Full assignment instructions
Your task [Overall - Parts A and B]
Based on the interview transcript ‘Pete - Initial Client Interview’ (below) you are required to prepare a detailed file note[‘strategy paper’]using the templates provided on L@G.
As detailed below and on L@G, your file note will be broken down into two parts, Part A and Part B, to enable you to receive feedback on your initial submission. Please refer to the submission section below and the specific Part A and Part B instructions for more information on what is required for each part.
Overall, yourfinal file note submission (Part B) should include an overview of the interview with Pete, includinghis current situation, his goals and objectives and any issues raised; and then based on this information, your strategic recommendations that address how he should achieve these goals. These recommendations should include wealth creation (both inside and outside of superannuation), wealth protection (insurance) and lifestyle recommendations.
In practice, yourfile note would most likely go to a paraplanner who would use the recommendations (and reasoning) given in your file note to prepare a Statement of Advice (SOA) for Pete. However, you are not required to prepare a SOA.
Please note that a standard SOA template generally contains generic information such as what is a managed fund, what is total and permanent disability insurance etc. Accordingly, you are not required to include generic information such as this in your file note. Instead, the focus of your file note should be your strategy recommendations(and reasons why etc) as indicated in thePart A and Part B instructions.
Overall:
- Your submission must be prepared using the relevant templateprovided on L@G;
- Your submission is a strategy document only, as such you are NOT required to price any actual quotes or recommend specific investment products;
- As illustrated in the templates and the example, please bullet point your responses.
The purpose of this assessment item
This assessment item is a practical, real world assessment task. It has been designed to assist students in putting the course content into practice to enable greater understanding,and also to increase student’s work-readiness for those intending on pursuing a career in financial planning.
This assessment task is also designed to assist students in preparing for latter financial planning courses, such as Financial Planning,Construction and Review which requires students to complete a full SOA, the next step in the financial planning process.
Marking
It is important that you refer to thePart A and Part B Marking Rubrics (also in the Assessment folder on L@G) which detailthe expected standards of each section of the file note.
The assessment is worth a total 35% of your final grade, that is, 5% for Part A and 30% for Part B. You will be advised of your mark via ‘My Marks’ on L@G.
Resources provided
Please refer to L@G (Assessment folder) for the requiredtemplatesfor Part A and Part B and the detailed Part A and Part Binstructions which provide more information on how to complete these. You will also find several short videos to help you get started and to help clarify certain areas of the assignment; these include:
- Assignment background: which contains further information as to the purpose of the assignment and the rationale behind the assessment design.
- Getting started: how to complete Part A: which goes through how we would complete Part A and some tips and tricks on completing your assignment.
- Investment choices: whichgoes through what you need to include in the wealth creation / lifestyle recommendations sections of your file note, including the level of detail required.
- Future value calculations: which goes through how to complete the future value calculations, why these are required as part of your file note, and what you need to include in the Appendix to your file note.
- Getting started: how to complete Part B:which goes through how we would complete Part B and some common concerns to watch out for.
Please also refer to the ‘frequently asked questions’ document in the relevant assessment folder on L@G for both Part A and Part B. This document will be updated throughout the coursefor any additional questions asked that are likely to be relevant to the entire cohort.
Individual or joint submission
Students may complete the assignment (both Part A and Part B) individually or with another student. The choice is up to each student. Groups of three or more arenot permitted.
If students choose to complete the assignment together, then each student will receive the same mark. The teaching team will notdiscuss anydisputes or complaints from students asserting that one student did more work than the other, given working with another student is optional.
Accordingly, students should make sure that the person they choose to work with carries their responsibilities and completes their allocated taskson time and to the desired standard.
Pleasenote,studentschoosingto complete the assignment with another student must complete thegroup sign up process on L@Gin order to see the jointassignment submission points. Please refer to the group sign up sheet on L@G for more information.
If you are completing the submission with another student, onlyone memberof the group is required to submit the assignment, though both students will be able to see the submission, the marks and any feedback provided.
Submission
Your Assignment will be submitted in two parts as follows:
- Part A: You are required to submit your intended wealth creation recommendations, together with lifestyle recommendations for feedback.This will be worth5%of your final grade and isdue onWednesday 2May by 1pm (AEST). More details on Part A, including specific instructions, template and marking guide are available on L@G.
- Part B:You are required to submit your full file note as detailed above.This will be worth 30% of your final grade and isdue on Friday 25 May by 1pm(AEST). The full file note includes any wealth creation / lifestyle recommendations for Pete, which may or may not be the same as your Part A recommendations. Based on your feedback for Part A, you can chose to update / change your recommendations as desired.
All submissions must be submitted via the Blackboard Assignmentsubmission point on L@G (within the assessment folder)and an electronic coversheet must also be completed. Further instructions on this are provided on L@G.
Finally, itis your responsibility to ensure you upload the correct file and the complete assignment is submitted by the due date. Please note you may submit your assessment item as many times as you like prior to the due date. Yourfinal submissionwill be marked and count towards your final grade.
Academic integrity
A reminder that the assignment is an individualor jointassessment item. Accordingly, please ensure the file note is your own work, or the work of your group. Plagiarism will not be tolerated.
Plagiarism occurs when the work of another is represented, intentionally or unintentionally, as one's own original work, without appropriate acknowledgement of the author or the source. This includes copying ideas or concepts from other students. There are severe penalties in place for those that breach the academic integrity provisions, both for the person sharing the informationandfor the person copying. Accordingly, if you wish to see if you are on the right track, we recommend you see the teaching team in our consultation hours, rather than discussing your specific assignment recommendations with other students.
Additional information on plagiarism can be found on L@G.
Additional information
Please ensure that you check the L@G Announcements regularly for any clarifications or amendments to this assignment.
1
Pete - Initial Client Interview
Stage / Adviser / ClientRapport / Hi Pete, welcome to our financial planning firm. Did you have any trouble finding us? / No trouble at all thanks.
Can I offer you a tea or coffee? / A coffee would be great thanks.
[Advisor organises this]
Nutshell / Can I ask, in a nutshell – howcan I help? / Basically there’s a few reasons why I wanted to see a financial planner, firstly, I have a young daughter, so I want to make sure she is financially protected if anything was to happen to me. A workmate was recently talking about insurance cover he’d taken out and it made me realise that I need to get this sorted too.
I also want to buy a house for us, so I need some advice on saving for a deposit too.
Finally, I want to get my superannuation sorted. I’ve never had the time to look into this and I don’t know whether I’m in a good fund or not. So some advice on this would be great.
Bridge between rapport and compliance / That all sounds great, thanks for coming to see us today. What’s your daughter’s name and how old is she? / Her name’s Isabelleand she’s recently turned 8. She’s really into her sport and magic is her latest craze.
Sounds like fun! From what you’ve said so farI’m confident we can help you achieve… [state the client’s goal(s)]. / Great.
Before, we go any further, have you ever seen a financial planner before? / No, one of my workmates recommendedI come and see a financial planner, as I know I need to get my insurances sorted as well as getting investment advice.
Ok great, we’ll look at this in more detail shortly. What we’ll do today, is I’ll firstly explain how we work, ask a few more questions, and then get an understanding of your current situation. How does that sound?
/ Sounds great.
Advisor goes through FSG / [Advisor goes through the Financial Services Guide (FSG), explaining:
- key points, including the company, authorisation; services; fees and the complaints process
- how the financial advice process will work, including the various stages, ongoing reviews etc
Bridge between FSG and Fact Find / Before I make any recommendations, I need to understand more about your goals and objectives and then we’ll consider your current financial situation.
Every financial plan is unique to each client. Having you achieve your goals is as important to us as it is to you.
To do this, if you can answer the questions as openly and accurately as possible – we can better understand your needs and concerns. Any details you don’t know – we’ll itemise them for follow up.
If you have any questions – don’t hesitate to ask – let me give you my card – for future reference. How does that sit with you? / Sounds great – based on what I’ve heard I’m keen to proceed.
Gather some personal details / Before we look more closely at your goals and objectives – let me find out more about you personally.
[USING FACT FIND: collect details re client’s background, goals and objectives and current financial situation]
What is your date of birth?
What is your current marital status?
Do you have any dependents other than Isabelle?
For completeness, Isabelle’s mother…? / DOB: 2 /2/1990 [aged 28]
Single
No, just Isabelle
Kerryand I separated when Isabelle was quite young, a little less than a year old and for various reasons I ended up with full custody of her. Isabelle and her mum are on quite good terms now, and she is involved, just not from a financial perspective.
[You can assume for the purposes of the assignment that Pete does not receive any child support from Kerry and nor does he financially support her. That is, effectively treat Pete as a single father from a financial point of view.]
Ok thanks for that, there are a few more personal details we need to get:
Are you an Australian citizen?
What is your current address?
Do you own or rent this property?
What is your best contact number?
Email address? / Yes, Australian citizen
35 Moolabar St, Morningside
Rent
Phone: 0412 345 678
Email:
Occupation / What do you do for work? And can you tell me what you earn per year? / I’m employed as an electrician, working for a large electrical company earning around $65,000 per year plus super.
What’s on your mind / Thanks for that. You mentioned that making sure Isabelle is financially protected if anything was to happen to you isconcerning you, can you tell me more about this? / Basically, I want to make sure that if I passed away, or became seriously ill or injured, she would be financially taken care of and there wouldn’t be the added stress about paying for her schooling or expenses. I just want to sure she would be financially set up if something did happen to me.
That all sounds reasonable, we can definitely look into this. We’ll discuss how much insurance you may need shortly when we do what’s called an insurance needs analysis.
Now, you also mentioned that you would like to buy a house and get your superannuation sorted too, can you tell me more these concerns? / In terms of buying a house, I’d love to be able to be able to do this, it would be nice to have some more space, particularly as Isabelle gets older. I’d also prefer to be paying off my own mortgage rather than somebody else’s.
I also want to make sure my super is sorted, it’s an area I haven’t put too much thought into. I have a couple of different superannuation funds from different jobs and have just put it all in the ‘too hard’ basket. So any help here would be appreciated.
How would you like to get there? / That’s definitely a common problem and something we can help with.
Before we get into this, let’s look at these concerns in a little more detail now.
In terms of buying your own home, have you considered how much you will need for a deposit and when you want to purchase this? / I want to make sure I have a 20% deposit so I avoid the lenders mortgage insurance, so I’m probably looking at being able to afford what I want in around 5-6 years’ time.
In terms of a deposit, I would like to buy in the same area we’re in now, as Isabelle has a lot of friends here and the schools are great. I’ve looked into what I would like and it is quite an expensive area, plus given house prices are increasing, I’d say I’ll probably be looking at a house around $550,000 in5-6 years’ time, so I’d be looking at a deposit of around $110,000 plus another say $5,000 for legal fees, insurance, building and pest inspections etc. So my overall goal is to have $115,000 saved up within 5-6 years.
What I didn’t mention before, was that I also really want to take Isabelle to the UK for Christmas next year [2019], as it’s her great-grandfather’s 80th birthday party and it would be a good chance to see some of her relatives over there and to hopefully enjoy a white Christmas.
That sounds great! A white Christmas would be pretty special. How much are you expecting this to cost? / Given it’s a long way to travel, I’d like for us to stay for at least 3 weeks, and it would be good to show her the sights while we’re there, so at this stage I’m budgeting on around $10,000.
Ok great. Looking at your superannuation now, you mentioned earlier sorting this out and making sure that you’re in the right fund is important to you. Though I was wondering whether you’d given any specific thought to your retirement at all? / It’s not something I’ve specifically thought about, I tend to focus more on the day to day stuff and making sure Isabelle’s ok.
At this stage, I’m more interested in making sure I’m in the right fund and making the most of my employer’s contributions than anything else. Though I’m open to discussing any extra contributions if you think I need to be making these…
That’s great. In terms of retirement planning, it is an important consideration, even for someone young, like yourself. Though I understand you do have strong goals outside of superannuation, so we’ll look at this as part of reviewing your superannuation funds. / Sounds good.
What’s important to you? / Let’s determine the priorities for each of your goals now.
Using a scale of low / medium / high, what priority would you say getting appropriate insurance cover in place was? / Definitely high priority, it’s something I know I need to get sorted.
What about buying your own home? / It’s a medium-high priority, it’s something I really want to do, though I know I need to get everything else sorted first.
What about the holiday to the UK? / High priority. It’s higher than buying my own home at this stage as my great-grandparents are getting older and I really want Isabelle to visit them before too much longer.
That makes sense. Just to confirm, would you be happy delaying the purchase of your own home if it meant that you and Isabelle could go to the UK? / Yes that’s correct, though I’d prefer not to delay much longer than 6 years unless I really had too.
Sure. What about getting your superannuation sorted? And planning for your retirement? / Getting my superannuation funds sorted and invested appropriately is definitely a high priority and something I want sorted as soon as possible. Though any retirement planning would be a low priority given it’s so far away. But I’m open to your thoughts and advice on this.