Superannuation and Retirement Planning

This document is a written assignment for the subject of Superannuation and Retirement Planning. It includes instructions for completing and submitting the assignment, as well as sections covering establishing client relationships, analyzing client objectives, addressing client questions, presenting strategies, and agreeing on a plan. The assignment is based on a case study of Nathan and Mary Davidson, who are concerned about their retirement savings. The document also provides information on their current financial situation, superannuation, insurance, investments, and needs and objectives.

Written Assignment
Superannuation and Retirement Planning
(DFP3_AS_v6A1)
Student identification (student to complete)
Please complete the fields shaded grey.
Student number
Written 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)
Section 1 Not yet demonstrated Not yet demonstrated
Section2 Not yet demonstrated Not yet demonstrated
Section3 Not yet demonstrated Not yet demonstrated
Section4 Not yet demonstrated Not yet demonstrated
Section 5 Not yet demonstrated Not yet demonstrated
Feedback(assessor to complete)
[insert assessor feedback]
DFP3_AS_v6A1

Before you begin
Read everything in this document before you start your written assignment for Superannuation and
Retirement Advice (DFP3v6).
About this document
This document is the written assignment, to be submitted with your Oral A assignment with audio
recording. These assessments must be submitted before submitting your Oral B assignment.
This document includes the following:
• Instructions for completing and submitting this assignment.
• Assignment sections (including factfinder templates, cash flow templates and managed funds
calculations).
– Section 1: Establish the relationship with the client and identify their objectives, needs and
financial situation.
– Section 2: Analyse client objectives, needs, financial situation and risk profile to develop
appropriate strategies and solutions.
– Section 3: Address clients’ questions and concerns about superannuation matters.
– Section 4: Present appropriate strategies and solutions to the client and negotiate a financial plan,
policy or transaction. Provide ongoing service where requested by the client.
– Section 5: Agree on the plan, policy or transaction.
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 KapLearn Superannuation and
Retirement Advice (DFP3v6) subject room. You must submit and complete your oral A assignment,
audio recording, written assignment and exam, prior to you commencing and submitting your oral B
assignment and audio recording. We strongly suggest completing your oral A assignment and audio
recording, written assignment and exam in Week 10 and once completed, to then commence and submit
oral B assignment and audio recording no later than Week 12.
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How to use the sample case study and SOA in KapLearn
The sample case study provides a model to help you prepare your SOA for this assignment. The case study
explains the process that is undertaken to develop the SOA with reference to an example and it is a very
useful resource. Download the sample SOA and refer to it as you work through the learning materials for
this subject.
Before you start work on this assignment, go back to the sample SOA and:
• compare how the SOA matches with the goals and objectives identified in the case study
• consider what information has been included in the SOA
• consider why this information has been included.
This exercise will help you prepare an SOA for this assignment that addresses your client’s goals.
Please bear in mind that not all SOAs are exactly alike in their construction, but all have common heading
topics within them. Accordingly, there may be minor differences between the sample SOA and the SOA
template in this assignment. However, all the required compliance elements will be included in both
formats.
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Instructions for completing and submitting this written
assignment
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_Assignment_versionnumber_Submissionnumber
(e.g. 12345678_DFP3_AS_v6_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.
Submitting the written assignment
Only Microsoft Office compatible written assignments submitted in the template file will be accepted for
marking by Kaplan Professional Education. 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 written assignment must be completed before submitting it to Kaplan Professional Education.
Incomplete written assignments will be returned to you unmarked.
The maximum file size is 20MB for the Written and Oral AAssignment. Once you submit your written
assignment for marking you will be unable to make any further changes to it.
You are able to submit your written assignment earlier than the deadline if you are confident you have
completed all parts and have prepared a quality submission.
Please refer to the Assignment submission/resubmission instructions (pdf) in the Assessment section of
KapLearn for details on how to submit your written assignment.
Refer to your study guide so you can plan ahead to complete your audio recording before the written and
oral A assignment is due.
Note: The written assignment (in Word), oral A assignment (in Word) and audio recording must all be
submitted together.
The written assignment marking process
Please note: You have 12 weeks from the date of your enrolment in this subject to submit your
completed oral A assignment and audio recording, written assignment, exam and oral B assignment and
audio recording.
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You must submit and complete your oral A assignment, audio recording, written assignment and exam,
prior to you commencing and submitting your oral B assignment and audio recording. We strongly
suggest completing your oral A assignment and audio recording, written assignment and exam in Week 10
and once completed, to then commence and submit oral B assignment and audio recording no later than
Week 12.
If you reach the end of your initial enrolment period and have been deemed ‘Not Yet demonstrated’ in one
or more assessment items, then an additional four (4) weeks will be granted, provided you attempted all
assessment tasks during the initial enrolment period. Please note, you must complete all the assessments
in Oral A assignment, audio recording, written assignment and exam prior to commencing and submitting
your Oral B assignment and audio recording.
Your assessor will mark your assignments and return them to you in the subject room in KapLearn under
the ‘Written and Oral Assessment’ page.
Make a reasonable attempt
You must demonstrate that you have made a reasonable attempt to answer all of the questions in
your written 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 written and oral A assignment.
How your written 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 ’demonstrated’ or
‘not yet demonstrated’.
Your assessor will follow the below process when marking your written assignment:
• Assess your responses to each question, and sub-parts if applicable, and then determine whether you
have demonstrated competence in each question.
• Determine if, on a holistic basis, your responses to the questions have demonstrated overall
competence.
You must be deemed to be ‘demonstrated’ in all assessment items in order to be awarded the units of
competency in this subject, including:
• all of the exam questions
• the written and oral A and oral B assignment.
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‘Not yet demonstrated’ and resubmissions
Should sections of your assignment be marked as ‘not yet demonstrated’ 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 only need amend those sections
where the assessor has determined you are ‘not yet demonstrated’.
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 written assignment is your opportunity to demonstrate your competency against these units:
FNSFPL503 Develop and prepare financial plan
FNSFPL504 Implement financial plan
FNSFPL505 Review financial plans and provide ongoing service
FNSASICU503 Provide advice in superannuation
FNSASICZ503 Provide advice in financial planning
We are here to help
If you have any questions about this written assignment, you can post your query at the ‘Ask your Tutor’
forum in your subject room. You can expect an answer within 24 hours of your posting from one of our
technical advisers or student support staff.
Page 6 of 78

Case study — Nathan and Mary Davidson
You are a financial planner for AFS licensee EANWB Financial Planning. Nathan and Mary Davidson have
been undertaking their own research into planning their retirement, and recently attended one of your
firm’s retirement seminars. After this seminar they spoke with you about their concerns that they may not
accumulate enough money in superannuation to fund their retirement.
You met with them and during your initial meeting you provided them with some basic information,
including a fact finder for them to fill out. You then organised a second meeting, at which you collected
more information on their current financial situation and spent time clarifying their needs and objectives.
A summary of their financial situation,based on your interviews with the clients,is provided below.
The completed fact finder,including the risk profile questionnaire,can be found on page 11 of this
assignment.
Current situation
Nathan, age 54, and Mary, age 52, are married and have two children, Jonathan and Sarah, who are nearing
the end of their schooling.
They own their own home, valued at $600,000, and have recently received an inheritance from the estate
of Mary’s mother.
Although theyhave cleared their mortgage,they still have access to a redraw facility of $100,000.
However, they do not want to access this unless there is as an emergency.
Nathan is a full-time sales representative for an agricultural supplies company. He earns $140,000 annually
plus superannuation guarantee (SG) contributions from his employer paid into the employer’s default fund.
Mary is primarily a self-employed marketing consultant and has business income net of expenses of
$65,000 annually. She also works as a contracted employee in a mining engineering company. Her hours
vary, but typically she earns about $5,600 annually, plus SG which is paid into the employer’s default fund.
Jonathan and Sarah attend a private school and Nathan and Mary pay a total of $7,000 annually in fees,
uniforms, books, school trips etc.
The only other assets they have are their two cars.
Superannuation
Nathan has $270,000 in his superannuation fund and Mary has $99,000. They are both invested in the
default balanced option. Further details of their superannuation are in the fact find (Appendix 1).
Neither Nathan nor Mary has made any personal contributions to their superannuation fund.
Nathan’s employer will allow salary sacrificing to superannuation without impacting on any other employee
benefits and will maintain his SG contribution based on his pre-salary sacrifice income.
Mary’s employer will not allow her to salary sacrifice to superannuation, but does make SG contributions to
her superannuation fund.
Nathan and Mary are happy with their current superannuation funds and the underlying investments
they are invested in. They do not wish to receive advice in regard to changing their funds or
investment portfolios.
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Insurance
Nathan and Mary’s their life insurance and total and permanent disability (TPD) insurance are owned by
their superannuation funds.
Nathan and Mary both have self-owned trauma policies and income protection policies. Mary also has
business overheads insurance.
Their cars are comprehensively insured and they have home building and contents insurance cover
including legal liability cover.
Nathan and Mary have family private health insurance cover.
Further details on their insurance policies are in the fact find.
They have specifically stated that they do not require any advice on their insurance policies.
Investments
Nathan and Mary have not had any investments other than their superannuation. Surplus income had been
used to pay off their mortgage.
However, they do have $350,000 in their savings account that was left over from the inheritance from
Mary’s mother’s estate after paying off their mortgage. This savings account, which is their bank’s ordinary
transaction account, does not pay any interest.
Other information
Nathan and Mary have a credit card with a limit of $30,000 that they use for all their general expenses
and entertainment. However, they never spend up to their limit and their average expenses are
$7,500 per month, which they repay within the interest-free period.
Nathan and Mary take regular annual holidays with their children, and spend approximately $10,000 per
trip.
Other expenses include deductible charity donations of $1,220 and accountant’s expenses of $500
annually.
Needs and objectives
Nathan and Mary are concerned they will not have enough money to provide an adequate income in
retirement. They do not want to rely on the age pension and would like to be fully self-sufficient if possible.
After your initial meeting with them, they reviewed their situation and decided they would like you to
prepare advice using a retirement income of $80,000 a year (in today’s dollars). They based this figure on
their current spending after deleting items that will not apply after retirement (such as school fees) and
considering their desired lifestyle in retirement. They have used their bank’s ‘Retirement Projector’ and
determined that if they live to age 95 and earn 4% (net of inflation) on their investments, they will need
almost $1.3 million in retirement savings when Nathan is age 65.
Nathan and Mary would like to channel their surplus income into their retirement planning now that they
do not owe anything on their mortgage.
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They have ‘parked’ the inheritance money in their savings account and plan to retain $50,000 in a secure
investment to support the children in their last years at school and into university. They want to invest the
balance in a tax-effective way, and are considering adding it to Mary’s superannuation to help her
‘catch up’ because she earns less than Nathan and took time out of the workforce to raise the children
when they were young.
Like most people, they would also like to reduce their overall tax liability.
Closing the interview
Before concluding your meeting, you review the information Nathan and Mary provided to check that it is
complete and accurate and ask if they have any questions.
Nathan and Mary understand from their own research that there are many ways to add money to their
superannuation, but are confused about which will be the most appropriate for them.
You advise Nathan and Mary what happens next and explain that, with their agreement, you will prepare a
written report based on the information they have shared with you, which will include recommended
strategies to help them toachieve their financial goal of having adequate funds for retirement.
Nathan and Mary agree to proceed to the next stage of the financial planning process and you make an
appointment to present the plan in a fortnight.
As their financial planner, your task is to prepare a statement of advice (SOA) that will include strategies to
meet Nathan and Mary’s goals.
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Fact finder
Important notice to clients
Your planner must act in your best interest when making any superannuation and retirement
recommendations. Therefore, before making a recommendation, the planner must ask you about your
investment objectives, financial situation and your particular needs.
The information requested in this form will be used strictly for that purpose.
Warning
The planner could make inappropriate recommendations or give inappropriate advice if you fail to fully and
accurately complete this form.
Personal and employment details
Personal details
Client 1 Client 2
Title Mr Mrs
Surname Davidson Davidson
Given & preferred names Nathan Mary
Home address 1 Galbraith Grove, Stanhope Gardens, NSW 1 Galbraith Grove, Stanhope Gardens, NSW
Business address n.a. n.a.
Contact phone [phone] (02) 6655 4477
Age 54 52
Sex  Male Female Male  Female
Smoker Yes  No Yes  No
Expected retirement age In 11 years, approximately age 65 When Nathan retires
Dependants (children or other)
Name Age Sex School Occupation
Jonathan 17 M Yes
Sarah 18 F Yes
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Employment details
NathanDavidson MaryDavidson
Occupation Sales representative Marketing consultant
Employment status Self-employed  Employee  Self-employed  Employee
Not employed Pensioner Not employed Pensioner
 Permanent Part-time Permanent Part-time
Casual Contractor Casual  Contractor
Other Government Other Government
Business status Sole proprietor Partnership  Sole proprietor Partnership
Private company Trust Private company Trust
Notes
Any other person to be contacted (e.g. accountant, banker, solicitor etc.)?
Mary is primarily a self-employed sole trader but is also an employed contractor.
Page 11 of 78

Cash flowstatement
Cash flow Nathan Mary Combined Comment
Salary less any salary sacrificed amount $140,000 $70,600 $210,600Includes for Mary income net of
business expenses and income
from employment as above
Non-taxable income nil nil
Rental income n.a. n.a.
Unfranked dividends received nil nil
Franked dividends received nil nil
Interest nil nil No interest paid on cash
Other income (e.g. taxable benefits, trust income,
investment income)
nil nil
Total income received before tax $140,000 $70,600 $210,600
Investment expenses nil
Expenses
Mortgage nil nil
School fees $3,500 $3,500 $7,000
Utilities n.a. n.a. Paid as part of the expenses
through credit card
Personal insurance $5,496 $3,564 $9,060 Nathan’s annualised premiums:
$3,612 trauma, $1,884 income
protection
Mary’s annualised premiums:
$2,172 trauma, $420 income
protection, $972 business
overheads
Car insurance $1,600 $1,600 $3,200
Home building and contents insurance $750 $750 $1,500
Health insurance $1,422 $1,422 $2,844
Living expenses $45,000 $45,000 $90,000 $7,500 per month through
credit card
Holidays $5,000 $5,000 $10,000
House maintenance n.a. n.a. Paid as part of the expenses
through credit card
Motor vehicle n.a. n.a. Paid as part of the expenses
through credit card
Other
$610 $610 $1,220 Donations
$150 $350 $500 Accountant’s fees
Total expenses $63,528 $61,796 $125,324
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Assets and liabilities
Asset Owner Value Liabilities Net value Notes
Personal assets
Family home Nathan/Mary $600,000 $0 $600,000Redraw of $100,000 available
for emergency use
Home contents Nathan/Mary $150,000 $0 $150,000Insured value
Car Nathan/Mary $11,000 $0 $11,0002008 Ford Focus
Car Nathan/Mary $16,000 $0 $16,0002008 Ford Falcon XR6
Total $777,000 $0 $777,000
Superannuation
Employer superannuation Nathan $270,000 n.a. $270,000Balanced option
Employer superannuation Mary $99,000 n.a. $99,000Balanced option
Total $369,000 $369,000
Other assets
Savings account Nathan/Mary $350,000 Nil $350,000Transaction account
Total $350,000 Nil $350,000
Net worth $1,496,000 $0 $1,496,000
Liabilities
Loan Current debt Percentage tax
deductible
Interest only Repayment
Home loan n.a. n.a.
Investment property n.a. n.a.
Investment loan n.a. n.a.
Personal loan n.a. n.a.
Other n.a. n.a.
Total $0 $0
Needs and objectives
Details Comments
Accumulate sufficient funds in superannuation to retire in
11 years on $80,000 a year
They estimate that they will need $1.3m in superannuation
when Nathan is around age 65
Use excess income for retirement saving
Retain $50,000 in a secure investment to support children in
their last years at school and into university
Invest balance of Mary’s inheritance for retirement
Reduce overall tax liability
Other
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Estate planning
Do you have a will?  Yes No
When was it last updated: October 2009
Do you have powers of attorney?  Yes No
Current superannuation, insurances and investments
Superannuation
Member Nathan Mary
Fund name ASSF Super Fund CISF Super Fund
Date of joining fund 1 July 1992 (service date) 1 July 1992 (service date)
Type of fund  Accumulation Defined benefit  Accumulation Defined benefit
Pension Pensioner Pension Pensioner
Contribution
(e.g. 5% of salary)
SG By employer By yourself SG By employer By yourself
Current value of your
superannuation fund
$270,000 $99,000
Amount of death and
disability cover
$720,000 $720,000
Is there provision for you to
top-up or salary sacrifice?
 Yes No Yes  No
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Superannuation taxation details
Nathan Mary
Current value $270,000 $99,000
Tax-free component $0 $0
Taxable component:
Taxed element $270,000 $99,000
Untaxed element $0 $0
Preservation:
Preserved $270,000 $99,000
Unrestricted non-preserved $0 $0
Restricted non-preserved $0 $0
Previous years contributions:
Non-concessional contributions:
Year 1 $0 $0
Year 2 $0 $0
Year 3 $0 $0
Year 4 $0 $0
Concessional contributions:
Year 1 SG only SG only
Year 2 SG only SG only
Year 3 SG only SG only
Year 4 SG only SG only
Other contributions:
Small business CGT exempt contributions $0 $0
Personal injury payments $0 $0
Page 15 of 78

Nominated beneficiaries
Name Binding Non-binding
(Yes/No)
Trustee discretion
(Yes/No)
Yes/No Amount
Nathan— Beneficiary is Mary Yes 100% No No
Mary— Beneficiary isNathan Yes 100% No No
Are there any current flags or splits on your superannuation
benefitin the event of a marriage breakdown?
Yes/No N Details
Are you a beneficiary of any current flags or splits of a
superannuation benefit in the event of a marriage breakdown?
Yes/No N Details
Life insurance details
Life insured Owner Policy type Company Policy
number
Death
benefit
Comments Annual
premium
DOES NOT WISH TO BE REVIEWED
Disability insurance details
Life insured Owner Policy type Company Policy
number
Death
benefit
Comments Annual
premium
DOES NOT WISH TO BE REVIEWED
Trauma insurance details
Life insured Owner Policy type Company Policy
number
Death
benefit
Comments Annual
premium
DOES NOT WISH TO BE REVIEWED
Income protection insurance details
Life insured Owner Policy type Company Policy
number
Benefit
amount
Waiting
period
Benefit
payment
period
Annual
premium
DOES NOT WISH TO BE REVIEWED
Page 16 of 78

General insurance details
Item covered Owner Policy type Company Combined
policy number
Cover
amount
Other benefit Total annual
premium
DOES NOT WISH TO BE REVIEWED
Investment details
Investment type Company Purchase date Units held/
fixed rate
Current
value
Owner
Savings account East Antipodean National Wealth Bank n.a. $350,000 Nathan and
Mary
Investment atti tude details
Are you concerned about the amount of tax that you are paying? Yes/No
Why? Would like to pay less if possible; think tax rates are too high
How important is liquidity (i.e. funds available) to you? Very/Moderately/Not
Why? They are investing for the long term and have enough cash to meet short-term needs
If you had funds available for investing, how would you choose to invest them? Why?
Not certain looking forward — probably in shares and/or property depending how much is available. That’s one of the reasons
we are seeking advice
Are there certain investments that you wish to avoid? Yes/No
Which ones? Don’t want anything exotic or too risky
RISK PROFILE
Determining your investor risk profile Points
This investor risk profile questionnaire has been designed to help you understand the type 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? Nathan Mary
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 and 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
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What return do you reasonably expect to achieve from your investments?
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 10 years, for how long would you be prepared to see your investment
performing below your expectations before you cashed it in?
You would cash it in if there wasany loss in value 10 10
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?
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 get greater tax efficiency from more volatile investments, which balance would you be most comfortable with?
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?
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
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Which of the following best describes your purpose for investing?
You want to invest for longer than five years, probably to age 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 an eligible termination 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 20 20
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 190 150
INVESTOR RISK PROFILE SUMMARY
0–50 Defensive
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
51–130 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
131–210 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
211–300 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
301–350 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
Acknowledgment
The information provided in this financial fact finder is complete and accurate to the best of my knowledge.
I understand that a policy purchased without the completion of a fact finder, or following a partial or inaccurate completion,
may not be appropriate to my needs. I also understand that a policy purchased that differs from that recommended by the planner
may not be appropriate to my needs. I acknowledge that my planner has provided me with the completed financial fact finder,
signed by me.
Page 19 of 78

Client(s) signature(s)
Planner’s name
Planner’s signature
Date
Page 20 of 78

The Assignment(student to complete)
Section 1 Establish the relationship with the client and identify
their objectives, needs and financial situation
Section 1 Part A— Establish relationship
Apart from the initial contact with the Davidsons at your retirement seminar, you have met with them
twice in order to gather the information you need to assess their situation and provide them with advice.
Briefly explain at least five (5) strategies you are likely to use with a client in order to ensure that they are
comfortable with you and the interview process.(200 words)
1. In order to maintain a good amount of relation with Nathan and Merry it is important that the they
are very much comfortable with the financial planner. Hence it is very much helpful in maintaining
the report within the business.
2. Making a good amount of relationship with Nathan and Merry is also important so that they could
feel like I am the best person to solve all the queries of the client. Hence this process will improve
the relationship between the client and the service provider.
3. The service authenticity is another important aspect to improve the relationship between the client
and the service provider. In order to make sure that the client will be getting the authentic service
the service provider should tell them that I am the government authorised service provider, hence
the customers could be sure about the authenticity of the financial advice.
4. In order to make Nathan and Merry feel free to share all the information, the financial advisor
should clarify them about the confidentiality of the shared information. In this way they could feel
free to share all the information and not hesitate.
5. However to provide quality advise to Nathan and Merry , it is important to know the financial and
retirement goals of them so that they could suggest according to that.
Assessor feedback: Resubmission required?
No
Section 1 Part B— Adviser obligations
Referring directly to yourself and your licensee,explain what an FSG is and why it is necessary.
Provide details of the law you must comply with and the information the FSG must contain, including your
complaints procedure.(250 words)
One of the main document which plays an important role for our client Nathan and Merry is the FSG or
financial service guide. Thus generally helps in checking the financial aspects as well as the services we offer
to our client. However the services are related to the privacy of the information and the documents which
the clients offer. Here the services are related as per the Australian financial services licencing as well as the
type of services the firm holds. All these are included in the complaints process. FSG describes the
procedure which deals with the kind of complaints associated the type of services provided to the
customers. Thus in this case a clear rundown of the concept is important if the client is unsure of how to
Page 21 of 78

proceed with the work actually taken. Thus here FSG is an important tool to communicate with the
complaints lodged by the client. On the other hand The FSG is an important tool to describe that whether
the clients will be accepting any of the financial services offered by us in the procedure. Thus we are
required to give you proper FSG solutions if we provide certain financial services to you as well as the to our
retail customers.
Assessor feedback: Resubmission required?
No
Page 22 of 78

Section 1 Part C—Tax and cash flow
Using the information you have gathered from your clients (i.e. the information provided in the case study
and fact finder),complete the table below and determine their cash flow position and annual savings
capacity.
You can assume that the clients have no tax deductions or liabilities other than those stated in the case
study or fact finder.
Section 1 Table 2
Tax calculation Nathan Mary Combined Comments
Income from employment
Salary or income from employment $140000 $70600 $210600 The net business income of marry
is $65000 and net income from
the employer is $3500
Salary sacrifice
Salary after salary sacrifice $140000 $70600 $210600
Rental income
Unfranked dividends
Franked dividends
Franking (imputation) credits
Interest
Other income (e.g. taxable benefits, trust income,
investment income)
Capital gains <1 yr
Capital gains >1 yr
Tax-free component of capital gains
Assessable income $140000 $70600 $210600
Deductible expenses $150 $350 $500 Accounting fees
Donations $610 $610 $1220 Donated to the national breast
cancer foundation of $1200
Bucket donation has been charged
to $20
Income protection insurance $1884 $420 $2304
Business overheads insurance $972 $972
Other
Taxable income $137356 $68248 $205604
Tax on taxable income $38768 $13277 $52495
Non-refundable tax offsets (e.g. LITO/SAPTO)
Medicare levy $2747 $1365 $4112
Medicare levy surcharge
Franking rebate
Refundable rebates and offsets
Total tax $41515 $15092 $56607
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Page 24 of 78

Cash flow Nathan Mary Combined Comment
Salary less any salary sacrificed amount $140000 $70600 $210600
Total expenses $63528 $61696 $125324
Total income received before tax less total
expenses $76472 $8804 $85276
Total tax payable from tax table above $41515 $15092 $56607
Total net cash flow $34597 -$6288 $28669
Assessor feedback:
[insert feedback]
Date assessed: Click here to enter a date
Does the student need to resubmit? No
Questions that need to be resubmitted
First submission Not yet demonstrated
Resubmission Not applicable
To pass this subject, you will need to be assessed as DEMONSTRATED for either your first submission or
your resubmission.
Page 25 of 78

Section2 Analyse client objectives, needs, financial
situation and risk profile to develop appropriate
strategies and solutions
Section 2 Part A—Gaps in information
Identify any gaps in your data collection based on the fact finder in Appendix 1 and the summary of
information provided. From the interviews, are there any other issues that would need to be followed up
with Nathan and Mary? (100 words)
From the above information it is seen that there have been some contradictory issues relating to the data
base on account of the information of the generated from Nathan and Merry. It is seen from the details
that the both the superannuation information have invested in the default balance sheet. On the other
hand the later states the factors finder of the company assets and liabilities which depicts that Nathan have
been certified under the growth option of superannuation’s. Thus in order to reduce the contradiction
between the process the information generated need to be clarified from both ends .
Assessor feedback: Resubmission required?
No
Section 2Part B— Risk profile
Identify the Davidsons’ likely risk profile based on the information they have provided. Identify any
concerns that you may have with their responses compared with the information in the case study.
• Suggest questions you could use to clarify the responses.
• Justify why you do or do not think that the score and the resulting risk profile category is an accurate
reflection of their tolerance to risk, and decide on a profile for each. (250 words)
The above case stud provides the thorough details about the current financial position of Nathan and
marry. It is seen from the case study that the couple have gone old by times and hence are sick. However
both of them are edging towards retirement and hence it is important for them to make a good financial
plan which is important h would be providing them with proper retirement benefit. Since the couple is old
and they are Having sickness issues it is important for them to make a retirement financial plan in which
their family will be benefited. Apart from this they have children who are not mature and old enough to
provide some alternative plans for the couple leaving them in serious issue to meet both the ends. Apart
from this the savings they have is not sufficient for them to meet both ends .on the other hand the
expenditure could rise in the near future as well as there are certain expenses related to the future study
of their children. Hence while making a proper portfolio for them the financial advisor have asked them
about the savings they want to have for them.
By looking at the current risk profile of the investor it is seen that the couple have balanced risk in their
portfolio which does not assure them with quality return. Since the couple are growing old and they need
to stabilize their money it is advised them to make a moderate risked portfolio. Since they do not have a
good amount of savings and want to ensure minimum amount of return on investment, in that case they
should go for moderate risk portfolio. It is also seen that Nathan have more income than marry and hence
he have a clear idea about the diversification of investment. Since marry wants to play it fair and square
and Nathan wants to a bit of loss in the process, then balanced portfolio is the ultimatum for them.
Page 26 of 78

However marry could afford a moderate portfolio also since it provides good amount of return at the end.
Assessor feedback: Resubmission required?
No
Page 27 of 78

Section 2 Part C — Strategies
Summarise appropriateretirementstrategies for Nathan and Mary.
• Consider superannuation and non-superannuation assets and strategies.
• Provide a detailed explanation of why you consider these assets and strategies to be appropriate.
• Include the lump sum amount that Nathan and Mary will need at retirement to achieve their income
goal, and strategies to help them reach that goal.
• Provide a summary of other recommendations that you will include in your SOA for Nathan and Mary.
(500 words)
In order to accumulate 1.3 million in current monitory valuation it is important to structure the process into
a proper way. Hence it is recommended to sacrifice the part of the salary to adjust the investment. Hence
the inflation rate adjusted for the inflation is termed at 4% to 6%. Here it is assumed at 5%. Hence the
salary sacrifice should be done to attain the financial objective. Thus Nathan will require almost $10490 pa
and marry $7060 pa. Thus the contribution is made to accomplish the financial goal of $1.3 million. Hence
both of them will be important to make the contribution gap.
The next objective is to save some extra money for emergency purpose. The objective will be attended as
the salary will be sacrificed and the investment criteria will be useful for attaining the first objective.
The third objective is to retain the $50000 as investment in children’s education. However it can be
financed from the surplus of $35000 received from inheritance. The amount is currently in savings having
no interest. Hence the same amount of 5% in almost 8 years the investment could be gained. Thus the 5%
interest bearing securities in 8 years in which the sum value could be achieved.
The tax liability is another important factor which could be used to reduce the tax liability. Hence the tax
liability objective is to be accomplished as well as the inheritance amount to be contributed to
superannuation fund and to be distributed among the two.
Assessor feedback: Resubmission required?
No
Assessor feedback:
[insert feedback]
Date assessed: Click here to enter a date
Does the student need to resubmit? No
Questions that need to be resubmitted
First submission Not yet demonstrated
Resubmission Not applicable
To pass this subject, you will need to be assess41.ed as DEMONSTRATED for either your first submission or
your resubmission.
Page 28 of 78

Section 3 Address clients’ questions and concerns about
superannuation matters
Section 3 Part A—Product research
Nathan and Mary have stated they are happy with their current superannuation funds. If, however, it is
requested, provide a summary of the type of research you would conduct to ensure the suitability of these
funds for the clients’ future retirement needs. (250 words)
It is seen from the study that the currently the couple is very much happy with the superannuation fund
and as well as the amount of return they have over the fund. Hence to judge the process it is important
toconduct a survey. The research to include valid data as well as supportive details, in respect of it. After
the data is collected the result is analysed properly to ensure that all the requirements are been made
properly identifying the best investment of the client. However a detailed analysis shave been undertaken
in order to assess the financial positions of the client by assessing the assets and liabilities, tax statements,
cash flow statement and to check on whether the financial statements are been properly analysed to see
the risk taking ability of the investor. So it is necessary to find out the accuracy of the investment portfolio
and finding out at all the ratio is been provided at $1.3 million. Thus the risk is fully dependent on the kind
of portfolio they have for the clients. Apart from this the suitability of the portfolio is also been checked and
the extensive research is undertaken to make the best suitable portfolio of the client.
Assessor feedback: Resubmission required?
No
Section 3 Part B —Client queries on superannuation contributions
Nathan and Mary have a number of questions about superannuation contributions after the seminar they
attended and as a result of their research. Respond to their questions, basing your answer on their personal
situation. You may be required to re-educate the clients where they are confused or misunderstand the
superannuation rules.
Question 1
Nathan is confused about taxation of superannuation contributions. He has friends who write a cheque,
send it to their superannuation fund and claim a tax deduction. He asks:
Am I correct in assuming that we can both claim personal tax deductions for any
superannuation contributions we make? Could you explain the tax deduction rules
that apply to our situations, how much can we contribute and when we can start?
Answer Nathan’s questions. (250 words)
Employee superannuation fund is a kind if fund in which the tax amount is deducted from the
superannuation account of the depositor. This money is considered as the employer superannuation
amount which is used to be deducted. Hence an individual could try to enforce the tax deductions for his
superannuation contribution. Thus an employee if gets a small amount of the income it will be considered
as the self-employed income for any personal business owner. Thus the people who claim for the tax
deductions which can be useful for a good amount if business, income from investment, foreign source and
Page 29 of 78

income from government and government pensions.
However both Nathan and merry have been having the advantage of claiming the personal tax deductions
for any contributors for the superannuation fund made by them. Hence the tax deduction rules that will be
applicable with respect to the client have been discussed below –
1. In order to take the tax benefits the investor may try to sacrifice some part of the salary.
2. Marry being a self-employed employee can also claim for the tax deduction for her superannuation
fund because the employees could well try to claim the deductions based on the super
contribution.
3. All the individuals aged of 75 years could be eligible to claim the deductions for their personal
superannuation. Hence by looking at this rule the clients have been subjected to apply for 15% of
contributions tax within the fund.
 Thus to gain the deduction in the superannuation marry requires to be considered as self-
employedperson.
 The loss occurred on the debt the business are to be controlled and need to be managed by
marry.
 The individual tax file are to be considered as the legal income tax file for the business.
Hence in all these cases marry could try to enforce the deduction claim in the superannuation fund
deduction. Hence the sacrifice in the salary is advised to the couple by the financial advisor in order to
enjoy the benefits of the deduction. The sacrifice could be estimated at $14500 and marry will Sacrifice
$7100. Hence it is applicable at 15% of the deduction of the tax value in the surplus.
Assessor feedback: Resubmission required?
No
Page 30 of 78

Question 2
Mary asks:
We read an article recently that said Nathan can split the superannuation contributions he
makes to my superannuation account. Is that correct, and if so, how does it work?
Answer Mary’s question. (150 words)
In respect to answer Mary’s question it can be said that Nathan could look to divide the superannuation
contribution undertaken by the spouse. Moreover segregating the superannuation fund could be well
effective in getting the tax benefits. Nathan could try to divide 85% of the before tax contributions in two
ways –
If the balance account of Nathan is less than $1000 or below $1000, then the contribution is divided. Again
if nathan wants to separate less than$1000 then there are different rules. Thus to complete the
contribution nathan needs to complete the transaction split attached to his spouse. Further nathan could
also assist the superannuation fund to his spouse by increasing the contribution value and arranging the
splitted value of the contribution.
Apart from this the tax rules 2015-2016 states that nathan could try to offset 18% of the tax value on super
annuation contribution. Thus this process can be contributed to the spouse on the last financial year .
Hence the contribution is based on the resent value. So the contribution co0uld be divided into two ways
namey-
 Taxable segregated contribution.
 Untaxed segregated contribution to the taxpayer.
In other cases where the taxed segregation is required contributed to 8untaxed segregated 85% of spouse
account, then untaxed segregated amount will be 100%. Thus it is noted that 100% of the taxed value
should be transferred to the tax payer account if the person is a public sector employee. Thus in this case as
nathan is not a public sector employee then he will be able to tax at 85% of the taxable value. In case of the
untaxed contributions which cannot be claimed at deduction and as well as it cannot be divided between
spouse.
Assessor feedback: Resubmission required?
No
Question 3
Nathan is concerned about tax payable if they invest any of their cash savings into superannuation. He says:
I’ve heard that some people have had to pay tax on superannuation contributionsat the highest
tax rates. How can we be sure we won’t fall into that trap?
Answer Nathan’s question. (150 words)
It is been considered as the inheritance contribution which means that the individual can give up to
$180000 annually or it is below 65 age at any time of the financial year then the said person will be able to
make three years of non-concessional contributions. Thus any surplus will be taxed at 49%.
However for nathan he can withdraw any excess contribution tax free even through the earnings from the
supplier contributions. Hence he can get tax benefits on the superannuation fund for the inheritance
amount by employing a good investment strategy in form of shares and deposits. Thus to avoid such
problems nathan could try to impose high tax plaid values in the concessional contributions with tax
deductions levered to mortgages.
Page 31 of 78

Assessor feedback: Resubmission required?
No
Page 32 of 78

Section 3 Part C —Client queries on superannuation benefit
payments
Question 1
Mary asks:
When and how can we access our superannuation? Can we get it if we are still working?
Explain the rule that applies in their circumstances. Explain when and under what circumstances they will
be able to access their superannuation.(200 words)
As per this query superannuation’s could be accessed at the age of 65 for a working individual. it can be
accessed at the age of preservation and when the individual retires . However the client could access he
fund at the time of retirement policy if the certain individual continues to work. Thus the first condition for
the couple is that they are not been satisfied with the fund. They have not opted for the changes in the
fund thus the main condition behind thus process is that there are extreme amount of hardship and
financial optimization. Since there is no such financial hardship related to this aspect then they can access
the fund. Apart form that the client should ensure that they don’t Have any kind if terminal illness.
However the non-preserved benefit will be liquidated at any point of time. So to liquidate the benefits
there lies a need to make the member satisfied. Thus the general conditions related to this policy will be
like-
The members have reached the preservation age and hence have called it off.
After reaching to the preservation age, the member will be making the retirement income benefit scheme.
The employment arrangement have been stopped at the age of 60.
The members who have not retired even after reaching at the age of 65.
The member have expired.
There are even few special situations when partial super benefit can be released before the member has
reached the preservation age and they are:
•Termination of gainful employment;
•Temporary incapability;
•Permanent incapability;
•Extreme financial hardship;
•Terminal medical condition;
•Compassionate grounds;
•Release authority payments;
Mary can access her superannuation once she reaches the age of 65. However, she can access her
superannuation before retirement age that is when she will reach the age of preservation. Preservation age
can be between the ages 55 to 60 years. If she is not retired fully, she can still access a part of her
superannuation through a transformation to the retirement pension. There are certain conditions in which
Mary will be able to access her superannuation amount before she reaches her preservation age are:
 Incapacity- As she suffers from permanent or temporary incapacity to work
 Compassionate grounds- As Kellie needs to make regular payment for her serious illness she can
access her superannuation early
It is seen that Mary can withdraw her non-preserved contribution as the amount she paid within her fund
and has not claimed for any deduction yet. As Mary has met all the grounds in which she is liable to claim
superannuation so she can withdraw her money by choosing to withdraw a lump sum in the form of regular
payments such as pension. She can also withdraw superannuation in the form of assigned pension in which
Page 33 of 78

she can withdraw capital lump sums at any point of time.
Mary can also receive her superannuation while working under transition to retirement scheme. This will
allow her to remain after the preservation age and access few superannuation position.
Since Nathan is of 54 years of age he has not reached the preservation age. In this situation, Nathan cannot
access balance by remaining full time employed by transition to retirement scheme. The transition to
retirement pension works in the same way as pension, except it cannot be liquidated in lump sum until he
retires fully. Thus he can have the full-fledged benefits once he have retired.
Assessor feedback: Resubmission required?
No
Question 2
Nathanasks:
I understand that we are too young to access our superannuation any time soon. In general
terms, please explain how we would be taxed right now if we were old enough and retiring and
we took our money out as a lump sum. I don’t want to commit to something that will work
against us.
Discuss the situation if the lump sum was taken at retirement after age 60 and just before age 60. Include a
brief explanation of components of the lump sum,how they are taxed andany other matters relating to
them?(200 words)
As per the query imposed by the investor, the law states that withdrawing the lump sum amount of above
year’s age will be tax free. So for the tax aspect no tax value is paid off. In the tax component if the
withdrawer is under the rate of 55 years and the tax rate is 22%. Hence the preservation rate is between
taxed at 17%.
Superannuation lump sum amount will be considered at an ad – hoc cash payment at the super fund. Thus
the company could not generate the lump sum amount. Thus the super annuation fund are been deemed
to be at the retirement income statement. Hence the tax implications can be taken from the lump sum
amount which includes –
Tax free components on clients are not subjected to tax value.
Since Nathan is aged 54 years he is subjected to be eligible for getting lump sum taxable amount.
As no retirement age of Mary is provided, therefore the lump sum superannuation withdrawal for her will
be:
•No tax on the tax free components
•On untaxed element there will be no tax as $185000.00 is tax free.
Therefore, if Mary withdraws in lump sum no tax is required to be paid.
Such rules indicate that Nathan and Mary will remain deferred from tax if they retire at the age of 65 years.
It should be considered that when Mary withdraws a lump sum, the proportional rule applies for which she
cannot choose tax components that they can withdraw. If 80% of Nathan’s super is taxable component and
20% of it is tax-free component then the lump sum should be of the same proportion.
Page 34 of 78

Assessor feedback: Resubmission required?
No
Page 35 of 78

Question 3
Mary asks:
I don’t like the idea of paying lump sum tax and then losing some benefits. Tell us more about
these income stream options. How do they work? What are the rules that apply and how much
tax do we pay if we were to commence an income stream now orcould weaccess our
superannuation now?
Discuss this in broad terms and explain the situation immediately before and after reaching age 60.
Assume Mary and Nathan will continue to work until age 60 and then retire. (300 words)
The two main important factors for significant income stream terms are annuity and pension. Annuity is the
amount received from the life insurance premium fund and the word pension is useful in receiving the
superfund. thus the differences is crucial as receiving the income of the person policy having the required
advantage-
In case of interest earning there is no tax.
The money can be assessed at the point of time.
However these rules are applicable for the couple since both of them has to have a minimum balance of
$10000 in their super annuation account or has to maintain minimum balance of $50000.
However the self-managed super funds are applicable to both the couples which offers a way to save for
the retirements. Hence the account based pensions are been added into the investment funds. Thus the
income stream will be offering 4% of nathan and marry as both of them lies in the age range of 64 years or
less.
However non account based income stream option is also available in this case in order to gain income
which represents small portion of the market stream. Hence with the help of these products these products
the company could also try to imply the fixed income base for life. Hence there are certain rules and
regulations to be followed up regarding this case. Thus the superannuation fund will be requiring the
accrual certification considering the chance of existence in which the fund will be able to pay the pension as
prescribed by the government. However the fixed income stream will be another option to consider where
the pre determined income stream lies between 0 to 100 % and the term end. It is also seen that being a
marry being a self employed marketing person and previously having the experience of working in mining
industry will be having two source of income from the business and hence she has to sacrifice any one of
the income to gain the advantage of the business. Apart from this Nathan can also try to transfer the
transition retirement market which is an essential tool and must have at least$10000 of the super money
to invest till he has reached the preservation age. Thus it is said that Nathan could to draw the amount
from the account adding it as a regular base income. Hence in the each of the financial year the company is
allowed to draw maximum of 10 percent of amount in the current valuation of the fund.
Assessor feedback: Resubmission required?
No
Page 36 of 78

Assessor feedback:
[insert feedback]
Date assessed: Click here to enter a date
Does the student need to resubmit? No
Questions that need to be resubmitted
First submission Not yet demonstrated
Resubmission Not applicable
To pass this subject, you will need to be assessed as DEMONSTRATED for either your first submission or
your resubmission.
Page 37 of 78

Section 4 Present appropriate strategies and solutions to
the client and negotiate a financial plan, policy or
transaction. Provide ongoing service where
requested by the client
You must now prepare an SOA based on the recommendations made, which will be used to record this
advice (including amendments, if any) for Nathan and Mary. Remember that the SOA must be of a standard
that is compliant and would be suitable to present to a client.
Important instructions
• What to submit: You have been provided with cash flow templates to use for the assignment SOA.
Please include them with your submission.
• Template SOAs and SOA preparation software: Do not use the sample SOA published by ASIC as a basis
for your submission. The use of financial planning software and dealer templates to prepare your SOA is
also not permitted. Submissions that exhibit excessive reliance on SOA templates may be considered to
be plagiarism or collaboration, and may not be considered to be a reasonable attempt at the
assignment.i
• Assumptions: You must list the assumptions used in your SOA in your assignment submission. These will
generally include:
– any assumptions you have made regarding missing background information on the clients
– any assumptions you have used to calculate future income from your recommended investments
– any assumptions used for fees and premiums relating to the products you have recommended.
• Strategy advice: You must provide specific strategy recommendations in the following areas based on
the information given:
– wealth creation strategies to meet retirement needs
– personalinvestments
– strategies using superannuation
– asset allocation.
Use the information on each of these areas given in the subject notes to provide reasons for each of the
strategies recommended.
• Product advice:Specific product recommendations are not required; however, you do need to make and
justify any recommendations of the type of product(s) selected for the client’s consideration.
You have been told the clients are happy with their current superannuation funds and do not require
any specific advice on their current personal insurance arrangements. However, it is expected that you
will provide in the ‘Things to consider section’ of the SOA, appropriate comments about any issues you
have identified with these areas and their future estate planning needs.
• Cash flow projections: You must include detailed cash flow tables using Appendices 1 and 2 as a
template, showing Mary and Nathan’s situation before and after your recommendations. These should
be included as Appendices 1 and 2 to your SOA.
• Recommendations: You should include superannuation projections up to the retirement age of your
clients before and after your recommendations as Appendix C to your SOA. In addition, please show that
your strategy will enable your clients to meet their retirement income goal for 21 years (based on
Nathan living to age 84 and Mary to age 85).
Page 38 of 78

The SOAtemplate
An SOA has been commenced for Nathan and MaryDavidson, using the data collected in the interviews,
their fact finder and theirrisk profile.You must complete the remaining sections in the SOA as directed.
The SOA starts on the following page. Please review the sample case study and the text as a guide
to completing your SOA.
Statement of advice
Prepared for
Nathan and MaryDavidson
Prepared by
<Your name>
Authorised Representative Number: 66666
AR address
AR contact details
Authorised Representative of
EANWB Financial Planning
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 39 of 78

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.
The client should be able to read this executive summary and understand the advice you are giving and
the reason/s underpinning the advice, and be able to determine whether or not their goals have been
achieved. There should be sufficient detail to allow the client to make a decision, taking into account any
risk/s involved and your fees. It should be written without using jargon and in clear, unambiguous
language, and be appropriate to their level of financial understanding.
Your situation
Summarise your clients’ current situation. Provide a brief statement about their family, employment,
health, asset and debt position. (150 words)
As per the case study it us seen that both Nathan and marry who reaching towards retirements are both
been employed. However Nathan works as a sales person and earns an annual salary of $140000 and his
wife marry who is a self-employed person and works on a mining engineering firm. Her salary was close to
$70600. However they are on the verge of retirement and thus want to secure their post retirement life
thus by making an investment plan which will help to secure their as well as their children life. Hence the
investment strategy is to role of the $1.3 million in such a way from which they can secure maximum
amount of return on investment. However the couple are healthy and not have any health issues. They
have paid the mortgage for the house and have inherited $350000 from marry’s mother. Besides this apart
from the superannuation fund they do not have any savings for them. The duo have household assets and
have 2 cars for them along with the life and general insurance coverage. Thus it is said that the asset and
the debt position of the investor is very much moderate.
Assessor feedback: Resubmission required?
No
Your objectives
List your clients’ objectives (i.e. their financial and non-financial goals, objectives and needs).Nathan and
Mary expressed a desire to address their immediate needs and medium and long-term objectives.
Summarise these in point form for Nathan and Mary to confirm. (100 words)
The main objective if the investor will be as follows –
 To gather sufficient fund of $80000 after retirement.
 It is planned to retain the savings if $50000 for the children education.
 The retirement savings will be close to making the use of an extra income.
 Retirement inheritance is been also planned.
 Tax liability I said to be reduced.
Page 40 of 78

Assessor feedback: Resubmission required?
No
Page 41 of 78

Summary of our strategy and recommendations
For the short term — up to one year
Summarise your recommendations for your clients’ short-term goals. Present the strategies in point form
to provide a quick picture of your intentions.
For the short term perspective it is recommend that Nathan and marry need to sacrifice the salary to get th
benefit after post retirement .
Assessor feedback: Resubmission required?
No
For the medium term — two to five years
Summarise your recommendations for your clients’ medium-term goals.Include strategies that cannot be
considered immediately or require monitoring.
In order to attain the medium term objectives it is recommended that the marginal tax rate is to be applied
in order to get the super annuation fund and to gain the tax saving objective.
Assessor feedback: Resubmission required?
No
For the long term — more than five years
This is where you need to summarise your recommendations for your clients’ long-term goals.
The investor could also invest the fund for long term perspective. Hence it is advised that-
The surplus fund received in this manner from inheritance could be invested in this manner and the sum of
$50000 will be saved for children education.
Nathan needs to sacrifice the salary of $10590 till retirement .
Similarly marry will be doing the same for $7060 and it should be continued till retirement.
Assessor feedback: Resubmission required?
No
Page 42 of 78

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 to $Y through regular contribution of $X.
• Your objective of yyy will be achieved by…
• Align the outcomes with the objectives.
After the recommendation is being prepared it is seen that the expected outcome may come into the mind
are the queries and questions may be arising into the minds of the clients. Thus the questions may arise will
be like
The scope and the strategy-
Does the financial need cope with the advice and the strategy?
Have all the advices been clarified to the client?
Have the advantage and disadvantages be clarified?
Does the cash flow projection cope with the strategy?
Has the cash flow statement been made keeping in mind the advantages and disadvantages of the work?
Is the advice appropriate to the customer?
Are the benefits been cleared ?
Are the losses cleared by the implementation of the advise ?
Needs , objective and situation
Does the recommendation clarified and addressed the situation ?
Does the income , expense, assets and liabilities are been properly managed with the requirements ?
Apart from this there are a few other questions which are needed to be answered. these are –
Whether the clients agree with the recommendation and are they willing to implement it ?
Does the objectives strategy fulfil the recommended strategy of the financial advisor?
However the financial advisor could give some additional advises to the clients keeping in mind their
different queries and needs. Apart from this thy need to check the feedback the customer is giving out if it .
to make sure that such objectives are being properly fulfilled and they are remained satisfied with the
recommendations , then it is important that the projected investment plan should need to be conducted on
a continuous basis and if it is seen that the clients are not been satisfied with the objectives stated, then
the objectives are needed to be cross checked every month .
The amount which is needed from the couple to sacrifice the salary in order to get the retirement plan. And
it is important because since the salary is to be contributed by the company , then it is important that the
clients mare having proper knowledge on the changes .
Has the salary amount been invested elsewhere?
Assessor feedback: Resubmission required?
No
Risks in our advice
Identify both financial and non-financial risks that can impact the desired outcome.
Page 43 of 78

The financial and non-financial risk which could have an impact on the desired outcome are as follows –
Financial risk
Market risk including the interest rate risk, exchange prices , equity prices and commodity prices etc.
Credit risk
Liquidity risk
Non-financial risk
Model risk
Operational risk including the fraudulence , misconduct and internal audit control failure .
Settlement risk
Accounting risks including the GAAP and the IFRS compatibility issues and managed earnings .
Regulatory risks
Legal risk
Task risk
Key man risk
Performance meet risk
Sovereign risks and political risk
Assessor feedback: Resubmission required?
No
Summary of our fees and commissions
The fees and the commissions are to be paid in a certain value which includes a good amount of money
over the total amount used as investment . An hourly basis rate will be charged against the time and the
financial planner will be able to recommend the client the best investment portfolio .
Assessor feedback: Resubmission required?
No
Your next steps
The next steps involves the review and monitoring the financial plan and the recommendation will be made
on the basis of the certain question and asked by the couple which needs to be answered by the financial
advisor without any fail. However both Nathan and marry needs to consider the services offered by the
financial advisor and must review the strategies adopted in to the financial circumstances within time. They
should review the strategies monitored by the Australian government act who can pass new laws with time
regarding the changes scrutinised on constant basis relating to specified situation. Apart from this the
specialist needs to monitor the changes and advise the clients the best possible portfolio to invest on. Here
the necessary advertisements are need to be made as per the legislative and regulatory framework. Thus
reviewing the investments should be done on a constant basis and the market is fluctuated and it cannot
be observed over time. Hence for this reason investments should be done on a regulatory basis and the
allocation should be done constantly. Thus for the ongoing service the clients are needed to be reassured
Page 44 of 78

that the investments are to be aligned with the investment option for fulfilling the financial goal. Thus the
SOA prepared provides recommendation provides for retirement. Thus the recommendation will not be
reviewed within 6 months which is the idle time.
Assessor feedback: Resubmission required?
No
Body
While this section contains similar headings as the executive summary, the information provided is more
detailed and supports the recommendations made. As with the executive summary, it should be written
without using jargon andin clear, unambiguous language, and be appropriate to your client’s 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.
In this case the clients are needed to have the advice because the clients feel that the they may not
accumulate the money from superannuation fund on the verge of retirements. However they want to have
a safe and secured post retirement’s life as well as securing the life of the children. They also want a hassle
free return for which they are been suggested to have moderate portfolio investment scheme. Thus they
seek the advice from the advisors.
Assessor feedback: Resubmission required?
No
What you would like to achieve
Summarise here what you understand to be your clients’ main objectives.
Following our discussions, here is what I understand to be your main objectives and needs:
The investor needs to form step by step activities to reach to an effective achievement. Hence it is
recommended to follow these below steps –
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 Accumulation of sufficient funds for retirement scheme which is amounted to $800000.
 Retention of $50000 for children education fund.
 Inheritance of retirement investment.
 Reduction of tax liability.
Assessor feedback: Resubmission required?
No
Page 46 of 78

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
Fill the gaps
Client 1 Client 2
First name(s) Nathan Mary
Surname Davidson Davidson
Age
Marital status Married Married
Health status
Smoker status Non-smoker Non-smoker
Employment status Permanent Part-time
Employer name
Occupation Sales representative Marketing consultant
Annual salary $140,000 $70,600
Summarise the discussion points that could/need to be raised here.
The main decision points includes the thoughts of getting the personal details like getting to knw about th
health status if the client o whether they smoke or consume alchohol. Thus the financial advisor needs to
get the health and the financial status of the couple which will make it easy to determine the financial
investment portfolio.
Assessor feedback: Resubmission required?
No
Children and dependant details
It is seen from the case study that the couple had two children namely jonathan aged 17 and sarah aged 18,
both of the children have their schooling period ended .
Your existing insurance
Fill any gaps.
Personal insurance yes
Car insurance Yes
Page 47 of 78

Home contents Insurance Yes
Health insurance Yes
Your existing estate planning
Summarise the clients’ existing estate planning provisions here.
The clients have a will along with the power of attorney and it was last updated in 2009.
Assessor feedback: Resubmission required?
No
Financial information
Current income and expenses details
Income and expenses
Complete the table:
Nathan Mary Total
Assessable income $140000 $70600 $210600
Net tax payable $41515 $15092 $56607
Yearly expenses $63528 $61796 $125324
Estimated surplus $76472 $8804 $85276
Discussion points:
From the table you have prepared and your cash flow analysis, identify questions you will need to ask about
their income, lifestyle, expenses and intentions, before you start preparing your strategies. What are the
gaps?(100 words)
The question requires the task including-
The stability on the income
Eagerness to maintain the same lifestyle after retirement .
Tallying the expenses with the previous expense.
Chalking out the intention of investment.
However it is seen that the client have not provided the accurate details of the insurance value which keep
the financial advisor on a hunt.
Assessor feedback: Resubmission required?
No
Page 48 of 78

Assets and liabilities
Value Liability Net value
Home $600000 $0 $600000
Home contents $150000 $0 $150000
Motor vehicles $27000 $0 $27000
$770000 $0 $777000
Personal assets
Employer superannuation—Nathan $270000 NA $270000
Employer superannuation—Mary $99000 NA $99000
Savings account $350000 nil $350000
Investment assets NA NA NA
Net worth $1496000 $0 $1496000
Discussion points:
Prepare discussion points you will use to obtain a better understanding about how your clients see their
situation and future. What are their attitudes to debt, personal assets, investments and superannuation
assets that can assist you with your advice? What are the gaps?(100 words)
From the above discussion point it is seen that the client are in need of gaining $1.3 million before they
retire. Hence the clients make the debt payment and have a good sense of respect to the repayment issue.
the personal assets owned by them will be helpful in protecting the investment of the investors. Hence
there is less level of risk which is specified as per the desire formed. Though they do not invest the value of
the superannuation fund but the amount deposited by the employer is being saved. Hence the gap is
determined with no changes in the investment policy and the insurance are been properly maintained.
Assessor feedback: Resubmission required?
No
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.Before acting on the advice,you shouldconsider its appropriateness in light
of your particular circumstances, needs and objectives.
Page 49 of 78

Your risk profile
In this section, you need to provide:
• an overview of the different risk profiles
• the risk/return characteristics of various asset classes
• the client’s risk profile including the appropriate mix of assets (the asset allocation) for the client’s risk
profile, the appropriate investment return time horizon for that profile and any specific concerns.
Discuss their attitudes to investing and any other experience or interests that can support your
assessment.
The risk profile of the investor include a defensive risk statement which haven risk and less return. Thus the
moderate risks include the balanced risk fund whereas the risk statement is moderate and the rate of
return thus played an important role regarding this aspect . Hence in general sense it can be termed that
the high risks in portfolio investment generates high gain. On the other hand low investment risk will
provide low gain for the investor return. Thus by observing the current portfolio of the client it is
recommended that the coupe is in need of balanced risk in the portfolio hence it will ve them lower level of
risks and also assure low but stable amount of return on investment. Thus for this case it is recommended
to give them $1.3 billion before they reach retiring .
Assessor feedback: Resubmission required?
No
Page 50 of 78

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 you did in the assignment above 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
recommendations. You are not required to provide specific advice to your client about their estate planning
needs. However, if after analysis of their situation you believe that advice is required, you need to explain
what advice they should seek and why.
Concept. If you use technical terms or concepts in your discussion explain what the terms mean.
For example, do not assume they know what ‘gearing’ or ‘franking’ means
Note:You do not have to completeall of the recommendation boxes below. You can add more boxes
if required.
Recommendation 1
The first recommendation for Nathan and marry will be to sacrifice some portion of salary in order to get
the retirement benefit .
Assessor feedback: Resubmission required?
No
Recommendation 2
The second recommendation is to apply the superannuation fund to levy the tax liabil
Assessor feedback: Resubmission required?
No
Page 51 of 78

Recommendation 3
In order to make the children education possible it is recommended to invest a sum of $50000.
Assessor feedback: Resubmission required?
No
Recommendation 4
Nathan needs to sacrifice $10590 as well as marry needs to sacrifice $7060 to enjoy the retirement
benefits.
Assessor feedback: Resubmission required?
No
Page 52 of 78

Things you should consider
In this section briefly discuss strategies that you did not recommend that could be considered at another
time and how they could benefit the clients.
The strategies which is needed to consider the but it could be used to another point of time including the
deposit and add some more amount in the superannuation fund personally so that they can receive more
amount in the future and client ever needs to take and increase the capacity if they can gain more amount f
return on investment.
Assessor feedback: Resubmission required?
No
Retirement planning
Briefly state what has been achieved with your strategies and highlight what still needs to be addressed or
reviewed.
As per the retirement strategies implied the client will be able to get $1.3 million on a serious note before
they retire and thus be able to save $8000 in this process. The portfolio is recommended to them which will
be required to provide the required result and the aspects will be making to evaluate the finding out of the
risks with the portfolio value. Thus the hidden costs will be needed to consider in the later future.
Assessor feedback: Resubmission required?
No
Estate planning
You have recorded the clients’estate planning details for completeness of information gathered in the
fact finder. You have explained that you cannot provide legal advice. However, if you see deficiencies in
their current structure, discuss them briefly and suggest a course of action. (100 words)
The information regarding this manner with respect to the couple not sufficient to provide any legal advise
but the information they provide will be updated for a long time and therefore they need to update it even
if the changes are not been shown. Thus the mortgage has been paid off but it is seen that they have
prepared of power to attorney but the name of the attorney is not even mentioned.
Assessor feedback: Resubmission required?
No
Taxation issuescurent
Since the couple have a substantial growth surplus thus it is recommended that they start to accumulate
the funds in cash which results in the increase of taxable income. Hence the cash amount will be
monitored on an ongoing basis and accumulated cash reserve ratio and investments will be paid off during
that particular time. Apart from this some alternative investment plan will be imposed so that the beneits
are been paid. Since the insurance will not changes in the tax valuation as per the current scenario. Finally
Page 53 of 78

all the investment strategies will be imposed on the accumulated phrase of t superannuation fund. Thus
the maximum tax applied to the income generated will be 25% while the main value will be 15%. Hence it
may reduce by taking credits or other deductions obtained by the superannuation fund. Thus the capitak
gains in the superannuation fund will be considered in the rate of 10%.
Assessor feedback: Resubmission required?
No
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.
Asset allocation after implementation of recommendations
Asset allocation Weight Risk profile weight Variance (weight)
Defensive assets
Australian cash 25% 28% -3%
Australian fixed interest 30% 47% -17%
International fixed interest 12% 0 12%
Total for defensive assets 67% 75% -8%
Growth assets
Australian equities 8% 8% 0
Australian property 17% 9% 8%
International equities 7% 8% -1%
International property 1% 0 -1%
Total for growth assets 33% 25% 8%
Grand total 100% 100% 0%
Comments on proposed asset allocation versus your risk profile
You need to explain the reason for any large (greater than 10%) variances here. Refer to the sample SOA for
a discussion on variances. Discuss how the situation will change over time.
It is seen from the above details that the any variance greater than 10% will be added in this case. Hence
Page 54 of 78

this profile will be adequate for this process.
Assessor feedback: Resubmission required?
No
Investment product recommendations
Product recommendations
Note that I can only recommend products on our recommended list, which has been approved by
EANWB Financial Planning.
Use the space below to list the products that you are recommending Nathan and Maryinvest in and those
that they already have that you recommend they keep.
Nathan and MaryDavidson, following our investment strategy, we recommend that you invest in the following
products:
Oz super fund
Besta super fund
Rab bank online direct high saver account.
Assessor feedback: Resubmission required?
No
Relevant research material and product disclosure statements (PDSs) are attached for your attention. It is
important that you read these documents carefully and contact us ifyou 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 PDSs as part of your assignment. The above statement is a standard
inclusion in an SOA.
Cooling-off period
Details on the cooling-off period for each product are provided in the PDS.
Page 55 of 78

Disclosure of remuneration, commissions and other
benefits
How are we paid?
Commissions and fees — upfront, ongoing and financial planning advice fees
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 may either delete the table below or fill it in with $0 as the fee
charged to make it clear.
Fee type Initial fee Initial fee paid to licensee Initial fee paid to adviser
SOA fee $2000 $2000 $0
Implementation fee $0 $0 $0
Ongoing advice fee* $1500 $1500 $0
Total $3500 $3500 $0
*Ifthe ongoing service fee is charged as a percentage of the product(s), you may use the table below instead. If you are charging a flat fee
or an hourly fee you should use this table.
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).
Assessor feedback: Resubmission required?
No
Page 56 of 78

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
Oz super fund $0 $0 $0 $0 $0
Besta super fund $0 $0 $0 $0 $0
Total $0 $0 $0 $0 $0
Note: Please see the sample SOA for directions on completing the answers in the paragraphs below.
Product providers will also charge a fee for the management of the funds invested in their products.
The annual management fee charged by Answer here is Answer here%. The amount you will be charged
will depend on the funds you have invested.
For example, $Answer here invested with them will incur a $Answer hereannual management cost.
Commissions
Our policy on taking commissions from product and service providers is summarised below:
However no ongoing commission will be taken care of by the investment policies and other super
annuation fund recommendations. Thus the changes may be applicable in this case for investment and
purchase of the products .
Assessor feedback: Resubmission required?
No
Other fees and benefits
EANWB 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 Professional Practice on alternative forms of remuneration. A copy
of the register for EANWB Financial Planning is publicly available and can be provided on your request.
Ongoing services
You need to make sure that your client fully understands what you are offering in terms of ongoing service.
Draft an outline of the level of ongoing service you intend to recommend to Nathan and Mary. In your
outline, discuss the type of information that you would regularly provide to Nathan and Mary in relation to
their financial planning needs. (250 words)
The level of ongoing services will be recommended in this case will be discussed below-
An update on the portfolio based on half yearly basis.
Annual review of the entire situation and recording the advice over the adjustments made.
Implementation on the review meeting whenever the new recommendation is made.
Invitation to any seminars.
Annual Christmas function on the clients .
Page 57 of 78

Assessor feedback: Resubmission required?
No
Page 58 of 78

Ongoing service fee
What would you do to ensure that Nathan and Mary know the specific costs relating to an ongoing service?
(100 words)
To check the ongoing service fee relating to the cost changing over the ongoing services , the client is given
knowledge about the changes in the initial meeting so that they were aware of all the costs at the
beginning . thus a brochure is provided relating to the changes in the cost structure and providing the
future cost valuation.
Assessor feedback: Resubmission required?
No
Page 59 of 78

Implementation schedule
In order to ensure that your recommendations will be implemented efficiently, you need to ensure that all
tasks that need to be completed by bothyou and the clientsare itemised in the schedule. 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.
Nathan and MaryDavidson, in order to proceed with our recommendations, you will need to complete the
steps below:
Action By whom By when
Increase salary sacrifice by
providing notification to your
employer
Nathan 3rd march
Increase salary sacrifice by
providing notification to your
employer
Mary 3rd march
Complete application for change
of investment with Oz Super
Nathan 1st march
Complete application for change
of investment with BESTA
Mary 1st march
Lodge notification of change of
investment option with BESTA
Financial planner 3rd march
Open RAB Bank online direct high
saver account
Financial planner 3rd march
Arrange appointment with Estate
Planning Specialist
Financial planner 28thfebruary
Attend Estate Planning meeting The couple 10th march
Diarise ongoing review schedule Financial planner 1st march
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.
Assessor feedback: Resubmission required?
No
Page 60 of 78

Authority to proceed
By signing this authority to proceed, I/we Nathan and MaryDavidsonacknowledge the following:
• I/We acknowledge that the information I/we 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 my/our current situation,
investments and financial objectives.
• I/We have been provided with an EANWB Financial Planning FSG.
• I/We have read and understood the PDSs for the recommended products.
• I/We acknowledge that the product(s) listed in the table below are to be implemented in
my/our name/s:
Product(s) Amount
Answer here Answer here
Answer here Answer here
Answer here Answer here
• I/We wish to make the following change/s to the recommendations within the SOA:
Product(s) Amount
Answer here Answer here
Answer here Answer here
Answer here Answer here
Signed__________________________________ Date _____/_____/______
Client Name
Signed__________________________________ Date _____/_____/______
Client Name
Signed__________________________________ Date _____/_____/______
Financial Planner
Please note that a cooling-off period may apply to your initial investment or insurance policy.
Refer to the PDS.
Page 61 of 78

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 Name
Signed__________________________________ Date _____/_____/______
Client Name
Page 62 of 78

SOA — Appendix 1—Current situation
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.
Cash flow statement
Income and expenses
Client 1 Client 2 Notes
Income from employment
Salary
Salary sacrifice (state % if applicable)
Salary after salary sacrifice
Rental income
Unfranked dividends
Franked dividends (state % return if applicable)
Franking (imputation) credits (state franking % if applicable)
Interest (state % return if applicable)
Other income, e.g. taxable benefits
Capital gains <1yr
Capital gains >1yr
Tax-free component of capital gains
Assessable income
Deductible expenses
Include income protection premiums if held outside
superannuation
Rental expenses, repairs etc.
Taxable income
Tax on taxable income (state year applied)
Non-refundable tax offsets (e.g. LITO/SAPTO)
Medicare levy
Medicare levy surcharge
Franking rebate
Refundable rebates and offsets
Net tax payable
Page 63 of 78

Family cash flow
Client 1 Client 2 Combined
Salary less any salary sacrifice amount
Non-taxable income (e.g. income from superannuation income
streams for a person over age 60, Family Tax Benefit)
Interest income
Dividends received (excluding franking credits)
Rental income
Other income
Total income received before tax
Investment expenses
Interest payments
Rental expenses
Other
Living expenses
General living expenses
Home mortgage
Car payment
Credit cards
Holiday
Children’s education
Other loans, e.g. personal
Insurance premiums
Other
Total expenses
Total income received before tax less expenses
Net tax payable from the ‘Income and expenses’ table above
Net cash flow
Page 64 of 78

Assets and liabilities
Asset Owner Value Liabilities Net value Notes
Personal assets
Family home
Home contents
Car 1
Car 2
Other
Total
Investment assets
Investment property
Savings account
Term deposit
Shares
Other
Total
Superannuation assets
Client 1 superannuation
Client 2 superannuation
Total
Net worth
Liabilities
Loan Current debt Percentage deductible Interest only Repayment
Loan
Home loan
Investment property
Other
Total
Page 65 of 78

SOA — Appendix 2— Post strategy implementation
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.
Cash flow statement
Income and expenses
Client 1 Client 2 Notes
Income from employment
Salary $140000 $70600
Salary sacrifice $10590 $7060 (state % if applicable)
Salary after salary sacrifice $129410 $63540
Rental income
Unfranked dividends
Franked dividends (state % return if applicable)
Franking (imputation) credits (state franking % if applicable)
Interest $11824 $1750 (state % return if applicable)
Other income, e.g. taxable benefits
Capital gains <1yr
Capital gains >1yr
Tax-free component of capital gains
Assessable income $141234.00 $65290.00
Deductible expenses
$150 $350 Include income protection premiums if held outside
superannuation
Rental expenses, repairs etc.
Taxable income $141084 $64,940
Tax on taxable income (state year applied)
Non-refundable tax offsets (e.g. LITO/SAPTO)
Medicare levy
Medicare levy surcharge $2,747.00 $1,365.00
Franking rebate
Refundable rebates and offsets
Net tax payable $143,831 $66,305
Page 66 of 78

Family cash flow
Client 1 Client 2 Combined
Salary less any salary sacrifice amount
$129410.00 $63540.00 $192950.00
Non-taxable income (e.g. income from superannuation income
streams for a person over age 60, Family Tax Benefit)
Interest income
$1,884.00 $420.00 $2304.00
Dividends received (excluding franking credits)
Rental income
Other income
$138590.00 $62938.00 $201528.00
Total income received before tax
Investment expenses
Interest payments
Rental expenses
Other
Living expenses
General living expenses
$45,000 $45,000 $90,000
Home mortgage
nil nil
Car payment
$1,600 $1,600 $3,200
Credit cards
7,500
Holiday
1,000
Children’s education
7,000
Other loans, e.g. personal
nil nil
Insurance premiums
7668 5736 13404
Other
Total expenses
104,268 32936 152,704
Page 67 of 78

Total income received before tax less expenses
$34,322 $30,002
Net tax payable from the ‘Income and expenses’ table above
Net cash flow
$34,322 $30,002
Page 68 of 78

Assets and liabilities
Asset Owner Value Liabilities Net value Notes
Personal assets
Family home Nathan/Mary $600,000 $0 $600,000
Home contents Nathan/Mary $150,000 $0 $150,000
Car 1 Nathan/Mary $11,000 $0 $11,000
Car 2 Nathan/Mary $16,000 $0 $16,000
Other $777,000 $0 $777,000
Total Nathan/Mary $600,000 $0 $600,000
Investment assets
Investment property
Savings account
Term deposit
Shares
Other
Total
Superannuation assets
Client 1 superannuation Nathan $270,000 n.a. $270,000
Client 2 superannuation Mary $99,000 n.a. $99,000
Total $369,000 $369,000
Net worth
Liabilities
Loan Current debt Percentage deductible Interest only Repayment
Loan
Home loan
Investment property
Other
Total
Page 69 of 78

SOA — Appendix 3
You can use two methods to calculate and show the clients’ projected superannuation balances based on
the strategies recommended.
Firstly, you may use an Excel spreadsheet to project the balance of the clients’ superannuation funds up
until the age of retirement (i.e. age 65 for Nathan) before and after your recommendations. You should
then show the analysis that demonstrates that the clients can generate $80,000 annually from their
superannuation for 21 years.
Use the FV formula in Excel to calculate annual balances for the accumulation and you can also use it to
show drawdown of the income in a separate calculation.
Alternatively, depending on the strategies you have recommended, you may use one of the following
online financial calculators to assist you in completing these tasks:
• First State Super:
<https://supercalcs.com.au/FSS_TransCalc/Home/YourDetails>
• Russell Investments:
<https://www.yoursupersolution.com.au/Calc/TtrDisclaimer.aspx>
• Superfacts Calculator:
<https://secure.superfacts.com/calcs/ttr/default.htm?site=mercer#Top0>
• Hesta:
<https://www.hesta.com.au/resources-calculators/calculators.html>
• ASIC’s MoneySmart Calculator:
<
https://www.moneysmart.gov.au/tools-and-resources/calculators-and-apps#super>
Assumptions:
• Rates of return are net of inflation to project in today’s dollars.
• Rates of return are appropriate to the clients’ risk profiles.
• Rates of return are after fees.
• Ignore contributions tax on SG and salary sacrifice, if any.
• In retirement the clients’ funds are invested in a conservative asset allocation and the rate of return
should be no higher than 3% net of fees and inflation.
Please ensure that you use a rate of return that is net of inflation and is appropriate to the clients’ risk
profile.
Include details of all assumptions that you have made. You may ignore the impact of contributions tax on
the SG and salary sacrifice, if any.
Page 70 of 78

Use a table such as Table 1 below to show the expected financial result of the projections. Use the form of
table on the following page (Table 1(a)) to complete the list of assumptions.
Table 1 Superannuation account balance projections
Current situation After recommended strategy
Nathan’s
age
Nathan’s account
balance at
year end
Mary’s account
balance at
year end
Combined
account balance
Nathan’s account
balance at
year end
Mary’s account
balance at
year end
Combined
account balance
54
Table 1(a) Assumptions relating to Table 1 above
Value Nathan: Current Mary: Current
Nathan: Strategy
recommendations
Mary: Strategy
recommendations
Contribution amount: SG and
any other payment(pmt)
Contribution frequency
Rate = the rate of return of
the fund, net of inflation and
fees
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 superannuation at the end of the previous year and should be entered as a
negative value
• rate = annual rate divided by the frequency of contributions
• pmt = the contribution amount and should be a negative value when accumulating funds and positive
when funds arebeing drawn from the superannuation
• type = (can be left blank) indicates that the payments happen at the end of each period.
Page 71 of 78

Table 2 Superannuation income analysis post-retirement
Nathan’s age Combined account balance Assumptions Combined fund
65 Rate of return net of inflation
66 Frequency of drawdown
67 Income p.a. $80,000
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
Assessor feedback:
[insert feedback]
Date assessed: Click here to enter a date
Does the student need to resubmit? No
Questions that need to be resubmitted
First submission Not yet demonstrated
Resubmission Not applicable
Page 72 of 78

To pass this subject, you will need to be assessed as DEMONSTRATED for either your first submission or
your resubmission.
Page 73 of 78

Section 5 Agree on the plan, policy or transaction
Section 5 Part A
The SOA has been completed and a meeting has been organised with Nathan and Mary to present the
recommendations and, if they agree, to implement them.
Describe the steps that should be followed in presenting this advice to Nathan and Mary. In your answer,
you should address at least four (4) of the following requirements regarding presentation of advice:
• The order in which you present the information.
• What backup information and documents might you need?
• Any risks associated with the solution.
• Two (2) questions that the Davidsons are likely to ask you,and the answers you will give.
• The language you will use to present the strategy to Nathan and Mary. (400 words)
In this case the first and foremost thing to be considered is the language. It is the responsibility of the
financial advisor to make the couple understand the rules and regulations in the language they are
comfortable with. Here it is seen that the investors are comfortable with English. Apart from thus in order
to know about the past performance of the company rules and regulations will be maintained to let the
investors understand the company policies.
The risks associated with the solutions made are-
Market value risk
Liquidity risk
Credit risk
Model risk
Operational risk
Accounting risk
Settlement risk
Regulatory risk
Legal risk
Tax risk
Sovereign risk
Performance netting risk
Key man risk
Assessor feedback: Resubmission required?
No
Page 74 of 78

Section 5 Part B
Suggest a minimum of two concerns that the Davidsons might have about the strategy that you have
proposed. Explain how you would address each of these concerns. (100 words)
The two aspects which plays the most important part in this case includes –
Regular monitoring of the financial plan.
Change in the investment technique due to the change in the laws.
It is said that the regulators do the monitoring of the recommended financial plan and required necessary
modification to the change in the regulatory aspects and legislative frameworks. Thus by reviewing the
investment techniques will be effective in meeting the requirements through the help of the financial
aspects and hence the clients will be reassured that the investments will be re aligned with Nathan and
marry for achieving the financial goals.
Assessor feedback: Resubmission required?
No
Page 75 of 78

Section 5 Part C
Assume the recommended superannuation strategy for Nathan is to commence salary sacrificing into his
superannuation fund. Whatinformation pertaining to a salary sacrifice arrangement would you recommend
be confirmed between Nathan and his employer and how should this be recorded to ensure that the
arrangement is correctly implemented? (75 words)
Salary sacrificing is the strategy utilized by the employer and the investor where a portion of the pre tax
salary is used to sacrifice the benefits of a similar value. In the case of Nathan the he must agree to pay
some of the concessional amount to the super annuations fund. The strategy is to ask the employer to
direct the portion of pre tax salary to the similar value. Here the salary sacrificed is to be 155 received by
fund in which for most people it will be less than the marginal rate which is considered as concessional rate.
Assessor feedback: Resubmission required?
No
Page 76 of 78

Section 5 Part D
In the checklist below, listsix(6) key actions &/or documentationandrecord who should
completethesethroughout the financial planning process with the Davidsons.
Checklist —
Action/Documentation Who will action
Cash and equivalents client
Notes receivable client
securities client
Limited partnerships advisor
Insurance contracts client
Personal assets client
Assessor feedback: Resubmission required?
No
Page 77 of 78

Section 5 Part E
You will need the help of a colleague to implement the agreed upon recommendations. Prepare a short
email for your colleague that introduces the clients, broadly summarises the advice, and explains to them
the actions needed to implement the recommendations. Include a list (dot point) of documents you will
attach to assist your colleaguein performing the implementation. Use the information recorded in the
Implementation Schedule to assist you with this task. (150 words)
Dear Mr. x
It is to notify you that my client Mr. Davidson , a retired workman wants to make a financial planning for
their post retirement life and wants to have a portfolio from which he gets a good amount of return.
Besides since his children are till now not matured enough and he wants to save some money for the higher
studies of their children, it is advised to him to make a balanced portfolio. In this case he will be eligible t
enjoy the tax benefits only if he and his wife sacrifices their salary into the super annuations fund. However
after a lot of discussion and queries they have finally managed to understand the process and will be
bringing required documents for the work. The documents includes as below-
Cash and equivalents
Notes receivable
Securities
Limited partnerships
Insurance contracts
Personal assets
Hence I seek your assistance at the time of documentation. Thus I will be thankful to you if you assist me
out in closing this deal.
Thank you
Mr y
Assessor feedback: Resubmission required?
No
Assessor feedback:
[insert feedback]
Date assessed: Click here to enter a date
Does the student need to resubmit? No
Questions that need to be resubmitted
First submission Not yet demonstrated
Resubmission Not applicable
To pass this subject, you will need to be assessed as DEMONSTRATED for either your first submission or
your resubmission.
Page 78 of 78