Personal Wealth Management

Running head: PERSONAL WEALTH MANAGEMENT
Personal Wealth Management
Name of the Student:
Name of the University:
Author’s Note:

1PERSONAL WEALTH MANAGEMENT
Table of Contents
Part A...............................................................................................................................................3
Life Objectives.............................................................................................................................3
Information about Dean and Hamish...........................................................................................3
Personal Details.......................................................................................................................3
Balance Sheet...........................................................................................................................4
Income Statement....................................................................................................................4
Current Financial Position...........................................................................................................5
Financial Ratios.......................................................................................................................5
Asset Allocation.......................................................................................................................5
Projected Cash Flow................................................................................................................7
Recommendation about your financial position..........................................................................7
Part B...............................................................................................................................................9
Executive Summary.....................................................................................................................9
Part C.............................................................................................................................................11
Insurance Product Recommendation.........................................................................................13
Insurance Needs for Dean..........................................................................................................13
Life Insurance........................................................................................................................13
Total and Permanent Disability Insurance.............................................................................14
Income Protection Insurance.................................................................................................14

2PERSONAL WEALTH MANAGEMENT
Insurance Need for Hamish.......................................................................................................15
Life Insurance........................................................................................................................15
Total Permanent Disability Insurance...................................................................................16
Income Protection Insurance.................................................................................................17
Superannuation Contribution Strategy for Dean and Hamish...................................................18
Reasons for Recommendation...................................................................................................18
How is my Advice Appropriate?...............................................................................................18
Consequences of advice.............................................................................................................19
Commissions..............................................................................................................................19
Authority to Proceed..................................................................................................................19
Cooling Off Period....................................................................................................................20
Bibliography..................................................................................................................................21

3PERSONAL WEALTH MANAGEMENT
Part A
Life Objectives
Short term An extensive analysis of your personal insurance needs.
Medium term
They have $100,000 in 5 years’ time for the purpose of
education grant to their young son.
You want $50,000 expenses saved for around the world trip in
15 years’ time in order to enjoy your 21st anniversary.
Long term Both retire comfortably on $650 a week debt free when
Hamish turns 65.
Information about Dean and Hamish
Personal Details
Dean Hamish
48 years 50 years
He is employed as a nurse and earns
$68,000 per year plus 9.5%
superannuation guarantee contributions
He is employed as a pharmacist earning
$88,000 per year plus 9.5%
superannuation guarantee contributions.
Health: Excellent Health: Excellent
Smoker: No Smoker: No
Risk profile: Conservative Risk profile: Balanced

4PERSONAL WEALTH MANAGEMENT
You both have child named Hayden who is 2 years old and at the current time period, you
are not looking to have another baby.
Balance Sheet
Liabilities Assets
Home mortgage $600,000 House $850,000
Credit cards $50,000 Vehicles $65,000
Car loans $50,000 Savings account $20,000
Transactional
bank account $10,000
Superannuation: HESTA
Industry Superannuation $70,000
Fund (Dean)
Superannuation: HESTA
Industry Superannuation $80,000
Fund (Hamish)
Shares $152,000
Other assets $50,000
Total: $700,000 Total: $1,295,000
Income Statement
Details Amount
Living expenses $41,600
Insurance $4,500
Credit card $8,038
House mortgage (principal and interest, 5.2% interest rate) $91,838
Car loans $4,200
Total annual expenses $150,176
Estimated annual surplus/deficit cash ($30,765)

5PERSONAL WEALTH MANAGEMENT
Current Financial Position
Financial Ratios
Net worth ratio
The net worth ratio calculated is 45.95%. Both of you own
45.95% of your assets while on the other hand your creditors
own 54.05%. This is not a favorable position to be in owning
lower than the amount that you to owe.
Liquidity ratio
Your liquidity ratio computed is 9.61%. This is seen to be a
bad scenario as you may not have sufficient cash to pay your
short-term debts.
Savings ratio As both of you pay an increased amount of mortgage the
savings ratio is negative and the value comes to -25.76%.
Monthly debt
service ratio
The monthly debt service ratio is 87.16% and this suggests
that 87.16% of the net income is going towards servicing
debt.
Asset Allocation
Dean
Asset class Asset allocation (%)
Cash 4.3
Fixed interest 11.1
Total defensive assets 15.4
Australian equities 54.9
International equities 5.3
Property 22.5
Alternative strategies (growth) 1.9