Financial Planning Research
FNSFPL502, FNSFPL508, FNSINC501
1) In today’s financial planning practices, most planners use a ‘platform’ for their clients’ investments.
a) Describe the differences between a WRAP and a Master Fund?
b) What are the benefits for a planner in using a ‘platform’?
c) Explain the purpose of an Approved Product List (APL).
d) If a planner is recommending a particular Fund within a WRAP platform, what additional research must the planner do beyond the APL?
2. Describe the risks associated with the following asset classes:
3. Your client has been identified as having a ‘balanced’ risk profile. What are the differences between using a Model Portfolio for this client as opposed to constructing your own portfolio of varying asset classes and managers to achieve a balanced portfolio .(60% growth 40% defensive)
4. Your client is concerned about the security of investing in a Managed Fund. How can you describe to your client, the security measures around his investment in a Managed Fund?
5. FoFA was introduced by legislation. What are three main aspects of this legislation?
6. Describe dividend imputation and how do franking credits benefit an investor?
7. Centrelink pension may be available to a retiree when the reach ‘age pension age’.
a. What are the ‘tests’ a person need to pass to be eligible for a Centrelink Pension?
b. If they pass one test and fail the other what is the outcome?
8. Passive investment, is investing in an Index Fund. What are the risks and the benefits?
9. What are the risks and benefits of an active fund manager?
10. You are considering an investment for your client in an international fund. Your APL does not permit the use of derivatives. What additional research would you conduct before you recommend this product?
11. There are the risks of investing in an international fund? Select an International Fund. Write a paragraph that could be included in a SOA justifying your selection of this particular fund.
12. You have a young client with $10,000 to invest and the capacity to save an additional $200 pm. Your client would like to save for a deposit on a home in seven years. You recommend investing $10,000 in a managed fund, balanced option, with additional monthly investments of $200.
a. How would you explain ‘dollar cost averaging’?
b. Is this a suitable way to save for a deposit over seven years? Why and what are the risks?
13. Your licensee determines the asset allocation for a ‘conservative investor’ is as follows;
• Cash and fixed interest (50%)
• Australian shares (25%)
• International shares (5%)
• Property (20%)
a. What is the percentage of defensive to growth?
b. What are the risks attached to this asset allocation for a 65 yo retiree?
14. Your client is a 50 yo, married male, he comes to you with a PDS for a geared investment product into Asian markets. Last year it performed extremely well and he wants to invest $50,000 into this fund.
a. What actions should you take before you make any recommendations?
b. This fund has high “quantitative’ rating. What are the limitations of quantitative research?