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)
Section 1 Not yet demonstrated
Not yet demonstrated
Section2 Not yet demonstrated
Not yet demonstrated
Section3 Not yet demonstrated
Not yet demonstrated
Section4 Not yet demonstrated
Not yet demonstrated
Section 5 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 DFP3Superannuation and Retirement Planning (DFP3v3) about this document.
This document includes the following:
• Instructions for completing and submitting this assignment.
• Assignment sections (including factfinder templates, cash flow templates and managed funds calculations).
– Section 1: Establish the relationship with the client and identify their objectives, needs and financial situation.
– Section 2: Analyse client objectives, needs, financial situation and risk profile to develop appropriate strategies and solutions.
– Section 3: Address clients’ questions and concerns about superannuation matters.
– Section 4: Present appropriate strategies and solutions to the client and negotiate a financial plan, policy or transaction. Provide ongoing service where requested by the client.
– Section 5: Agree on the plan, policy or transaction.
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 Superannuation and Retirement Planning (DFP3v3) subject room.
Instructions for completing and submitting this assignment
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
When completing this assignment, assumptions are permitted although they must not be in conflict with the information provided in the Case Studies.
You may also be required to conduct additional research to properly answer some assignment tasks including sourcing additional information from other organisations in the finance industry to ensure the suitability of products or services to meet the clients’ requirements.
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_Submissionnumber
(e.g. 12345678_DFP1B_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.
Submitting the assignment
You must submit your completed assignment in a compatible Microsoft Word document.
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 assignment must be completed before submitting it to Kaplan Professional Education. Incomplete assignments will be returned to you unmarked.
The maximum file size is 5MB. Once you submit your assignment for marking you will be unable to make any further changes to it.
You are able to submit your assignment earlier than the deadline if you are confident you have completed all parts and have prepared a quality submission.
The assignment marking process
You have 12 weeks from the date of your enrolment in this subject to submit your completed assignment.
Should your assignment be deemed ‘not yet competent’ you will be give an additional four (4) weeks to resubmit your assignment.
Your assessor will mark your assignment and return it to you in the (DFP3v3)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 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 assignment.
How your 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 competent or not yet competent.
Your assessor will follow the process below when marking your 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.
‘Not yet competent’ and resubmissions
Should sections of your assignment be marked as ‘not yet competent’ 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 competent’.
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:
FNSASICZ503 Provide advice in financial planning
FNSFPL503 Develop and prepare financial plan
FNSFPL504 Implement financial plan
FNSFPL505 Review financial plans and provide ongoing service
FNSASICU503 Provide advice in superannuation
FNSINC501* Conduct product research to support recommendations
FNSIAD501* Provide appropriate services, advice and products to clients
FNSCUS505* Determine client requirements and expectations
FNSCUS506* Record and implement client instructions
* These are prerequisite units of competency for FNSASICU503.
We are here to help
If you have any questions about this 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.
Case study — Nathan and Mary Davidson
You are a financial planner for AFS licensee EANWB Financial Planning. Nathan and Mary Davidson have been undertaking their own research into planning their retirement, and recently attended one of your firm’s retirement seminars. After this seminar they spoke with you about their concerns that they may not accumulate enough money in superannuation to fund their retirement.
You met with them and during your initial meeting you provided them with some basic information, including a fact finder for them to fill out. You then organised a second meeting, at which you collected more information on their current financial situation and spent time clarifying their needs and objectives.
A summary of their financial situation,based on your interviews with the clients,is provided below. The completed fact finder,including the risk profile questionnaire,can be found on page 10 of this assignment.
Current situation
Nathan, age 54, and Mary, age 52, are married and have two children, Jonathan and Sarah, who are nearing the end of their schooling.
They own their own home, valued at $600,000, and have recently received an inheritance from the estate of Mary’s mother.
Although theyhave cleared their mortgage,they still have access to a redraw facility of $100,000. However, they do not want to access this unless there is as an emergency.
Nathan is a full-time sales representative for an agricultural supplies company. He earns $140,000 annually plus superannuation guarantee (SG) contributions from his employer paid into the employer’s default fund.
Mary is primarily a self-employed marketing consultant and has business income net of expenses of $65,000 annually. She also works as a contracted employee in a mining engineering company. Her hours vary, but typically she earns about $5600 annually, plus SG which is paid into the employer’s default fund.
Jonathan and Sarah attend a private school and Nathan and Mary pay a total of $7,000 annually in fees, uniforms, books, school trips etc.
The only other assets they have are their two cars.
Superannuation
Nathan has $270,000 in his superannuation fund and Mary has $99,000. They are both invested in the default balanced option. Further details of their superannuation are in the fact find (Appendix 1).
Neither Nathan nor Mary has made any personal contributions to their superannuation fund.
Nathan’s employer will allow salary sacrificing to superannuation without impacting on any other employee benefits and will maintain his SG contribution based on his pre-salary sacrifice income.
Mary’s employer will not allow her to salary sacrifice to superannuation, but does make SG contributions to her superannuation fund.
Nathan and Mary are happy with their current superannuation funds and the underlying investments they are invested in. They do not wish to receive advice in regard to changing their funds or investment portfolios.
Insurance
Nathan and M
ary’s their life insurance and total and permanent disability (TPD) insurance are owned by their superannuation funds.
Nathan and Mary both have self-owned trauma policies and income protection policies. Mary also has business overheads insurance.
Their cars are comprehensively insured and they have home building and contents insurance cover including legal liability cover.
Nathan and Mary have family private health insurance cover.
Further details on their insurance policies are in the fact find.
They have specifically stated that they do not require any advice on their insurance policies.
Investments
Nathan and Mary have not had any investments other than their superannuation. Surplus income had been used to pay off their mortgage.
However, they do have $350,000 in their savings account that was left over from the inheritance from Mary’s mother’s estate after paying off their mortgage. This savings account, which is their bank’s ordinary transaction account, does not pay any interest.
Other information
Nathan and Mary have a credit card with a limit of $30,000 that they use for all their general expenses and entertainment. However, they never spend up to their limit and their average expenses are $7500 per month, which they repay within the interest-free period.
Nathan and Mary take regular annual holidays with their children, and spend approximately $10,000 per trip.
Other expenses include deductible charity donations of $1,220 and accountant’s expenses of $500 annually.
Needs and objectives
Nathan and Mary are concerned they will not have enough money to provide an adequate income in retirement. They do not want to rely on the age pension and would like to be fully self-sufficient if possible.
After your initial meeting with them, they reviewed their situation and decided they would like you to prepare advice using a retirement income of $80,000 a year (in today’s dollars). They based this figure on their current spending after deleting items that will not apply after retirement (such as school fees) and considering their desired lifestyle in retirement. They have used their bank’s ‘Retirement Projector’ and determined that if they live to age 95 and earn 4% (net of inflation) on their investments, they will need almost $1.3 million in retirement savings when Nathan is age 65.
Nathan and Mary would like to channel their surplus income into their retirement planning now that they do not owe anything on their mortgage.
They have ‘parked’ the inheritance money in their savings account and plan to retain $50,000 in a secure investment to support the children in their last years at school and into university. They want to invest the balance in a tax-effective way, and are considering adding it to Mary’s superannuation to help her ‘catch up’ because she earns less than Nathan and took time out of the workforce to raise the children when they were young.
Like most people, they would also like to reduce their overall tax liability.
Closing the interview
Before concluding your meeting, you review the information Nathan and Mary provided to check that it is complete and accurate and ask if they have any questions.
Nathan and Mary understand from their own research that there are many ways to add money to their superannuation, but are confused about which will be the most appropriate for them.
You advise Nathan and Mary what happens next and explain that, with their agreement, you will prepare a written report based on the information they have shared with you, which will include recommended strategies to help them toachieve their financial goal of having adequate funds for retirement.
Nathan and Mary agree to proceed to the next stage of the financial planning process and you make an appointment to present the plan in a fortnight.
As their financial planner, your task is to prepare a statement of advice (SOA) that will include strategies to meet Nathan and Mary’s goals.
Fact finder
Important notice to clients
Your planner must act in your best interest when making any superannuation and retirement recommendations. Therefore, before making a recommendation, the planner must ask you about your investment objectives, financial situation and your particular needs.
The information requested in this form will be used strictly for that purpose.
Warning
The planner could make inappropriate recommendations or give inappropriate advice if you fail to fully and accurately complete this form.
Personal and employment details
Personal details
Client 1 Client 2
Title Mr Mrs
Surname Davidson Davidson
Given & preferred names Nathan Mary
Home address 1 Galbraith Grove, Stanhope Gardens, NSW 1 Galbraith Grove, Stanhope Gardens, NSW
Business address n.a. n.a.
Contact phone (02) 6655 4477 (02) 6655 4477
Age 54 52
Sex ? Male Female Male ? Female
Smoker Yes ? No Yes ? No
Expected retirement age In 11 years, approximately age 65 When Nathan retires
Dependants (children or other)
Name Age Sex School Occupation
Jonathan 17 M Yes
Sarah 18 F Yes
Employment details
NathanDavidson MaryDavidson
Occupation Sales representative Marketing consultant
Employment status Self-employed ? Employee ? Self-employed ? Employee
Not employed Pensioner Not employed Pensioner
? Permanent Part-time Permanent Part-time
Casual Contractor Casual ? Contractor
Other Government Other Government
Business status Sole proprietor Partnership ? Sole proprietor Partnership
Private company Trust Private company Trust
Notes
Any other person to be contacted (e.g. accountant, banker, solicitor etc.)?
Mary is primarily a self-employed sole trader but is also an employed contractor.
Cash flowstatement
Cash flow Nathan Mary Combined Comment
Salary less any salary sacrificed amount $140,000 $70,600 $210,600 Includes for Mary income net of business expenses and income from employment as above
Non-taxable income nil nil
Rental income n.a. n.a.
Unfranked dividends received nil nil
Franked dividends received nil nil
Interest nil nil No interest paid on cash
Other income (e.g. taxable benefits, trust income, investment income) nil nil
Total income received before tax $140,000 $70,600 $210,600
Investment expenses nil
Expenses
Mortgage nil nil
School fees $3,500 $3,500 $7,000
Utilities n.a. n.a. Paid as part of the expenses through credit card
Personal insurance $5,496 $3,564 $9,060 Nathan’s annualised premiums: $3612 trauma, $1884 income protection
Mary’s annualised premiums:
$2172 trauma, $420 income protection, $972 business overheads
Car insurance $1,600 $1,600 $3,200
Home building and contents insurance $750 $750 $1,500
Health insurance $1,422 $1,422 $2,844
Living expenses $45,000 $45,000 $90,000 $7,500 per month through credit card
Holidays $5,000 $5,000 $10,000
House maintenance n.a. n.a. Paid as part of the expenses through credit card
Motor vehicle n.a. n.a. Paid as part of the expenses through credit card
Other
$610 $610 $1,220 Donations
$150 $350 $500 Accountant’s fees
Total expenses $63,528 $61,796 $125,324
Assets and liabilities
Asset Owner Value Liabilities Net value Notes
Personal assets
Family home Nathan/Mary $600,000 $0 $600,000 Redraw of $100,000 available for emergency use
Home contents Nathan/Mary $150,000 $0 $150,000 Insured value
Car Nathan/Mary $11,000 $0 $11,000 2008 Ford Focus
Car Nathan/Mary $16,000 $0 $16,000 2008 Ford Falcon XR6
Total $777,000 $0 $777,000
Superannuation
Employer superannuation Nathan $270,000 n.a. $270,000 Balanced option
Employer superannuation Mary $99,000 n.a. $99,000 Balanced option
Total $369,000 $369,000
Other assets
Savings account Nathan/Mary $350,000 Nil $350,000 Transaction account
Total $350,000 Nil $350,000
Net worth $1,496,000 $0 $1,496,000
Liabilities
Loan Current debt Percentage tax deductible Interest only Repayment
Home loan n.a. n.a.
Investment property n.a. n.a.
Investment loan n.a. n.a.
Personal loan n.a. n.a.
Other n.a. n.a.
Total $0 $0
Needs and objectives
Details Comments
Accumulate sufficient funds in superannuation to retire in 11 years on $80,000 a year They estimate that they will need $1.3m in superannuation when Nathan is around age 65
Use excess income for retirement saving
Retain $50,000 in a secure investment to support children in their last years at school and into university
Invest balance of Mary’s inheritance for retirement
Reduce overall tax liability
Other
Estate planning
Do you have a will? ? Yes No
When was it last updated: October 2009
Do you have powers of attorney? ? Yes No
Current superannuation, insurances and investments
Superannuation
Member Nathan Mary
Fund name ASSF Super Fund CISF Super Fund
Date of joining fund 1 July 1992 (service date) 1 July 1992 (service date)
Type of fund ? Accumulation Defined benefit ? Accumulation Defined benefit
Pension Pensioner Pension Pensioner
Contribution (e.g. 5% of salary) SG By employer By yourself SG By employer By yourself
Current value of your superannuation fund $270,000 $99,000
Amount of death and disability cover $720,000 $720,000
Is there provision for you to top-up or salary sacrifice? ? Yes No Yes ? No
Superannuation taxation details
Nathan Mary
Current value $270,000 $99,000
Tax-free component $0 $0
Taxable component:
Taxed element $270,000 $99,000
Untaxed element $0 $0
Preservation:
Preserved $270,000 $99,000
Unrestricted non-preserved $0 $0
Restricted non-preserved $0 $0
Previous years contributions:
Non-concessional contributions:
Year 1 $0 $0
Year 2 $0 $0
Year 3 $0 $0
Year 4 $0 $0
Concessional contributions:
Year 1 SG only SG only
Year 2 SG only SG only
Year 3 SG only SG only
Year 4 SG only SG only
Other contributions:
Small business CGT exempt contributions $0 $0
Personal injury payments $0 $0
Nominated beneficiaries
Name Binding Non-binding
(Yes/No) Trustee discretion
(Yes/No)
Yes/No Amount
Nathan— Beneficiary is Mary Yes 100% No No
Mary— Beneficiary isNathan Yes 100% No No