Advanced Financial Planning (DFP8_AS_v2A2)

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Advanced Financial Planning (DFP8_AS_v2A2)

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Assignment result (assessor to complete)

Result — first submission (Details for each activity are shown in the table below)
Parts that must be resubmitted:
Result — resubmission (if applicable)

Result summary (assessor to complete)

First submission Resubmission (if required)
Part 3 Demonstrated Demonstrated
Part 4 Demonstrated Demonstrated


Before you begin

Advanced Financial Planning (DFP8_AS_v2A2)

Read everything in this document before you start your assignment for Advanced Financial Planning (DFP8v2).

About this document

This document includes the following four (4) parts:

  • Part 1: Instructions for completing and submitting this assignment and statement of competency
  • Part 2: The case study
  • Part 3: The SOA:

      –    Statement of advice (SOA) template

      –    SOA Appendix 1: Cash flow tables (financial position before and after implementation of strategy)

      –    SOA Appendix 2: Projections and assumptions

  • Part 4: Assignment questions (Parts A–G).

How to use the study plan

We recommend that you use the study plan for this subject to help you manage your time to complete the assignment within your enrolment period. Your study plan is in the KapLearn Advanced Financial Planning (DFP8v2) subject room.

Part 1: Instructions for completing and submitting this assignment

Completing the assignment

The assignment

For this assignment you are required to complete the following tasks:

In your assessment workbook:

  • Review Part 1: Review the key advice areas that you are required to be proficient in, to complete this assignment.
  • Part 2: Case study
  • Complete Part 3 (the SOA template), using the data in the case study

      –    complete SOA Appendix 1 cash flow tables

      –    complete SOA Appendix 2 projections and assumptions

  • Complete Part 4 (assignment questions) Parts A, B, C, D, E, F and G.

The information and resources that can assist you in answering the questions in this assignment can be primarily sourced from your topic notes. Some data will have to be externally sourced.

Word count

The word count shown with each question is indicative only. You will not be penalised for exceeding the suggested word count. Please do not include additional information which is outside the scope of the question.

Additional research

You will be required to source additional information from other organisations in the financial services industry to find the appropriate product/s to meet your client/s requirements, and perhaps to calculate your advice fees.

Saving your work

Download this document to your desktop, type your answers in the spaces provided and save your work regularly.

  • Use the template provided, as other formats will not be accepted for these assignments.
  • Name your file as follows: Studentnumber_SubjectCode_Submissionnumber
    (e.g. 12345678_DFP8_Submission1).
  • Include your student ID on the first page of the assignment.

Before you submit your work, please do a spell check and proofread your work to ensure that everything is clear and unambiguous.

Submitting the assignment

You must submit your completed assignment in a compatible Microsoft Word document.
You need to save and submit this entire document.

Do not remove any sections of the document.

Do not save your completed assignment as a PDF.

The assignment must be completed before submitting it to Kaplan Professional Education. Incomplete assignments will be returned to you unmarked.

The maximum file size is 5MB. Once you submit your assignment for marking you will be unable to make any further changes to it.

You are able to submit your assignment earlier than the deadline if you are confident you have completed all parts and have prepared a quality submission.

The assignment marking process

You have 12 weeks from the date of your enrolment in this subject to submit your completed assignment.

Should your assignment be deemed ‘not yet competent’ you will be give an additional four (4) weeks to resubmit your assignment.

Your assessor will mark your assignment and return it to you in the Advanced Financial Planning (DFP8 v2) subject room in KapLearn under the ‘Assessment’ tab.

Make a reasonable attempt

You must demonstrate that you have made a reasonable attempt to answer all of the questions in your assignment. Failure to do so will mean that your assignment will not be accepted for marking; therefore you will not receive the benefit of feedback on your submission.

If you do not meet these requirements, you will be notified. You will then have until your submission deadline to submit your completed assignment.

How your assignment is graded

Assignment tasks are used to determine your ‘competence’ in demonstrating the required knowledge and/or skills for each subject. As a result, you will be graded as either competent or not yet competent.

Your assessor will follow the below process when marking your assignment:

  • Assess your responses to each question, and sub-parts if applicable, and then determine whether you have demonstrated competence in each question.
  • Determine if, on a holistic basis, your responses to the questions have demonstrated overall competence.

‘Not yet competent’ and resubmissions

Should sections of your assignment be marked as ‘not yet competent’ you will be given an additional opportunity to amend your responses so that you can demonstrate your competency to the required level.

You must address the assessor’s feedback in your amended responses. You only need amend those sections where the assessor has determined you are ‘not yet competent’.

Make changes to your original submission. Use a different text colour for your resubmission. Your assessor will be in a better position to gauge the quality and nature of your changes. Ensure you leave your first assessor’s comments in your assignment, so your second assessor can see the instructions that were originally provided for you. Do not change any comments made by a Kaplan assessor.

Part 2: The case study


You work for KeyPlan Pty Ltd, a financial planning company which is an Australian Financial Services Licence holder and a registered life insurance broker.

Your company has planners who can provide advice in:

  • superannuation
  • investments and savings plans (including margin lending, securities, derivatives and managed investments)
  • investment portfolio construction
  • strategic financial planning and asset allocation
  • debentures
  • retirement planning
  • budget and cash flow planning
  • debt management
  • social security and other government benefits
  • salary packaging
  • insurance (i.e. life, disability, income protection and trauma)
  • deposit and payment products
  • estate planning.

Your advice is limited to the areas in which you have completed appropriate accreditation.

KeyPlan does not deal in the establishment of self managed superannuation funds, provide real estate evaluations and advice, income tax preparation, superannuation fund accounting, superannuation fund administration or the preparation of legal documents such as wills or trusts. You can assume that you have gained registration from the Tax Practitioners Board (TPB) as a tax (financial) adviser.

You have organised a meeting with new clients, Ben and Sarina Masoni, who are seeking advice regarding their current situation. Sarina has just been made redundant from her current employer. This event, together with an inheritance about to be received by Sarina, has acted as a trigger for them to concentrate their efforts now to build an effective long-term wealth strategy for their eventual retirement.

Ben and Sarina have said they wish to become more active investors but admit they are time poor and would rather enjoy more family time when they are not working, rather than managing the complications of financial investments and strategies. They are looking for an effective wealth creation and estate plan and want peace of mind to know that it is structured to meet their and the family’s needs. The following pages detail the information you have obtained from them at your initial meeting.

Ben and Sarina’s current situation

Table 1           Personal details

Name Ben Masoni Sarina Masoni
Salutation Mr . Mrs
Age 53 46
Status Married Married
Home address 28 Rowlins Street, Indooroopilly, Brisbane QLD 28 Rowlins Street, Indooroopilly , Brisbane, QLD
Health Good Good
Smoker No No
Occupation Consulting Engineer/Managing Director Senior Physiotherapist
Employer B & M Agricultural Consultants Pty Ltd IMS Medical  Pty Ltd
Projected retirement age 65 When Ben decides to retire


Dependents/family relationships Name Age/date of birth
Son Alasdair 16
Daughter Sally 14

Alasdair and Sally currently attend a co-educational public school. They are both, academically, in the top 10% in their respective years and show strong inclinations to undertake some form of tertiary study.  They are expected to remain dependent to some degree on their parents until they complete those further studies, assumed to be at around age 22.

Table 2           Professional relationships

Solicitor Sonia Ho
Time span of relationship 8 years
Quality of relationship Adequate: used for wills, some company matters and conveyancing.


Accountant Mark Welsh
Time span of relationship 12 years
Quality of relationship Very good. Mark has played an important role as an adviser to the consultancy business.

Assets and investments

Sarina and Ben have a number of assets held in different structures or derived from different sources. Each of these is described in separate sections below:

  • personally held assets and investments
  • superannuation
  • shares in B & M Agricultural Consultants Pty Ltd
  • an inheritance
  • a redundancy.

Personally held assets and investments

Provided below are details of Sarina and Ben’s current investments and assets.

Assets Value Liability Ownership status Other information Purchase price
Principal residence: Indooroopilly, Brisbane, QLD $870,000 $220,000 Joint ownership House purchased 5 years ago with original mortgage of $270,000. Interest rate of 4.4% P&I. The clients are making additional payments of $1,000 per month in addition to the minimum required payments on their mortgage. $697,000
Cash management trust $28,000 $0 Joint ownership Interest of 2.0% per annum, can be reinvested. N/A
Everyday bank account $9,000 $0 Joint ownership No interest, used for holidays and daily expenses, balance varies. N/A
B & M Agricultural Consultants  Pty Ltd $119,544 $0 Two shares each Value is 50% of the value of the company. Value is calculated as 2 times profit before tax. Cost base of shares is $2 each
Home contents $65,000 $0 Joint ownership Estimated value for insurance purposes. N/A


Provided below are details of Sarina and Ben’s superannuation.

Financial assets Value Ownership Other information
Superannuation $315,678 Ben Invested in the high growth option (5% cash; 5% international fixed interest;
20% property; 40% Australian equities; 30% international equities). Eligible start date is 1 July 1992. Average annual return over 10 years is 5.9%. There are no exit fees or entry fees and the annual member fee is $124, with investment fees of 0.25% per annum.
Superannuation $133,634 Sarina Invested equally between two single sector options, the cash fund and Australian share fund (asset allocation is 50% cash, 50% Australian equities). Eligible start date is 1 July 1999. Average return over 10 years is 4.1%. There are no exit fees, no entry fee, and no member fees, however the investment fees are 1.1% per annum.

Both Ben and Sarina’s superannuation benefits are fully preserved.

Ben has a tax free component of $63,000 and a taxed element of the taxable component of $252,678.

Sarina’s benefit is all in the taxed element of the taxable component.


Sarina’s much loved aunt, Ruth, died 4 months ago. Ruth never married and was Sarina’s late mother’s only sibling. Sarina and Ruth were very close with Sarina acting as Ruth’s carer for many years before her death. Sarina herself is an only child and is the sole beneficiary of her aunt’s estate.

Sarina inherited her aunt’s former home in Spring Hill, Brisbane and she is currently negotiating the final sale of the property. It is a two-bedroom, ground floor apartment and holds no sentimental value for her. She would rather invest the funds in more flexible assets to provide for the future needs of her family. There is no outstanding loan attached to the property and it was never rented out. She will receive the values shown in the table of inherited assets below, after meeting all expenses related to the sale. Sarina is unsure of how best to invest these funds.

In addition, the trustees of Ruth’s account-based pension fund have paid the remaining benefit amount to the executors of her estate.  Sarina is expecting to receive the death benefit payment shortly. The amount and components of the death benefit are:

  • taxed element of the taxable component: $242,000
  • tax free component:  $36,000

      Total:                                                                   $278,000

Sarina would like to know what tax is payable on this benefit and how the net proceeds should be invested.

Table of inherited assets at date of Ruth’s death (but excluding superannuation benefit)

Inherited assets
Asset Shares held Purchase date Purchase price Share price at date of death Value at date of death Other information (assumed dividends and franking level)
BHP Billiton Ltd 1,212 9/03/1984 $10.75 $20.56 $24,919 Current annual dividends: $0.72 per share 100% Franked
Commonwealth Bank 320 19/05/1997 $3.31 $72.21 $23,107 Current annual dividends: $4.20 per share 100% Franked
Commonwealth Bank 19 4/09/2000 $27.70 $1,372
Commonwealth Bank 22 27/08/2001 $30.05 $1,589
Insurance Australia Group 1,100 19/06/2000 $1.78 $5.34 $5,874 Current annual dividends: $0.26 per share 100% Franked
Insurance Australia Group 110 8/08/2000 $2.75 $587
National Australia Bank 740 30/07/1985 $4.08 $27.08 $20,039 Current annual dividends: $1.98 per share 100% Franked
National Australia Bank 50 4/02/2000 $21.73 $1,354
Rio Tinto Ltd 242 1/01/1988 $6.67 $46.53 $11,260 Current annual dividends: $2.23 per share 100% Franked
Wesfarmers 1,000 1/02/1985 $2.15 $42.83 $42,830 Current annual dividends: $1.98 per share 100% Franked
Online cash account n/a n/a n/a n/a $9,500 Earning 1.5% p.a.
Apartment in Spring Hill, QLD (selling now) n/a 23/5/1986 $62,000 n/a $419,000 Ruth’s principal residence in Spring Hill, Brisbane. Debt free, no income, net value after sale.
Total inheritance excluding super benefit $561,431

B & M Agricultural Consultants Pty Ltd

Ben and Sarina own 50% of the eight issued shares in B & M Agricultural Consultants Pty Ltd with their business partners Mark and his wife Sarah. Ben and Mark are joint Managing Directors with Sarina and Sarah the other directors. The company’s constitution states that all directors are employees of the company and are entitled to be paid employee benefits from the company, such as the provision of cars, superannuation contributions, directors fees, etc. at the discretion of the Managing Directors.

Ben and Sarina have a buy/sell agreement with Mark and Sarah that in the event of death or total and permanent disability of Ben or Mark their four shares would be transferred to the other party. Ben and Mark have a good working relationship and are of similar ages.

At this stage, Ben and Sarina have not put in place a funding arrangement nor do they know how to do this. Under the buy/sell agreement the consideration is half the value of the company. The value of the company is calculated as two (2) times the average of the last two year’s profit before tax.

B & M Agricultural Consultants Pty Ltd — Profit and Loss Statement
2015/16 2014/15
Consulting revenue $752,375 $708,356
Other revenue (bank interest etc.) $3,578 $4,140
Total revenue $755,953 $712,496
Marketing and advertising $9,130 $8,421
Rent $37,023 $31,234
Insurance and legal expenses $18,257 $18,070
Administration and compliance $84,679 $82,296
Costs directly associated with Consulting (MD salaries, contracted consultants fees, etc.) $481,703 $458,548
Total expenses $630,792 $598,569
Profit before tax $125,161 $113,927
Tax $35,671 $34,178
Net profit after tax $89,490 $79,749


B & M Agricultural Consultants Pty Ltd — Statement of Financial Position
2015/16 2014/15
Cash $90,660 $82,008
Trade and other receivables $57,403 $57,251
Plant and equipment $18,183 $18,427
Total assets $166,246 $157,686
Trade and other payables $46,675 $41,867
Total liabilities $46,675 $41,867
Net assets $119,571 $115,819

Redundancy details – Sarina

Sarina has been working for the same company since her daughter Sally started school and has completed nine years of service. Her role has been made redundant following a restructure of the large allied health services business she works for.  She has an offer to work for her old boss, who started his own physiotherapy business about four years ago. He is able to match her current salary and she can start as soon as she is ceases work with her current employer.

Since her aunt died Sarina has wanted to work in a more supportive environment than her current employer offers.

Payment details
Type of payment Basis for calculation Pre-tax amount ($)
Lump sum annual leave Accrued entitlement – 18 weeks 26,534
Lump sum long service leave Pro-rata entitlement – 7.8 weeks 11,400
Payment in lieu of notice 5 weeks 7308
Redundancy 16 weeks 23,384
Golden handshake Lump sum 20,000

Annual income details

The figure below shows the income sources that Sarina and Ben are expected to have in the current financial year. As no dividends were paid from the company, they are not shown in the diagram.


Annual expenditure

Ben and Sarina have a detailed family budget that they presented to you at their meeting. It is provided below, together with any relevant notes about the expenses. They are confident that their expenses are unlikely to vary significantly in the next few years.

Expense Ben
($ per annum)
($ per annum)
($ per annum)
Accountant’s fees $750 $550 $1,300 For individual personal annual tax returns
Charitable donations $450 $450 $900 Total donation amount to Cancer Council Australia and the McGrath Foundation, in equal proportions— both DGRs.
Children’s school expenses and ‘pocket money’ $1,800 $1,800 $3,600
Council rates $740 $740 $1,480 Principal residence
Discretionary: restaurants, gifts, clothing, shoes, etc. $19,299 $19,299 $38,598
Electricity $1,150 $1,150 $2,300
Gas $491 $491 $982
Groceries $9,000 $9,000 $18,000
Health insurance $1,566 $1,566 $3,132 Family hospital and extras policy with excess of $500
Holidays $6,000 $2,000 $8,000
House insurance $721 $721 $1442 Home and Contents policy
House maintenance and repairs $5,500 $5,500 $11,000 Includes cleaners, etc.
Income protection $1,305 $737 $2,042 90 day wait, benefit to age 65, 75% income plus superannuation (SG)
Medical bills/prescriptions $904 $904 $1,808
Mobile phones and internet Paid by company $1,698 $1,698 Work related use for Ben
Mortgage $15,070 $15,070 $30,140 Annual repayment amount inclusive of additional monthly payments of $1,000 ($500 each against budget item)
Pay TV $626 $626 $1,252
School fees $550 $550 $1,100 Alastair and Sally’s school fees are $550 each
Water $726 $726 $1,452
Total expenses $66,648 $63,578 $130,226  

Investment objectives and attitude to risk

Ben considers himself to be quite knowledgeable about investments and understands how volatility in markets can affect investment performance. He has seen significant fluctuations in the returns of his superannuation fund, though that did worry him for a while.  He has said that now Sarina has receiving the inheritance he would be happy to leave investments in place and ride out any negative short term performance.

COIT 20246 – ICT services management

Sarina however is more conservative than Ben. She thinks that they are now doing well enough that they don’t need to take on higher levels of risk. She would prefer to see some less aggressive investments for the money she receives from her inheritance. She thinks property is great, although she is not sure she wants the responsibility of managing an investment property at this point in time, which is why she is selling her aunt’s apartment.

Ben and Sarina believe they do not need additional income from any investment strategies but want long-term capital growth. They completed the risk profile below and sent it to you prior to your initial meeting. At the meeting you confirm that these are the correct risk profiles to be allocated to each of them based on their attitudes towards investing.

Risk profile

Determining your investor risk profile Points
This investor risk profile questionnaire has been designed to help you understand the type of investor you are, so that with the help of your adviser, you can choose the investments that best match your financial objectives.
Which of the following best describes your current stage of life? Ben Sarina
Single with few financial commitments. You are keen to accumulate wealth for the future. Some funds must be kept available for enjoyment, such as cars, clothes, travel and entertainment. 50 50
A couple without children. You may be preparing for the future by establishing and furnishing a home. There are a lot of things you need to buy. You are probably better off financially now than you may be in the future. 40 40
Young family. This is the peak home purchasing stage. You have a mortgage and a very small amount of savings. Probably dissatisfied with your financial position and the amount of money saved. 35 35
Mature family. You are in your peak earning years and have the mortgage under control. Many partners also work and any children are growing up and have either left home or require less supervision. You are starting to think about retirement, although it may be many years away. 30 P 30 P
Preparing for retirement. You probably own your own home and have few financial commitments; however, you want to ensure that you can afford a comfortable retirement. Interested in travel, recreation and self education. 20 20
Retired. No longer working you must rely on existing funds and investments to maintain your lifestyle. You may be receiving the pension and are keen to enjoy life and maintain your health. 10 10
What return do you reasonably expect to achieve from your investments? Ben Sarina
A return without losing any capital 10 10
3–7% p.a. 20 20
8–12% p.a. 30 30 P
13–15% p.a. 40 P 40
Over 15% p.a. 50 50

HRM502 – Human Resource Management

Estate planning

Ben and Sarina created wills and powers of attorney with the help of their lawyer about five years ago.

Ben’s will states that when he dies everything is left to Sarina and Sarina’s will leaves everything to Ben. This includes their respective shares in the company.

In the event that both of them should die, their respective wills leave everything to their children in equal shares. They have not nominated any guardians for their children in the event of both of them dying.

Ben has granted enduring power of attorney (EPOA) to his father. Sarina had granted enduring power of attorney (EPOA) to her mother Gloria, now deceased.

Both Ben and Sarina have made binding death nominations in their superannuation, again to each other.

Current Developments in Accounting Thought

Ben’s buy/sell agreement with his business partner Mark is in the form of call options. Both hold a call option obligating the other to sell on death or permanent disability. The surviving partner can ‘call’ upon the ceasing owner or the executor/executrix of the estate, to transfer the business interest and legally binds them to sell at a predetermined value. The value of each partner’s share has been defined as half of the net value of the business.

Ben and Sarina have not put in place a funding arrangement for the buy/sell agreement and are unsure how to do this. Further, this conflicts with the terms of their wills.

Insurance and risk management

They have the following insurance policies:

Policy Life insured Owner Cover Premium per annum Notes
Death and TPD Ben Superannuation fund $432,000 $1,532 Any occupation TPD
Death and TPD Sarina Superannuation fund $280,000 $993 Any occupation TPD
Income protection Ben Self $9,581 per month $1,505 90 day waiting period, benefit to age 65
Income protection Sarina Self $5,201 per month $737 90 day waiting period, benefit to age 65
Home and contents NA Joint $450,000 home $55,000 contents $1,242 Multi-policy discount applies as all policies are held with the same company
Private health insurance Family Joint $500 excess for hospital and extras $3,332 Applicable rebate taken up front as a premium reduction

Ben and Sarina both have income protection policies because their accountant told them that they were tax deductible. They each own their own policy and are both covered for 75% of their income plus superannuation contributions.

They have not provided any details of their other insurances and have said they do not need a review of their general insurances at the moment.

Ben and Sarina’s needs and objectives

  1. Inheritance
  • Sarina would like to invest the proceeds of her aunt’s estate in the most tax effective way. She is not interested in any complicated tax schemes or products. It is important to her that whatever she doesn’t need to use to improve the family lifestyle now is kept for the children when they might need it.
  • Sarina would also like advice on the best course of action for the share portfolio and her aunt’s superannuation death benefit. She will consider alternative investments and would like your advice including the tax implications on any of her decisions. She is particularly confused about how capital gains tax applies to her.
  • Sarina and Ben would like to take the family to South America for four weeks next year using part of Sarina’s inheritance. They estimate this will cost $25,000.
  • She would like to think that her aunt’s estate could also contribute to either a deposit to help her children each buy a small house or apartment when they find stable employment after their tertiary studies or, alternatively, as a contribution to the costs of their tertiary education. She thinks that $50,000 in today’s dollars is what they would like to give each of them.

This is one of the reasons why she is concerned that at least some of the portfolio does not lose value over the next five years. She would also like to keep the inheritance separate from her other assets but is happy to take advice on this.

  1. Redundancy
  • Sarina is unsure how tax is applied to her redundancy payout and would like to know how much she will receive after tax and if the payment has any impact on her overall taxable income.
  • She does not need access to the funds and doesn’t need to generate income from them. She is happy to put them towards long-term wealth accumulation.

Psychology: Behavioural Science 

  1. Long-term wealth accumulation and retirement
  • They would like to be able to generate sufficient income in retirement to meet their projected retirement expenses. They assume that in retirement they will not be providing for the children and the mortgage will be paid out but they will spend the extra money on travel and entertainment. They also confirm that final retirement is planned to be when Ben turns age 65.

      At your request they have completed a retirement budget and in today’s dollars they believe they would need $64,000 p.a. after tax, plus $18,000 every two years for overseas travel. Any additional local holidays they may wish to take in retirement have been factored into their annual retirement budget.

  • Ben and Sarina have had no formal savings plan even though they have managed to accumulate surplus funds in their CMT each year. They believe that have their expenses under control although recently they’ve noticed that their cash management account has not been increasing and they’re not sure why this has occurred. Accordingly, they would like you to analyse their income and expenses and devise any cash flow strategies you think are appropriate to be considered.
  • Ben cannot foresee any major expenses coming up in the next five years or so, other than the holiday Sarina mentioned. Both of their cars are leased via the company and their house is in good repair and does not need any immediate work.
  • Ben had not previously considered his retirement as he has thought it was still a long way away, but now Sarina has received the inheritance from her aunt, it’s prompted them both to believe that a review of their retirement planning objectives should be undertaken. This may include building up their superannuation.
  • Ben is confident that the current asset allocation in his superannuation is appropriate and he is happy with his choice of fund. He does not wish to change funds because he has been happy with its relative performance, cost of insurances and service. The fund has a wide range of investment options with Ben invested in the high growth option. He would consider making additional contributions to superannuation although he is not sure about how this is done and the rules relating to the strategy.
  • Sarina is not sure about her current superannuation fund as it was the one she joined when she started working for her previous employer. As she is moving to a new role she would be interested in looking at alternatives. She chose the current asset allocation based on a recommendation by a colleague at work. She has recently realised that the fees she is paying are higher than Ben’s and is not sure if it is the best type of fund for her. She has never received any advice from the fund itself, although advice was offered previously. She would consider making additional contributions to superannuation but only if she was convinced it was appropriate.
  • Sarina expressed some concern to you about how governments seem to be constantly changing superannuation rules and the risk that might pose to future retirement strategies.
  • Ben and Sarina have also advised you that in making any forward projections and /or recommendations to meet their retirement objectives, their share of the value of the company should not be included as an asset for retirement income purposes. They have asked you to do this to ensure any projections are conservative and based on investment assets they have now or can accumulate through personal investing and not what they could have in the future through the possible sale of the company.
  1. Estate planning and asset protection
  • Ben and Sarina would like to ensure that the death of either of them would not have an adverse financial impact on the family. If Ben died, Sarina would like to stop work for a year at least to look after the children. Ben wouldn’t stop working if Sarina should pre-decease him and would need help with taking care of the family and their home.
  • Following a near car accident on their way back from a recent holiday in Noosa, Ben and Sarina became concerned about the effect on the care and long-term financial security of their two children if they both should die. They have requested your advices on what strategies are available to cater for this event so their children could be effectively cared for. They wish to have explained the pros and cons of any strategies developed to achieve these goals.
  • In the event of either one of them being permanently disabled, they would like to provide for sufficient funds to employ a full-time carer and still be able to meet their current expenses.
  • They would both be prepared to use some of their assets in the event of their death or permanent disability, but they would not want their children to miss out on any of the benefits of the wealth they have accumulated so far.
  • Ben and Sarina would like a review of their current life insurance arrangements because they are not sure if the policies they have meet their needs. The death and TPD amounts were just whatever was automatically added into their superannuation fund when they joined.
  • Ben and Sarina completed the following checklist with you at the meeting:

International Human Resource Management

Estate planning goals On death of Ben On death of Sarina Death of both
Provisions for each spouse Replace Ben’s income until Sally is 22 so that Sarina can stay home.

All assets would be left to Sarina.

Income to provide for full time housekeeper, estimated at $55,000 p.a. until Sally is 22.

All assets would be left to Ben.

Pay off the mortgage Yes Yes Yes
Pay off other debts No No Yes
Provisions for the children They would like to leave all assets in trust for the children until Alasdair and Sally have attained the age of 25. Income to be generated for a family member to care for the children, plus income to enable them to meet current expenses for the children.


Equalisation of children’s inheritance They cannot see this as being an issue. Both children are treated equally.
Provisions for others Any children of their children, if they formed a trust.
Charitable gifts No No No
  • Ben has a buy/sell agreement in place but has not thought about funding for the agreement. He is interested to know about funding options.
  • They are happy with their home and contents insurance.

Part 3: Completing the SOA

Based on the information in the case study and your analysis of the clients’ objectives, use the template provided to produce your Statement of Advice (SOA) which is a record of your advice (including amendments, if any) for Ben and Sarina.

Remember: Your SOA is both a legal document and a representation to the client of your professionalism, prepared to assist them in understanding the recommendations that you, as their financial planner, are making. Accordingly, as a legal and professional document, it should be spell checked and reviewed to ensure that there are no typos, grammatical errors, or spelling mistakes.

Important instructions for completing the SOA

  1. Use the SOA template provided which includes cash flow templates.

      SOA preparation software: The use of financial planning software and dealer/licensee templates to prepare your SOA is not permitted. Submissions that exhibit excessive reliance on SOA templates may be considered a case of plagiarism or collusion and may not be considered to be a reasonable attempt at the assessment.

  1. List any assumptions you have made to complete your SOA in Appendix 2. Assumptions will generally be made regarding:
  • missing background information on the client
  • calculations of future returns from your recommended investments
  • clarity in relation to any of your recommendations
  • fees relating to the products you have recommended.

MBA HRM Assignment

Assumptions that you cannot make:

  • inventing new lump sums of money
  • referrals to outside experts to cover basic information that you should be able to provide, such as ‘our insurance adviser will call you to analyse and resolve your insurance needs’
  • not addressing goals mentioned by the client by assuming these will be dealt with at a later date.
  1. Your SOA must address each of the goals listed in the case study and provide appropriate strategy recommendations. Your strategies are limited to the areas of advice in which you have completed appropriate accreditation. As such, you should not recommend products or strategies that do not meet your level of accreditation. For example, if you are not qualified in derivatives you should not recommend derivatives strategies.

      In support of the recommendations made, you must include:

  • tax calculations for the redundancy
  • a cash flow statement showing all income and tax payable for their current financial year and net disposable income
  • a cash flow statement showing all income and tax after implementation of your recommendations and net disposable income
  • asset allocations for all their investments, current and recommended
  • tax implications of any investment recommendations, including CGT
  • full estate planning recommendations and how these interact with insurance recommendations where relevant
  • full insurance analysis and recommendation
  • portfolio projections that show how your recommendations enable the clients to meet their goals.

      You must include at least one (1) alternative strategy that you considered and rejected for each of the clients’ goals. Include a brief explanation of why the strategy was rejected.

      Use the information on each of these areas given in the subject notes to provide reasons for each of the strategies recommended.

      Product advice: Specific product recommendations for insurance, superannuation and estate planning recommendations are not required. You may recommend generic products to implement these strategies.

      You are required to recommend appropriate investment products to implement the advice you have provided in relation to any asset allocation, wealth accumulation or savings goals. Please do not use the products from the case study SOA. You are required to source (or develop) your own fund details. It is not necessary to include Product Disclosure Statements in your assignment for any products recommended in your SOA.

HI6008 Business Research

  1. You must include detailed cash flow tables using the assignment template and Appendix 1 to show the client/s situation before, and after, your recommendations.

      You should include cash flow projections for personal investment recommendations as Appendix 2 to your SOA. Use a Microsoft Excel spreadsheet to calculate your projections and complete the included template. Provide projections to Ben’s projected retirement at age 65.

  1. You should include projections for personal investment recommendations in Appendix 2 of your SOA. Use a Microsoft Excel spreadsheet to calculate your projections and complete the included template. Provide projections to Ben’s projected retirement age.

The SOA template

A statement of advice has been commenced for Ben and Sarina Masoni, using the data collected in the interviews, the fact finder and risk profile. You will need to complete the remaining sections in the SOA as directed. The statement of advice starts on the following page.

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