RMIT Financial Planning Project: Superannuation Advice and Analysis

This project presents a detailed financial planning case study involving a couple, Johnny and Julia Wilson, seeking financial advice. The case includes an analysis of their income, expenses, assets, and liabilities. The financial expert assesses their current financial state, including gross and net incomes, tax payments, and expenditures. The Wilsons outline their financial goals, such as debt clearance, investment for income protection, retirement planning, home acquisition, and funding their children's education. The expert provides recommendations on debt management, investment strategies, asset allocation within superannuation funds (including growth and defensive assets), and the possibility of acquiring a new house. The project also includes relevant documentation, such as a statement of advice, client information, and financial data. The final advice focuses on asset allocation within superannuation, recommending an aggressive investment approach, with a significant portion allocated to growth assets like Australian and international shares, and real estate, along with defensive assets like fixed interest and cash, aligning with the Wilsons' long-term financial objectives and risk profile. The project also includes a simulated workplace project, focusing on financial planning analysis and research, superannuation advice, and product research to support recommendations, fulfilling the requirements of the Diploma of Financial Planning.

Running head: TRANSCRIPT
Transcript
Name of the Student:
Name of the University:
Authors Note:

1
TRANSCRIPT
Johhny and Julie Wilson:
Hi I am Johhny Wilson and she is my Julia Wilson. We have come here to get our finances in
order.
Financial expert:
Hi, I am ……………, will advise you on your finances to help you make optimum use of your
financial resources. Please tell me about your current state of income and earnings.
Johhny and Julia Wilson:
Our combined income from salary at present before deduction of income taxes is $286,000.
Along with that we also receive rental income of $30,000 per annum at present and expected to
continue to receive this rental in the future also. We also have investments and earn around
$30,000 per year as income from this investment. This is our gross income however, we are
responsible citizens of the country and do pay our taxes honestly each year.
Financial expert: That’s great we all should do that as it is our basic responsibility to pay taxes
on our income.
Johhny and Julia: Yup, absolutely.
Financial expert: So how much taxes you pay on your combine income and individual income? It
is important me to also have an idea as to the gross and net individual income of you and your
wife.
Johhny: Gross income of mine is $210,000 per annum and I pay taxes of $73,132 thus, have a
net income of $136,868 in the latest year.

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Julia: My gross income in the latest year has been $106,000 and have paid income tax of
$28,972. Thus, my net income for the year is $77,028. The total taxes paid by us combined is
$102,104 to give us a net combined income of $225,896 in the latest year.
Financial expert: So can I have a preliminary idea about the total household and other
expenditures that needed last year including any payment of instalment to repay loan and other
such staffs. I mean I want to know if you guys have any money left with you after meeting all the
expenditures and repayments of loan and etc. from the net income of $225,896 in the latest year.
Johhny and Julia: Yes, I mean in the last year after meeting all expenditures including payment
of mortgage we had a surplus of $39,572. So, yes we did have significant amount of money left
with us after payment of all the expenses and payment of mortgage from our combined annual
income.
Financial expert: Ok, great now tell us about the goals and objectives that you want to achieve in
the future from your finances?
Johhny and Julie Wilson: We want to immediately clear our debts, make necessary investment to
protect income, achieve a stable financial state in the future, invest in funds to ensure there
would be necessary funds available to us to support the education of our children, ensure that we
have necessary funds to travel within and outside the country, have necessary resources to
support our holidays.
Johhny individually said:
I want to retire at the age of 55 and do not want to work again. Thus, please advise us about the
investment schemes or other means to ensure that we have sufficient funds to support my
retirement plan.

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Johhny and Julia: We also want to acquire a house by the end of 2020 that is expected to cost
around $2 million. So how should we go about it?
Johhny individually: I want to purchase a new bike within next 12 months so please advise me
whether I should start saving for it now.
Financial experts: Well I have understood exactly what you are looking to achieve in the future. I
would request you to please provide all details about your current income and expenditures.
Johhny and Julia: Here is the document showing the amount of income and expenditures of our
family at the present.
Income Johhny Julia Combined
Gross salary 180,000.
00
106,000.
00
286,000.
00
Income (Other) 30,000.
00
30,000.
00
Income from rent 12,000.
00
Gross income 210,000.
00
106,000.
00
328,000.
00
Less: income tax
payable
73,132.
00
28,972.
00
102,104.
00
(A): Income after tax 136,868. 77,028. 225,896.

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00 00 00
Expenditures Amount ($)
Personal expenditures 47,540.00
Payment of Bills and other expenses 88,864.00
Payment of mortgages 40,560.00
Car related payment 9,360.00
(B): Total payments 186,324.00
Financial expert: So at present you both are combining a surplus of $39,572 per year. Well
that’s a healthy surplus let me see how to utilize that surplus and recommend other measures to
help you achieve your goals and objectives.
Financial expert: I would request you to please allow me 7 days’ time to conduct an in depth
assessment of your current financial state and position. I shall be able to recommend you
appropriate measures when we will have our next sitting in our office on the same day and time
of next week.
Johhny and Julia: Ok please take your time and help us by giving your valuable advice. Thanks
see you next week.

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After analysis of the information data and through research the second sitting shall take place
after a week on the same day.
Financial expert: After going through all the details and considering various investment and
superannuation option the following recommendations have been made. These will help you to
achieve most of yopur goals and objectives however, immediate payment of mortgage is not
possible as it is significant amount.
Rescheduling the loan repayment.
Taking new protection policies.
Stability in financial condition.
Household expenses.
Salary sacrifice and increase contribution to super funds.
Entering into a new mortgage.
Setting up a separate education fund for the children.
Invest in shares of Australian companies.
Johhny and Julia:
So why is it not possible to clear the debt immediately?
Financial expert: The amount of mortgage is quite high at above $300,000 and with merely little
above $39,000 in annual surplus you need to sale your properties to clear the debt. As a financial
expert I would never advise you to do that.

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Johhny and Julia: So what about the house that we want to buy for $2 million by the end of
2020?
Financial expert: Entering into another mortgage agreement is the only way to acquire a house
by the end of 2020 as currently you do not have the necessary resources to finance the
acquisition entirely from your own resources.
Johhny and Julia: Can you please recommend about the allocation of assets of superannuation
funds to enable us to achieve our goals and objectives in the future?
Financial expert: Sure sir and mam. Look taking into consideration your goals and objectives, it
is clear that defensive and moderate return on the investment would not cut the ice. Hence, the
asset mix should be extremely aggressive and you should invest 80% of the funds on growth
assets and keep the 20% for investment in defensive assets.
Johhny and Julia: So what are the specific assets you think the superannuation fund should be
invested?
Financial expert: Growth assets primarily include shares and securities of companies, real estate
and other properties. Considering your risk profile I would recommend both of you to invest
40% of the combined superannuation fund on Australian shares; 20% on international shares and
20% in real estate and other properties.
As far as the defensive assets are concerned investment of 10% should be made on fixed interest
assets and the balance 10% should be kept in hand as cash for contingency purposes.
Johhny and Julia: Thank you so much for your valuable time and advice. We are honestly feeling
relieved and will follow your recommendations to the tee. Thank you once gain.

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Financial expert: Honestly it is my job so thank you to consider us worthy of recommending you
about your finances. We shall have a strong relationship going forward and I hope to see you
both very soon at your new home in 2020.
Johhny and Julia: Sure. Thank you.