Written Assignment

21 Jul Written Assignment

Written Assignment

Financial Planning Fundamentals
(DFP1_AS_v4)

Student identification (student to complete)

Please complete the fields shaded grey.

Assignment result (assessor to complete)

Result — first submission (details for each activity are shown in the table below)

Parts that must be resubmitted

Result — resubmission (if applicable)

Result summary (assessor to complete)

		First submission	Resubmission (if required)
	Part 1: Instructions for completing and submitting this assignment
	Part 2: Case study
Part 3: Assignment questions	Question 1	Not yet demonstrated	Not yet demonstrated
	Question 2	Not yet demonstrated	Not yet demonstrated
	Question 3	Not yet demonstrated	Not yet demonstrated
	Question 4	Not yet demonstrated	Not yet demonstrated
	Question 5	Not yet demonstrated	Not yet demonstrated
	Question 6	Not yet demonstrated	Not yet demonstrated
	Question 7	Not yet demonstrated	Not yet demonstrated
	Question 8	Not yet demonstrated	Not yet demonstrated
	Question 9	Not yet demonstrated	Not yet demonstrated

Feedback (assessor to complete)

[insert assessor feedback]

Before you begin

Read everything in this document before you start your assignment for Financial Planning Fundamentals (DFP1_AS_v4).

About this document

This document is the Written Assignment — half of the overall Written and Oral Assignment.

This document includes the following parts:

• Part 1: Instructions for completing and submitting the assignment
• Part 2: Case study
• Part 3: Assignment questions (includes uploading an Excel spreadsheet for Question 2, in addition to uploading this completed template, i.e. upload 2 documents; this completed template and your completed Excel spreadsheet).

How to use the study plan

We recommend that you use the study plan for this subject to help you manage your time to complete the assignment within your enrolment period. Your study plan is in the KapLearn Financial Planning Fundamentals (DFP1v4) subject room.

Instructions for completing and submitting the assignment

Saving your work

Download this document to your desktop, type your answers in the spaces provided and save your work regularly.

• Use the template provided, as other formats will not be accepted for these assignments.
• Name your file as follows: Studentnumber_SubjectCode_Assignment_versionnumber_Submissionnumber
  (e.g. 12345678_DFP1_AS_v4_Submission1).
• Include your student ID on the first page of the assignment.

Before you submit your work, please do a spell check and proofread your work to ensure that everything is clear and unambiguous.

Word count

The word count shown with each question is indicative only. You will not be penalised for exceeding the suggested word count. Please do not include additional information which is outside the scope of the question.

Additional research

You will be required to do additional research to answer the assignment questions.

Submitting the written assignment

Only Microsoft Office compatible written assignments submitted in the template file will be accepted for marking by Kaplan Professional Education. You need to save and submit this entire document.

Do not remove any sections of the document.

Do not save your completed assignment as a PDF.

The written assignment must be completed before submitting it to Kaplan Professional Education. Incomplete written assignments will be returned to you unmarked.

The maximum file size is 20MB for the Written and Oral Assignment. Once you submit your written assignment for marking you will be unable to make any further changes to it.

You are able to submit your written assignment earlier than the deadline if you are confident you have completed all parts and have prepared a quality submission.

Please refer to the Assignment submission/resubmission instructions (pdf) in the Assessment section of KapLearn for details on how to submit your written assignment.

Your written assignment and oral assignment must be submitted together on or before your due date. Please check KapLearn for the due date.

The written assignment marking process

You have 12 weeks from the date of your enrolment in this subject to submit your completed assignment.

If you reach the end of your initial enrolment period and have been deemed ‘not yet demonstrated’ in one or more assessment items, then an additional four (4) weeks will be granted, provided you attempted all assessment tasks during the initial enrolment period.

Your assessor will mark your assignment and return it to you in the Financial Planning Fundamentals (DFP1v4) subject room in KapLearn under the ‘Assessment’ tab.

Make a reasonable attempt

You must demonstrate that you have made a reasonable attempt to answer all of the questions in your written assignment. Failure to do so will mean that your assignment will not be accepted for marking; therefore, you will not receive the benefit of feedback on your submission.

If you do not meet these requirements, you will be notified. You will then have until your submission deadline to submit your completed written and oral assignment.

How your written assignment is graded

Assignment tasks are used to determine your ‘competence’ in demonstrating the required knowledge and/or skills for each subject. As a result, you will be graded as either demonstrated or not yet demonstrated.

Your assessor will follow the below process when marking your written assignment:

• Assess your responses to each question, and sub-parts if applicable, and then determine whether you have demonstrated competence in each question.
• Determine if, on a holistic basis, your responses to the questions have demonstrated overall competence.

You must be deemed to be demonstrated in all assessment items in order to be awarded the units of competency in this subject, including:

• all of the exam questions
• the written and oral assignment.

‘Not yet demonstrated’ and resubmissions

Should sections of your assignment be marked as ‘not yet demonstrated’ you will be given an additional opportunity to amend your responses so that you can demonstrate your competency to the required level.

You must address the assessor’s feedback in your amended responses. You only need amend those sections where the assessor has determined you are ‘not yet demonstrated’.

Make changes to your original submission. Use a different text colour for your resubmission. Your assessor will be in a better position to gauge the quality and nature of your changes. Ensure you leave your first assessor’s comments in your assignment, so your second assessor can see the instructions that were originally provided for you. Do not change any comments made by a Kaplan assessor.

Units of competency

This assignment is your opportunity to demonstrate your competency against these units:

FNSFPL502	Conduct financial planning analysis and research
FNSFPL501	Comply with financial planning practice ethical and operational guidelines and regulations
FNSFPL506	Determine client’s financial requirements and expectations
FNSINC401	Apply principles of professional practice to work in the financial services industry
BSBITU402	Develop and use complex spreadsheets
FNSCUS505	Determine client requirements and expectations
FNSINC501	Conduct product research to support recommendations
FNSIAD501	Provide appropriate services, advices and products to clients
FNSCUS506	Record and implement client instructions

We are here to help

If you have any questions about this written assignment you can post your query at the ‘Ask your Tutor’ forum in your subject room. You can expect an answer within 24 hours of your posting from one of our technical advisers or student support staff.

Part 1: The case study

Joe and Natalie Olden

You met Joe Olden when he came into your office last week. He had been mowing the grass in the park over the road, saw your business sign and came for a chat to see if you could help him and his wife.

They live in a small rural community outside town and have been married for three years. Joe is 26 and is a horticulturalist with the local council. Natalie is 24 and a librarian. However, she is not working at present as she looks after their twins. Until the twins arrived, their focus had been on working hard and saving for a deposit to buy a house. They rent a nice home on the edge of town and enjoy the scenic views over the hills.

Their landlord has approached them saying she wants to sell the house and will give them first refusal to purchase it. Joe’s parents have offered to help them with a loan.

They want some help in making a decision and understanding how it will all work.

You give Joe your Financial Services Guide (FSG) and a fact-find form and you agree to meet next week.

First meeting

After introductions and pleasantries, you ask Joe if he has read the FSG and briefly go through the contents for Natalie. They are comfortable to have an initial consultation to see where it takes them.

They have completed the fact find and as you discuss the contents, you make additional notes on their file. The fact find looks as follows:

Joe and Natalie Olden fact find

Table 1           Personal details

Name	Joe Olden	Natalie Olden
Salutation	Mr Olden	Mrs Olden
Age	26	24
Marital status	Married	Married (We just celebrated our third anniversary)
Home address	Hillview Cottage Burgenfield
Health	Good	Good
Smoker	No	No
Occupation	Horticulturalist	Librarian
Employer	Burgenfield Rural Council	Burgenfield Library
Projected retirement age	Probably 67	Not thought about it

 

Dependants/family relationships	Name	Age/date of birth
Son	Jason	2 (Both in good health and developing normally)
Daughter	Jillian	2

Table 2           Professional relationships

Solicitor	None
Time span of relationship	n.a.
Quality of relationship

 

Accountant	None
Time span of relationship	n.a.
Quality of relationship

Table 3           Assets and investments

Assets and investments (personally owned)

Assets	Value	Ownership status	Other information	Purchase price
Everyday bank account	$500	Joint	We try to keep at least this amount in the account. We’d like to have more cash on hand for the unexpected because with the twins something is always happening.
Joe’s ute	$4,000	Joe	It’s 12 years old and still running well. It’s a great little workhorse.	$15,000
Natalie’s sedan	$12,000	Natalie	It’s only three years old and I love it. The four doors and hatchback make it great to take the kids out and for shopping.	$18,000
Home contents	$7,000	Joint	Includes gardening equipment that Joe uses for their garden and occasional gardening jobs he does.
Bonus saving account	$22,500	Joint	We were saving quite well and enjoyed a carefree lifestyle until the twins came along, but for the last year we have often had to resist the temptation to dip into it. We get extra interest if we don’t make withdrawals.

Table 4           Liabilities

Debts	Value	Payment	Ownership status	Other information	Interest rate
Credit card	$2,500	Minimum	Joint	We would prefer to pay it off each month but we spent a lot rearranging the house when the twins arrived.	22.5%
Car loan	$5,400	$61 p.w.	Natalie	We have two years until it’s paid out.	13.5%
HECS debt	$12,000	None	Natalie	It is from Natalie’s librarian course.	CPI

Table 5           Superannuation

Fund	Value	Ownership	Other information
SunSuper	$16,300	Joe	From my job with the council. I’ve been with them since I left school and did my apprenticeship.
Council Super	$11,800	Natalie	From my job in the library since I finished university.

Table 6           Income p.a.

Income type per annum	Joe	Natalie	Notes
Salary	$48,000		Super on top of this. I hope to get the supervisor’s job in a couple of years when he retires.
Salary		$5,000	I was on $47,000 before I took time off to have the kids. I’m not sure how long I’ll be away but I don’t want to lose the opportunity to work locally. This is my town and I love it. I still do some work from home for the library. I hope to earn $5,000 a year but we’ll see.
Centrelink		About $19,000	About $730 a fortnight.
Interest	$394	$394	From $22,500 bonus saving account.
Total combined gross income	$72,788

Table 7           Estimated annual expenditures

Expense per year	Joint	Notes
Accountant’s fees		A friend does our tax online
Charitable donations		None
Children’s pocket money		n.a.
Council and water rates		Included in rent
Discretionary: restaurants, gifts, holidays, etc.	$1,000	We used to go out a lot and take short weekend breaks but we are more likely to go for a walk than to the pub nowadays
Debt repayment	$3,765	Car loan ($3,165 p.a.) and minimum payment on the credit card ($600)
Electricity	$1,000
Gas	$600
Weekly shopping	$30,000	With things for the kids we easily spend $550 each week
Health insurance		We don’t have any
Holidays		We now visit an aunt on the coast if we go anywhere
House insurance		Landlord’s responsibility
House maintenance and repairs		Landlord’s responsibility
Income protection		Never thought about it
Medical bills/prescriptions	$1,500	We are pretty healthy
Mobile phones and internet	$1,500
Motor vehicle and fuel	$10,000
Mortgage		n.a.
Pay TV		We don’t get much time to watch TV
Private school fees		n/a
Rent	$15,600	$300 p.w.
Total expenses	$64,965

Table 8           Investment objectives and attitude to risk

Joe and Natalie did not fill out this part of the fact find. They said it did not apply to them or they did not understand the questions or possible answers.

Determining your investor risk profile	Points
This investor risk profile questionnaire has been designed to help you understand the type of investor you are, so that with the help of your adviser, you can choose the investments that best match your financial objectives.
Which of the following best describes your current stage of life?
Single with few financial commitments. You are keen to accumulate wealth for the future. Some funds must be kept available for enjoyment, such as cars, clothes, travel and entertainment.
A couple without children. You may be preparing for the future by establishing and furnishing a home. There are a lot of things you need to buy. You are probably better off financially now than you may be in the future.
Young family. This is the peak home purchasing stage. You have a mortgage and a very small amount of savings. Probably dissatisfied with your financial position and the amount of money saved.
Mature family. You are in your peak earning years and have the mortgage under control. Many partners also work and any children are growing up and have either left home or require less supervision. You are starting to think about retirement, although it may be many years away.
Preparing for retirement. You probably own your own home and have few financial commitments; however, you want to ensure that you can afford a comfortable retirement. Interested in travel, recreation and self-education.
Retired. Now that you are no longer working you must rely on existing funds and investments to maintain your lifestyle. You may be receiving the pension and are keen to enjoy life and maintain your health.
What return do you reasonably expect to achieve from your investments?
A return without losing any capital
3–7% p.a.
8–12% p.a.
13–15% p.a.
Over 15% p.a.
If you did not need your capital for more than ten (10) years, for how long would you be prepared to see your investment performing below your expectations before you cashed it in?
You would cash it in if there were any loss in value
Less than 1 year
Up to 3 years
Up to 5 years
Up to 7 years
Up to 10 years
How familiar are you with investment markets?
Very little understanding or interest
Not very familiar
Have had enough experience to understand the importance of diversification
Understand that markets may fluctuate and that different market sectors offer different income, growth and taxation characteristics
Experienced with all investment sectors and understand the various factors that may influence performance
If you can only receive greater tax efficiency from more volatile investments, which balance would you be most comfortable with?
Preferably guaranteed returns, before tax savings
Stable, reliable returns, minimal tax savings
Some variability in returns, some tax savings
Moderate variability in returns, reasonable tax savings
Unstable, but potentially higher returns, maximising tax savings
Six months after placing your investment you discover that your portfolio has decreased in value by 20%. What would be your reaction?
Horror. Security of capital is critical and you did not intend to take risks.
You would cut your losses and transfer your money into more secure investment sectors.
You would be concerned; however, you would wait to see if the investments improve.
This was a calculated risk and you would leave the investments in place, expecting performance to improve.
You would invest more funds to lower your average investment price, expecting future growth.

 

Which of the following best describes your purpose for investing?
You want to invest for longer than five years, probably to age 55–60. You are mainly investing for growth to accumulate long-term wealth.
You are not nearing retirement, have surplus funds to invest and are aiming to accumulate long-term wealth from a balanced fund.
You have a lump sum (e.g. an inheritance or a lump sum payment from your employer) and you are uncertain about what secure investment alternatives are available.
You are nearing retirement and you are investing to ensure that you have sufficient funds available to enjoy retirement.
You have some specific objectives within the next five years for which you want to save enough money.
You want a regular income and/or totally protect the value of your savings.
Investor profile total points

 

Investor risk profile summary
70–140	Conservative
You are a conservative investor. Risk must be very low and you are prepared to accept lower returns to protect capital. The negative effects of tax and inflation will not concern you, provided that your initial investment is protected.
140–210	Moderate
You are a cautious investor seeking better than basic returns; however, risk must be low. Typically, an older investor seeking to protect the wealth that you have accumulated, you may be prepared to consider less aggressive growth investments.
210–280	Balanced
You are a prudent investor who wants a balanced portfolio to work towards medium- to long-term financial goals. You require an investment strategy that will cope with the effects of tax and inflation. Calculated risks will be acceptable to you to achieve good returns.
280–315	Growth
You are an assertive investor, probably earning sufficient income to invest most funds for capital growth. Prepared to accept higher volatility and moderate risks, your main concern is to accumulate assets over the medium to long term. You require a balanced portfolio, but more aggressive investment strategies may be included.
315–350	High growth
You are an aggressive investor prepared to compromise portfolio balance to pursue potentially greater long-term returns. Your investment choices are diverse but carry with them a higher level of risk. Security of capital is secondary to the potential for wealth accumulation.

Table 9           Estate planning

They have not bothered about wills because if one of them died everything would go to the other. They haven’t got around to doing anything now they have the kids.

Insurance and risk management

Policy	Life insured	Owner	Cover	Premium per annum	Notes
Death and TPD	Joe	SunSuper	$125,000 Death $175,000 TPD	$3.92 p.w.	Standard cover
Death and TPD	Natalie	Council Super	$87,000 Death	$2.00 p.w.	TPD cancelled as she is not working
Income protection
Home and contents
Private health insurance
Joe’s ute insurance
Natalie’s sedan insurance		Natalie	Fully comprehensive	$420 p.a.	Premium included in motor vehicle costs

 

You ask them about the offer from their landlord.

Question	Answer
Tell me about this offer from your landlord?	We’ve always got on well with her. We pay our rent on time and she always responded promptly if we had any problems. She likes to come and collect the rent if she can so she can see our kids. So, we’re friends, really. She says she’s selling up and moving to the coast and can’t manage a rental property from far away. She knows we were saving to buy a house and it would make life easy for her if we bought it and she didn’t have to pay real estate agent fees. Of course, it would make life easy for us too as we wouldn’t have to move.
How much is she asking?	Well, she wants $280,000. It sounds like a bargain compared to the prices they pay in the cities nowadays but it’s only a two-bedroom weatherboard cottage; it suits us just fine though. We looked at the asking prices for other homes in the window of the real estate office and it seemed a fair price.
Have you asked about a mortgage?	Yes, we spoke to the bank and they told us if we could make a 20% deposit they would fund the rest. So that means we would borrow $224,000 and we need a $56,000 deposit — a bit more than that to cover legal costs.
And you’ve had an offer from Joe’s parents?	Yes, we told them we have saved $22,500 but they could see we were short about $40,000 so they said they’d lend us the money to help us out. It’s too big an opportunity to pass by.
But it’s a loan, not a gift?	That’s right. They are in their mid-50s and plan to retire in 10 years and will want the money back by then. Joe has two brothers and neither of them is married yet so he’s the apple of their eye, having presented them with two grandkids at once. They haven’t said anything about paying interest but it’s sort of understood that once we get on top of the mortgage payments and I’m back at work we can pay them back in instalments.

 

Part 2: Assignment questions

Question 1a

The first four steps of the safe harbour are repeated below. They all form part of this stage in the financial planning process and you must address all four steps in this first question.

• Step 1: Identify the objectives, financial situation and needs of the client that were made known through the client’s instructions.
• Step 2: Identify the subject of the advice the client is looking for (whether explicitly or implicitly).
• Step 3: Identify the objectives, financial situation and needs of the client that would reasonably be considered relevant to the advice sought on that subject (the client’s relevant circumstances).
• Step 4: If it is reasonably clear that information relating to the client’s circumstances is incomplete or inaccurate, make reasonable enquiries to get complete and accurate information.

Required

(i)            Briefly describe the clients’ financial situation, their objectives and needs as initially explained by them.

(ii)       What do you believe the clients hope to gain from engaging with a financial planner?

(iii)      Describe the importance of completing the fact find at this point in the financial planning process and the compliance requirements associated with completing the fact find.

(150 words)

Answer here Step 1: Joe 26 years old and Natalie 24 years old have married for more than 3 years with 2-years-old twins. Joe is a horticulturalist with the local council and Natalie is a librarian who takes care of their children in most of her time. They rent a home and the landlord wants to sell the house. But the landlord will give them the first refusal to purchase it. And Joe’s parents have offered to help them with a loan. They want some help in making a decision and understanding how it will all work. Step 2: Joe and Natalie need advice on buying a house and supporting their children. Also they need to understand how the financial plan works. Step 3: To achieve their objects, I provide the following advice: Cash flow and budgeting Establishment of insurance in health and income protection Estate plan Step 4: Fact-finding can provide an abundance of useful information which will identify key elements of a client’s life that can structure their futures and help us to recognise how they can fulfil their life’s goals and ambitions.

 

Assessor feedback	Resubmission required?
	No

Question 1b

(i)        What is the subject of the advice the clients are seeking? What advice have they asked for?

(ii)       What additional advice do you think they need from what you know about their circumstances?

(100 words)

Answer here (i)

 

Assessor feedback	Resubmission required?
	No

Question 1c

Assume you have asked the clients more questions and have explained the areas where you think they need advice.

Read the fact find thoroughly and identify all the issues they are concerned about. Identify what you consider would be reasonable objectives for the clients. In your answer describe a minimum of six objectives. (200 words)

Answer here

Question 1d

This task requires you to identify what gaps there are in your understanding of the client’s situation. List five other clarifying questions you would ask them.

(150 words)

Answer here

Question 2a

Natalie and Joe have given you an estimate of what they currently receive from Centrelink in family benefit payments. In this question you are required to undertake research to determine and validate the amounts Natalie currently receives from Centrelink, including rent assistance. You will need this information for Question 2b. You will need to apply this process again in determining the payments for Question 2d for their changed situation.

Resources that you can use to undertake the tasks include:

• Reread Topic 8 of the study guide on payments to support families.
• Refer to the latest Guide to Commonwealth Government Payments booklet available at <https://www.humanservices.gov.au> ” Organisations/About Us ” Publications and Resources ” ‘A guide to Australian Government payments’.
• The Human Services website at <https://www.humanservices.gov.au> for more information on family benefits.

There are three (3) parts to the question:

(i)        You have agreed to meet Joe and Natalie in a week’s time. List five (5) research steps you will need to undertake, as well as their order, to prepare you for discussing their eligibility for Centrelink payments.

(ii)       Identify five (5) key data items required to determine Natalie’s eligibility for Centrelink FTBA, FTBB and rent assistance payments.

(iii)      Calculate the Centrelink benefits you estimate she will receive, showing in summary form how you arrived at the calculations.

            Note: You are not required to calculate Energy Supplement payments. You should assume that the annual supplement paid to Natalie under FTBA is $737 and for FTBB is $338, and include these figures in the annual cash flow calculations.

Answer here

 

Assessor feedback:	Resubmission required?
	No

 

Creating an Excel spreadsheet

Upload your Excel spreadsheet for Questions 2b, 2c and 2d, in addition to uploading this completed template, i.e. upload 2 documents; this completed template and your completed Excel spreadsheet.

Questions 2b, 2c and 2d require you to use spreadsheets in addressing specific tasks relating to Joe and Natalie’s situation.

You will be required to create an Excel workbook and include three worksheets. The first should be titled ‘Cash flow renting’, the second ‘Mortgage repayments’, and the third ‘Cash flow buying’. You must demonstrate that you can match the ‘Cash flow buying’ worksheets to the other two worksheets.

For assistance in the use of Excel, refer to the Excel tutorial resources found under the ‘Assignment’ tab in KapLearn.

Question 2b

(i)        Before you start, describe in about 100 words how you would organise your personal work station to ensure an ergonomically sound working environment for completing this task.

For guidance, refer to the 2015 HSW Handbook, Workstation Ergonomic Guidelines, University of Adelaide, <https://www.adelaide.edu.au/hr/hsw/docs/haz-man-task-ergo-guide.pdf>,
(viewed 5 December 2018).

(ii)       Create a worksheet to analyse the clients’ current position (‘Cash flow renting’) when they are renting the cottage. The worksheet should show tax and cash flow statements as well as a statement of net worth. You must set out the worksheet in a form and style that you can show to your clients (do not use abbreviations and present the data in a way the clients will be able to understand). Be consistent in the way you present the data (for instance, presentation of dollar amounts and percentages). (Reference can be made to the Kaplan resource ‘How to complete a cash flow table’ when completing this question as well as the case study in Topic 10.)

Following analysis of your worksheet, briefly describe the conclusions you have formed of their financial situation.

(iii)      Using the cash flow data recorded in the worksheet, create a graph that clearly shows the clients’ overall income compared with their total expense. The style of graph you use is your choice, but it must be clearly labeled to show the clients, in simple language, their overall income and expense position.

Answer here Existing spreadsheet to be used.

 

Question 2c

Create a second worksheet (‘Mortgage repayments’).

(i)        Calculate the costs of a 25-year mortgage if the clients borrow $224,000. You should determine illustrative interest rates from searching mortgage provider websites. Find a provider who offers a ‘honeymoon’ interest rate, (i.e. a lower interest rate for an initial introductory period) and calculate repayments using the honeymoon rate and, separately, when the loan reverts to the higher standard rate. Set out your assumptions and workings.

(ii)       What is the impact on the repayments when reverting to the standard rate?

Answer here

 

Assessor feedback:	Resubmission required?
	No

Question 2d

(i)        Create a third worksheet (‘Cash flow buying’) showing a second cash flow statement and net wealth statement if they go ahead and buy the house, using the mortgage calculations completed in Question 2c. Assume they cash out their bonus savings account to go towards the costs of buying the house. Consider every item in the statements.

             Note: You are not required to calculate Energy Supplement payments. You should assume again that the annual supplement paid to Natalie under FTBA is $737 and for FTBB is $338 and include these figures in the annual cash flow calculations.

(ii)       Briefly describe how their income will change as a result of buying the property, including in your answer the differences you have identified. Some costs are likely to increase and some may decrease. Some new cost items will apply. Consider Centrelink benefits and interest earned.

(iii)      After analysing the differences, what advice could you give them to improve their financial situation?

(iv)         Describe the impact on their budget if mortgage interest rates rose by 2% from the standard rate.

(100 words)

Answer here

 

Assessor feedback:	Resubmission required?
	No

 

Question 3

(i)        Consider their debt management position if they go ahead and purchase the house. Briefly describe in what sequence they should pay off their debts, if they had the capacity. Explain your reasoning.

(ii)       What strategies could be considered to reduce their current debts?

(200 words)

Answer here

 

Assessor feedback:	Resubmission required?
	No

Question 4a

Describe three risks that could detrimentally affect the client’s financial position.

Reread the fact find and think about what risks they face. You should consider all the risks to their lifestyle and not just the traditional ones that can be insured.

(200 words)

Answer here

 

Assessor feedback	Resubmission required?
	No

Question 4b

Although you do not need to provide specific, tailored risk management and estate planning advice, you can identify issues for the clients to consider and provide strategic advice that will assist them.

(i)        Briefly describe what risks Joe, Natalie and their family face if either or both of them were to die and what general options do you believe they should consider to mitigate these risks.

(ii)       What other professionals should you refer them to who could assist in their estate planning needs?

(iii)      Write a brief letter that you could provide to an in-house estate planning specialist, referring Joe and Natalie to them for help reviewing and advising them on their estate planning needs. Consider how you would introduce the clients, what relevant information you could provide, and how the clients prefer to be contacted.

(200 words)

Answer here

 

Assessor feedback	Resubmission required?
	No

Question 5

(i)        In Question 1c, you identified at least six (6) objectives for Joe and Natalie. For each objective, set out your recommendations to assist Joe and Natalie in achieving that objective. In your recommendations describe how your advice meets the clients’ goals, noting why it is in their best interests. Refer to ‘Step 3 Development of recommendations’ in Topic 10 for one way to present your answer. (500 words)

(ii)       Describe an adviser’s ‘best interests’ obligations when researching and designing financial advice. Refer to Topic 4 and FPA Practice Standards. (100 words)

Answer here

 

Assessor feedback	Resubmission required?
	No

Question 6a

Identify two issues that Joe and Natalie may wish to change in your recommendations. Refer to the negotiations that occurred in the advice process in Topic 10. Explain how you would deal with their objections or concerns, and how you would incorporate them into your recommendations.

(200 words)

Answer here

 

Assessor feedback	Resubmission required?
	No

Question 6b

You have completed your presentation to Joe and Natalie and they have asked sensible questions, so you are confident they understand the outcome of your analysis and your recommendations. They continue talking to each other.

What if you overheard Joe say to Natalie, ‘Well, it would be easier to manage a mortgage if I took on part‑time jobs for cash. And if I borrow the Council’s slasher I could do some bigger jobs at weekends. But that means more time away from you and the kids. What do you think?’ You can assume Joe did not intend you to hear their conversation.

Respond to the following four questions which relate to ethical considerations and the effect this new information may have on the client’s financial future.

(i)        What are the ethical and legal issues you face now that you have this extra information? What should you do to meet your professional responsibilities? Refer to Topics 2, 3 and 4 to help you consider your position.

(ii)       What are the implications for Joe as far as the Income Tax Assessment Act 1997 (Cth) is concerned? What can you say to him and what do you recommend he does?

(iii)      What are the implications for Joe if he borrows Council equipment for private use?

(iv)         What would be the implications for the family tax payments that Natalie receives? What can you say to them and what do you recommend they do?

(250 words)

Answer here

 

Assessor feedback:	Resubmission required?
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Question 7

Joe and Natalie agree to join your ongoing service plan. Identify four specific issues related to their financial circumstances that you will raise with them at a review meeting in 12 months.

(200 words)

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Assessor feedback	Resubmission required?
	No

Question 8

You are asked by your team to create and implement a Sustainability Protocol for your organisation’s work practices. Refer to section 3.5 and ‘Triple Bottom Reporting’ in Topic 3 for assistance.

(i)        Describe two (2) sustainability practices that you could include in the Protocol and the benefit that each will contribute to the organisation’s long-term sustainability. (100 words)

(ii)       Draft a brief email to your colleagues informing them of the existence of the new Protocol and highlight how each of the principles described in Question 8(i) will be implemented. (100 words)

Answer here

 

Assessor feedback	Resubmission required?
	No

Question 9

Your Sustainability Protocol has been received well; however, three months after its implementation, you notice that your colleagues are not following its principles as you intended. List and summarise four (4) team communication techniques you could use when making sure everybody understands and follows the sustainability principles. (150 words)

Answer here

Assessor feedback:

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Date assessed:	Click here to enter a date
Does the student need to resubmit?	No
Questions that need to be resubmitted
First submission	Not yet demonstrated
Resubmission	Not applicable

To pass this subject, you will need to be assessed as DEMONSTRATED for either your first submission or your resubmission.