Confirmation and Fee Structure for Superannuation Fund

The assignment content discusses the costs associated with a superannuation fund for Sandy. The client is required to pay an annual contribution of $105, out of which $100 will be deposited in the superannuation fund and $5 will be retained by the financial advisor. The financial advisor charges fixed contribution fees, and the annual fixed amount is paid over and above the annual contribution. Additionally, there are administration and management fees, investment fees, and analyst fees. Sandy must confirm her acceptance of these costs through written communication. She has three options: bronze, silver, and gold service packages, each with different fees and benefits.

Section 1
Part a
In the super plan, this Sandy is contributing $ 21250 per annum with the initial balance of
$320,000. Sandy has received the bonus of$60,000 which he entirely wants to invest in the super
plan. The bonus received by the sender will increase the future value for his retirement from
$850,000 to $950,000. Sandy is happy to invest the entire amount because at the age of 54 Sandy
might not have a responsibility where she would require large investment. As of now, the
monthly expenses of Sandy might be in control; therefore, she might not require her bonus
amount. If the entire bonus amount is added to the super plan then Sandy can either increase the
future value of her investment or she can receive the same future value of$850,000 by working
for lesson number of years.
Part b
Sandy might not be extremely happy about funds getting lock the wait till the condition of
release is not mad. If the funds are locked it implies that the liquidity of the Sandy will reduce.
The sender will now have less amount of money reserved for the personal emergency is,
therefore, Sandy might not be happy if the funds are locked away. However, the decision to lock
the funds depends on the additional return provided by the investment scheme in lieu of the
reduction in liquidity full stop if a particular investment scheme is providing the attractive
Returns then Sandy Might is happy to lock away her funds.
The main reason for which Sandy might not be happy to block his funds is the incentive for the
liquidity. The incentive for the liquidity is defined as the extra return which investor expect for

following his liquid investment. If Sandy is foregoing his liquid funds he will expect higher
returns than the investments which are providing the liquidity of the funds. The return
expectation of the investor in these cases depends on the benchmarking of similar index that are
providing the similar return and the similar liquidity.
However, in the practical scenarios investors, other clients are not aware of the Fund Manager or
the financial advisor to explain the investor about the investment options available and suggest
him the best investment option which is viable to him.
Once the client is convinced that he is getting the best option considering both the liquidity and
The returns into the account then he will not hesitate about blocking of his funds. Hence it is the
duty of the fund manager to convince the client and provide him best investment option
according to his objectives.
Section 2
Part a
The rate of return which is used in the super plan in order to calculate The projected future value
of the firms at the retirement for the Sandy is 5%. The gross Returns which are earned on the
investment funds in the super plan is expected to be 7%. The gross returns, however, do not
consider the inflation into account. The net returns for the investment in the super plan are
calculated as the difference between the gross returns and inflation which is 5% In this case.

In this case, inflation is considered because of the net amount of money which is received after
11 years might not value Same as today. Therefore inflation-adjusted returns are calculated in
order to consider the effect of inflation.
The amount of 950 thousand which is to be received by Sandy is by considering 7% gross
return. However the value of $950,000 might not be the same as today therefore net return on the
investment which is made by Sandy would be 5%.
Part B
The time frame which has been assumed in this case for the investment Is known as the
Investment Horizon. The investment Horizon for the investment in the super plan is 11 years.
This investment Horizon implies that Sandy would be contributing an annual amount for
investment in the super funds for the next 11 years. After the end of 11 years, the sender will
receive the lump sum amount of$950,000 at his retirement.
In this case, we have assumed that after the additional bonus payment of below 60000 the lump
sum amount which is to be received by Sandy at his retirement has increased from$850,000
to$950,000. However, it can also be done that by the investment of additional 60000 bonuses
Sandy can reduce his investment Horizon and receive the lump sum amount of$850,000 at his
retirement.
Part C
In this case, Sandy is required to provide his acceptance for the above-mentioned conditions
which are required for investment in Superfund.

The sand is required to provide his confirmation on the following given condition. The initial
balance which is provided for the investment in the fund by the Sandy is $320,000. The
investment Horizon for the investment is 11 years The gross return which is to be earned on the
investment by the sand is 7%, however, the net returns after the adjustment of the inflation are
5%. The annual contribution which Sandy is required to make for his investment funds is 20
$1250. The lump sum amount which is to be received by Sandy In normal circumstances is
$850,000. However, if the sending decides to invest his bonus of $60,000 now he is expected to
receive lump sum amount of 900$15,000 at his retirement. The administration and management
fees are charged on the fund is 0.45% of the portfolio amount and 6.5 Dollars per month.
Investment fees charged is 0.5% of the annual contribution. The analyst fees are $1100+ taxes
and the new fees which would be charged with the increase account balance would be 3688
dollars.
Sandy is required to give his acceptance for the investment in the super fund by written
communication.
Section 3
Part a
Our major objective here is to plan the investment for sending in the superannuation funds. We
would be providing consultancy to the Sandy for the amount of the funds he needs to deposit in
order to save his desired amount till the age of retirement. In this planning, the task of Sandy is
to plant his expenses and investment in such a manner so that he can save the desired amount of
funds which are required to be invested annually in the superannuation fund.

As per the current scenario, Sandy is required to make an annual contribution of $ 21250 on the
annual basis along with the bonus payment of$60,000 in order to get the retirement fund
of$950,000 at his retirement at the age of 65. Is Sandy is not able to make a desired annual
contribution of $ 21250 then he will default on his superannuation fund which can lead to the
deviation from his desired objective of receiving a desired amount at his retirement.
Part b
as we have already discussed it will take 11 years of recurring investment of $21250 for Sandy
2 reach his desired goal of obtaining $960,000 at his retirement. For over there is one important
thing to notice in the superannuation planning for the Sandy. As we can observe that Sandy has
recently received a bonus amount of 60000 dollars so his retirement amount has increased
from$860,000 to $960,000. In case Sandy thinks that $860,000 are enough for him after his
retirement then he needs to invest for 9.38 years by depositing the current bonus of$60,000.
The amount is calculated by the Excel function
Rate 0.05
PV 320000
FV 860000
PMT 21250
Years =NPER(5%,-21250,-380000,860000,1)
Part C
We have already discussed that it is important for the send it makes the payments at the regular
intervals with the punctuality so that the progress of superannuation fund can be monitored on

the regular basis. As a consultant, it is our duty to appraise the performance of superannuation
fund and intimate Sandy about the progress On a regular basis. Sandy would be sent reminders
for the annual payments From the multiple sources of communication. Initially send you would
be sent a communication through the email in order to make the payment one month prior to the
due date in order to avoid Any hiccups at the last moment. The initial due date for the payment
would be one month prior to final due date.
Sandy would be sent notifications through emails and messages so that he can make the deposit
in time. However, if the first due date which is one month prior to the final due date is
compromised then the regular followups will be made to this Sandy in order to understand his
financial situation and create an alternative so that he can avoid default on his payment towards
the superannuation fund.
Section 4
part 1
The superannuation contribution fees are charged when a particular contribution is Made to the
account of the superannuation funds. The super animation contribution fees are paid directly to
the financial consultant for his services of providing the recommendation to his clients.
Superannuation contribution fees are generally negotiable and vary according to The consultant.
Superannuation contribution fees can either be fixed made by the clients towards the
superannuation fund.

If the contribution fee is defined as the percentage of the investment then the amount is
subtracted from the deposit itself. For example, if the contribution fee is 5% of the total amount
then if$100 is paid as the annual contribution. In such cases the client would be required to pay
$105 as the annual contribution out of which$100 would be deposited in the superannuation fund
and$5 would be retained by the financial advisor. In case the financial advisor charges fixed
contribution fees in such cases The annual fixed amount is paid to the financial advisor over and
above the annual contribution. In case of sending the contribution fees which is charged by the
financial advisor is $1100 plus an additional amount for goods and services tax.
Part 2
The administration and management fees are charged on the fund is 0.45% of the portfolio
amount and 6.5 Dollars per month. Investment fees charged is 0.5% of the annual contribution.
The analyst fees are $1100+ taxes and the new fees which would be charged with the increase
account balance would be 3688 dollars.
Part 3
Sandy is required to provide the confirmation through the written communication for the
acceptance of the above-mentioned cost on his superannuation funds. The confirmation must be
taken from the Sandy on this important point as well
The bonus received by the sender will increase the future value for his retirement from $850,000
to $950,000. Sandy is happy to invest the entire amount because at the age of 54 Sandy might not
have a responsibility where she would require large investment. As of now, the monthly
expenses of Sandy might be in control; therefore, she might not require her bonus amount. If the

entire bonus amount is added to the super plan then Sandy can either increase the future value of
her investment or she can receive the same future value of$850,000 by working for lesson
number of years. Once the confirmation is received from the Sandy the supper annuation fund
for him will be finalized
Section 5
Part a
for the investment in the superannuation fund, we have three plans for the sending. These three
plants are described as a gold Silver and bronze service package. The bronze service package
will have the Annual fees of$990 in which the superannuation portfolio of Sandy would be
reviewed once which will include investment and implementation. In the bronze package, Sandy
would have access to the client seminar which would be held on an annual basis and Sandy can
change his investment only once within the given funds.
The Silver package will have Annual fees of 2750 dollars. The self-service package will have to
annual reviews of the portfolio investment and implementation. The fees of the silver surface
package would be 2750 dollar which will include access to annual client seminar along with
additional access to a client information evening. In the Silver surface package, the client will
have the option to make to changes in the investment funds within the fund limit.
The third service which is provided is the gold service package which has the Annual fees
of$5,500 and it includes 4 annual portfolio and investment reviews along with the
implementation. In the gold service package, Sandy will have access to the annual client seminar

along with it he will have access to two additional client information evening. In the gold service
package, Sandy can make three changes in his investment options within the point element.
Since the gold service package is the premium service it will provide additional benefits like
access to annual client function quarterly update on the economic news additional portfolio and
investment reports along with assistance on Central Bank.
Part B
We have mentioned the basic fees for all the three packages in the above discussion apart from
the basic fees which is 990 dollars or the bronze package 2750 dollar for Silver package
and$5,500 for gold package following additional fees would be applicable. The administration
and management fees are charged on the fund is 0.45% of the portfolio amount and 6.5 Dollars
per month. Investment fees charged is 0.5% of the annual contribution.
Part C
Sandy is required to provide his acceptance towards his desired plan among bronze, silver and
gold through the written communication.
The confirmation must be taken from the Sandy on this important point as well
The bonus received by the sender will increase the future value for his retirement from $850,000
to $950,000. Sandy is happy to invest the entire amount because at the age of 54 Sandy might not
have a responsibility where she would require large investment. As of now, the monthly
expenses of Sandy might be in control; therefore, she might not require Her bonus amount. If the
entire bonus amount is added to the super plan then Sandy can either increase the future value of

her investment or she can receive the same future value of$850,000 by working for lesson
number of years.
Section 6
Part a
In case send you to decide to choose the bronze option the biggest advantage which is obtained
by the Sandy is that he will have the minimum amount of fixed cost associated with the
superannuation fund. The bronze plan has only 990 dollars of consultancy fees. The bronze plan
would be appropriate for the Sandy if he does not wish to monitor his fund frequently.
The bronze plan is the basic plan and it will allow the Sandy to minimise the fixed cost
associated with the investment with the superannuation fund. As we know that is Sandy Monster
more closely monitor his investment funds and analyze each and every deviation from his
desired objective then he should choose the gold or the Silver Plan. But in case Sandy is looking
for the basic consultancy services provided to him and he wants to monitor is investment once
every year he can minimize is caused by choosing the bronze plan.
Once the Sandy decides to opt for the bronze plans his early expenses towards the management
of the super annuation would be lower than The Silver service package and gold service package.
However in the bronze service package and I will get access to the basic plan which will not
provide the additional facilities which are provided in the gold plan.

Part b
The total cost which is applicable for the bronze option is$990 of the consultancy fees and apart
from the consultancy fees The administration and management fees are charged on the fund is
0.45% of the portfolio amount and 6.5 Dollars per month. Investment fees charged is 0.5% of the
annual contribution.
Part c
The fees would be collected at the time of the annual deposit of $ 21250 is made by the Sandy.
The fees which are applicable to the bronze plan will be charged over and above the annual
contribution of $ 21250. The intimation of the collection of fees would be sent to the sending in
advance. Sending would be provided with the detail of each and every fish which is charged to
him and all the charges would be clearly mentioned along With the taxes. Sandy would be
provided with the invoice in which we can see his detailed annual bill for the maintenance of his
fund. Sandy will be required to send his written communication through the digital medium in
order to accept the entire fee which would be charged to him on the annual basis by the fund
consultant.