Wealth Creation and Estate Planning
Semester 1, 2020
End of Week 10, Friday 15 May, 2020 (5 pm Australian Eastern Daylight Time)
This assignment is worth 40% of your final marks (the assignment is marked out of 100 and scaled back to 40%).
See the Client Data Form in the Assignment folder.
Your task is to take the role of an adviser and provide Jason and Elise with a report that addresses the following:
1. An assessment of whether they can meet their goals and objectives given their current circumstances and future savings capacity.
2. Recommend a savings and investment plan that best meets their goals and objectives.
3. As the clients do not wish to put more money into superannuation, you are not required to consider any superannuation-based or related strategies. Insurance and estate planning requirements also do not need to be addressed in detail.
4. A detailed assessment of the client’s risk profile (including an interpretation of their answers to the risk profile questions in the Client Data Form) and a recommended asset allocation that is suitable for them.
5. You are going to recommend that the clients use either the Morning Star Australian A Shares or Vanguard Investor Funds as their investment. You should advise the clients as to which product you would recommend and why. (You will recommend an appropriate portfolio mix in line with their risk profile.) You should explain the risks and benefits associated with the product you have chosen.
6. You are required to analyse the two products and provide a table which compares the costs and features, including the investment objectives and styles. (This table and any narrative should be included as an attachment to the client report.) Information for each fund manager can be found in the assessment folder.
7. Advise the clients on whether gearing is suitable for them and, if so, how this could be achieved and what level of gearing you would recommend. You need to explain to the clients in detail the risks and benefits associated with gearing.
8. Provide the clients with projections using the MoneySmart managed fund calculator and/or the savings and investment calculator to model their outcome. These calculators can be found at http://www.moneysmart.gov.au/tools-and-resources/calculators-and-tools
(Note: You can use other modelling software/tools or Microsoft excel for your projections)
9. The word limit for your report is 4000 words – you can include appendices.
10. You are not required to provide a Statement of Advice (SOA). However, your report needs to be presented in a professional, clear and concise manner that a retail client would be able to easily read and understand.
11. Remember that clients do not always provide all relevant information. You may be required to make some assumptions in your report. This is fine, so long as it is clearly noted in the body of the report or in a footnote.
12. Client’s circumstances may be incompatible with their expressed goals. If this is the case an advisor must point this out to the clients and suggest more realistic or achievable goals.