ASSESSMENT TASK FNSFPL502 AND FNSFPL508

Conduct Complex Financial Planning ResearchAssessment Task FNSFPL502 and FNSFPL508 Your details: Name: Address: Phone: Company name Email: Your Assessment Task Keep a copy of your…

Conduct
Complex Financial Planning ResearchAssessment
Task
FNSFPL502
and FNSFPL508

Your
details:

Name:

Address:

Phone:

Company
name

Email:

Your
Assessment Task

Keep a
copy of your assessment task for a period of 12 months.

Submit
your assessment to our Education Team via
[email protected]

Plagiarism
Statement

All
assessments must be your own work and not a result of plagiarism or
collaboration with other students or workmates.

Assessment

The
pass mark is 70% for each element.
If you do not achieve this, you will receive feedback via your email
address and be asked to resubmit your assessment for a second
marking. Assignments will not be returned to you.

Task

Assessments

Elements

Target
Mark

Pass
Mark

Actual
Mark

1

Evaluate
client’s current situation & identify issues

FNSFPL502.1
& 508.1

77

54

2

Identify
research requirements and parameters

FNSFPL502.2
& 508.2

29

20

3

Extract
and analyse information

FNSFPL502.3
& 508.3

170

119

4

Summarise
and present results of research

FNSFPL502.4
& 508.4

36

25

Total

312

218

Assessor’s
Initials: ____________________

Assessment
Date: ____________________

Introduction

Objective

The
objective of this first assessment is to develop a Research Report
for the practical client situation described in the case
study
assigned to you.

Scope

To
achieve this objective, you will need to:

Evaluate
client’s current situation and identify issues,

Identify
research requirements and parameters,

Extract
and analyse information, and

Summarise
and present results of research.

The
assessment tasks in this assessment will allow you to demonstrate
your knowledge and skills in these elements

Assessment
process

Start
by:

Reading
the Assessment Task and case study.

Type
your answers to the assessment tasks into this template document
(hand-written answers are not accepted)

Submit your completed document by
emailing it to [email protected]

Don’t
forget to keep a copy and retain it for 12 months

Need
help?

If
you have any questions, please email the Mentor Support Team at
[email protected]

Related
Assessments

When
you have completed all written assessment tasks in this program of
study (Statement of Advice series), you will then need to
undertake one other related assessment:

Skills
Assessment (telephone simulation) to assess your communication
and interpersonal skills
in relation to presenting
your research findings to the financial planner.
FNSFPL508A.4.4

This
assessment will be conducted together with the presentation
requirements in relation to preparing a financial plan,
FNSFPL503A
implementation FNSFPL504A
and ongoing service FNSFPL505A

Units
of competency

Upon
successful completion of these assessments, you will be awarded
two units of competency for:

FNSFPL502:
Conduct financial planning analysis and research,
and

FNSFPL508:
Conduct complex financial planning research.

Assessment
Task 1

1.0
Evaluate the client’s current situation and identify the issues

FNSFPLN502.1

FNSFPL508.1

The
first assessment involves the evaluation
of the case
study
allocated to you, to assess the client’s current situation and
identify the issues.

This
requires that you:

undertake
an analysis of the integrity of information provided by the
client,

identify
and quantify the client objectives and expectations and test them
for viability, and

establish
the basis for strategy development based on confirmed objectives.

For
this activity, refer to the case study and complete your answers
to these assessment tasks in the space provided in the following
pages.

Marks
/ 77

Assessment
Task 1

1.1
(a) Analysis of integrity of client information

FNSFPLN502.1.1

FNSFPL508.1.1

From
the scenario in your case study, list
in the table below what documents
you would review to analyse the integrity of the information
provided by the client.

Enter
your answers in the space provided below.

Information
provided by client

What
documents would you review to confirm accuracy or analyse the
integrity of the information provided?

Marks

Cashflow
Management

Income

$
K

$
K

Wife’s
income:

/
1

ii) Husband’s
income:

/
1

Tax

i) Wife’s
annual tax:

/
1

Husband’s
tax:

/
1

Expenses

$
K

$
K

i) Living
expenses/mortgage:

/
1

ii) Discretionary
expenses (holidays etc):

/
1

Subtotal
/ 6

continued

Assessment
Task 1,
continued

Information

What
documents would you review to analyse the integrity of the
information provided?

Marks

Wealth
Creation

Super
$
K

$
K

i) Wife’s
superannuation:

/
1

ii)
Husband’s superannuation:

/
1

Investments($
K)

i) Cash
Investments Held:

/
1

Debt
Reduction($
K)

($
K)

i) Mortgage:

/
1

ii) Credit
Cards:

/
1

Wealth
Protection

Personal
Insurance

$
K

$
K

i) Wife’s
current Life/TPD insurance :

/
1

Husband’s
current Life/TPD insurance :

/
1

Estate
Planning yes
/ no

yes
/ no

i) Wife’s
estate planning:

/
1

ii) Husband’s
estate planning:

/
1

/9

continued

Assessment
Task 1

1.1
(b) Analysis of integrity of client information

FNSFPLN502.1.1

FNSFPL508.1.1

Use
the http://www.taxcalc.com.au/1
and a current
tax rate to
calculate Dennis and Donna’s:

Investment
income

Superannuation
contributions, and

Surplus
income after tax.

Use
the Financial Planning Research spreadsheet provided to assist you
in your calculations and then enter your results in the table
below. You should use the copy and paste function to copy the
calculations from the spreadsheet in to the tables below.

As
your clients have private health insurance, the Medicare Levy
surcharge
does not apply. Also, assume that investments are jointly held so
that 50% of the income is earned by each.

Investment
Income

Investment

Amount

Rate

Income

Bank
Account

Term
deposit

Cash
Management Account

Total

/
2

Superannuation
Contributions (current situation)

 

Base
Salary

SG
Rate

Amount

Donna

Dennis

Total

/
2

Surplus
Income (current situation)

 

Base
Salary

Investment
Income

Taxable
Income

Tax
on Income

Medicare
levy

Tax
Payable

(incl
LITO)

Expenses

(incl
mortgage payment)

Surplus
income

Donna

Dennis

Total

/
6

/
10

continued

Assessment
Task 1

1.2
Identify client objectives and expectations

FNSFPLN502.1.2

FNSFPL508.1.2

From
the scenario in your case study,

write
down one or more specific financial objectives
and expectations for the generic needs provided,

quantify
the objective by expressing the amount
in today’s dollars (PV- Present Value), and

Describe
how you would verify
each objective.

Generic
Needs

(a)
Specific client objectives and time frames (if applicable)

(b)
Amount (PV)

(c)
How would you verify the amounts in (b) or test for viability? (No
calculations are required)

Marks

Cashflow
Management

Income

/3

Tax
minimisation

/
3

Expenses

/3

Wealth
Creation

Superannuation

/
3

Investment
Planning

/
3

Debt
reduction

/
3

Wealth
Protection

Personal
Insurance

/
3

Estate
Planning

/
3

/
24

Continued

Assessment
Task 1,
continued

1.3
a) Develop strategic options

FNSFPLN502.1.3

FNSFPL508.1.3

From
the scenario in your case study, establish the basis for strategy
development by identifying the strategic options
for each generic need.

You
should develop a minimum of three options for each generic need
which would act as a hypothesis for you to investigate further.

Generic
Needs

Possible
Options

Marks

Cashflow
Management

Income

/
3

Tax
minimisation

/
3

Expenses

/
3

Wealth
Creation

Superann-uation

/
3

Investment
Planning

/
3

Debt
Reduction

/
3

Wealth
Protection

Personal
Insurance

/
3

Estate
Planning

/
3

/
24

continued

Assessment
Task 1,
continued

1.3
b) Develop strategic options,
continued

FNSFPL508.1.3
(b)

From
the various options that you have given in 1.3 (a), please list
four (4) options / alternatives that you would want to present to
the clients to get their approval before conducting detailed
research.

For
example, you might start this discussion to confirm
objectives
with “I
understand that you have a preference to do X, but if I could show
you a significant advantage in doing Y, would you consider it?”

Would
you consider:

Marks

1

/1

2

/1

3

/1

4

/1

/
4

Total
/ 77

Assessment
Task 2

2.0
Identify research requirements and parameters

FNSFPLN502.2

FNSFPL508.2

The
next step in the Financial
Service Advice Process
includes the identification
of research requirements and parameters.

This
requires that:

Aims
and objectives of research including strategy, product and
performance parameters are established against client
requirements and expectations with all issues identified,

Intended
use of the research information is clearly established

A
wide range of relevant internal and external information
resources required for the research are identified and accessed,

Information
requirements not met by regular sources are identified and
strategies developed to access them legitimately, and

Timeframes
are established and requests for information prioritised to
ensure milestones are met.

Complete
your answers to this assessment task in the space in the table
provided:

The
first column you are required to fill in is
(b) – What are some research questions that you could ask to
determine the clients’ aims and objectives?

You
are required to provide 1 or 2 additional Research Questions for
each generic need, but no calculations or sums are required at
this stage.

The
second column you are required to fill in
is (c) – Where would you find this information?

You
are required to provide some examples of websites, on-line
calculators type of spreadsheet etc. you could utilise to answer
the questions in part (b).

The
final column (d)
– Priority
requires you to allocate a level of importance to each generic
need.

Use
the numbers 1 – 3 with 1 being the highest priority.

An
example of a research question is provided in the first row for
each generic need.

Marks
/ 29

Assessment
Task 2,
continued

Generic
Needs

(a)
What is the expected outcome for the clients? (Intended
use or reason)

What
are some research questions that you could ask to determine the
clients’ aims and objectives?

(Please
provide 1 or 2 additional research questions for each)

(c)
Where would you find this information?(e.g.
websites, calculators, spreadsheets etc)

(d)
Priority1
– 3

(1
being highest)

Marks

Cashflow
Management

Income

Maximise
savings

Maintain
current level of income

How
much of the surplus income can be allocated to other investments
to maximize savings over the next 7 years?

Spreadsheet

1

/2

Tax
Minimisation

Pay
lower rate of tax

Identify
cost of paying off mortgage

Obtain
tax benefits

How
much tax is currently being paid in the cash and fixed interest
investments?

/
4

Expenses

Reduce
after tax costs

Is
the client’s estimate of $40,000 pa for living expenses and
$10,000 pa for holidays an accurate estimate?

/
4

Wealth
Creation

Superannuation

Maximise
growth of fund

Identify
contributions required to achieve retirement income

Is
there a portfolio within Dennis’ current superannuation fund
that is more in line with his risk profile and more likely to
have an average annual return of more than 4%?

/
4

Subtotal
/ 14

continued

Assessment
Task 2,
continued

Generic
Needs

(a)
What is the expected outcome for the clients? (Intended
use or reason)

What
are some research questions that you could ask to determine the
clients’ aims and objectives?

(Please
provide 1 or 2 additional research questions for each)

(c)
Where would you find this information?(e.g.
websites, calculators, spreadsheets etc)

(d)
Priority

(1
– 3 with 1 being the highest )

Marks

Investment
Planning

Establish
investment for grandchildren’s future education costs

Will
the clients need access to these funds before the 12 year time
frame?

/
4

Debt
Reduction

Clear
non-deductible debt before Donna retires

How
long it would take to pay off the home loan if a lower rate is
obtained?

/
4

Wealth
Protection

Personal
Insurance

Wealth
protection without losing any current benefits

What
other (if any) insurances are available under their current
superannuation funds?

/
4

Estate
Planning

Estate
protection

What
do the clients know about having a valid will, powers of
attorney, testamentary trusts etc?

/
3

Total
/ 29

Assessment
Task 3

3.0
Extract and analyse information

FNSFPLN502.3

FNSFPL508.3

The
next step in the Financial
Service Advice Process
includes the extraction
and analysis of information according to research requirements and
parameters.

This
requires that:

Data
extraction criteria are established that are relevant to intended
use and client requirements and do not unduly limit the scope of
research,

Trends
are identified to provide meaningful information on performance
of possible strategies, products and markets,

Financial
products are analysed within appropriate timeframes to ensure
currency of decision making and comprehensive risk assessment is
made of products identified through the research,

Obtained
information is prioritised according to client requirements and
expectations, and

Issues
that require specialist research or advice are identified and
appropriate advice obtained.

Complete
your answers to this assessment task in the spaces provided in the
following pages.

(Marks
170)

Assessment
Task 3.1

3.1
Research tax minimisation

FNSFPLN502.3

FNSFPL508.3

Referencing
the
Tax
Calculator2
research the four (4) different tax minimisation options specified
below and calculate the potential annual tax that could be saved
by your clients.

Use
the Financial Planning Research spread sheet provided to assist
you in your calculations and then enter your results in the table
below. You should use the copy and past function to copy the
calculations from the spreadsheet in to the tables below.

Complete
your answers in the space provided below.

Tax
Minimisation Options

Calculations

Potential
Tax saving (pa)

Marks

How
much tax is currently paid on the cash and fixed interest
investments?

Income

Tax
rate

Tax

x

=

x

=

N/A
– Current situation

/
3

If
the cash and fixed interest investments were transferred from a
joint ownership to Dennis’ name how much tax would be saved?

Income

Tax
rate

Tax

x

=

x

=

/
3

How
much would Donna save in tax if she salary sacrificed up to the
concessional contribution cap?

/
3

How
much extra Low Income Tax Offset would Dennis be entitled to, if
he salary sacrificed to meet the 19% marginal tax rate?

(Note:
Do not include investment income)

/
3

Subtotal
/ 12

Assessment
Task 3.2

3.2
Research surplus income

FNSFPLN502.3

FNSFPL508.3

Using
the previous Tax
Calculator
for the current
financial year, Calculate the tax payable and surplus income
available if the client were to implement the tax minimization
options identified in the previous assessment task.

Do
not
include the interest income in this calculation and complete your
answers in the space provided below.

In
your summary, consider the changes to total tax payable, surplus
income and increased superannuation contributions.

Table
1- Surplus Income (current)

 

Base
Salary

Salary
Sacrifice

SG
(9.5%)

Total
Super Contribution

Taxable
Income

Tax
on Income

Medicare
levy

Tax
payable (incl LITO)

Expenses
(incl mortgage payment)

Surplus
income

Donna

Dennis

Total

Table
2-Surplus Income (after salary sacrifice)

 

Base
Salary

Salary
Sacrifice

SG
(9.5%)

Total
Super Contribution

Taxable
Income

Tax
on Income

Medicare
levy

Tax
payable (incl LITO)

Expenses(incl
mortgage payment)

Surplus
income

Donna

Dennis

Total

Table
3-Change between above

 

Base
Salary

Salary
Sacrifice

SG
(9.5%)

Total
Super Contribution

Taxable
Income

Tax
on Income

Medicare
levy

Tax
Payable(incl LITO)

Expenses(incl
mortgage payment)

Surplus
income

Donna

Dennis

Total

/
6 marks

Summary

Mark

/
3

Subtotal
/ 21

Continued

Assessment
Task 3.3

3.3
Research super contributions

FNSFPLN502.3

FNSFPL508.3

Calculate
the NET
impact of the contemplated salary sacrifice strategies on annual
superannuation savings (after tax).

You
should refer to the Key
super rates and thresholds3
on the ATO website to identify the current contribution tax and
cap on contributions.

In
your summary, consider the impact of the proposed changes in
annual contributions on accumulated superannuation, contribution
tax paid by the funds in relation to the change in surplus income.

Superannuation
(Current)

 

Annual
Contribution (SG)

Concessional
Contributions Tax

Amount
over Concessional Cap

Tax
on amounts over the cap

Total
Tax Payable

Annual
Contribution (after tax)

Donna

Dennis

Total

Superannuation
(after salary sacrifice)

 

Annual
Contribution (SG and salary sacrifice)

Concessional
Contributions Tax

Amount
over Concessional Cap

Tax
on amounts over the cap

Total
Tax Payable

Annual
Contribution (after tax)

Donna

Dennis

Total

Net
change between above 2 tables

 

Annual
Contribution

Concessional
Contributions Tax

Amount
over Concessional Cap

Tax
on amounts over the cap

Total
Tax Payable

Annual
Contribution (after tax)

Donna

Dennis

Total

/
6

Summary

Mark

/
4

Subtotal
/ 31

Continued

Assessment
Task 3.4

3.4
Research super target

FNSFPLN502.3

FNSFPL508.3

Using
the Super
Simulator
4
on the AMP website, calculate both Donna and Dennis’:

https://www.amp.com.au/super/supersimulator/index.html#!/

Projected
savings in an average market (on Donna’s retirement in 7
years),

Target
super savings required to generate their desired retirement
income (i.e. $30K+- pa for Donna and $10K+-pa for Dennis).

Additional
Information

Move
the Blue Slider to align the above amounts of required income
in retirement

Remember
to set the clients retirement age

Do
not projected Dennis’s superannuation after he moves to
part-time work

Your
projection should use Dennis’s proper risk profile

Use
the ‘Print Screen’ command on your computer to copy the image
of the projected super savings for both Donna and Dennis and paste
in the space provided below. Then read the Assumptions and
Methodology section and list the key assumptions used by the Super
Simulator under the headings provided.

Superannuation
(after salary sacrifice strategies)

 

Current
Savings

Projected
Savings over7 years in average markets

Projected
Income generated in average markets

Target
Savings

Target
Income Generated

Savings
Gap

Mark

Donna

$290,000

Dennis

$138,000

Total

$428,000

/10

Assessment
Task 3.4,
continued

Donna

Mark

Paste
copy of Donna’s super simulation results here:

/
1

Subtotal
/ 42

Continued

Assessment
Task 3.4,
continued

Dennis

Mark

Paste
Dennis’ super simulation results here:

/
1

Assumptions (% or $),
Methodolgy and/or Risks

Mark

Salary
Increase

/
1

Rates
of Investment Returns for an average market

/
1

Fees

/
1

Pension

/
1

Today’s
dollars

/
1

Subtotal
/ 48

Continued

Assessment
Task 3.5

3.5
Compare superannuation funds

FNSFPLN502.3.3
and 3.4

FNSFPL508.3.3
and 3.4

Compare
two alternative superannuation funds of your choice (refer to
Personal
Super Fund Profiles
5
on the Rainmaker website to find fund if required). In your
analysis, you should consider the security of the fund in terms of
the reputation of the product provider, their experience in the
superannuation market, the long-term average return and whether
the investment options match Dennis’ risk profile. On the
following page recommend one fund that will enable Dennis to
receive a return in line with his risk profile.

Question

Fund
1

Fund
2

Marks

Provider

/
1

Product
name

/
1

URL
of PDS

/
1

PDS
version No. & issue date

/
1

Experience

/
1

Return
1 Yr

/
1

Return
3 Yr

/
1

Return
5 Yr

/
1

All
Fees (MER,
admin, exit and entry)

/
1

Investment
options

/
1

Risks

/
1

Subtotal
/ 59

Assessment
Task 3.5,
continued

Graph
Returns

Create
a graph using the Financial Planning Research Spreadsheet (Excel
Worksheet) comparing the last year’s return of the two funds on the
previous page to Dennis’ current fund. Copy and paste it in the
space below.

Copy
and paste the graph here.

Recommend
a fund, either Dennis existing super fund or one of the funds that
you researched. Ensure that the investments are in line with Dennis
risk profile. Explain your reasons to justify your recommendation,
but not based on just investment returns alone. Given that there is
limited information on Dennis existing fund you are allowed to make
your own assumptions in comparing it against the ones that you
researched.

Recommend
a fund

Mark

/
2

Subtotal
/ 61

Continued

Assessment
Task 3.6

3.6
Research using investments to pay down mortgage

FNSFPLN502.3

FNSFPL508.3

Calculate
whether your clients would be better off in after tax dollars:

Using
their investment monies ($36,000) to pay down their mortgage; or

Retaining
the investments

You
will need to calculate comparison savings in after
tax
dollars over the next 7 years to clear the debt before Donna
retires.

Interest
saved (by using investment to pay down mortgage)

Interest
earned(by retaining investments in Dennis’ name)

Marks

/
4

Would
Dennis and Donna be better off keeping their investments (bank
account, term deposit and cash management account) or use the funds
to pay down their mortgage? By how much?

Keep Investments OR
Pay Mortgage?

Marks

Keep
their investments?

Yes
/ No

/
1

Show
your calculations

/
1

By
how much?

/
1

Subtotal
/ 68

continued

Assessment
Task 3.7

3.7
Calculate the future value of investment needs

FNSFPLN502.3

FNSFPL508.3

Using
the ‘ Compound Interest Formula’ , calculate the future value
of your client’s investment needs, assuming a:

3%
pa rate of inflation (net of inflation), and

Complete
your answers in the table provided below bearing in mind the
different timing requirements for funds. Show calculations using 8
decimal places, but the final results in two decimal places.

Then
summarise your findings in terms of the future values (FV) arrived
at, in relation to the client’s stated present values (PV).

Calculations

Marks

Uni
Fees

Present
Value (PV) = $120,000

Inflation
rate per year (r) = 3%

Number
of years (n) = 12

2/
2

2/
2

2/
2

Formula:

FV
= PV(1 + r)n

Uni
Fees

FV
=

=

= $

2/
2

2/
2

2/
2

Summarise
what the future value of investment needs will be

Summary

Marks

/
3

Subtotal
/ 83

continued

Assessment
Task 3.8

3.8
Calculate the future investment needs

Using
the formula provided below to calculate the regular investment
required to create a future value from the previous page,
determine how much Donna and Dennis would need to invest each year
for 12 years into an Investment Bond so as to provide for their
grandchildren’s university education (Show calculations using
eight decimal places, but the final results in two decimal
places..

In
your calculation, assume

a
6% pa return (after management fees),

no
entry fee (rebated), and

compounded
annually.

Provide
your answers in the space provided below

Calculations

Marks

Variables:

Future
Value (FV) =

Interest
rate expressed as a decimal (r) =

Number
of years (n) =

/
1

/
1

/
1

Formula:

Savings
Required (PMT) = [FV x r]

[(1 + r)n
-1]

Calculation:

Savings
Required (PMT) =

=

=

/
1

/1

/
1

The
advantage of Investment Bonds:

Add
this annual amount to the total expenses in the second table in task
3.2 to give you an updated surplus income figure.

Calculations

Amount

Marks

Surplus
income after current expenses and tax minimisation

/
1

LESS
allocation for investment bonds

/
1

Updated
surplus income

/
1

Subtotal
/ 92

continued

Assessment
Task 3.9

Question

Product
1

Product
2

Marks

Provider

/
1

Product
name

/
1

URL
of PDS

/
1

PDS
version No. & issue date

/
1

Experience

/
1

Return
1 Yr

/
1

Return
5 Yr

/
1

All
Fees (MER,
admin, exit & entry)

/
1

Investment
options

/
1

Risks

/
1

Preferred
Option: Why?

/
5

Subtotal
/ 107

Assessment
Task 3.10

3.10
Calculate mortgage payments to pay-out home loan

FNSFPLN502.3

FNSFPL508.3

After
researching their current home-loan, Donna and Dennis would save
money by considering lowering the interest rate on their mortgage
to 4.5%.

Using
the Home
Loans Repayment Calculator
from Your Mortgage6,
calculate what their current repayments would need to be increased
to so as to pay-out the home loan over 7 years.

Complete
your answers in the table provided below.

Calculations

Marks

Variables:

Loan
Amount (after strategy in task 3.6) $

Interest
Rate %

Term
7 years

New
Repayments pa $ pa (
p/mth x 12 )

Current
Repayments $
pa

Net
change $
pa

/
1

/
1

/
1

/1

/1

/1

Do
you think that 7 years to pay-out the home loan is:

too
short,

too
long, or

appropriate.

Provide
a justification for the selection that you have made above:

/
1

/1

Calculations

Using
the Net Change amount show the effect this will have on the
cash-flow table after Task 3.8 to update the total expenses and
surplus income figures.

Amount

Marks

Surplus
income after current expenses and tax minimization, LESS
allocation for investment bonds

Net
Change to repayments

/
1

Updated
surplus income

/
1

Subtotal
/ 117

continued

Assessment
Task 3.11

3.11
Calculate the value of investments on retirement

FNSFPLN502.3

FNSFPL508.3

Using
the Future Value of a Cashflow formula, calculate the gross value
of potential additional savings of $2,000 every 6 months assuming:

Additional
savings will continue until Dennis retires at 65, and

An
investment return of 8% pa compounding.

For
the purpose of this calculation, you will need to calculate the
number of periods until Dennis retires and the 8% interest rate
will be compounded half yearly (ie. 4% per period)

Complete
your answers in the table provided below.

Calculations

Marks

Variables:

6
monthly contribution (PMT) =

Interest
rate per period (i) =

Number
of periods (n) =

/
1

/
1

/
1

Formula:

Calculate
investment savings:(Show
your workings)

FV
=

=

=

= $

/
1

/
1

/
1

/
1

Will
these additional savings assist the clients with meeting any
previous goals or objectives identified? Please explain and
complete an updated cash flow table.

Updated
cash-flow table:

Net
cashflow after Task 3.10 less annual amount required above =
$____________

Subtotal
/ 124

continued

Assessment
Task 3.12

3.12
Additional super contributions

FNSFPLN502.3

FNSFPL508.3

Would
non-concessional super contributions be better than Education Bond
for saving for the grandchildren’s university education?

In
this activity, you are required to explain the subjective reasons
why an alternative
strategy to Investment Bonds, namely making non-concessional
superannuation contributions may be a better option for saving
towards university fees for your client’s grandchildren.

Subtotal
/ 127

Assessment
Task 3.13

3.13
Research insurance needs

FNSFPLN502.3

FNSFPL508.3

Determine
the personal insurance needs for your clients, considering their
current insurance, appropriate policy ownership and changing needs
as they transition towards retirement.

Since
there are a number of methods that can be used by you to calculate
insurance needs, you will be assessed on whether you can provide a
reasonable
basis for your calculations. Therefore, it is important to provide
details of your calculations and to fully explain your method of
calculation.

What
insurance cover do your client’s already have?

insurance
cover

Marks

1

/
1

What
are your client’s Term Life insurance requirements?In
your calculations, you should assume that the:

remaining
spouse continues working to retirement as planned,

deceased
bequeaths all assets to the remaining spouse,

remaining
spouse is the beneficiary of existing insurance held,

no
provision in the life insurance calculation needs to be made for
topping up superannuation, and

Donna
is able to increase her Life and TPD cover under her current
superannuation fund, and Dennis can establish Life and TPD cover
under his superannuation fund.

How
much should Donna’s life insurance cover be increased by?

How
much Life insurance does Dennis require?

Notes

Donna

Dennis

Marks

Clear
Debt (after strategy in Task 3.6)

Income
Replacement (annual income times years until retirement, plus
Dennis’ part time income)

/1

Grandchildren’s
University Fees

/1

Funeral
Costs

/1

Total

/1

LESS

Insurance
currently held

/1

Superannuation
currently held

/1

Additional
Cover Required

/
1

Total
Cover (Insurance
held + Additional)

/1

Subtotal
/ 136

Continued

Assessment Task 3.13

III.
What are your client’s TPD insurance requirements?(Assume
$100K Home modification, medical costs)

Notes

Donna

Dennis

Marks

Clear
Debt (after strategy in Task 3.6)

/1

Income
Replacement (annual income times years until retirement, plus
Dennis’ part time income)

/1

Home
Modification/Medical Costs

/1

Total

/1

LESS

Insurance
currently held

/1

Superannuation
currently held

/1

Additional
Cover Required

/
1

Total
Cover (Insurance
held + Additional)

IV.
What are your client’s Trauma insurance requirements? (assume
$50K is required for medical expenses)

Notes

Donna

Dennis

Mark

Clear
Debt

/2

Medical
Expenses

Total

V.
What are your client’s Income Protection insurance requirements?

Notes

Donna

Dennis

Income

Plus
SG (9.5%)

Equals
Insurable Income

/
2

Maximum
Monthly
Benefit Available (75%)

ADDITIONAL
INFORMATION

Assume
you have obtained 3 Trauma & 3 Income Protection insurance quotes
from 3 different Product Providers

COMPANY

TRAUMA
($ per-month)

INCOME
PROTECTION ($ per-month)

Donna

Dennis

Donna

Dennis

A
Life Insurance Company

153.07

181.24

182.58

121.87

Ins
at its best co

155.84

180.16

181.44

120.55

AMP

152.06

179.14

Zurich

179.37

118.05

Please
pick the quotes from the company that has quoted you the lowest
premium and use this information to complete the assessment task
3.13.

Subtotal
/ 149

Continued

Using
the information provided in above stated table. Complete the
quotation of the monthly cost for Trauma

Monthly
Cost

Donna

Dennis

Mark

/1

Using
the information provided in the above stated table. Complete the
quotation of the monthly cost for Income protection

Monthly
Cost

Donna

Dennis

Mark

/1

What
is the total annual cost of insurance cover proposed? (Monthly
premiums x 12 for Trauma and Income Protection)

Donna

Dennis

Mark

Total
Monthly Insurance cost

/1

Annual
cost for recommended Cover

IX.
Complete an updated cash-flow analysis after all of your previous
recommendations have been taken into consideration and comment on the
final outcome:

Calculations

Amount

Marks

Surplus
income after Task 3.11

/
1

LESS
annual cost of recommend insurance cover

Total
surplus income

Subtotal
/ 153

Continued

Assessment
Task 3.14

3.14
Identify insurance ownership

FNSFPLN502.3

FNSFPL508.3

In
the table below, indicate whether the insurance premiums would be:

Fully
tax deductible

Partly
tax deductible

Not
tax deductible.

Then
make a recommendation on whether which insurance policies should
be held by your clients’ superannuation fund or personally and
state your reasons.

Tax
Treatment of Insurance Premium

PolicyOwnership

LifeInsurance

TPDInsurance

TraumaInsurance

Income
Protection

Super
Fund

Personally

Policy
Ownership

PolicyOwnership

LifeInsurance

TPDInsurance

TraumaInsurance

Income
Protection

Donna

Dennis

Why?

Indicate
in the table below the reason why you chose the above ownership
structure:

PolicyOwnership

LifeInsurance

TPDInsurance

TraumaInsurance

Income
Protection

Reason

Mark

/1

/1

/1

/1

Subtotal
/ 156

Continued

Assessment Task 3.15

3.15
Compare Life Insurance products

FNSFPLN502.3.3
and 3.4

FNSFPL508.3.3
and 3.4

Using
information obtained from the previous activity, analyse the
respective insurance products offered by both AMP Elevate
Insurance and Zurich Futurewise. In your analysis you should
consider the experience of the product provider, definitions of
Income Protection and Trauma, their claims process and the cost of
insurance.

To
ensure that you are dealing with the current PDS, please provide
the internet link (URL), version number and release date.

Please
refer to attached AMP & Zurich PDS to complete this section

Question

AMP

Macquarie

Marks

1.
Provider/Underwriter

/
1

2.
Experience/ reputation

/
1

3.
Product name

/
1

4.
PDS version number & release date

/
1

5.Definition
of Income Protection

/
1

6.Definition
of Trauma

/
1

7.Claims
process

/
1

8.
Cost of Income

Protection

/
1.5

9.Cost
of Trauma

/1.5

10.
Risks

/
1

Subtotal
/ 167

Continued

Assessment
Task 3.16

3.16
Research estate planning needs

FNSFPLN502.3.6

FNSFPL508.3.6

Your
clients have expressed a preference to see a female wills and
estate specialist who lives relatively close to them in
Hurstbridge Victoria (postcode 3099) to help them establish a will
and power of attorney for your clients.

Using
the Accredited
Specialist Directory
7
on the Law Institute of Victoria website, identify the two
specialists located near your clients who can help can provide
appropriate advice.

List
eight (8) local Wills & Estate Specialists

Local
Wills & Estate Specialists

Marks

1

2

3

4

5

6

7

8

/
1

List
below the details of the 1st
female Wills & Estate Specialist

First
Female Wills & Estate Specialists

Marks

1

/
1

List
below the details of the 2nd
female Wills & Estate Specialist

Second
Female Wills & Estate Specialists

Marks

1

/1

Subtotal
/ 3

Total
/ 170

Assessment
Task 4

4.0
Summarise and present results of research

FNSFPLN502.4

FNSFPL508.4

The
next step in the Financial
Service Advice Process
includes the extraction
and analysis of information according to research requirements and
parameters.

This
requires that:

Information
on financial strategies and products is collated and checked
against research specification,

Written
performance, trend and risk analyses are prepared and checked
against research specification,

Any
qualifications or issues for further research are described and
documented, and

Research
findings are presented to the financial planner.

Complete
your answers to this assessment task in the space provided in the
following pages.

Marks
/ 36

Assessment
Task 4.1

4.1
Check findings

FNSFPLN502.4.1
and 2

FNSFPL508.4.1
and 2

For
each one of the Research Questions that you investigated in
relation to the case study, summarise your:

answer
to the research question, and

assessment
of risk8
on a scale of 1 to 3 (where 1 is high)

Provide
your answer in the table provided below.

Generic
Needs

(a)
Research Specifications / Question

(b)
Answer

(c)
Risk

Mark

Cashflow
Management

Income

Given
the annual adjustment to the superannuation contributions
contemplated in the tax minimisation strategy in 3.2, how would
this affect surplus savings?

How
much surplus income is now available each year to invest?

/
1

/
1

Tax
minimisation

How
much tax is paid on the cash and fixed interest investments?

If
the cash and fixed interest investments were transferred to
Dennis’ name how much tax would be saved?

How
much tax would Donna save if she salary sacrificed to her super
contribution limit?

How
much extra Low Income tax Offset would Dennis be entitled to if
he salary sacrificed all of his income above the 19% tax bracket?

/
1

/
1

/1

/
1

Expenses

How
much can the interest rate on the mortgage potentially be reduced
by?

How
much interest pa could potentially be saved if the cash and fixed
interest funds were applied to the mortgage?

/
1

/
1

Wealth
Creation

Superann-uation

Given
the contemplated salary sacrifice changes, how would this affect
the annual superannuation savings (after tax)?

What
would be Donna and Dennis’ projected super savings in an
average market on retirement in 7 years time?

What
would be Donna and Dennis’ target super savings to fund their
desired retirement income?

What
superannuation shortfall will they have after all recommendations
have been put place?

/
1

/
1

/
1

/
1

Subtotal
/ 12

continued

Assessment
Task 4.1,
continued

Generic
Needs

(a)
Research Specifications / Question

(b)
Answer

(c)
Risk

Mark

Investment
Planning

What
is the future value of car on retirement (7 years)?

What
is the future value of $120K university fees in 12 years?

How
much do Dennis and Donna need to contribute each year towards the
grandchildren’s education bonds to reach their goal?

Once
all recommendations have been put in place, what is their annual
surplus income?

What
future value of investment savings can be generated if they save
an additional $2,000 every six months at a rate of 8% pa
compounded six monthly?

How
much of these funds will need to be contributed towards super to
make up the shortfall?

/
1

/
1

/
1

/
1

/
1

/
1

Debt
reduction

How
long it would take to pay off the home loan if the new rate and
additional repayments recommendation is followed?

Is
it financially better to retain the investment and put it into
Dennis’ name or to use the funds to pay down the mortgage?

By
how much?

/
1

/
1

/
1

Wealth
Protection

Personal
Insurance

How
much Term Life insurance does Donna require?

How
much TPD insurance does Donna require?

How
much Trauma Insurance do Donna and Dennis require?

What
is the maximum amount of Income Protection Donna can apply for?

What
is the maximum amount of Income Protection Dennis can apply for?

What
would be the approximate monthly cost of their stand-alone
insurance cover?

/
1

/
1

/
1

/
1

/
1

/
1

Estate
Planning

Who
are the local will and estate specialists?

/
1

Subtotal
/ 28

continued

Assessment
Task 4.2

4.2
Further research

FNSFPLN502.4.3

FNSFPL508.4.3

In
the space provided below, detail:

At
least one additional research question that you believe needs
answering, and

If
specialist research or advice is required.

You
should consider the above in relation to each of the eight generic
needs specified.

Generic
Needs

Additional
Research Questions

Mark

Cashflow
Management

Income

Are
there are any potential additional sources of income, such as an
inheritance?

/
1

Tax
Minimisation

Can
we confirm with your accountant if there are any issues that
should be considered in relation to the proposed strategy?

/
1

Expenses

Do
you think that your current expenses will continue to be
appropriate into retirement?

/
1

Wealth
Creation

Superann-uation

Are
you comfortable with Dennis’ superannuation being rolled into a
more appropriate fund to match his risk profile?

/
1

Investment
Planning

Do
you understand how Investment bonds work?

/
1

Debt
Reduction

Are
there any other debts that should be considered in the plan (e.g.
credit card debt)?

/
1

Wealth
Protection

Personal
Insurance

Are
there any insurance providers that you would prefer we not
recommend?

/
1

Estate
Planning

Do
you have your own solicitor that could help you with your Estate
Planning requirements?

/
1

Subtotal
/ 8

Total
/ 36

1
http://calculators.ato.gov.au/scripts/axos/axos.asp?CONTEXT=&KBS=Medicare10.xr4&go=ok

2
http://www.taxcalc.com.au/

3
https://www.ato.gov.au/Rates/Key-superannuation-rates-and-thresholds/

4
https://www.amp.com.au/super/supersimulator/index.html#!/

5
http://www.selectingsuper.com.au/

6
http://www.yourmortgage.com.au/calculators/

7
http://www.liv.asn.au/Specialists.aspx

8
Notes:
(1) there should be only one risk assessment per Generic Need.

(2)
Risk to the client refers to the risk associated with the products
or services that are being investigated in relation to each Generic
Need.
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