Retirement Planning for Jacob and Jennifer

This assignment provides a detailed analysis of Jacob and Jennifer Bradford's retirement planning. The couple has an insurance coverage but needs to invest in mutual funds, shares, and debentures to reduce their tax liability and increase their income sources. A consultation is taken to cover health issues and medical expenses. It is advisable that the couple take out a medical insurance plan to live comfortably in their home during old age.

Compliant Statement of
Advice

EXECUTIVE SUMMARY
A statement of advice is a document, which is prepared to provide advise to the clients by
their licensed financial planner or advisor. The statement of advice includes the basis on which
advice is given, the details of licensee and clients. Information related to any benefit or
payments received by financial licensee or adviser is also included in statement of advice. This
is a statement that is prepared by financial planner to present clients with appropriate advice
related to their financial issues. These can be related with tax planning, investments decisions,
buying a home or a car, marriage, divorce or separation. The financial advisor with his/her
personal knowledge, skills and talents along with professional and legal regulations and all
relevant standards related with issue of clients are adhered. The client is then presented with
effective and efficient advice.
The present case study is related with a married couple that requires advice for their pre-
retirement plans. In the Bradford couple, Jacob works as an electrician, Jennifer Bradford is a
florist by profession with two children, intended to retire in next 4-5 years and they never felt the
requirement to approach a financial planner for their retirement plans. Both of them are self-
employed and own their shops are in the name of 'High Wire Electrics' by Jacob and 'Thanks a
bunch' by Jennifer. The couple is now thinking to seek financial advice for their retirement’s
plan, which is on 4-5 years. The couple has a perspective that in future they will live in their
current house as long as they can afford it and are capable of living alone by themselves as both
of them have no serious health issues. Jacob and Jennifer have a property investment worth
$400000. They also have a mortgage of $175000 along with loan with interest only. The couple
has no other investments and loan with no insurance coverage for any of them. They approached
for seeking advice related with more investment in the future, which can benefit them as a source
of income after retirement. The couple also wants to go mortgage and loan free before their
retirement. Both children of the Bradford are not dependent on them. As both of them are self-
employed they are not eligible for the government pension schemes.
At present, Bradford couple owns two houses in which they live in one and another is a
holiday house, which is not given on rent and is maintained by them only. Other than this, they
have no other investments. They owe a loan for their holiday home and personal loan with
minimal amount. The couple is wholly dependent on their incomes from their shops as they do
not have any other major source of income. Their approach is to seek advice from a financial

planner that is appropriable as this will help to plan better future with available investments and
fewer sources of income.
The Bradford couple requires a minimum income of $48000 after retirement to spend a
lavish life with meeting all their expenses and will be left with sufficient amount to meet their
livelihood. The couple needs an amount of $55000 along with amount of mortgage to be liability
free at time of retirement. At present, gross income of couple is $139900 as compared toe
current requirement of $82000; this gives a surplus amount of $57900 per annum. With
cumulative surplus for 3 years, the couple will be able to pay its mortgage amount of $175000
and can buy a new car of $30000 with a holiday of $25000. The investments can be done with
the present surplus income.
On the other hand, the couple can simply pay its mortgages and loan and then invest the
surplus left after the repayment of loan and mortgage. The investment of income is in more
suggestible as this will ensure a regular flow of income after retirement, as they are not eligible
to get government pension as being self-employed. With the surplus the couples also want that
$40000 shall be given to each child so that they can start their saving plans. In the financial
planning, it is also taken care off that their last wishes are carries out at time of the or death. at
present, they do not have any funeral plans and some are made to fulfil their wishes at the time of
their death.
The Bradford couple is provided with a planning for management of their current and
future incomes and expenses. The plans are made to reduce their tax liability in present times and
also after retirement, the surplus income can be invested in schemes that do not attract tax
liability, to reduce their tax obligation. Advices are given on how the couple can maximise their
resources of income so that they can meet their present requirements along with generation of
funds to secure their post retirement requirements.
The client is not getting any pension from the government due to their profession. They
can get a certain amount of funds under the scheme of old age pension support, but the client
does not want to undertake such support. Overall, the client Bradford couple are presented with a
solution of their problems along with professional advice on how they can manage their present
income, expense and investment to secure their future in which they can lead a happy after
retirement life without any worries about income sources to fund their requirements. Along with
the financial advice, advice related with insurance policies is also recommended to the couple.

Table of Contents
MAIN BODY...................................................................................................................................1
Presentation of Balance sheet and Cash flow statement ............................................................1
Balance sheet for Benford Couple...................................................................................................1
Cash flow Statement........................................................................................................................1
Recommendations.......................................................................................................................2
Anticipated outcomes..................................................................................................................3
Appropriate disclosures and disclaimers, including details of your remuneration (ASIC)........4
Action to Proceed........................................................................................................................5
Authority to Proceed...................................................................................................................6
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

MAIN BODY
Presentation of Balance sheet and Cash flow statement
Balance sheet for Benford Couple
Assets Amount
Financial assets
Cash and Deposit 76396
investments, loans and placements 85000
Total financial assets 99000
Non financial assets
motor vehicle 45000
motor vehicle 17000
Holiday home 250000
investment property 400000
principle resident 650000
home content 25000
Superannuation fund
Jacob 270000
Jennifer 100000
Total non financial assets 1757000
Total assets 1856000
Liabilities
Interest bearing liabilities
Personal Loan 20000
credit card overdraft 2000
loan on investment property 175000
Home loan 150000
Total interest bearing liabilities 347000
Total liabilities 347000

Net worth 1572396
Cash flow Statement
Opening balance of cash 14000
Cash inflow from operating activities 0
Cash outflow from operating activities 0
Income tax expenses
Jacob -41850
Jennifer -2750
Household expenses -42000
Contribution to life insurance -10000
Cash out inflow from financial activities
Salaries
Jacob 140000
Jennifer 30000
Cash inflow from financial activities 0
Income from UN managed funds 5000
Cash outflow from financial activities 0
Cash inflow from investment activities
Rent income
Jacob 4750
Jennifer 9750
Cash outflow from investment activities
Interest on loan
Principle resident
Jacob -15252
Jennifer -15252
Net cash flow 76396

Assumptions: the bank overdraft limit has been taken as the liability of the couple in the
balance sheet, so that an exact requirement of the cash can be ascertained.
The increase in the incomes is assumed to be from the increment in the personal incomes
of both Jacob and Jennifer.
Recommendations
The Bradford couple is provided with more than one recommendation in odder to manage
their current income, expenses and investment so that they can meet their current needs along
with securing their future in terms of regular source of income and investment of their funds.
Recommendation 1:
The couple is advised to go with a planning which focuses more on the reducing the tax
liabilities and generation of more sources of revenue. The surplus income of the Benford couple
have increased from past year to 76396. The major difference was due to increase in their
respective personal income (Al Nawaiseh and Jaber, 2015). For the retirement plan after 4 year
the present surplus income can be invested for shot term which can generate the additional
income In form on interest. The couple wants to go mortgage free before retirement it means that
all the loans have to be paid before retirement, except for the loan in investment property which
will be repaid in 6 years. The amount which is required before retirement includes 55000 for
purchasing a car and world tour along with 150000 loan on home and 116667 for loan on
investment property and 80000 for children and lastly 20000 and 2000 for personal loan and
bank overdraft limit respectively. The investment in car after retirement is 25000 which is under
the tax limit of 57581 for taxation purpose. The financial planner has given the advice that the
surplus income hall be set aside s investment and at the time of retirement the super annulation
fund will be available so loans amount can be repaid in lump sum amount (Financial statements,
2018). The short term investment of partial surplus income will be readily available at the time
of retirement for purchasing the car and going on a world tour. The couple has an insurance
coverage but it not for the whole life and does not include trauma and endowment. In the
financial planning a cover for whole life will be taken in the insurance cover along with a cover
for certain health issues and diseases.
Recommendation 2 :
Another plan for which the couple can go with is retention of the old source with
reducing tax liabilities and expansion of sources of funds along with a whole life insurance

cover with a certain risk coverages. It is advised that with investment of income in exempted
funds and schemes by government the tax liability can be reduced. The income sourced are nit
enough to generate an income of 42000 after retirement (Beck and et.al., 2016). So long term
investment is also recommended such as in from of purchasing of mutual funds and debenture of
a profitable company but it involves a risk as well. The managed funds cam also be sold when
they reach its actual value but at present its retention is advisable. With a proper plan of
investment and superannuation the Benford Couple can meet their current and future financial
obligation along with sufficient funds for their livelihood.
Anticipated outcomes
Investors profile: the risk profile of the Bradford couple is balanced one. In which they
have chosen low to medium risk profile for their investment and insurance coverage. They also
have a sufficient knowledge about the capital and investment market which will help them to
understand the trends in capital and investment market.
Reduction in tax liability: with a proper investment of the surplus funds of the Bradford
couple in the schemes and funds which attracts on or less lax liability will definitely reduce their
tax liability obligation in the future.
Increased investment : advice is given for the investment of the surplus capital of the
couple in mutual fund, share and debenture. The long term investment on property is also
suggested. Both the investment will attract good amount of return in form of dividend and
rental income.
Reduced loan liability: with the partial investment of surplus income the loans are
repaid with the rest of the income. With the amount of superannuation which will be realised at
the time of retirement the remaining amount of loans will be repaid (Bisogno, Santis and
Tommasetti, 2015). Only a moderate amount of loan in investment property will be left to repay
as it has to be repaid in 6 annual instalments.
Appropriate disclosures and disclaimers, including details of your remuneration (ASIC)
As per the guideline of Australian Security and investment commission following are certain
disclosures and disclaimers by financial planner:
Remuneration of financial planner: an amount of 3500 per annum will be charged by
the financial planner for providing financial advice to the Bradford couple. The couple is
required to pay the remuneration half at the beginning of the year another half at the end of third

quarter. As ling as the financial planer is providing the consultation services he is liable for the
fee with a 20% increment after a period of expiry of 3 years.
Risk related with investment: this clause is included to clarify that couple have
understood all the risk related with the various investment that they want to opt for their surplus
income. The mutual funds are strictly regulated by the market trends and with a slight change in
the economy or security market the prices and benefits can go high or low (Drehwinkel, 2016) .
A disclaimer is made that no one can hold responsible for a loss suffered in these investments.
No liability of the planner: the couple have opted for variability in return which means
different investments. The investment in mutual funds, shares and debenture are subject to
market risk. The planner will not be responsible for any fall in the price or loss in the mutual
funds. All the investment are made with the prior consultation and permission of the couple.
Confidentiality and privacy: the information of the client will be secured and will nor
be given access to any other person. The access to such information will be controlled as per the
standers of complete confidentiality and privacy regulation and law (ASIC, 2015). All the
documents and statements related with the Bradford couple will be discussed to them in order to
satisfy the requirement of ASIC related with the retention and safety of the private financial
information of the clients.
Integrity and fairness: the financial planner exemplify the client's integrity and fairness.
The planner have accepted the trust will honour the trust shown to financial planner (Heubner,
Eckardt and Müller, 2016). The trust will be honoured by display of integrity, honesty, fairness
adherence to the personal integrity and moral and ethical values. The planner will make sure that
he/she will not do anything or will fail to do anything that a will breach the trust of the client
they have placed in him/her.
Conflict of interest: the disclaimer is made that the financial planer or advisor have no
such relation ship that will influence the advice provided to client in any way (Ostermann, 2018).
The client have place a trust in the planner so it is his/her responsibility that he do not let any
factors to influence the advice provide to the client. An influence can lead to give an advice
which is not relevant or good for the client which will result in questioning the creditability of
the advisor and his /her professionalism

Action to Proceed
As a pre retirement plan for the Bradford couple is prepared the followings actions must
be taken with a priority in order to achieve the financial goals that couple want before their
retirement. The actions are
Repayment of loan: the first and foremost action that shall be taken in to account is
repayment of all the loans taken by the Bradford couple. All the loans that is personal loan, bank
overdraft and loan on principle home shall be repaid before retirement with the surplus amount
of income and realisation of superannuation fund at the time of retirement. A few instalments on
the investment property loan will be paid after retirement which can be repaid with the
superannuation funds.
Investment of surplus funds: the next action winch must be taken for a secure future
and well planner retirement is increase in the investments, the investment are diversified in order
to have variety of income sources (Weiss, Parkinson and Duncan, 2015). The fund for
investment are the partial surplus income of Jacob and Jennifer. The investment are
recommended in mutual funds, share and debenture of profitable companies along with long
term investment in property which will endure a regular income in form of rent.
Car and holiday amount: to ensure sufficient amount to purchase a car of 30000 and to
take a holiday worth 25000 a short term investment is planned. The investment can be in form of
bank saving or ant other form which will ensure a readily available fund immediately at the time
of retirement. The shot term fund will also generate an income though the amount will be
minimal but it will enhance the funds.
Authority to Proceed
Tax consultant: In order to reduce the tax liability a tax planner or advisor shall be
consulted. Advice for a person of the same field will help in better tax planning in order to
reduce the tax liability of the Bradford couple. The Bradford couple want to minimise their tax
obligation for pre and poet retirement time. The advice is provided as the investment shall be
done in the government schemes ans plans which do not attract tax liability (Solaiman, 2017).
This will reduce liability in two ways, one is that amount invested will nor attract liability and
other the amount which attract liability will get reduces by the investment funds.
Superannuation authority: the superannuation amount of Jacob is 270000 and for
Jennifer it is 100000, which make a total superannuation fund of 370000. on the retirement the

couple will get this amount to meet their future obligation and livelihood. An authority is
consulted to know the procurer to release the funds and plans for further investment in
superannuation.
Insurance agent:the couple has an insurance coverage but is not for the lifetime and also
do not cover any trauma and other health issues. A consultation is taken so that the present
insurance plan can cover the points mentioned above. The health insurance can cover the
medical and health check ups as the couple is health and do not suffer from any medical or
health issues. But it is advisable that a medical insurance shall be taken as they are in old age
and want to live in their home all alone with minimum income sources from rental income and
investment returns.
CONCLUSION
Jacob and Jennifer Bradford are provided with legal financial advise for their pre and post
retirement plan. Form the above it can be concluded that the surplus income shall be invested
partially for their retirement plans. The remaining income shall be invested in mutual funds,
shares and debentures and also in the properties. This investment will reduce the tax liability of
the couple and also increase the income sources for them.

REFERENCES
Books and journals
Al Nawaiseh, M. A .L. and Jaber, J., 2015. Auditing subsequent events from the perspective of
auditors: study from Jordan. International Journal of Financial Research. 6(3). p.78.
Beck, T and et.al., 2016. Financial innovation: The bright and the dark sides. Journal of Banking
& Finance. 72. pp.28-51.
Bisogno, M., Santis, S. and Tommasetti, A., 2015. Public-Sector consolidated financial
statements: An analysis of the comment letters on IPSASB’s exposure draft no.
49. International Journal of Public Administration. 38(4). pp.311-324.
Drehwinkel, D., 2016. Winkelstellung des Fahrpedals um (Bild 1). Für Diagnosezwecke und für
den Fall einer Störung ist ein redundanter (dop-pelter) Sensor integriert. Er ist Bestand-teil
des Überwachungssystems. Eine. Sensoren im Kraftfahrzeug. p.151.
Heubner, W., Eckardt, J. and Müller, S., 2016. Ultraschall-Wegsensorik in
Hydraulikzylindern. ATZ-Automobiltechnische Zeitschrift. 118(6). pp.44-47.
Ostermann, T., 2018. Elektromagnetische Störfestigkeitsprobleme in integrierten Schaltungen
aufgrund elektrostatischer Entladungen. e & i Elektrotechnik und
Informationstechnik. 135(1). pp.24-29.
Solaiman, S. M., 2017. nächster Artikel On computable numbers with an application to
th... Artificial Intelligence and Law. 14(2016).
Weiss, C., Parkinson, D. and Duncan, A., 2015. Living longer on less: Women, paid work, and
superannuation in Victoria, Australia. Sage Open. 5(3) p.2158244015597966.
Online
ASIC. 2018. [Online]. Available through
:<https://asic.gov.au/regulatory-resources/superannuation-funds/superannuation-guidance-
and-relief/>.
Financial statements. 2018. [Online]. Available through :<https://asic.gov.au/regulatory-
resources/financial-reporting-and-audit/preparers-of-financial-reports/financial-reports/>.