File Note – Statement of Advice

This document is a file note that provides a statement of advice for financial planning, wealth creation, and lifestyle recommendations. It includes information about the client's current situation, objectives, risk profile, and recommended strategies for achieving their goals. The document also discusses potential issues and special considerations, as well as alternatives considered. The subject is Financial Planning 1 and the document type is Statement of Advice.

1202AFE Financial Planning 1
Trimester 1, 2019
File Note – Statement of Advice
Client's name: Steven Holt and Amy Samberg
Date of contact: 1 April 2019
Re: Initial Appointment
FSG and adviser profile
Steven and Amy were handed Financial Services Guide (FSG) version 5 010219 and my
Adviser Profile at the interview on 1 April 2019. The FSG was explained to them.
Scope of advice
Full statement of advice (SOA). Specifically, the SOA will provide advice on the achievement
of wealth creation and lifestyle goals, personal insurances (that is life, total & permanent
disability (TPD), income protection (IP), trauma and private health insurance),
superannuation (including salary sacrifice, personal tax-deductible contributions and/or after-
tax contributions) and taxation planning where relevant.
The SOA excludes any budgeting and cash flow analysis, as well as any advice on debt
repayment, social security and estate planning. Client to be advised on the risks of not
receiving advice in these areas.
Current situation
Your personal profile Steven Holt Amy Samberg
Date of birth 27th January 1993 12th May 1992
Current age 26 years 27 years
Marital status De-facto De-facto
Residency Status Australian Australian
Residential address 1/15 Surf Street, Mermaid Beach
QLD
1/15 Surf Street, Mermaid Beach
QLD
Telephone [phone] 013 503
Email address [e-mail] [e-mail]
Employment status Full time Full time
Dependents Current age& date of birth
NA NA
Your health Steven Holt Amy Samberg
Current health Pretty healthy Pretty healthy
Pre-existing medical conditions? None None
Member private health fund None Yes
Smoker? NO NO
Family history considerations? Depression on father’s side Mother’s stroke last year

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Lifestyle Assets Owner Value
e.g. house, cars, home contents etc
Cars Steven and
Amy 32,000
Home Contents Joint 25,000
Subtotal 57,000
Financial Assets – Non-Super Owner Value
e.g. bank accounts, shares, rental property, managed
funds etc
Bank Account Steve $8,500
Term Deposit Amy 5,000
Home Property Joint 450,000
Subtotal 463,500
Financial Assets – Super Owner Value
Provide details of any superannuation fund(s) held
Q Super and SunSuper Steven 37,250
Australian Super Amy 26,000
Subtotal 63,250
Assets Total 583,750
Liabilities Owner Limit
Amount
outstandin
g
Interest
rate
Repaymen
t
Credit Card Amy 6,000 1500 18% 270
Mortgage Joint 357,000 4.1% 14,637
Liabilities Total 14907
Net Worth (Assets – Liabilities) $x568,84
3
Client Income $
Income source e.g. salary / wages, dividends, rental income etc
Salary for Amy and Steven 160,000
Income Total 160,000
Expenses – N/A for this assignment
Estimated Cash Surplus / (Deficit) per month $x825
INSURANCE
Owner Insurance
Type
Insurance
Provider
Benefit
Amount
Waiting
Period
Benefit
Period Premiums
e.g. client’s
name /
super fund
e.g. income
protection
Steven Income Q Super 765,000 180 days 2 years NA

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Protection
Insurance
Amy
Total
and
Perman
ent
Disabilit
y
insuran
ce
Australian 250,000 NA NA NA
Potential issues / special consideration
 One of the key issues that have been highlighted is that Amy and Steve are engaged
and are going to get engaged. It is seen that the potential issue has been that they
have only one source of income and that is their salary. The other issue that has
been addressed has been that the couple do not have sufficient amount of savings
that they can use with the help of which they can maintain a better lifestyle.
 They are even looking forward to have a grand wedding and planning to have a big
honeymoon and therefore are in need of sufficient amount of money with the help of
which their balances can be attained.
 It even needs to be considered that the couple are in need of undertaking
investments with the help of which their income can be increased. It is even seen that
the couple has to maintain their income in a proper manner as they need to pay off
their existing mortgage for the property that they have purchased.
 One of the key considerations for the couple has been that there are few factors that
have been assumed as well as ignored in order to prepare a proper statement of
advice for the couple and thereby provide proper recommendation.
 It is even considered that the couple will be in good health and thereby any sort of
additional expenses will not be incurred.
Objectives
 After reviewing the information that have been provided from your end I can
understand that there are several aims and objectives which you want to attain and
all the objectives need to be fulfilled and therefore as per the priority the objectives
have been laid down as follows:
 The primary objective is to create sufficient amount of income with the help of which
you can undertake your grand wedding. The amount of money that is required is
calculated and will be shown in the latter section and the creation of that amount will
be helpful in making your wedding a grand success. Even though you gave
estimated an amount that is ideal for your wedding but it is seen that a buffer amount
has to be maintained with the help of which any sort of emergency expenses can be
covered up.
 The next objective that is needed to be attained is planning for a big honeymoon.
You have been planning for this honeymoon for a very long time and therefore it is
our job to ensure that you dreams come true. As per your discussion the honeymoon
will for a longer duration of time in Europe and therefore adequate money needs to
be maintained with the help of which their dreams can come true. Hence, a proper
sum of money needs to be maintained so that they can perform their grand success
as well complete their honeymoon plans as well.
 The other objective that has been understood has been planning for a proper level of
investment with the help of which they can increase their income and even maintain
a proper lifestyle. The portfolio has to be created in such a manner such that their

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expenses can be met as well as additional income for the future can be preserved.
The investment portfolio is an effective plan as both you are quite young.
 The other objective which has been understood is maintaining proper and well
constructed superannuation for both of you. It is seen that both of you have vert less
knowledge about superannuation and therefore proper and well maintained fund can
be maintained that can be used up for the future. Both of you have not thought about
your future planning however, the financial advice that has to be given has to be for
that as well. Therefore this is an objective that has not been highlighted but is within
your conscience.
 The last objective which is an essential one as well has been preparing plans with
the help of which both of you can have adequate insurance coverage in order to
meet any sort of unprecedented events. It is seen that there are several insurances
that can be purchased but the product that is ideal for you will be recommended. This
is to be considered as you have a mortgage for their house purchased as well as
have a long life ahead. Both of you are working well and are earning properly
however, plans has to be maintained for the future with the help of which in case of
any emergencies you both can maintain your standard of living and even have the
capacity to pay off your debts. The attainment of all the objectives highlighted will
lead to the development of an effective financial advice. All the aspects has been
properly taken into consideration and planned accordingly with the help of which the
income that is desired and the products that can be purchased can be recommended
as well.
Risk profile
 The discussion and the meeting which we have undertaken have been helpful in
creating an understanding of the risk taking capability of you both. It is seen that risk
is one of the key aspects and the amount of risk one can take determines the sort of
investment recommendations that can be given. It is even seen that there has been
an amount of risk that is desired with the help of which one can attain personal
objectives. The perspective of risk is different for different people and therefore it is
seen that product recommendation will be done accordingly.
 As per our discussion, i have understood that Amy you are a conservative risk taker
and therefore are more into making income with low level of risk. On the other hand
Steven you are an aggressive investor and hence are into taking risks. You are not
afraid to face risk and therefore are a growth taking investor.
 However, in case of both of you want to undertake an investor together balanced
option is the most precise one as this would satisfy both of you.
 It is due to this fact that the recommendations that will be given will be based on the
risk taking capability and the concerned investments can change as per the time and
your want at different point of time.
 The risk profile determines that both of you are young and have the capability to
make further investments in the future as well.
Wealth creation & lifestyle recommendations – outside superannuation
1. Goal [wedding]
Recommended strategy:
 One of the key strategies that can be utilised by both of you has been increasing your
savings. The increase in the amount of savings even assists both of you to undertake
further investments with the help of it. The investments has to be taken in such a

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manner so that the desired amount can be attained within the mentioned time period.
The investments will differ for both of you and the combination of the earnings will be
helpful in attaining the desired results.
 The investment process should be segregated into long term and short terms plans
with the help of which the earnings required at the time of wedding can be
maintained and in the same manner the value needed after 5 years for your big
honeymoon can be attained with the help of the long term investment.
Advantages of strategy [reasons why]
 One of the key advantages of this strategy has been that the profit or the earnings
from the investment can be attained at a much shorter time period in accordance to
the other options of earning money. With the help of investments, you can even opt
out from the investment option at any point of time by paying a charge for it. It is even
seen that there is a chance of receiving an amount more than the actual desired and
therefore more earnings can be generated.
Disadvantages of strategy
 Investments are volatile in nature as they are related to risks. Any sort of investments
that are made in shares, bonds, debentures and even in properties are prone to risk.
The extent of risk varies from the kind of investment portfolio one creates but the
chances of risk remain. There are possibilities that the entire amount invested can be
lost and therefore this can have an impact on the earnings as well as the future
plans. Even though the chances of risks are low but the possibility remains. Hence,
this can have an adverse impact on the future course of life.
Alternatives considered
 There are several sort of alternatives that can be recommended but the most precise
one has to be selected based on your information and the future objectives that you
have highlighted. Hence, strategy one can suggest has been undertaking further
investments in both of your superannuation. Making further investments in the
superannuation will gain higher returns and this can be used by both of you in order
to attain the amount with the help of which you can meet your desire of getting
married. This option can be used only at the time when the recommended strategy is
not giving out the optimum result.
2. Goal [honeymoon]
Recommended strategy:
 The aim of going on a honeymoon as per our discussion suggests that it is long term
in nature. It is due to this fact that I can recommend to make investment in shares
and create a portfolio with the help of which they can plan for their future. The
investment portfolio that will be prepared will be a joint one as the aim of going on a
big honeymoon is for both of them. In this case the portfolio that has to be prepared
will be a combination of aggressive products and defensive products. The ratio of the
portfolio will constitute of 60% aggressive products and 40% defensive one. In this
manner the returns that would be attained will be the most effective one. In case
there is some sort of loss in one of the products, the other will compensate for it and
therefore any sort of losses can be mitigated. It is therefore seen that there exists
higher chances that the returns more than the expectations can be met properly.

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Hence, this is the most ideal strategy that I can come up with by looking at your
objectives.
 Undertaking investment in term deposits can be undertaken as well but the option will
not generate as much returns as the investment in portfolios.
Advantages of strategy [reasons why]
 Such investments provide returns of higher level and the expected amount of returns
is relatively higher than that of the other options and the extent of returns and income
attained will be very much high. There are chances of tax exemptions as well and
therefore this is the most effective strategy. Such investments provide better returns
in the longer period of time and at any point of time these can be converted to cash
as well.
Disadvantages of strategy
 The extent of risk associated to such investments is relatively high and therefore
there are chances of loss if the invested product does not perform effectively in the
market. It is even seen that such portfolios are very easy to sell in the market and this
suggests that the prices of the investment products are very volatile. Hence, this can
create an issue for you both in the future. Selling and purchasing any of the products
within the portfolio needs to be done by taking suggestions.
Alternatives considered
 Undertaking investments in property and real estate is one of the alternative
strategies. It is seen that you can purchase properties and you can use it as an
investment option with the help of which you can attain an asset as well as gain
returns out of it. Hence, this can be an effective alternative.
Wealth creation recommendations – superannuation
1. Should Steven consolidate (combine) his superannuation funds?
Recommended strategy:
 It is seen that you are quite young and have the opportunity to change your job. The
superannuation will be always be yours and therefore will not change. Maintaining
two superannuation funds can be a bit hectic even though the rates of interest may
vary. It is due to this fact that you might face some sort of dilemma. However, I would
recommend consolidating both of your super looking at the fact that both offer similar
interest rates. This will assist you to keep a track and in case you change your job
then all the funds can be recorded together.
Advantages of strategy [reasons why]
 One of the key advantages has been that all the superannuation funds can be
combined and therefore proper track can be maintained as to the amount of money
they are receiving.
Disadvantages of strategy
 The limitation of the strategy has been that amount of interest rate will be low of
clubbed and therefore this can have an impact on the overall income.

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Alternatives considered
 Maintain separate superannuation in order to maintain extensive level of income.
2. What investment option should they use for their superannuation fund(s)?
Recommended strategy:
 The investment option that they can undertake for their superannuation fund is to
undertake investments in the share investment portfolio with the help of which they
can significant amount of returns over the principal amount that they have invested.
The investment portfolio needs to be a Balanced one with 60% of the products from
the growth and high risk related from which increased amount of returns can be
attained. The rest of 40% needs to be from defensive assets that will confirm the
safety and the availability of a secured amount of returns in case of any loss.
Advantages of strategy [reasons why]
 The benefit has been that this investment will increase the level of returns by saving
tax as well as well enhancing the cash flow level.
Disadvantages of strategy
 There are increased chances of risk
Alternatives considered
 You both can purchase life insurance products as well as health insurance products
with the help of which your life can be secured and this will help you in having a safe
and secured life and be assured of the fact that their standard of living is assured and
if anything happens to any of you then their financial condition can be secured.
3. Should Steven and/or Amy make additional contributions to their superannuation?
Recommended strategy:
 In my opinion additional contributions need to be made in your superannuation as
they have a longer time to retire and therefore in order to make their retired life
secured additional investments have to be made.
Advantages of strategy [reasons why]
 Both of you can plan to make further holiday plans after your retirement and thereby
maintain a safe and secured life after retirement.
Disadvantages of strategy
 You both have to save more and therefore your current demands and expectations
have to be curbed in order to save more money.
Alternatives considered

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 Both of you can make investments in properties so that you can earn significant
amount of returns and thereby maintain a balanced current and future life as well.
Wealth protection (insurance) - recommendations
1. Life insurance
 Australian Income Protection Specialists
2. Total and permanent disability (TPD) insurance
 Permanent Insurance Company
3. Income protection (IP) insurance
 TAL Income Protection
4. Trauma insurance
 Real Life Insurance
5. Private healthinsurance
 Australian Health Insurance
Other
 NA

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Appendix 1 – Future value (FV) calculations

1202AFE Financial Planning 1
Trimester 1, 2019