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FINS5537
Individual Assignment
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.
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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.
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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.