
They would like to ensure they have appropriate budget to allow them to maintain their
current lifestyle and help them save for their key goals, including their children’s
education, paying off their debt, while also making sure they have plans to ensure they
are saving well for their long-term retirement objectives.
Although John and Betty can see the need to focus their attention on their key immediate
priorities of paying off their debt and saving for their children’s education, however, they
also would like to make sure their superannuation is well invested to help them save for
their retirement.
Both John and Betty have reasonable experience when it comes to investment and
management of their financial affairs. Although in recent times John and Betty have been
too busy to pay attention to their financial affairs, they feel with the appropriate help from
the professionals in the field (financial adviser, accountant, etc.) they would be able take
control of their finances and investments and be directed towards achieving their goals
and objectives.
John and Lisa have made wills soon after they got married, however, they haven’t
updated them since.
John and Lisa have a home and contents insurance cover they established when they
purchased their current family home. They have their motor vehicle comprehensively
insured. They also have family private health insurance coverage. However, they are
unsure if their general insurance covers are adequate and appropriate.
Their personal life insurance is limited to what they have inside their respective
superannuation accounts.
John and Betty have met with you and left you with the information below after the first interview.
4 of 12
John Betty
Income salary & wages *
(excludes employer SG
contribution)
$280,000
$280,000
Home (principal residence)
Purchased in 2011
$2,200,000 (Joint tenancy)
Home loan, the current
loan interest rate is 6.2%
variable rate (current
schedule repayment is
$12,000 p.m.)
The current loan
balance
outstanding
$980,000
Home contents
$220,000
Motor Vehicle
$80,000
Bank Account (at call)
$24,000 (Joint)
Term deposit @ 1.9%
maturing in 2 weeks
$55,000 (Joint)
Employer superannuation
(retail funds)
$410,000
(Insurance inside the
superannuation fund of
$700k life and TPD)
Superannuation Fund
Investment: Growth Fund
(100% growth assets)
$340,000
(Insurance inside the
superannuation fund $450K
life and TPD)
Fund’s Investment: Moderate
(50 % Growth, 50%
Defensive assets)
Australian shares
managed funds (Acquired
in Sep 2018)
Market value $ 33,000
Cost Base $28,000
Living expenses (excludes
school fees and Mortgage
repayments )
$100,000 p.a
# John and Betty’s current living expenses will continue until
retirement.
Notes to the supplied information:
*The employer makes only the mandated employer contribution (SGC) to their
nominated superannuation fund.
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You need to advise John and Betty on the issues below, taking into account the
following specific issues and concerns:
You need to clearly address the following issues: where you are providing advice
on each of the points below you need to ensure you highlight the benefits and the
risk of the advice relevant to the clients’ personal circumstances. You also need to
clearly demonstrate how your advice to the clients meets the best interest duty
Analyse and address the following goals, objectives, needs, and concerns and
whether they can achieve their objectives for John and Betty including their
retirement objectives and how. (Providing them with options and alternatives)
1. Retirement Planning:
John would like to retire once he reaches age 65. Betty is planning to retire
when she reaches age 60. However, they are happy to postpone retirement
for a few more years if this would help them achieve a more comfortable
retirement as John is happy to scale down his workload and stay working on
a consultancy basis for a few more years as a semi- retirement plan.
John and Betty think they need an after-tax income of $85,000 in today’s
dollars during their retirement as by then they think their debt will be paid out
(assume this income can be produced tax free at retirement). You need to
provide the calculation supporting your projections of their retirement needs.
2. Superannuation
John and Betty’s currently have their superannuation contributions go to an
employer nominated retail fund. They would like to know whether their
superannuation are invested appropriately, they also would like to know the
benefits and risks of establishing an SMSF relevant to their own specific and
personal circumstances. Be specific by relating to John and Betty specific
circumstances.
3. Gearing and debt Management:
John and Betty would like to pay off their current debt particularly their home loan as
soon as possible.
However, they are happy to consider the concept of borrowing to invest if they
feel it can help them achieve their retirement aim. Advice John and Betty and
the pros and Cons of such a strategy. Be specific on relating you advice to
John and Betty’s personal circumstances.
4. Investments
I. Managed Funds: John and Betty would like to get some advice on
the Australia shares managed funds they hold and to be provide
options on whether they should continue to hold this investment
currently held in John’s name. Advise John and Betty on the pros
and cons on holding this investment and explain, you also need to
elaborate on what can be done to make their investment more
diversified and potentially what other options available to them.
II. Term Deposit: the TD is maturing soon, and they would like some
advice on possible options available for them.
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5. Children education
John and Betty feel strongly about providing their children with good
education, They would like to continue to be able to provide a private school
education for their children. They feel they should have a budget of around
$30,000 p.a. in today’s per child for both primary and secondary school
6. Holiday
They would also like to take a family trip to Disney Land with the kids in the next 2- 4
years for which the expected cost is approximately $25,000 in today’s dollars.
7. Insurance
John and Betty would like to ensure they have adequate general and personal
insurance. For the personal insurance John and Betty only have the insurance
inside their employer superannuation fund, you are required to provide a clear
needs analysis to identify their different personal insurance needs (Life, TPD,
Trauma and income protection) and make appropriate recommendations on
the amount and type of covers required. You also need to provide insurance
product recommendations and supply quotes of premiums.
8. Estate Planning
They would like you to consider their estate planning and asset protection
needs. You need to provide a clear recommendation on all their estate
planning needs. (Avoid large generic contents in this section). Information
provided needs to be relevant and specific to the clients’ circumstances.
9. Risk Profiling - John and Betty’s attitude to risk:
o John likes owning shares as from his financial background he understands
that Australian shares and shares in general may have a higher volatility
than some other asset classes. However, he also understands shares
tend to perform well over the long term. John is comfortable with taking
risk if he can understand it and see that there are possible rewards.
o Betty on the other hand was brought up in a very conservative family
where her family had most of their money invested either in government
bonds or term deposits with one of the major banks. Betty’s family have
always talked in front of her that they dislike share investments as they
feel they can't sleep for worry about market events. However, they have
also said to Betty several times that she could never go wrong with
property investment and have always encouraged her and John to buy a
house when they first got married. Betty therefore is more conservative
than John when it comes to risky investments; however, as a result of
studying finance subjects at university she can see that sometimes there
could be some merit in taking calculated risks to achieve better returns.
o John and Betty have both indicated they wouldn’t mind taking some
calculated investment risks to help them achieve their objectives.
10. Projections
Projections should be made up to John & Betty’s life expectancy + 8 years.
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As part of your advice to the clients you need to address the following:
i. Get to know the clients by clearly analysing their goals and objectives needs and
concerns.
ii. Cash flow and net worth tables.
a) Establish their personal financial statements (balance sheet or net worth i.e. asset
less liability, cash flow analysis i.e. income less expenses to identify the client
surplus/deficit cash position). This needs to be done for both before your advice
(i.e. the current status quo) and post your advice incorporating your
recommendations
b) Prepare and present cash flow and asset projections (include projections of cash
flows for John and Betty, presenting both pre-tax and post-tax results).
iii. Risk profile and asset allocations
a) Establish their risk profile and as a result their appropriate asset allocations,
addressing their target asset allocations diversification for their different investment
including their superannuation. And their investment portfolio recommendations,
providing reasoning and justifications.
iv. Goals objectives funding
a) You need to illustrate a clear projected estimate of the financial target and the
source and method of funding the clients different goals and objectives , this
includes their retirement and other short-, medium- and long-term goals, etc. as
and where applicable)
v. Insurance needs analysis
a) Perform clear needs analysis of the insurance needs and establish their needs and
affordability of the insurance premium to justify your recommendations.
b) Provide appropriate and accurate insurance costing by obtain premium quotes and
estimates there are some websites that provide you with insurance quotes online).
vi. Provide assumptions used and justifications (cost, risk, suitability, etc.) where
required.
vii. Use visual aids like diagrams tables and charts to assist with your illustrations.
viii. Clear calculation and projections as needed.
Your task in summary is to prepare a complete and compliant Statement of Advice (SOA)
for John and Betty. The information provided in the client scenario is to be used in
preparing your calculations and advice. As the assignment is to be a SOA for clients, it
should be in a suitable format and use appropriate language. Clarity and conciseness are
important but full explanations are required.
Your SOA should clearly show the structure you recommend for their portfolio, how they
can achieve their goals and where the capital and income will be sourced. Your SOA
should address a long-term plan to provide income and should include projections.
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Individual Assignment Rubrics and marking guidance
The rubric below is read conjunction of the assignment expectation listed below
Very Good to Excellent ( D – HD) Satisfactory (Pass to Credit) Unsatisfactory
• Clear and appropriate
SOA/assignment layout and
structure
• Clearly addressing and providing
in depth analysis of all the clients
goals, objectives, risks and
concerns
• Clear and thorough analysis in
determining the client risk
profile addressing different goals
and time horizon (i.e. utilizing
goal-based risk profiling)
• Clearly identify strategies to help
the clients achieve their
objectives, with addressing clear
alternatives/ scenario analysis
• Clear and concise and effective
articulation in addressing the
required contents requested in
the assignment question
• Good and efficient use of Visual aids
(table, graphs, headings, etc.) for
illustration
• The SOA is Professionally
presented flow nicely and reader
friendly
• Meeting the compliance
requirement of an SOA.
• Clearly demonstrating the advice
meets Best interest duty
• Highlighting the risk of the advice
and how they can mitigated
• Meeting best practice standard
• Providing clear cash flow
projections
• Regularly relating the advice to the
client personal circumstances and
facts in the case study
• Little or no generic information in
the body of the advice
• Professionally prepared and
presented PowerPoint slides with
detailed speakers notes
• Clear evidence of independent
research and analysis incorporated
throughout assignment as required
• Appropriate use of referencing where
necessary
• Thoroughly Addressing all the points of
what expected of you below
• Very Low Similarity (Turnitin
report)
• Adequate SOA/ assignment
layout and structure.
• Clearly addressing and analysing
the clients goals, objectives, risks
and concerns
• Clear and adequate analysis in
determining the client risk profile
addressing different goals and
time horizon (i.e. utilizing goal-
based risk profiling)
• Clearly identify strategies to help
the clients achieve their
objectives, with addressing clear
alternatives and scenario analysis
• Clear and somewhat concise and
effective articulation in
addressing the required contents
requested in the assignment
question
• Adequate use of Good and efficient
use of Visual aids (table, graphs,
headings, etc.) for illustration
• The SOA is reasonably Professionally
presented and reader friendly
• Meeting the compliance
requirement of an SOA.
• demonstrating the advice meets
Best interest duty
• Clearly highlighting the risks of the
advice and how they can mitigated
• Providing clear cash flow projections
• Adequately relating this advice to
the client personal circumstances
and facts in the case study
• Some generic information in the
body of the advice
• Clearly prepared and presented
PowerPoint slides with detailed
speakers notes
• Some evidence of independent research
and analysis as required
• Appropriate use of referencing as
required
• Covering the key points of what expected
of you below
• Low Similarity (Turnitin report)
• Poor assignment layout and/or structure
• No Adequately addressing or
analysing the clients goals,
objectives, risks and concerns
• No clear analysis in determining
the client risk profile addressing
different goals and time horizon
(i.e. utilizing goal-based risk
profiling)
• Vague or unclear strategies
• Failing certain compliance
requirement.
• Not adequately demonstrating the
advice meets Best interest duty
• Not highlighting the risks of the
advice and how they can mitigated
• No or unclear cash flow projections
• High use of generic information
• Poor presentation overall
• No demonstrated independent
research or analysis
• Little or no use of references
• Not adequately Covering the points of
what expected of you below
• High Similarity (Turnitin report)
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Assignment mark allocation & what is expected from you
Mark Allocation
Marks breakdown (out of 100)
Overall Presentation, including executive summary tables charts, etc. 20
Marks.
Disclosure and compliance 15 marks
Analysing current situation, identifying the client goals, objectives needs and concerns
(including risk profile) 20marks
Projections and illustrations 15 marks
Strategy and recommendation 30 marks
What is expected from you (this has been collated from provided past guidance feedback
to students doing this assignment)
Deliver appropriate advice that address all the clients goals, objectives, needs, concerns
and special circumstances. The advice need to meet best interest duty and demonstrate
the client will be in a better position in following the advice and recommendation you have
presented. You need to clearly identify the risks of the advice and how they can be
mitigated.
Your SOA The SOA need to be professionally presented and reader friendly, aiming for
best practice and not for minimum standards. The statement of advice based entirely on
your own work. The SOA need to be compliant with all the financial services regulation
for the format, the advice itself and all appropriate and required disclosures. Providing a
compliant statement of Advice (i.e. disclosure, meeting the best interest duty, regulatory
etc.). The SOA must adhere ASIC RG175 requirements in particular the “Clear, Concise
and effective” requirement
Current situation: Building and structuring the client current situation (including pre
advice cash flow and net worth)
Clearly analysing the fact in the case study
Appropriately addressing all the client goals, objectives, needs, concerns and special
circumstances
Providing a client with strategy that addresses all the client goals, objectives and
concerns and aims to meet the client goals
Providing client with options and solutions – providing alternative strategies
Highlighting how the strategy is in the best interest of the client – i.e. meeting the best
interest duty
Highlighting the risk of the strategy (if any)
Addressing how risks can be mitigated.
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Providing post advice cash flow and net worth & the requested projections going
forward
Providing specific product recommendations to execute the strategy
Obtaining Authority from the client to proceed with the recommendation
Retirement Advice: you need to perform appropriate calculation to identify the amount
required to fund retirement income and other expenditures (if any) the clients intending
to undertake. You need to clearly demonstrate through both cash flow and net worth
projections how the clients is able (or unable if they don’t have sufficient resources) to
fund their retirement
Insurance Advice: you need to perform needs analysis based on the clients’ facts and
special circumstances listed in the case study. You need to identify needs and gaps and
provide clear recommendations of what insurance covers should be sought, increased or
upgraded, cover type, sum insured, etc . For Insurance quotes, you can make appropriate
and reasonable assumptions (i.e. client is in good health and is a non smoker, providing
there is no information to the contrary in the case study).
Estate Planning Advice: needs to be clear and non-generic recommendations. The
advice in this section must relate specifically to the client. You need to address more
issues than generic issues related to wills and Power of Attorney
Risk profile section – you are required to address the key issues and justify accordingly.
You therefore needed to make clear reference to how you determine the client risk profile
(Client risk tolerance, Time horizon, Goals and objective, Liquidity needs and investment
experience, etc.)
SMSF & Superannuation Advice: you need to avoid including generic information and
general pros and cons. Your advice related to SMSF (to set or not to set up, to keep and
not to keep, etc.) need to be specific to the client’s circumstances and facts listed in the
case study.
Other superannuation advice need to be provided with clear justification maintaining or
switching. All super switching advice need to refer to ASIC information sheet INFO182.
Switching Advice: All switching advice (superannuation, investment and insurance)
need to be clearly justified.
Projections Clear cash flow and net worth projection to be provided- you need reference
to your projection in the body of the SOA in relation to the specific goals (i.e retirement
funding, etc.) Cash flow projections and net worth projections to justify strategy and
demonstrate if financial goals and objectives are met.
Presentation – needs to be professionally presented and your SOA document must flow
nicely and need to be reader friendly
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Disclosure & Compliance – Appropriate disclosure of fees and benefits and meeting the
regulatory requirement of advice documentation.
Technically accurate advice - It’s critically important to provide accurate advice for the
client to rely on
Again, always relate to the clients' specific circumstances throughout the SOA and ensure
you are specific when explaining concepts, rules, regulations, legislative changes in
terms of highlighting their impact on the clients specific and relevant.
Key sections you must include in the SOA:
• Covering letter
• Cover page
• Table of Content
• Executive summary (2-3 pages max)
• scope of advice
• Assumptions
• Current situation- information about the client
• Goals and objectives analysis including needs, concerns and special
circumstances.
• Risk profile analysis
• Your advice and recommendations
• Investment advice
• Retirement planning advice
• Insurance advice
• Estate planning advice
• Superannuation and SMSF advice
• Other advice related to specific goals and objectives (education funding,
specific questions, etc.)
• Meeting best interest duty
• Risks of the advice and how they are mitigated
• Disclosure sections – meeting all legal and best practice disclosure
requirements:
• The cost of the advice and how you are paid.
• All fees, commission and other benefits including soft dollar commissions
• Specific disclaimers.
• How to proceed. Authority to proceed and actions to proceed
• Implementation schedule
• Appendices
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SCHEDULE & MILESTONE TO ACHIEVE
Week one: Analyse all the facts in the case study including goals, objectives, needs,
concerns and special circumstances + cash flow and net worth pre advice – formulate
the current situation part of the SOA.
Week Two: Start Building the skeleton of the SOA, do your research including calculation
of all financial targets and commence projections.
Week Three: Finalise projections and final draft of strategy recommendations
Week Four: Product research and finalise strategy recommendations.
Week five: Bring it all together constructing and finalising the SOA for submission.
End of Assignment
