Advanced Financial Planning Assignment: Case Study and SOA Template

This assignment for Advanced Financial Planning requires students to complete a case study and SOA template. The case study involves providing advice to new clients, David and Alyssa Forster, who are seeking advice about their financial situation. The SOA template includes cash flow tables, projections, and assumptions. Students must be proficient in tax and estate planning, superannuation, insurance, securities, and financial planning. The assignment covers conducting complex financial planning research, determining client requirements, providing comprehensive monitoring and ongoing service, developing complex and innovative financial planning strategies, presenting and negotiating complex and innovative financial plans, and implementing complex and innovative financial plans.

Assignment
Advanced Financial Planning (DFP8_AS_v3)
Student identification(student to complete)
Please complete the fields shaded grey.
Student number
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 3 Demonstrated Demonstrated
Part 4 Demonstrated Demonstrated
Feedback (assessor to complete)
[insert assessor feedback]

Before you begin
Read everything in this document before you start your assignment forAdvanced Financial Planning
(DFP8v3).
About this document
This document includes the following four (4)parts:
• Part 1: Instructions for completing and submitting this assignment and statement of competency
• Part 2: The case study
• Part 3: The SOA:
– Statement of advice (SOA) template
– SOA Appendix 1: Cash flow tables (financial position before and after implementation of strategy)
– SOA Appendix 2: Projections and assumptions
• Part 4: Assignment questions (Parts A–G).
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 KapLearnAdvanced Financial
Planning (DFP8v3) subject room.
Page 2 of 68

Part 1: Instructions for completing and submitting this
assignment
Completing the assignment
The assignment
For this assignment you are required to complete the following tasks:
In your assessment workbook:
• Review Part 1: Review the key advice in which you are required to be proficient to complete this
assignment.
 Part 2: Case study.
• Complete Part 3 (the SOA template), using the data in the case study
– complete SOA Appendix 1 cash flow tables
– complete SOA Appendix 2 projections and assumptions.
• Complete Part 4 (assignment questions) Parts A, B, C, D, E, F and G.
Most of the information and resources to help you answer the questions in this assignment can be found in
your topic notes. Some data will have to be sourcedexternally.
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 source additional information from other organisations in the financial services
industry to find the appropriate product/s to meet your client/s requirements, and perhaps to calculate
your advicefees.
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_DFP8v3_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.
Page 3 of 68

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 can 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 Advanced Financial Planning (DFP8v3)
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 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 following process when marking your assignment:
• Assess your responses to each question, and its sub-parts if applicable, and then determine whether you
have demonstrated competence in each question.
• Determine if, as a whole, your responses to the questions have demonstrated overall competence.
Page 4 of 68

‘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 need only 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 (in conjunction with the SOA presentation) is your opportunity to demonstrate your
competency inthese units:
FNSFPL508 Conduct complex financial planning research
FNSFPL602 Determine client requirements and expectations for clients with complex needs
FNSFPL603 Provide comprehensive monitoring and ongoing service
FNSFPL604 Develop complex and innovative financial planning strategies
FNSFPL605 Present and negotiate complex and innovative financial plans
FNSFPL606 Implement complex and innovative financial plans
FNSCUS505 Determine client requirements and expectations
FNSIAD501 Provide appropriate services, advice and products to clients
We are here to help
If you have any questions about this assignment you can post your query in the ‘Ask your Tutor’ forum in
your subject room. You can expect an answer from one of our technical advisers or student support
staffwithin 24 hours of your posting.
Statement of competency(student to complete)
All students completing this assignment are required to be proficient in the following advice areas:
• tax and estate planning
• superannuation
• insurance and risk protection
• financial planning
• securities.
Page 5 of 68

Part 2: The casestudy
Background
You work for KeyPlan Pty Ltd, a financial planning company which is an Australian Financial Services Licence
holder and a registered life insurance broker.
Your company has planners who can provide advice in:
• superannuation
• investments and savings plans (including margin lending, securities, derivatives and
managed investments)
• constructing an investment portfolio
• strategic financial planning and asset allocation
• debentures
• retirement planning
• budget and cash flow planning
• debt management
• social security and other government benefits
• salary packaging
• insurance (i.e. life, disability, income protection and trauma)
• deposit and payment products
• estate planning.
Your advice is limited to the areas in which you have completed appropriate accreditation.
KeyPlan does not:
• help to establishself-managed superannuation funds
• provide real estate evaluations and advice
• prepare income tax returns
• undertakesuperannuation fund accounting
• administer superannuation funds
• prepare legal documents such as wills or trusts.
You can assume that you are registered with the Tax Practitioners Board (TPB) as a tax (financial) adviser.
You have organised a meeting with new clients, David and AlyssaForster, who are seeking advice about
their financial situation. Alyssa has just been made redundant from her current employer. This, together
with an inheritance Alyssa is about to receive, has made them concentrate their efforts to build an effective
long-term wealth strategy for their retirement.
David and Alyssawish to become more active investors, but admit they are busy and would rather enjoy
family time than manage investments when they are not working. They are looking for an effective wealth
creation strategy and an estate plan and want peace of mind knowing that their finances are structured to
meet their and the family’s needs.
The following pages detail the information you have obtained from them at your initial meeting.
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David and Alyssa’s current situation
Table 1 Personal details
Name DavidForster AlyssaForster
Salutation Mr Mrs
Age 53 46
Status Married Married
Home address 11 Cove Rd, Brisbane QLD 11 Cove Rd, Brisbane QLD
Health Good Good
Smoker No No
Occupation Consulting engineer/Managing director Clinical psychologist
Employer Forster Consultants Pty Ltd Brisbane Family Medical Practice
Projected retirement age 65 When David decides to retire
Dependents/family relationships Name Age/date of birth
Son Rowan 16
Daughter Kaya 14
Rowan and Kayaattend a co-educational public school. They are both academically in the top 10% of their
years and show a strong inclination to go on to tertiary study. They both play weekend sport all year and
Kaya is involved in dance and drama. They are expected to remain dependent on their parents to some
degree until they complete further studiesat around age 22.
Table 2 Professional relationships
Solicitor Freya Patel
Time span of relationship 8 years
Quality of relationship Adequate, used for wills, some company matters and conveyancing
Accountant Kim Young
Time span of relationship 12 years
Quality of relationship Very good, has played an important role as an adviser to the
consultancy business
Page 7 of 68

Assets and investments
Alyssaand David have several assets held in different structures and derived from different sources. They
are:
• personally held assets and investments
• superannuation
• shares in Forster Consultants Pty Ltd
• an inheritance
• a redundancy payment.
Each of these is described in a separate section below.
Personally held assets and investments
Details of Alyssa and David’s current investments and assets.
Assets Value Liability Ownership status Other information Purchase price
Principal residence:
Indooroopilly, Brisbane,
QLD
$900,000 $210,000 Joint ownership House purchased 5 years ago with
original mortgage of $270,000.
Interest rate of 4.4% P&I. The clients
are paying $1,000 p.m. in addition to
the minimum required payments on
their mortgage
$697,000
Cash management trust $28,000 $0 Joint ownership Interest of 2.0% p.a., can be
reinvested
N/A
Everyday bank account $9,000 $0 Joint ownership No interest, used for holidays and
daily expenses, balance varies
N/A
Forster ConsultantsPty
Ltd
$119,544 $0 Two shares each Value is 50% of the value of the
company. Value is calculated as 2 x
profit before tax
Cost base of
shares is $2 each
Home contents $68,000 $0 Joint ownership Estimated value for insurance
purposes
N/A
Superannuation
Details of Alyssa and David’s superannuation.
Financial assets Value Ownership Other information
Superannuation $315,678 David Invested in the high-growth option (5% cash; 5% international fixed interest;
20% property; 40% Australian equities; 30% international equities). Eligible start
date is 1 July 1992. Average annual return over 10 years is 5.9%. There are no exit
fees or entry fees and the annual fee is $124, with investment fees of 0.25% p.a.
Superannuation $133,634 Alyssa Invested equally between two single-sector options, cash fund and Australian share
fund (asset allocation is 50% cash, 50% Australian equities). Eligible start date is
1 July 1999. Average return over 10 years is 4.1%.There are no exit fees, no entry
fee and no member fees.Investment fees are 1.1% p.a.
Both David and Alyssa’s superannuation benefits are fully preserved.
Davidhas a tax-free component of $63,000 and the remainder is a taxed element of the taxable component.
Alyssa’s benefit is all in the taxed element of the taxable component.
Page 8 of 68

Inheritance
Alyssa’s much-loved aunt, Betty, died four months ago. Betty never married and was Alyssa’s late mother’s
only sibling. Alyssa and Bettywere very close, with Alyssa acting as Betty’s carer for many years. Alyssais an
only child and isthe sole beneficiary of her aunt’s estate.
Alyssa inherited her aunt’s former home in Spring Hill, Brisbane, and she is currently negotiating the final
sale of the property. It is a two-bedroom, ground floor apartment and holds no sentimental value for her.
She would rather invest the funds in more flexible assets to provide for the future needs of her family.
There is no outstanding loan attached to the property and it was never rented out. She will receive the
values shown in the table of inherited assets below, after meeting all expenses related to the sale.
Alyssa is unsure how best to invest these funds.
In addition, the trustees of Betty’s account-based pension fund have paid the remaining benefit amount to
the executors of her estate. Alyssa expects to receive the death benefit payment shortly.The amount and
components of the death benefitare:
• Taxed element of the taxable component: $238,000
• Tax-free component: $40,000
• Total: $278,000
Alyssa would like to know the tax payable on this benefit and how the net proceeds should be invested.
Inherited assets at date of Betty’s death (excluding superannuation benefit).
Inherited assets
Asset Shares
held
Purchase
date
Purchase
price
Share price at
date of death
Value at
date of death
Other information (assumed
dividends and franking level)
BHP Billiton Ltd 1,212 9/03/1984 $10.75 $20.56 $24,919 Current annual dividends:
$0.72 per share
100% franked
Commonwealth Bank 320 19/05/1997 $3.31 $72.21 $23,107 Current annual dividends:
$4.20 per share
100% franked
Commonwealth Bank 19 4/09/2000 $27.70 $1,372
Commonwealth Bank 22 27/08/2001 $30.05 $1,589
Insurance Australia Group 1,100 19/06/2000 $1.78 $5.34 $5,874 Current annual dividends:
$0.26 per share
100% franked
Insurance Australia Group 110 8/08/2000 $2.75 $587
National Australia Bank 740 30/07/1985 $4.08 $27.08 $20,039 Current annual dividends:
$1.98 per share
100% franked
National Australia Bank 50 4/02/2000 $21.73 $1,354
Rio Tinto Ltd 242 1/01/1988 $6.67 $46.53 $11,260 Current annual dividends:
$2.23 per share
100% franked
Wesfarmers 1,000 1/02/1985 $2.15 $42.83 $42,830 Current annual dividends:
$1.98 per share
100% franked
Online cash account n/a n/a n/a n/a $9,500 Earning1.5% p.a.
Apartment in Spring Hill,
QLD (selling now)
n/a 23/5/1986 $62,000 n/a $419,000 Betty’s principal residence in
Spring Hill, Brisbane. Debt-
free, no income, net value
after sale
Total inheritance
excluding superannuation
benefit
$561,431
Page 9 of 68

Forster ConsultantsPty Ltd
David and Alyssa own 50% of the eight issued shares in Forster Consultants Pty Ltd with their business
partners,Bill and his wife,Laura.David and Bill are joint managingdirectorsandAlyssaand Lauraare the other
directors.The company’s constitution states that all directors are employees of the company and are
entitled to be paid employee benefits from the company, such as the provision of cars, superannuation
contributions, director’s fees, etc. at the discretion of the managing directors.
David and Alyssa have a buy-sell agreement with Bill and Laura that in the event of death or total and
permanent disability of David or Bill, their fourshares willbe transferred to the other party.David and Bill
have a good working relationship and are of similar age.
At this stage,David and Alyssa have not put in place a funding arrangement nor do they know how to do
this.Under the buy-sell agreement, the consideration is half the value of the company. The value of the
company is calculated as two times the average of the last two year’s profit before tax.
Forster Consultants Pty Ltd— Profit and loss statement
2016/17 2015/16
Revenue
Consulting revenue $752,375 $708,356
Other revenue (bank interest etc.) $3,578 $4,140
Total revenue $755,953 $712,496
Expenses
Marketing and advertising $9,130 $8,421
Rent $37,023 $31,234
Insurance and legal expenses $18,257 $18,070
Administration and compliance $84,679 $82,296
Costs directly associated with Consulting (MD
salaries, contracted consultants’ fees, etc.)
$481,703 $458,548
Total expenses $630,792 $598,569
Profit before tax $125,161 $113,927
Tax $34,419 $32,469
Net profit after tax $90,742 $81,458
Forster Consultants Pty Ltd— Statement of financial position
2016/17 2015/16
Assets
Cash $90,660 $82,008
Trade and other receivables $57,403 $57,251
Plant and equipment $18,183 $18,427
Total assets $166,246 $157,686
Liabilities
Trade and other payables $46,675 $41,867
Total liabilities $46,675 $41,867
Net assets $119,571 $115,819
Page 10 of 68

Redundancy details:Alyssa
Alyssa has been working for the same company for nine years, since her daughter,Kaya,started school. Her
role has been made redundant following a restructure of the large allied health services businessshe works
for. She has an offer to work for her past boss, who started his own psychology practiceabout four years
ago. He can match her current salary and she can start as soon as she stops work with her current
employer.
Since her aunt died,Alyssa has wanted to work in a more supportive environment than offered by her
current employer.
Payment details
Type of payment Basis for calculation Pre-tax amount ($)
Lump sum annual leave Accrued entitlement – 18 weeks 25,420
Lump sum long service leave Prorata entitlement – 7.8 weeks 11,150
Payment in lieu of notice 5 weeks 8,308
Redundancy 16 weeks 24,225
Golden handshake Lump sum 21,000
Annual income details
The diagram below shows the expected sources of income for Alyssa and David in the current financial
year. As no dividends were paid from the company, they are not shown.
Note:You may assume that your plan takes effect at the start of a new financial year.
The actual income received for this year is detailed in the table below.
Income type David Alyssa Notes
Salary $150,000 $85,000 Does not include SG
Interest $280 $280 From jointly held CMT
Total gross income $150,280 $85,280 This is not their taxable income
Notes:The table above includes only regular income. Any income generated by a superannuation death
benefit, redundancy or dividends is not included. Any income derived from the inheritance has not been
included in the table.
While the private use of a company vehicle would normally have fringe benefit tax implications, please
disregard this for the purposes of this assignment.
Page 11 of 68
Salary Income
from CMT
(50%)
Redundancy
payment
David Alyssa
Salary
Income from
CMT (50%)

Annual expenditure
David and Alyssa have a detailed family budget,whichthey presented to you at their meeting.
It is provided below, together with notes about the expenses where relevant. They are confident that their
expenses are unlikely to changesignificantly in the next few years.
Expense David
($ p.a.)
Alyssa
($ p.a.)
Combined
($ p.a.) Notes
Accountant’s fees $650 $550 $1,200 For individual personal annual tax returns
Charitable donations $1,200 $800 $2,000 Total donation amount toHeart
Foundation andRSPCA, in equal
proportions— both deductible gift
recipients (DGRs)
Children's expenses and activities $2,800 $2,600 $5,400
Council rates $650 $650 $1,300 Principal residence
Discretionary: restaurants, gifts,
clothing, shoes, etc.
$18,500 $18,500 $37,000
Electricity $1,520 $1,520 $3,040
Gas $ 525 $525 $1,050
Groceries $8,500 $8,500 $17,000
Health insurance $1,750 $1,750 $3,500 Family hospital and extras policy with $500
excess
Holidays $8,000 $ 8,000 $16,000
House insurance $1,010 $1,010 $2,020 Home and contents policy
House maintenance and repairs $8,200 $8,200 $16,400 Includes cleaners, etc.
Income protection $1,250 $935 $2,185 90-day wait, benefit to age 65,
75% income plus superannuation (SG)
Medical bills/prescriptions $950 $950 $1,900
Mobile phones and internet – $1,080 $1,080 Work-related use for David
Mortgage $16,120 $16,120 $32,240
Annual repayment amount inclusive of
additional monthly payments of $1,000
p.m. (joint expense)
Pay TV $830 $830 $1,660
School fees $750 $750 $1,500 Rowan and Kaya’s school fees are $650
each
Water $560 $560 $1,120
Total expenses $73,765 $73,830 $147,595
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Investment objectives and atti tude to risk
David considers himself to be quite knowledgeable about investments and understands how volatility in
markets can affect investment performance. He has seen significant fluctuations in his superannuation fund
returns, which worried him for a while.Hesays now that Alyssa has received the inheritance, he would be
happy to leave investments in place and ride out any negative short-term performance.
Alyssais more conservative than David. She thinks that they are now doing well enough tomake taking on
higher levels of riskunnecessary.She would prefer to make less aggressive investments with the money she
receives from her inheritance. She thinks property is a good investment, although she is not sure she wants
the responsibility of managing an investment property at the moment, which is why she is selling her aunt’s
apartment.
David and Alyssa believe they do not need additional income from any investments but want long-term
capital growth. They completed the risk profile below and sent it to you beforeyour initial meeting. At the
meeting you confirm that these are the correct risk profiles to be allocated to each of them based on their
attitudes towards investing.
Risk profile
Determining your investor risk profile Points
This investor risk profile questionnaire has been designed to help you understand whattype 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? David Alyssa
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
50 50
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
40 40
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
35 35
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
30  30 
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
20 20
Retired. 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
10 10
What return do you reasonably expect to achieve from your investments? David Alyssa
A return without losing any capital 10 10
3–7% p.a. 20 20
8–12% p.a. 30 30 
13–15% p.a. 40  40
Over 15% p.a. 50 50
If you did not need your capital for more than 10years, for how long would you be prepared to see
your investment performing below your expectations before you cashed it in?
David Alyssa
You would cash it in if there were any loss in value 10 10
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Less than 1 year 20 20
Up to 3 years 30 30 
Up to 5 years 40 40
Up to 7 years 45  45
Up to 10 years 50 50
How familiar are you with investment markets? David Alyssa
Very little understanding or interest 10 10
Not very familiar 20 20
Have had enough experience to understand the importance of diversification 30 30 
Understand that markets may fluctuate and that different market sectors offer different income,
growth and taxation characteristics
40  40
Experienced with all investment sectors and understand the various factors that may
influence performance
50 50
If you can only receive greater tax efficiency from more volatile investments, which balance would
you be most comfortable with?
David Alyssa
Preferably guaranteed returns, before tax savings 10 10
Stable, reliable returns, minimal tax savings 20 20 
Some variability in returns, some tax savings 30 30
Moderate variability in returns, reasonable tax savings 40  40
Unstable, but potentially higher returns, maximising tax savings 50 50
Six months after placing your investment you discover that your portfolio has decreased in value by
20%, what would be your reaction?
David Alyssa
Horror. Security of capital is critical and you did not intend to take risks 10 10
You would cut your losses and transfer your money into more secure investment sectors 20 20 
You would be concerned but would wait to see if the investments improve 30 30
This was a calculated risk and you would leave the investments in place, expecting performance to
improve
40  40
You would invest more funds to lower your average investment price, expecting future growth 50 50
Which of the following best describes your purpose for investing? David Alyssa
You want to invest for longer than five years, probably to the age of 55–60. You are mainly investing for
growth to accumulate long-term wealth
50 50
You are not nearing retirement, have surplus funds to invest and you are aiming to accumulate long-
term wealth from a balanced fund
40  40
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
30 30 
You are nearing retirement and you are investing to ensure that you have sufficient funds available to
enjoy retirement
25 25
You have some specific objectives within the next five years for which you want to save enough money 20 20
You want a regular income and/or totally protect the value of your savings 10 10
Investor profile total points 275 190
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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, but 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
Page 15 of 68

Estate planning
Davidand Alyssa created wills and powers of attorney with the help of their lawyer about five years ago.
David’s will states that when he dies everything is left to Alyssa.Alyssa’s will leaves everything to David. This
includes their respective shares in the company.
In the event that they should both die, their wills leave everything to their children in equal shares. They
have not nominated any guardians for their children in the event of both of them dying.
David has granted enduring power of attorney (EPOA) to his father. Alyssa had granted EPOAto her
mother,Gloria, now deceased.
Both David and Alyssa have made binding death nominations in their superannuation, again to each other.
David’s buy-sell agreement with his business partner,Bill, is in the form of call options. Both hold a call
option obligating the other to sell on death or permanent disability. The surviving partner can call upon the
ceasing owner or the executor of the estate to transfer the business interest and legally binds them to sell
at a predetermined value. The value of each partner’s share has been defined as half of the net value of the
business.
Davidand Alyssa have not put a funding arrangementin place for the buy-sell agreementand are unsure
how to do this. Further, this conflicts with the terms of their wills.
Insurance and risk management
David and Alyssahave the following insurance policies:
Policy
Life
insured Owner Cover
Premiump.
a. Notes
Death and TPD David Superannuation fund $432,000 $1,532 Any occupation TPD
Death and TPD Alyssa Superannuation fund $280,000 $993 Any occupation TPD
Income protection David Self $9,375 p.m. $1,250 90 day waiting period,
benefit to age 65
Income protection Alyssa Self $5,313 p.m. $935 90-day waiting period,
benefit to age 65
Home and contents NA Joint $450,000
home$55,000
contents
$2,020 Multi-policy discount applies
as all policies are held with
the same company
Private health insurance Family Joint $500 excess for
hospital and
extras
$3,500 Applicable rebate taken
upfront as a
premium reduction
David and Alyssa both have income protection policies because their accountant told them that they were
tax deductible. They each own their own policy and are covered for 75% of their income plus
superannuation contributions.
They have not provided any details of their other insurances and have said they do not need a review of
their general insurances at the moment.
Page 16 of 68

David and Alyssa’s needs and objectives
1. Inheritance
• Alyssa would like to invest the proceeds of her aunt’s estate in the most tax-effective way. She is not
interested in any complicated tax schemes or products. It is important to her that whatever she doesnot
need to use to improve the family lifestyle now is kept for the children when they might need it.
• Alyssa would like advice on the best course of action for the share portfolio and her aunt’s
superannuation death benefit. She will consider alternative investments and would like your advice,
including the tax implications ofany of her decisions. She is particularly confused about how capital gains
tax applies to her.
• Alyssa and David would like to take the family to Africafor four weeks next year using part of Alyssa’s
inheritance. They estimate this will cost $25,000.
• She would like to think that her aunt’s estate could also contribute to either a deposit to help her
children each buy a small home when they find stable employment after their tertiary studies orto the
costs of their tertiary education. She thinks she would like to give each of them.$50,000 in today’s
dollars.
This is one of the reasons she is concerned that at least some of the portfolio does not lose value over the
next five years. She would like to keep the inheritance separate from her other assets but is happy to take
advice on this.
2. Redundancy
• Alyssa is unsure how tax is applied to her redundancy payout and would like to know how much she will
receive after tax and if the payment has any impact on her overall taxable income.
• She does not need access to the funds and doesnot need to generate income from them. She is happy
to put them towards long-term wealth accumulation.
3. Long-term wealth accumulation and retirement
• David and Alyssawould like to be able to generate sufficient income in retirement to meet their
projected retirement expenses. They assume that in retirement they will not be providing for the
children and the mortgage will be paid up.They will spend the extra money on travel and entertainment.
They also confirm that final retirement is planned to be when Davidreachesage 65.
Atyour request they have completed a retirement budget and in today’s dollars.They believe they would
need $64,000 per annum after tax, plus $18,000 every two years for overseas travel. Any additional local
holidays they may wish to take in retirement have been factored into their annual retirement budget.
• David and Alyssa have had no formal savings plan even though they havemanaged to accumulate
surplus funds in their cash management trust (CMT) each year. They believe theyhave their expenses
under control, although recently they have noticed that their cash management account has not been
increasing.They are not sure why this has occurred. Accordingly, they would like you to analyse their
income and expenses and devise any cash-flow strategies you think are appropriate.
• David cannot foresee any major expenses in the next five years or so, other than the holiday Alyssa
mentioned. Both of their cars are leased through the company and their house is in good repair and
does not need any immediate work.
• David had not previously considered his retirement as he has thought it was still a long way
away,but now that Alyssa has received the inheritance from her aunt it has prompted them both to
believe that a review of their retirement planning objectives should be undertaken. This may include
building up their superannuation.
Page 17 of 68

• David is confident that the current asset allocation in his superannuation is appropriate and he is happy
with his choice of fund. He does not wish to change funds because he has been happy with its relative
performance, cost of insurances and service. The fund has a wide range of investment options, and
Davidhas invested in the high-growth option. He would consider making additional contributions to
superannuation, although he is not sure how this is done and what the rules relating to the strategy are.
• Alyssa is unsure about her current superannuation fund.It was the one she joined when she started
working for her previous employer. As she is moving to a new role, she would be interested in
alternatives. She chose the current asset allocation based on a recommendation by a colleague. She has
recently realised that the fees she is paying are higher than David’s and is not sure if it is the best type of
fund for her. She has never received any advice from the fund itself, although advice was offered. She
would consider making additional contributions to superannuation, but only if she was convinced it was
appropriate.
 Alyssa expressed some concern about how governments seem to be constantly changing
superannuation rules and the risk that might pose to retirement strategies infuture.
• David and Alyssa have also advised you that in making any forward projections and /or
recommendations to meet their retirement objectives, their share of the value of the company should
not be included as an asset for retirement income purposes. They have asked you to do this to ensure
any projections are conservative and based on investment assets they have now or can accumulate
through personal investing, and not what they could have in the future through the sale of the
company.
4. Estate planning and asset protection
• David and Alyssa would like to ensure that the death of either of them would not have an adverse
financial impact on the family. If David died, Alyssa would like to stop work for at least a year to look
after the children. David wouldnot stop working if Alyssa should die before him and would need help
with taking care of the family and their home.
• Following a near car accident on their way back from a recent holiday in Noosa, David and Alyssa
became concerned about the effect on the care and long-term financial security of their two children if
they both should die. They have requested your advice on what strategies are available to cater for this
possibility so their children could be effectively cared for. They wish to have the pros and cons of any
strategies developed to achieve these goalsexplained to them.
• In the event of either one of them being permanently disabled, they would like to provide for sufficient
funds to employ a full-time carer and still be able to meet their current expenses.
• They would both be prepared to use some of their assets in the event of their death or permanent
disability, but would not want their children to miss out on any of the benefits of the wealth they have
accumulated to date.
• David and Alyssa would like a review of their current life insurance arrangements because they are not
sure if the policies they have meet their needs. The death and total and permanent disability(TPD)
amounts were whatever was automatically added into their superannuation fund when they joined.
• David and Alyssa completed the following checklist with you at the meeting:
Page 18 of 68

Estate planning goals On death of David On death ofAlyssa Death of both
Provisions for each spouse Replace David’s income until
Kaya is 22 so that Alyssacan
stay home if she chooses
All assets would be left to
Alyssa
Income to provide for full-time
housekeeper, estimated at
$55,000 p.a. until Kaya is 22
All assets would be left to
David
n/a
Pay off the mortgage Yes Yes Yes
Pay off other debts No No Yes
Provisions for the children They would like to leave all assets in trust for the children until Rowan and Kaya have reached
age 25. Income to be generated for a family member to care for the children, plus income to
enable them to meet current expenses for the children
Equalisation of children’s
inheritance
They cannot see this as being an issue.Both children are treated equally
Provisions for others Any children of their children, if they formed a trust
Charitable gifts No No No
• David has a buy-sell agreement in place but has not thought about funding for the agreement. He is
interested to know about funding options.
• David and Alyssaare happy with their home and contents insurance.
Page 19 of 68

Part 3: Completing the SOA
Based on the information in the case study and your analysis of the clients’ objectives, use the
template provided to produce your SOA, which is a record of your advice (including amendments, if any) for
David and Alyssa.
Remember: Your SOA is both a legal document and a representation to the client of your
professionalism.The SOA is prepared to assist them in understanding the recommendations that
youare makingas their financial planner. Accordingly, as a legal and professional document, it should be
spell checked and reviewed to ensure that there are no typos, grammatical errors or spelling mistakes.
Important instructions for completing the SOA
1. Use the SOA template provided. It includes cash flow templates.
SOA preparation software: The use of financial planning software and dealer/licensee templates to
prepare your SOA is not permitted. Submissions that showexcessive reliance on SOA templates may be
considered a case of plagiarism or collusion and may not be considered to be a reasonable attempt at
the assessment.
2. List any assumptions you have made to complete your SOA in Appendix 2. Your assumptionswill
generally be about:
• missing background information on the client
• calculations of future returns from your recommended investments
• clarity in relation to any of your recommendations
• fees relating to the products you have recommended.
Assumptions that you cannot make:
• clients discoveringnew lump sums
• referrals to outside experts to cover basic information that you should be able to provide, such as
‘our insurance adviser will call you to analyse and resolve your insurance needs’
• that you need not address goals mentioned by the client and assume these will be dealt with later.
3. Your SOA must address each of the goals listed in the case study and provide appropriate
recommendations about strategy. Your strategies are limited to the areas of advice in which you have
completed accreditation. You should not recommend products or strategies that do not meet your level
of accreditation. For example, if you are not qualified in derivatives you should not recommend
derivatives strategies.
To support your recommendations, you must include:
• tax calculations for the redundancy
• a cash flow statement showing all income and tax payable for the current financial year and their net
disposable income
• a cash flow statement showing all income and tax after implementation of your recommendations
and net disposable income
• asset allocations for all their investments, current and recommended
• tax implications of any investment recommendations, including capital gains tax (CGT)
• full estate-planning recommendations and how these interact with insurance recommendations
where relevant
• full insurance analysis and recommendation
• portfolio projections that show how your recommendations enable the clients to meet their goals.
For each of the clients’ goals, you must include at least one (1) alternative strategy that you considered
and rejected. Include a brief explanation of why you rejected the strategy.
Page 20 of 68

Use the information on each of these areas in the subject notes to provide reasons for each of the
strategies you recommend.
Product advice: Specific product recommendations for insurance, superannuation and estate planning
are not required. You may recommend generic products to implement these strategies.
You must recommend appropriate investment products to implement the advice you have provided in
relation to any asset allocation, wealth accumulation or savings goals. Please do not use the products
from the case study SOA. You are required to source (or develop) your own fund details. It is not
necessary to include product disclosure statements in your assignment for any products recommended
in your SOA.
4. You must include detailed cash flow tables using the assignment template and Appendix 1 to show the
client/s situation before and after your recommendations.
You should include cash flow projections for personal investment recommendations as Appendix 2 to
your SOA. Use a Microsoft Excel spreadsheet to calculate your projections and complete the included
template. Provide projections to David’s projected retirement at age 65.
5. You should include projections for personal investment recommendations in Appendix 2 of your SOA.
Use a Microsoft Excel spreadsheet to calculate your projections and complete the included template.
Provide projections to David’s projected retirement age.
The SOAtemplate
AnSOAhas been commenced for David and AlyssaForster, using the data collected in the interviews, the
fact finder and risk profile.You will need to complete the remaining sections in the SOA as directed.The SOA
on the following page.
Page 21 of 68

Statement of Advice
Prepared for
David and AlyssaForster
Prepared by
<Your name>
Authorised Representative Number: 66666
AR Address
AR contact details
Authorised Representative of
KeyPlan Pty Ltd
ABN: 1010101010
Australian Financial Services Licensee
Licence No. 101010
Head office: 88 Money Lane, Accumulation.
You are entitled to receive a statement of advice (‘SOA’) whenever we provide you with any personal financial advice. Personal
financial advice is advice that takes into account any one or more of your objectives, financial situation and needs.
This SOA is a record of the personal financial advice provided to you and includes information on the basis on which this advice is
given, information about fees and commissions and any interests or associations which might influence the advice.
If this advice includes a recommendation to you to acquire a particular financial product, other than securities, or an offer to issue
or arrange the issue of a financial product to you, we will also provide you with a product disclosure statement containing
information about the particular product to help you make an informed decision about that product.
Be aware that the advice contained in the following SOA is valid for a period of 30 days only. If the plan is not implemented within
this time, it will need to be reviewed for accuracy.
Page 22 of 68

Executive summary
In this section, you need to provide your client with a concise summary of:
• their situation
• their objectives
• your recommended strategy to achieve the objectives
• the outcomes your client can expect from adopting the strategy.
This is anSOA, so the answers should be addressed to your client/s.They should be able to read this
executive summary and understand the advice you are giving and the reasons underpinning it and be able
to determine whether or not their goals have been achieved. There should be sufficient detail to allow the
client/s to make a decision, taking into account any risk/s involved and your fees. It should be written in
clear, unambiguous language without jargon and be appropriate to their level of financial understanding.
Your situation
This is where you need to summarise your clients’ current situation.
After reviewing the information provided from your end, I can summarize that you two have been married
for a long period of time and have the responsibility of two dependent children. You are in need of an
appropriate plan for enhancing your investment portfolio. I see Alyssa you have accepted redundancy and
want to invest the same in super funds for enhancing your returns. The information I have reviewed claims
Alyssa, you have inherited an estate from your aunt who died 4 months ago and left the estate which
includes some direct shares, cash at bank, some apartment and proceeds from an account-based pension.
You want to use the proceeds from such estate to secure your retirement plan as well as set up an
investment trust for your children. Both of you are holding shares in Forster Consultants Pty Ltd. You have
your Will and general insurance.
Assessor feedback: Resubmission required?
No
Your objectives
This where you need to list your client’s objectives (i.e. their financial and non-financial goals,
objectives and needs).
The Objectives I have learnt, that you are in need of which can be identified from your case are related to
your financial and non-financial goals:
Alyssa
 You are in need of gaining appropriate knowledge and effectively use the proceeds which is to be
received from her aunt estate and invest a portion of such funds in flexible assets to provide for the
needs of the family in future. Alyssa would also like to know tax implications of such investment.
 To gain proper knowledge and understand tax implications for both income tax and GST. In
addition to this, understand the tax implication on redundancy payments which is Alyssa will be
receiving. She also wants to put the funds towards long term wealth accumulation.
 To set a trust fund on behalf of her children so that she can set aside a sum of $ 50,000 in today’s
dollar for each of them.
 She also has an objective to assess the viability of her super fund provider and allocation of assets
to her super fund.
Page 23 of 68

David
 David wants to invest in high growth options which can give him an average return of 5.9% over the
10-year period
 He wants to assess the current buying and selling options for getting a better grasp of funding
options available to him.
Both
 The couple has a joint aim to plan in such a manner that they get a retirement income of $ 64,000
p.a. and this payment would be initiating when David turns to age of 65. In addition to this, they
also want a sum of $18,000 every two years for overseas travel.
 To develop appropriate cash flow strategies which would comply with their long term plans.
 Identify the best alternative plan which is available to David and Alyssa considering the
superannuation funds which can act as an efficient retirement tool for the couple. The aim is to get
a comfortable retirement life with appropriate super payments.
 The couple also wants leave out their holdings in shares from the retirement plan which is being
formulated.
 The couple wants to ensure that death of either one of them should not have an adverse effect on
the family.
 The couple wants advice of their current insurance as they have their doubts that the same does
not meet their needs.
The aim of the couple is to select the best alternative options for enhancing the insurance covers so that
the couple is able to cope with the current events which are taking place.
Assessor feedback: Resubmission required?
No
Page 24 of 68

Summary of our strategy and recommendations
For the short term — up to one year
This is where you need to summarise your recommendations that address your client’s short-term goals.
It is recommended that you create an offset account against current home loan and with this account, the
couple need to allocate the proceeds which are received from inheritance. This will minimize the amount of
non-deductible interest which is paid to nil and this will also permit the couple to access the funds as per
their wish. This will also allow the couple to have appropriate funds for their super contribution.
You are also recommended that you use the proceeds which you receive from the sale of inheritance estate
from your aunt, Alyssa to reduce the loan amount of $ 210,000 so that overall burden of loan is reduced.
Allocation of $ 25,000 to CMT and the proceeds of the same can be used in planning a family holiday next
year.
Alyssa, you need to contribute the net proceeds relating to redundancy payment to her superannuation
contribution as per non-concessional contribution. The amount which needs to be contributed is around $
39,000.
Alyssa, you need to invest in investment bonds which can assist you in retirement plan more effectively.
This amount needs to be contributed from the remaining proceeds of estate which would be inherited by
you. The amount which needs to be invested is around $ 75,000
You can also apply for Life and TPD insurance within the super fund for better coverage and the amount
need to extend to $ 300,000 for better coverage
David, you need to enhance his Life and TPD insurance within existing super fund which would be of $
450,000. Then you can take out a life and TPD policy with the business partner life insured to fund sell and
buy contracts.
Assessor feedback: Resubmission required?
No
For the medium term — one to five years
This is where you need to summarise your recommendations that address your client’s medium-term goals.
Alyssa, you need to plan for the long-term wealth creation with the investment plans and the proceeds
which you will be receiving from your aunt’s estate.
David, you need to initiatives for reducing taxes and the best way is to opt for a salary sacrifice option.
You also need to commence a TTR when you reach the age of 60
I would recommend you both to start a discretionary trust where appropriate investments can be made so
that each of the dependent child receive $ 50,000 which can then be used as a deposit for a unit once they
reach the age of 22.
Assessor feedback: Resubmission required?
No
Page 25 of 68

For the long term — greater than five years
This is where you need to summarise your recommendations that address your client’s long-term goals.
The couple should start contributing to the retirement fund so that once David reaches the age of 65, they
can lead a comfortable retirement life. The plan is to assign the surplus funds towards both concessional
and non-concessional contributions and at the same time balance their super funds considering their child
needs.
Assessor feedback: Resubmission required?
No
Page 26 of 68

Summary of expected outcomes if you implement our advice
For example:
• Should you proceed with the recommendations contained within this report, we estimate that:
• You will reduce your debt by $XYZ and/or save $ABC
• You will build wealth in non-superannuation assets through regular contribution of $X.
Should you move forward with the recommendations which is provided by me and follow the advices is
given by me then it is estimated that the following will be the outcomes:
The loan amount of $ 210,000 would be paid off with the proceeds available from the inheritance which
you are getting Alyssa and you would also be keeping aside appropriate funds of $ 50,000 for each of your
children and also have enough funds for the family trip which you have been planning.
Superannuation funds for both of you will develop due to the contribution made for the existing financial
year and forward. This is due to the contribution of surplus funds towards both concessional and non-
concessional contributions.
Application of inheritance funds for offset account will lead to savings in interest and also free up certain
cash outflows. The interest saving would be on the basis of the loan amount and existing interest rate
applicable in the market. The overall savings would be of the $ 1000 which is paid by you on monthly basis
plus the interest part on the remaining loan which is $ 9140 (210,000*4.40%). This would be an appropriate
savings for you and also leave more funds in your hands.
You would have appropriate funds set out for their children’s requirements and they would have
appropriate deposits for their first home.
The extra funds which are available to you can then be invested in a long term saving funds which is tax
efficient and allow you to make extra contribution as and when they need.
If the recommendation is closely followed than a suitable level of insurance cover is available you as well.
Assessor feedback: Resubmission required?
No
Page 27 of 68

Risks in our advice
Detail the issues clients need to be aware of when following advice. The answer must include risks relating
to the proposed recommendations for David and Alyssa.
Tip: Refer to the sample SOA for examples of relevant descriptions that should be included under each
subheading below.
The returns which are considered for the entire period and on the basis of which the advice is provides is
based on flat line compounded returns.
The contributions which are to be made by the couple are based on current rates as required by legislations
and the same is subjected to change over the period of retirement and this must be considered by the
couple.
The flow of income is considered to be constant for the purpose of estimation and there would not be a
case of unemployment for the couple.
Assessor feedback: Resubmission required?
No
Summary of our fees and commissions
Detail charges that the clients will incur. Ensure that any fee structure is Future of Financial Advice (FOFA)
compliant and detail the fees that both you and your firm will receive.
The fess and the commission structure which will be charged are on the basis on the nature and complexity
of the case and the same is discussed below:
Planning Fee
Implementation Fee
Ongoing Fees
Assessor feedback: Resubmission required?
No
Page 28 of 68

Your next steps
Outline what your clients will need to do next to decide whether or not to follow the advice.
You must go through the plan which is formulated in details and analyse every step and possibility of the
same. In case of any clarifications, you can always contact me for explanation or suggest certain
recommendations to improve the plan. The next step would always be taken when you approve it and
ready to proceed.
Assessor feedback: Resubmission required?
No
Body
While this section contains headings similar to those in the executive summary, the information provided is
more detailed and supports the recommendations made. As with the executive summary, it should be
written in clear, unambiguous language without jargon and be appropriate to your clients’ level of financial
understanding.
Important information about you
This section contains information about you that we used in preparing our advice, such as:
• your reasons for seeking advice
• what you would like to achieve
• your personal and financial information.
Present position
Your reasons for seeking advice
Outline why the clients sought advice.
You are seeking professional advice from what I have gathered from the information provided by you is
mainly because of the significant amount of funds in your hands and I can understand that you want to
make of the funds in the best possible manner so that it can maximise your returns and give you a desired
standard of living. Alyssa, you have inherited an estate from your aunt and have also received redundancy
payments which you want to invest appropriately. You also want to know about the tax implications for the
funds and ensure that the proceeds are invested in a manner which would maximise your returns in long
run. In addition to this, you require better understanding of the superannuation funds and assets allocation
for the same.
I also believe you as couple require sound plan and a better general insurance cover which would suitable
level of cover which will satisfy all your needs. In addition to this, Alyssa you want to gift funds to your
children in today’s dollars of $50,000 which can be used by them once they reach 22 years of age. The
funds which are gifted to the children would be used for their first house.
Assessor feedback: Resubmission required?
No
Page 29 of 68

What you would like to achieve
Summarise here what you understand to be your clients’ main objectives.
The information which is available to me states that your objective is to effectively accumulate appropriate
funds for the loan which needs to be paid and the same would be acting as an insurance in case you are
face a tragedy such as death or permanent disablement.
Then, there is the holiday trip which you are planning for next for which a cash reserve would be
maintained by you. This would be allocated from the funds you receive from the inheritance property.
Alyssa, you want to use to the redundancy payments which you will be receiving for enhancing your
contribution to superannuation as non-concessional contribution
Alyssa, you want to invest in an investment bond with the proceeds which is available to you from the
estate. This option provides you with Nil CGT implications if the investment fund is held for 10 years. The
contribution to the super fund would be depending on legislations at the current period.
Alyssa, you also have applied for Life and TPD insurance within Superannuation fund on which you will be
looking for advice.
David, you would like to enhance the Life and TPD insurance within the existing super fund.
David, you want to take out a Life and TPD policy with the business partner listed as the life insured to fund
sell/buy contract.
David, you want to commence a TTR when you reach the age of 60.
As much I can understand, you want to start a discretionary trust where appropriate investments are to be
made so that each of the dependent child receive $ 50,000 in today’s dollar which can be used as a deposit
for a house property once they reach the age of 22. This is to ensure that the future of your children are
secure.
Begin planning for Retirement funding after David reaches age 67 assigning surplus funds towards both
concession and non-concessional contributions, while trying to balance super assets between the two of
their child.
Assessor feedback: Resubmission required?
No
Page 30 of 68

Your personal and financial information
Listed below is a summary of your relevant personal and financial details that you have provided.
Personal information
Personal details
Client 1 Client 2
First name(s) David Alyssa
Surname Forster Forster
Current age 53 46
Marital status Married Married
Health status Good Good
Smoker status No No
Employment status Employed Employed
Employer name Forster Consultants Pty Ltd Brisbane Family Medical Practice
Occupation Consulting engineer/Managing director Clinical psychologist
Annual salary $150,000 $85,000
Summarise the discussion points that could/must be raised here and add any information that is not
included elsewhere.
Na
Assessor feedback: Resubmission required?
No
Children and dependent details
Dependents/family relationships Name Age/date of birth
Son Rowan 16
Daughter Kaya 14
Your existing insurance
Personal insurance See Below
Home contents insurance See Below
Health insurance See Below
Page 31 of 68

Suggested answer(your existing insurance)
Suggest they may replace this information with the more detailed information in the case study:
Policy Life insured Owner Cover Premiump.a
.
Notes
Death and TPD David Superannuation fund $432,000 $1,532 Any occupation TPD
Death and TPD Alyssa Superannuation fund $280,000 $993 Any occupation TPD
Income protection David Self $9,375 p.m. $1,250 90 day waiting period,
benefit to age 65
Income protection Alyssa Self $5,313 p.m. $935 90-day waiting period,
benefit to age 65
Home and
contents
NA Joint $450,000
home$55,000
contents
$2,020 Multi-policy discount applies as
all policies are held with the
same company
Private health
insurance
Family Joint $500 excess for
hospital and extras
$3,500 Applicable rebate taken upfront
as a premium reduction
Your existing estate planning
Summarise the clients’ existing estate planning provisions here.
As per the information which is available to me, David and Alyssa, both of you have a Will to your names
which was prepared 5 years ago and the same clearly states that in case of death of any one of you, all the
assets including shareholdings in Forsters ltd to the other. Your current estate plan also allows you to give
EPOA and you have also made each other nominee in case of anyone death. In addition to this, you also
have a buy/sell agreement in place. As per my opinion, the current estate plans of yours need slight
amendments so that proceeds which you will be receiving from inheritance needs to be incorporated in the
plan.
Assessor feedback: Resubmission required?
No
Page 32 of 68

Financial information
Current income and expense details
Income and expenses (excludes redundancy payment, inheritance and additional mortgage
repayments)
Client 1 (David) Client 2 (Alyssa) Total
Assessable income p.a. 150280 85280 235560
Tax and Medicare levy 3006 1706 4712
Income after tax 147274 83574 230848
Annual expenses (excluding
additional monthly mortgage
payments)
73765 73830 147830
Estimated annual
surplus/deficit
73509 9744 83253
Discussion points:
Summarise the discussion points that could/must be raised here.
As per my opinion, both of you are satisfied with the application of additional contribution with the
assistance of super funds. The information which is available to me are from the financial statements which
you have submitted shows that there is a redundancy payment which needs to be assessed considering
your income, Alyssa and also the pre-taxed income must also be considered. The case further reveals that
Alyssa, you have been redundant at the age of 46 but you still wish to continue as along as David continues
to work. The age of retirement for you, David, is 65 years of age and so there is a lot of time left. I estimate
that you would require a significant amount of money for maintaining your standard of living for which the
redundancy amount.
Assessor feedback: Resubmission required?
No
Assets and liabilities
Personal assets
Family home Joint $
900,000.00
$
210,000.00 $ 690,000.00
Home contents Joint $
68,000.00 $ - $ 68,000.00
Business Two shares
each
$
119,544.00 $ - $ 119,544.00
Personal assets total $
1,087,544.00
$
210,000.00 $ 877,544.00
Superannuation assets
Super David $
315,678.00 $ - $ 315,678.00
Super Alyssa $
133,634.00 $ - $ 133,634.00
Superannuation assets total $
449,312.00 $ - $ 449,312.00
Investment assets – non-superannuation
Cash management trust Joint $
28,000.00 $ - $ 28,000.00
Bank account Joint $ $ - $ 9,000.00
Page 33 of 68

9,000.00
Inheritance - Apartment Alyssa $
419,000.00 $ 419,000.00 $0 tax payable
Inheritance - Shares Alyssa $
156,200.09 $ 156,200.09
Inheritance - Cash Alyssa $
9,500.00 $ 9,500.00
Superannuation death benefit
lump sum following Alyssa’s
aunt’s death (net of tax)
Alyssa $
237,540.00 $ 237,540.00 Net proceeds after tax
Redundancy Alyssa $
78,400.60 $ - $ 78,400.60 Net proceeds after tax
Investment assets total $
937,640.69 $ 937,640.69
Net worth $
2,474,496.69
$
210,000.00
$
2,264,496.69
Discussion points:
Summarise the discussion points that could/must be raised here.
The discussion points which can be raised around deductable vs non-deductable debt. There can be further
discussion regarding protection of income.
Assessor feedback: Resubmission required?
No
Page 34 of 68

Incomplete and/or inaccurate information warning
Note that if, for any reason, the information on which our advice is based is incomplete or inaccurate,
then it may not be appropriate and before acting on the advice you should consider its
appropriatenessin light of your particular circumstances, needs and objectives.
Your risk profile
In this section, you need to provide:
• an overview of the different risk profiles
• asset classes and risk and return
• the clients’ risk profiles, including the appropriate mix of assets (the asset allocations) for the clients’ risk
profiles, the appropriate investment return time horizon for that profile and any specific concerns
• include an analysis of the trends in returns for the asset allocation mix that you have recommended and
explain what these mean.
The assessment of the risks profile for the couple are done on the basis of numbers which are provided in
the risks profile. The risk profile shows that David has a risk figure of 275 which makes his of the balanced
status. The key feature which is associated with a balanced risktaker is that he wants his portfolio to be
balanced and are generally of cautious nature and they follow such an approach to manage the risks for the
purpose of attaining the long term and medium-term goals of the business. The requirement of David is to
pursue such a strategy which can cope with the requirement of inflation and tax implications. The risk
figure which is shown for Alyssa is 130 which signifies that she is a moderate investor. A moderate investor
is always cautious and always goes for better returns in an investment. She would prefer an investment
option which is less aggressive and can provide regular returns.
The assets which can be identified for David are principle residence, superannuation fund, cash
management trust and a regular bank account. In addition to this, David also has significant shares in
Forster Consulting and also the value of home content is also high. In the case of Alyssa, she has inherited
estate from her aunt. She is considering to sell the property of her aunt for the purpose of earning more
revenue. In the case of David, suitable mix of assets as his investments are suitably managed.
Assessor feedback: Resubmission required?
No
Page 35 of 68

Strategy recommendations
This section tells you:
• what our advice is and why it is appropriate for you
• reasons for our recommendations
• what you need to consider, and any risks associated with our advice.
Read this section carefully and ask me if you have any questions.
Recommended action — first year
You will use your findings from the analysis of the case study as the basis for the information you will need
to provide in this section.
For each recommendation below, discuss the reasons, risks, advantages and disadvantages.
ALL recommendations should be listed here. They are to include, investment and debt management,
superannuation and life insurance recommendations. If estate planning advice is required you should
recommend that your clients are referred to the most appropriate professional.
Recommendation 1
You need to create an offset account against the existing home loan and allocate an amount of inheritance
proceed towards the same. This will be useful for deducting the non-deductible expense to nil while the
couple would still have access to funds and would be able to free surplus funds for contributing to their
respective super funds. This will provide an equal tax return of 5.8% which would be risk free in regards to
the funds which are allocated.
Assessor feedback: Resubmission required?
No
Page 36 of 68

Recommendation 2
You should initiate permitting superannuation grants in order to give out effective outcome of concession
contribution caps.
David, you need to start salary sacrifice contribution option so that you can maximise the available
concession contribution caps for financial year 2016/17.
Salary sacrifice can be described as a settlement with the employer for making payments for some items or
services from an individual’s pre-tax salary.
This provides an efficient tool for retirement as the superannuation contribution will assist in attaining long
term goals for both of you.
As the funds are being invested in superannuation, the same will not be assessable for tax purposes until
the same is matured. In addition to this, David you are also suggested that you start TTR once you reach the
age of 60 years.
For You Alyssa, You need to contribute amount from redundancy funds into the super account anf slightly
enhance the investment. Your contribution to super funds would be $ 178,500. The current superannuation
which is available for you is assessed and the same matches her risk profile but the same needs be
maintained.
Assessor feedback: Resubmission required?
No
Recommendation 3
I would recommend that you retain the income protection insurance which is available to you as I believe
that a benefit of $ 9375 and $ 5313 is best suited for you guys, David and Alyssa. I would also be
recommending you to enhance the life and TPD insurance considering the current expenses and level and
your requirements. The amount of coverage for life and TPD insurance is suggested to be $1,166,700 for
each of you. I would also be suggesting that you provide a premium for the same at $ 4,705.08 and $
1561.92 for both of you.
Assessor feedback: Resubmission required?
No
Recommendation 4
Alyssa, you need to contribute the proceeds which you receive from redundancy payment to your
superannuation fund as a non-concessional payment
This will make sure that the superannuation funds establish is further strengthen and selected
superannuation policy meets their needs in a tax effective manner.
One major advantage is that the proceeds which are contributed to superannuation funds would not be
assessed until the fund attains the condition of release. The redundancy payment which Alyssa receives will
be crucial for maintain her current salary. The proceeds which would be available to you for contribution is
shown in table below and the same is shown net of tax.
Page 37 of 68

Payment Details
Type of Payment
Basis of
Calculation
Pre-tax amount
($)
Tax Amount
($)
Post Tax
Payment
Lump sum annual leave 18 weeks
25,420.
00
8,134.
40
17,285.
60
Lump sum long service leave 7.8 weeks
11,150.
00
3,568.
00
7,582.
00
Payment in lieu of notice 5 weeks
8,308.
00 -
7,893.12
32,533.
00
Redundancy 16 weeks
24,225.
00
Golden handshake
21,000.
00
6,720.
00
21,000.
00
COMBINED POST TAX PAYMENT 78,400.60
I would also be recommending that you keep aside a sum of $ 65,000 so that in case Alyssa is injured or
Temporarily disabled than this sum would provide for the needs of the family and in such a case David
would work for full career in order to meet the needs of the clients.
Assessor feedback: Resubmission required?
No
Recommendation 5
Alyssa, you need to start a new trust which would be an investment bond from the proceeds which would
be left from the estate which she receives from her aunt. It is recommended that Alyssa invest a sum
around $ 120,000 in the bond and the rate of return for the same would be 4%. The estimated income
which can be generated is anticipated $ 177,629 if the rate of return does not fluctuates. The investment
fund can be established for a period of 10 years until their retirement. This provides Nil CGT implications if
held for 10 years and proceeds at that time can be assessed.
If the same funds are for any reason withdrawn before 10 years period lapses the tax will be applicable
depending on the period when the fund was withdrawn.
I would also be recommending that the discretionary spending which is incurred by you be reduced to $
20,000 instead of the amount which is shown to be $ 38, 598. This would ensure that you guys have more
cash flows in your hands and lead more to your savings and it is also clear that the mortgage amount
would apply anymore if you follow my recommendations and pay off the same with the funds which you
would be acquiring from inheritance of the estate.
Assessor feedback: Resubmission required?
No
Page 38 of 68

Things you should consider
Estate planning
I would recommend to you guys that you maintain a proper will and update the same considering yoyur
requirements. You need to have EPOA of the Guardianship for your children and this will be securing their
interest. Even if one of you dies, the other would be able to handle the situation and take care of the family
needs. In addition to this, the insurance coverage would appropriately provide for all your needs in such a
situation.
Assessor feedback: Resubmission required?
No
Taxation issues
The redundancy payments which is received available to you will be charged with tax on the portion which
is above the tax threshold.
It is my suggestion that you should sell off most of your shares to keep a CGT neutral position, this will
permit you to gain funds from sale without incurring any further CGT.
Alyssa, you will also have tax withheld from death benefit payable from superannuation benefit. In addition
to this, there would be no tax implication on the sale of property of your aunt provided the house is sold
within a period of 2 years from the death of your aunt.
Assessor feedback: Resubmission required?
No
Page 39 of 68

Alternative strategies considered
Your client will want to know that you have carefully considered their situation and in this process, rejected
some potential strategies that were not the most suitable for their needs.
Insert details of any relevant alternate strategies that you considered and the reasons that they
were rejected.
David you, need to start a TTR now and not at the age of 60 – here the extra income is not needed and the
concessional contribution caps can be met easily from the surplus income generated. The tax treatment
would not be preferential until the age of 60.
Managed Fund vs Investment bond – Managed fund can have CGT implication on redemption regardless on
which timeline the investment was held
SMSF- This option does not require the client to manage his own affairs
Assessor feedback: Resubmission required?
No
Page 40 of 68

Recommended asset allocation
Proposed asset allocation
Your investment assets are invested across various asset classes. The table below summarises:
• Weight: the proposed asset allocation resulting from our recommendations.
• Risk profile weight: the recommended asset allocation for your investment risk profile.
• Variance (weight): the variance between the recommended and proposed asset allocation.
Comments on proposed asset allocation versus your risk profile
The asset position for you, Alyssa is within your superannuation fund and the investment bond would be in
line to your risk profile. Your request regarding the funds for the children’s houses will be deposited in a
less aggressive option.
In case of you, David your current investment does not match with your risk profile but same can be
managed.
Assessor feedback: Resubmission required?
No
Asset allocation after implementation of recommendations
Asset allocation Weight Risk profile weight Variance (weight)
Defensive assets
Australian cash 10.68% 5.00% 5.68%
Australian fixed interest 15.00% 15.00% Neutral
International fixed interest 8.50% 10.00% -1.50%
Total for defensive assets 34.18% 30.00% 4.18%
Growth assets
Australian equities 23.51% 25.00% -1.49%
Australian property 9.40% 10.00% -0.60%
International equities 32.82% 35.00% -2.18%
International property 0.00% 0.00% Neutral
Total for growth assets 65.82% 70.00% 4.18%
Grand total 100.0% 100.00%
Page 41 of 68

Investment product recommendations
Product recommendations
Note that I can only recommend products on our recommended list, which have been approved by KeyPlan
Financial Planning.
Use the space below to list the products that you are recommending David and Alyssa invest in.
As per the information which is presented to me, following our investment strategy, we recommend that
you invest in the following products:
I would suggest to you Alyssa that you should choose a colonial first state first choice wholesale
superannuation fund. The superannuation fund allows both personal and employer contribution and has an
extensive range of investment plans associated with the same. In addition to this, the superannuation fund
also has a personal insurance cover with it as well.
I also suggest that you choose Lifeplan investment bond as your investment bond permits you to invest
within your tax paid investments which has CGT reductions applicable if the same are held for a period of 8
years or more. The investment will be fully CGT free upon redemption if the same is held for 10 years. An
investment bond also permits her to make extra contribution.
Assessor feedback: Resubmission required?
No
Relevant research material and product disclosure statements (PDS) are attached for your attention. It is
important that you read these documents carefully and contact us should you have any questions or if
there are areas of the document that you do not fully understand. All of these products are on our
approved recommended list.
Note: You do not need to include these PDS as part of your assignment. The above statement is a standard
inclusion in an SOA.
Cooling-off period
Details about the cooling-off period for each product are provided in the PDS.
Page 42 of 68

Disclosure of remunerations, commissions, fees and benefits
How are we paid?
If you are charging SOA preparation fees, implementation fees, ongoing advice fees or any other
non-product related fees, you must provide the details here. You may need to source information outside
of the subject notes to complete this requirement. However, you can use the examples of how fees are
shared between advisers and licensees from the sample SOA if needed.
If you are not charging these fees you must retain the table and complete it clearly reflecting that no
fees are charged.
Suggested answer
Answers will depend on the recommendations. Assessors should check that the values are reasonable for
the scope of advice and the table must not be blank.
Advice fees
Fee type Initial fee Initial fee paid to licensee Initial fee paid to adviser
SOA/plan fee $3,000 3,000 1500
Implementation fee $7,000 7,000 3500
Ongoing advice fee* $4,000 4000 2000
Total 14,000 14,000 7,000
*If you are charging a flat fee or an hourly rateit should be included in this table. If an initial and/or ongoing service fee is charged as a percentage of
the product(s) you have recommended, it should be included in the table below.
Investment recommendations
Summarise all of the products that you have recommended to the client here. Refer to the sample SOA for
examples of what to include. You will need to source information outside of the subject notes to complete
this table, based on the products you have used (or created).
If you wish to implement the products I have recommended, there may be initial and ongoing fees
applicable, as detailed below.
Product Initial fee Initial fee paid to
licensee
Initial fee paid to
adviser
Ongoing fees
paid to licensee
Ongoing fees
paid to adviser
CFS FC W/Sale
Personal Super
Nil Nil Nil Nil Nil
Lifeplan Investment
Bind
Nil Nil Nil Nil Nil
Total Nil Nil Nil Nil Nil
Neither KeyPlan Financial Planning nor I will receive initial or ongoing commission for any investment or
superannuation recommendations. Where applicable, they will be rebated to you. However, you may also
be charged fees for purchasing and investing in some products we recommend.
Page 43 of 68

Insurance recommendations
Product Premium Initial commission
paid to dealer
Initial commission
paid to adviser
Ongoing commission
paid to dealer
Ongoing commission
paid to adviser
Alyssa -CFS FC
W/Sale
Personal
super – Death
and TPD
$1,771 Nil Nil Nil Nil
Total
Assessor feedback: Resubmission required?
No
Other fees and benefits
KeyPlan Financial Planning and I may also receive additional benefits. Where the benefits received are
greater than $300 in value, they will be recorded in a register that meets the requirements of the
Financial Planning Association (FPA) Code of Practice on alternative forms of remuneration. A copy of the
Register for KeyPlan Financial Planning or me is publicly available and can be provided upon your request.
Page 44 of 68

Ongoing services
You need to make sure that your client fully understands what you are offering in terms of ongoing service.
Use the space below to record how you will manage this process.
An ongoing service requires the couple to actively keep in touch with me and we can arrange meetings for
discussing financial status and any changes which have been made to the portfolio. The meeting would be
held in every six months but an immediate and urgent meeting to discuss strategy can be called on the
wishes of the couple. The would be a part of the service which I am providing for which I would only take
my annual fees. The ongoing services and suitable for the same would be discussed with the client and we
will review the same.
Assessor feedback: Resubmission required?
No
Page 45 of 68

Implementation schedule
You must make sure that your client fully understands their responsibilities when it comes to implementing
the strategies recommended in this plan.Use the table below to record the details of the steps the clients
must take to fulfil theirduties.The schedule should highlight the priority of each task, as well as the order of
completion. The time frame should be as specific as possible.
Suggested answer
Answer will depend on recommendations.
Assessor should check that all recommended strategies are included here and that the key steps are listed.
The implementation checklist should also have a realistic timeframes.For example, rollover of
superannuation, insurances, etc., completion of forms may happen soon, but acceptance would not be
expect to be achieved within one day or one week.
David and Alyssa — in order to proceed with our recommendations, you will need to complete the steps
below:
Action By whom By when
Set off non-deductable debt from
proceeds received from inheritance
property $ 210,000
Alyssa As soon as funds are attained
Construct a lump sum non-concessional
contribution to supesr from redundancy
proceeds
Alyssa As soon as funds are attained
Start a Salary Sacrifice contributions up to
Concessional caps for the 15/16 financial
year
Alyssa and David Right Now
Make an investment of $ 120,000 in
Lifeplan investment bond with proceeds
from inheritance so that appropriate
retirement planning can be made w
Alyssa With the proceeds left
Create a discretionary trust to fund
children’s deposits for property on
reaching age 22 from proceeds for
inheritance
Alyssa and David As soon as funds are attained
Rollover current super to CFS FC W/Sale
personal super fund
Alyssa Right Now
Provide application for Death and TPD
insurance with CFS super fund
Alyssa Right Now
Adjust degree of cover currently kept in
superannuation fund to required levels
David Right Now
Assess Will and Buy/Sell agreement Alyssa and David Right Now
Note: The recommendations contained in this SOA are current for 30 days only. Please contact me for
further discussion if you are unable to act on our recommendation within this time frame.
Page 46 of 68

Assessor feedback: Resubmission required?
No
Page 47 of 68

Authority to proceed
By signing this authority to proceed, I/we David and AlyssaForster acknowledge the following:
• I/We acknowledge that the information I provided in the financial needs analysis has been used to arrive
at the recommendations contained in this SOA.
• I/We have read, understood and retained a copy of the SOA prepared by <Your name> dated <Date>.
This document contains information which accurately summarises our current situation, investments
and financial objectives.
• I/We have been provided with a KeyPlan Financial Planning financial services guide.
• I/We have read and understood the PDSs for the recommended products.
• Please note that a cooling-off period may apply to your initial investment or insurance policy. Refer to
the product disclosure statement.
• I/We acknowledge that the product(s) listed in the table below are to be implemented in my/our
name/s or in the name of Forster Consultants Pty Ltd:
Product(s) Amount
Colonial First State Firstchoice Wholesale Personal Superannuation $ 140,000
Lifeplan Investment Bond $120,000
• I/We wish to make the following change/s to the recommendations within the SOA
Product(s) Amount
NA NA
NA NA
NA NA
Signed Date / /
Client Name
Signed Date / /
Financial Planner
Consent to ongoing contact
I/We consent to being contacted by our adviser on an ongoing basis, in line with the agreed ongoing service
review structure detailed within this recommendation. My/our preferred hours of contact are between
______ and ______.
Signed Date / /
Client’sname
Page 48 of 68

SOA Appendix 1: Cash flow tables
Use the ‘How to complete a cash flow table’ resource provided in KapLearn for guidance on how to
complete the following tables for your client. Additionally, refer to the sample SOA.
Accurately completed cash flows are essential in the financial planning process to support
recommendations. They are vitalto demonstrating your competency.
Financial position before implementation of strategy
Note: The items listed in this template are indicative only and must be adapted to your clients’ personal
circumstances. There may be other relevant income or expense items that are not included in this
template. You should add, delete or substitute items where appropriate.
Income and tax (answer is for current situation excluding inheritance, company or redundancy)
Tax calculation David Alyssa Combined Notes
Income from employment
Salary $
150,000.00
$
85,000.00
$
235,000.00
Salary sacrifice $ - $ -
Salary after salary sacrifice $
150,000.00
$
85,000.00
$
235,000.00
Rental income $ - $ -
Unfranked dividends $ - $ -
Franked dividends $ - $ -
Franking (imputation) credits $ - $ -
Interest $
280.00
$
280.00
$
560.00
Assessable income $
150,280.00
$
85,280.00
$
235,560.00
Accountant’s fees $
650.00
$
550.00
$
1,200.00
For individual personal
annual tax returns
Charitable donations $
1,200.00
$
800.00
$
2,000.00
Income protection $
1,250.00
$
935.00
$
2,185.00
Taxable income $
147,180.00
$
82,995.00
$
230,175.00
Tax on taxable income $
41,953.60
$
18,520.38
$
60,473.98
based on 2018/2019 tax
rates
Medicare levy $
2,943.60
$
1,659.90
$
4,603.50
Low income tax offset $ - $
(530.00)
$
(530.00)
taxable income between
$48K to $90K is eligible
for $530 offset
Total tax $
44,897.20
$
19,650.28
$
64,547.48
Current cash flow
Cash flow David Alyssa Combined Notes
Salary less any salary sacrificed
amount
$
150,000.00
$
85,000.00
$
235,000.00
Non-taxable income $ - $ - $ -
Interest $
280.00
$
280.00
$
560.00
Page 49 of 68

Total income received before
tax
$
150,280.00
$
85,280.00
$
235,560.00
Investment expenses $ - $ - $ -
Expenses $ -
Mortgage $
16,120.00
$
16,120.00
$
32,240.00
Annual repayment
amount inclusive of
additional monthly
payments of $1,000 p.m.
(joint expense)
Accountant $
650.00
$
550.00
$
1,200.00
For individual personal
annual tax returns
Donations $
1,200.00
$
800.00
$
2,000.00
Total donation amount
to Heart Foundation and
RSPCA, in equal
proportions — both
deductible gift recipients
(DGRs)
School fees $
750.00
$
750.00
$
1,500.00
Children's expenses &
activities
$
2,800.00
$
2,600.00
$
5,400.00
Utilities $
4,085.00
$
5,165.00
$
9,250.00
Personal and house insurances $
4,010.00
$
3,695.00
$
7,705.00
Family hospital and
extras policy with $500
excess
Groceries $
8,500.00
$
8,500.00
$
17,000.00
Discretionary: restaurants, gifts,
clothing etc.
$
18,500.00
$
18,500.00
$
37,000.00
Holidays $
8,000.00
$
8,000.00
$
16,000.00
House maintenance $
8,200.00
$
8,200.00
$
16,400.00
Motor vehicles $ - $ - $ - Forster Consultants Pty
Ltd has provision for cars
Medical expenses $
950.00
$
950.00
$
1,900.00
Total expenses $
73,765.00
$
73,830.00
$
147,595.00
Total income received before
tax less total expenses
$
76,515.00
$
11,450.00
$
87,965.00
Total tax payable from tax table
above
$
44,897.20
$
19,650.28
$
64,547.48
Total net cash flow $
31,617.80
$
(8,200.28)
$
23,417.53
Page 50 of 68

Current assets and liabilities
Asset Owner Value Liabilities Net value Notes
Personal assets
Family home Joint $
900,000.00
$
210,000.00 $ 690,000.00
Home contents Joint $
68,000.00 $ - $ 68,000.00
Business Two shares
each
$
119,544.00 $ - $ 119,544.00
Personal assets total $
1,087,544.00
$
210,000.00 $ 877,544.00
Superannuation assets
Super David $
315,678.00 $ - $ 315,678.00
Super Alyssa $
133,634.00 $ - $ 133,634.00
Superannuation assets total $
449,312.00 $ - $ 449,312.00
Investment assets – non-superannuation
Cash management trust Joint $
28,000.00 $ - $ 28,000.00
Bank account Joint $
9,000.00 $ - $ 9,000.00
Inheritance - Apartment Alyssa $
419,000.00 $ 419,000.00 $0 tax payable
Inheritance - Shares Alyssa $
156,200.09 $ 156,200.09
Inheritance - Cash Alyssa $
9,500.00 $ 9,500.00
Superannuation death benefit
lump sum following Alyssa’s
aunt’s death (net of tax)
Alyssa $
237,540.00 $ 237,540.00 Net proceeds after tax
Redundancy Alyssa $
78,400.60 $ - $ 78,400.60 Net proceeds after tax
Investment assets total $
937,640.69 $ 937,640.69
Net worth $
2,474,496.69
$
210,000.00
$
2,264,496.69
Page 51 of 68

Financial position after implementation of strategy
Note: The items listed in this template are indicative only and must be adapted to your clients’ personal
circumstances. There may be other relevant income or expense items that are not included in this
template. You should add, delete or substitute items where appropriate.
Income, tax and cash flow
Tax calculation David Alyssa Combined Notes
Income from employment
Salary $150,000.00 $85,000.00 $235,000.00
Salary sacrifice $
-
$
-
$
-
Salary after salary sacrifice $150,000.00 $85,000.00 $235,000.00
Rental income $
-
$
-
$
-
Unfranked dividends $
-
$
-
$
-
Franked dividends $
-
$
-
$
-
Franking (imputation) credits $
-
$
-
Interest $280.00 $280.00 $560.00
Other income (e.g. taxable benefits, $
-
$
-
$
-
investment income)
Capital gains < 1 year $
-
$
-
$
-
Capital gains > 1 year $
-
$
-
$
-
Tax-free component of capital gains $
-
$
-
Assessable income $150,280.00 $85,280.00 $235,560.00
Deductible expenses $
-
$
-
$
-
Rental expenses, repairs etc. $
-
$
-
$
-
Taxable income $150,280.00 $85,280.00 $235,560.00
Tax on taxable income $43,235.00 $19,263.00 $62,498.00
Page 52 of 68

Non-refundable tax offsets (e.g. LITO/SAPTO) $
-
Medicare levy $3,005.60 $1,705.60 $4,711.20
Medicare levy surcharge $
-
Temporary Budget Repair levy $
-
Franking rebate $
-
$
-
Refundable rebates and offsets $
-
Total tax $46,240.60 $20,968.60 $67,209.20
Cash flow
Cash flow David Alyssa Combined Notes
Salary less any salary sacrificed amount $
135,750
$
76,925
$
212,675
Non-taxable income
Rental income
Unfranked dividends received
Franked dividends received
Interest
Other income (e.g. taxable benefits, investment
income)
Total income received before tax
Investment expenses
Expenses:
Mortgage
Accountant $ 650 $ 550 $
1,200 Deductible
Donations $
1,200 $ 800 $
2,000 Deductible
Children's expenses & activities $
2,800
$
2,600
$
5,400
School fees $ 750 $ 750 $
1,500
Council Rates $ 650 $ 650 $
1,300
Discretionary: restaurants, gifts, clothing etc. $
18,500
$
18,500
$
37,000
Electricity $
1,520
$
1,520
$
3,040
Gas $ 525 $ 525 $
1,050
Groceries $ $ $
Page 53 of 68

8,500 8,500 17,000
Health Insurance $
1,750
$
1,750
$
3,500
Holidays $
8,000
$
8,000
$
16,000
House Insurance $
1,010
$
1,010
$
2,020
House maintenance $
8,200
$
8,200
$
16,400
Income Protection $
1,250
$
1,250
$
2,500 Deductible
Medical Bills $ 950 $ 950 $
1,900
Mobile Phones & Internet $
1,080
$
1,080
Mortgage $
16,120
$
16,120
$
32,240
Pay TV $ 830 $ 830 $
1,660
School fees $ 750 $ 750 $
1,500
Water $ 560 $ 560 $
1,120
Total expenses $
74,515
$
74,895
$
149,410
Total income received before tax less total
expenses
$
61,235
$
2,030
$
63,265
Total tax payable from tax table above $
37,240
$
15,956
$
53,197
Total net cash flow $
23,995
$
(13,926)
$
10,068
Page 54 of 68

Recommendedassets and liabilities
Asset Owner Value Liabilities Net value Notes
Personal assets
Family home Joint 900,000 0 900,000 Answer here
Home contents Joint 55,000 0 55,000 Answer here
Car 1 Na Na Na Answer here
Car 2 Answer here
Other Answer here
Total Joint $ 9,55,000 0 $ 9,55,000 Answer here
Superannuation assets
David’s superannuation David 315,678 315,678
Alyssa’s superannuation Alyssa 133,634 133,634 Net redundancy added as NCC
Total 449,312 449,312
Investment assets
Investment property NA NA NA NA NA
Savings account NA NA NA NA NA
Term deposit NA NA NA NA NA
Shares NA NA NA NA NA
Managed funds NA NA NA NA NA
Other NA NA NA NA NA
Total NA NA NA NA NA
Net worth NA NA NA NA NA
Page 55 of 68

Appendix 2: Projections and assumptions
Use a Microsoft Excel spreadsheet to project the balance of the clients’ investment portfolio before and
after your recommendations up to David’s proposed retirement age. Your projections should show how the
recommendations are expected to meet the clients’ retirement objectives.
Copy the projections into a table like the one shown below and complete the list of assumptions in the
table on the following page.
Please ensure that you use rates of return, both current and proposed, that are an appropriate average
return for the clients’ portfolio.
Include details of all assumptions that you have made.
Table 1 Account balance projections
Current situation Proposed portfolio and investment strategy
Time period Portfolio value at end of year (assume all income is reinvested)
Investments Inheritance Investments Inheritance
Annual David’s
Superannuation
315,678 David David’s
Superannuation
315,678 David
Annual Alyssa’s
Superannuation
133,634 Alyssa Alyssa’s
Superannuation
133,634 Alyssa
Annual Superannuation
Asset Total
449,312 Joint Superannuation
Asset Total
449,312 Joint
Annual Investment
assets
901,851 Combined Investment
assets
901,851 Combined
Annual Cash
Management
Trusts
28,000 Joint Cash
Management
Trusts
28,000 Joint
Annual Bank Account 9,000 Joint Bank Account 9,000 Joint
Annual Investment
Property
278,000 Alyssa Investment
Property
278,000 Alyssa
Annual David’s
Superannuation
315,678 David David’s
Superannuation
315,678 David
Annual Alyssa’s
Superannuation
133,634 Alyssa Alyssa’s
Superannuation
133,634 Alyssa
Annual Superannuation
Asset Total
449,312 Joint Superannuation
Asset Total
449,312 Joint
Page 56 of 68

Table 2 Assumptions
Value Current situation Proposed strategy
Return period (monthly or annual) Na Na
Rate of return: Capital growth Na Na
Investments Na Na
Inheritance Na Na
Rate of return: Income Na Na
Investments Na Na
Inheritance Na Na
Investment loan interest rate Na Na
Annual contribution from cash flow Na Na
Investments Na Na
Inheritance Na Na
Other: Na Na
Hints for using the FV formula in Excel to predict account balances: Nper = either 1 for annual or 12 for
monthly contributions; PV = value of the investment the end of the previous year and should be entered as
negative; rate = annual rate divided by the frequency of contributions; pmt is the contribution amount and
should be negative when accumulating funds; type can be left blank and indicates that the payments
happen at the end of each period.
Page 57 of 68

Part 4: Assignment Questions
Presentation and implementation
Part A
David and Alyssa are coming into your office tomorrow for the SOA presentation meeting. As your SOA
contains a number of different recommendations you will need to plan for your presentation.
Explain how you will guide David and Alyssa through the assumptions used in formulating the plan, and the
degree to which variations in the assumptions may impact on expected outcomes. (250 words)
I have prepared a plan for you which I am sure would be extremely beneficial from the point of view of tax
minimization and would help you in achieving your goal to reach a suitable retirement status while
maintaining your current standard of living. The plan which is devised would ensure that you have enough
provisions so that you can travel in a period of every two years. The assumptions which I have made is that
David would work till the age of retirement of 67 during which period your super funds would be developed
appropriately. I have projected that super investments would yield a return of 6.5% and 5.5% for David and
Alyssa respectively considering the different risk profiles.
In case any of you two do not work on full time basis for the considered period that there would be
significant changes in the estimations and the return would be needed to be computed accordingly. The
return might fall lower than the estimated flat line returns as considered above.
It is considered that the investment bond would yield a projected 4% return which is after tax of course.
Assessor feedback: Resubmission required?
No
Page 58 of 68

Part B
Explain the advantages, disadvantages and key risks involved with one of your strategy recommendations.
(250 words)
Investment in Life plan Investment Bond –
The benefits of the Life plan Investment Bond are discussed below in details:
One of the main advantage which is associated with the investment bond is that it is a very useful tool
considering tax efficiency and it is considered to be an alternative strategy for superannuation funds. The
life plan investment bond can effective enhance wealth of an individual while at the same time maintaining
the tax liability to a minimum. The tax burden is taken of completely as the company has to bear a tax
liability at the rate of 30%. The life plan investment bond is considered to be efficient for the client because
 Provides a tax offset of 30% provided withdrawal is made after 10th year.
 The assessable section for income tax reduced with withdrawals made in 9th and 10th year and the
reduction is to two-thirds and one-third respectively.
 Tax free withdrawals after 10th years.
Another major advantage is that child savings can be done effectively for children who are not allowed to
make investments at that young age. The life plan Investment bond allows the parents to make investment
on behalf of their children and nominated them to the investment wealth when they are of age. At a
nominated age between 10 and 25, the investment is transferred to the child without levying any personal
tax, fees or charges.
As discussed above, it is a complementary strategy to superannuation funds and it overcome some of the
limitations which are faced in case of superannuation funds.
The life plan Investment bond option provides access to 42 different investment options which provides
exposure to a variety of assets. The investment bond also has an option relating to tax minimization and
enhancing the returns.
The disadvantage which is associated with the Life plan Investment Bond are mainly the risks of using such
an option. The disadvantage which is associated with the life time insurance bond is that it is along term
investment and do not provide any benefits to the investors for a period of 5-7 years or even more. It is to
be also noted that life insurance locks in cash for a minimum period of 10 years
Interest rate risk is the probability that a fixed-rate debt instrument will reduce in value as an outcome of
an increase in interest rates. This will affect the returns of the investment bonds and affect the planning
process.
Assessor feedback: Resubmission required?
No
Page 59 of 68

Part C
Assume that you are making recommendations that require the sale of assets inherited by Alyssa, including
the sale of her aunt’s principal residence. Explain to Alyssa how CGT would apply to her for each of the
assets she inherited if she sold them within six months of her aunt’s death or if she kept them for more
than three years and then sold them. Use language that Alyssa would understand and show sample
calculations to illustrate your points. (350 words)
In case of the estate which is left behind by Alyssa’s Aunt, I would recommend that the principle house of
residence should be sold within a period of 2 years as this strategy would ensure that there is no CGT
applicable to the estate. The shares would be assessed upon the price on which the same was gained, if
acquired pre-20 Sept 1985 then “purchase” price for Alyssa will be share price at the date of death. In case
the property and its shares are sold out within a period of 6 months from the death of your aunt than there
would be a partial exception on overall amount of capital gains tax applicable. However, if the property is
sold after a period of 3 years that the client would attract full exemption on accounts of capital gains
thereby making higher profits from the sale of property. The net inheritance which is computed for the
property is $ 822,240.09 considering the residence property and the shares which is inherited by Alyssa.
The residence property would be sold off and the proceeds for the same would be used for mortgage
repayment and also allocation of proceeds to each of Alyssa’s children and also for a family trip. Alyssa is
also recommended that she sells all her shares except the shares which is from CBA as the sane would be
expected to generate more returns in future.
Assessor feedback: Resubmission required?
No
Page 60 of 68

Part D
Assume that you have recommended to David that he uses a life insurance policy to fund his buy-sell
agreement with his business partner,Bill.
Explain why you have recommended one owner of the policy over another. Use language that
Davidwillunderstand. (200 words)
The policy would be providing David with life insurance coverage as well meet the requirements of the buy
and sell agreement which is being considered by the clients. This arrangement would arrangement would
allow purchase of shares in the event of death of partner. The value of the life policy requires to be grossed
up to permit for the CGT applicable to David on gaining the death benefit. The suggestion of life insurance
policy over another policy is provided judging the needs of David and there is also the benefit that life
insurance policy allows transfer of shares to the partners in case of death of the original policyholder.
Therefore, it is clear that life insurance policies have a better advantage over other kinds of policies in such
a situation. There are some other factors which are also taken into consideration such as the premium of
the life insurance product, the coverage which is offered by the product. Therefore, it can be suggested
that life insurance product is the best option for David.
Assessor feedback: Resubmission required?
No
Page 61 of 68

Part E
Complex financial planning requires that taxation, legal, estate, insurance and asset strategies are
integrated to achieve maximum benefit for the client.
Explain how your estate plan offers an appropriate integration of tax benefits to the beneficiaries while still
meeting the clients’ goals. (300 words)
The buy/sell contract has to be made clearer around whether the shares are simply being allowed to the
other party on death. Creating a discretionary trust permits the trustee/s discretion on how and when any
investment income and or capital are payed to the beneficiaries of the trust. The amount for the
discretionary trust would ensure that proper protection is provided to the assets which is to be inherited by
Alyssa. It is recommended that Alyssa should sell off the property and most of the shares except the shares
of CBA so that the proceeds can be investment in repaying mortgage and also setting up trust funds for her
children. In addition to this, it is also recommended that a part of the proceeds roughly around $ 65,000 is
kept aside for any requirements of the family in case Alyssa is permanently or temporarily disabled. This
would protect the income of the family and also ensure that the needs of the family are considered
appropriately. Alyssa even has to update her EPOA given her Aunt’s death.
Assessor feedback: Resubmission required?
No
Page 62 of 68

Part F
Your SOA contains a number of different recommendations for David and Alyssa in a number of
different areas.
Explain how you will you coordinate the implementation of the strategies recommended in the plan.
Include:
• how you collect the fees in line with industry and organisational requirements
• the timing of transactions for implementation
• a plan for handing over to external specialists and monitoring that they complete the required work
• all actions you will take to ensure implementation occurs within a reasonable time frame
• communications with anyone you need to brief in your organisation or externally to implement the plan
• any steps you take to ensure that the client is kept up to date and any concerns are addressed
Word limit (300 words)
The first step which I would be ensuring is that appropriate funds are available for the purpose of filing
relevant application forms. In addition to this, I would be verifying their forms and documents relating to
insurance and other requirements so that the smallest detail is appropriate to the needs of the clients. The
best way to ensure that timely implementation of plan is done is by creating a checklist of activities for
which the client would be confirming with me each steps which is taken by the client. In certain areas I
would also refer to my superiors in the organization for the purpose of getting a second opinion on my
plans for the client and also for ensuring that the plan is on the right track. I would be requiring the
insurance products documents and TPD coverage clauses before the client invests in the same so that I am
double sure that the product would be able to meet the needs of the clients.
Assessor feedback: Resubmission required?
No
Page 63 of 68

Ongoing service
Part G
Almost a year haspassed and you have called David and Alyssa to arrange their annual review.
David has told you about a product that he has heard about called ‘Mercer LifetimePlus’ that won an
innovation award from Canstar in 2015. He wants to know if this could be a suitable investment for him and
if he should move some of his current superannuation into the product.
He has no idea what the product really does, but it sounded good and he would like you to present your
research and recommendations to him at the review.
In order to prepare for the review, complete the following:
1. List at least three (3) available information sources, both internal and external, that you will use to
research this product (for example specific webpages, news articles, rating agency reviews, research
team circulars etc.).
2. Explain how you would gain access to information, such as a copy of the PDS, assuming you do already
not have it available at your place of work.
3. Explain what you would do if you wanted specialist advice about this product and the steps you would
take to make sure you got the information in time for the review.
4. Use your research findings to describe to David how the product works, using at least two different
methods for presenting financial data (e.g. a table and a graph, two different types of charts, etc.).
5. Explain whetherthis product is suitable for David’s current situation or not.
(600 words)
1. The part aims to find out the sources which will be of assistance for the products which is
required by the couple. There are three available product resource sources which are inclusive of
web pages for the company that has been incorporated by Mercer Life Time Plus product.
Information can also be gathered from rating agencies reviews where the quality of products and
its features are useful for creation for research.
2. When the copy of Product Disclosure Statement is not seen in the office, the financial planner can
look into the PDS online from the website of the firm and can even read through the traits of the
product
3. The steps which would be taken is to firstly expand the scale of my research regarding the
product. This would begin with proper scrutiny of the nature of the product and also all the
features which is related to the product. I would also be reviewing views of experts and clients
who have used the product and ensure that they are rating the product as positive. I would also
take second opinions from my seniors who are working with me in the organization. These steps
would give me time for proper review of the product and ensure that the needs of the clients are
properly meet.
4. LifetimePlus is the only investment product that provides income for life without compromising
on performance and this is the major advantage of the product and I am of the opinion that the
same would meet the your needs David. The return is appropriate and the nature of the
investment is conservative in nature. The performance of the managed funds is shown below:
Page 64 of 68

The performance of LifetimePlus is represented by blue bar lines while that of the peers is shown by black
bar lines. The charts shows that the performance of the fund is superb from a long term investment
perspective and therefore the same is appropriate for retirement. A comparison for performance of
funds is shown below:
Lifetime
Plus
Other
Peers
Fees
Comparison 0.47% p.a 1.31% p.a
Capital Return 2.50% 1.30%
5. As per the analysis of the product, it can be said that the new product would be appropriate for the
business.
Page 65 of 68

Assessor feedback: Resubmission required?
No
Page 66 of 68

PART H
You have recommended an ongoing service plan for the clients.Explain how you achieve the following by
outlining how you manage the ongoing service for clients from an administrative and technical
perspective.Your answer should show how you manage ongoing service internally and externally and
ensure client satisfaction.
To help you answer this, you should describe how you:
• follow internal and external requirements for documentation
• diarise key revision dates and arrangementsfor contact with clients
• develop procedures for clients to request unscheduled reviews
• establish procedures to monitor critical timings and priorities
• create a way to monitor ongoing performance of the financial plan
• monitor the quality of ongoing client service
• ensure you provide ongoing service that meets industry best practice and organisational and regulatory
requirements
• check and follow up lodgement of documentation to ensure deadlines are met
• ensure you obtain fees and charges and carry out processes according to organisational and legislative
requirements
• establish clear arrangements for clients to contact a representative at any time with concerns and
queries
• monitor client satisfaction against the practice’s performance indicators.
The internal and external requirements of the documentation of the required products would be analysed
by me. The different documents relating to insurances and super funds would be review by in order to
ensure that the smallest details of the documents are covered by me. I would be analysing all the features
of the products and set a meeting time date with the client in case some addition of features need to be
revised for the products. I would also be creating a checklist for all the activities so that timely process and
procedures are followed by the clients. In order to assess the level of satisfaction of the client can be
monitored from the regular meeting with the clients and listening to their opinions so that all the needs of
the clients are met.
Assessor feedback: Resubmission required?
No
Page 67 of 68

PART I
As part of the review process you undertake another fact-finding exercise with the clients, as it has been 12
months since you last met.
Although the clients claim to be following your recommendations, you note that the balance in their
savings account does not seem to be as large as you think it should be.
Explain:
• the types of information you could use to determine why the account balance is lower than expected
(include at least two (2) different sources of information)
• how you can analyse the integrity of information provided by theclients
•
The two sources are inclusive of the web pages of the company from which the product is being purchased
and information with the help of PDS. The integrity of the information which is provided to the client can
be analysed by reviewing the information regarding the products.
Assessor feedback: Resubmission required?
No
Page 68 of 68