FNSFPL502 & FNSFPL508: Complex Financial Planning Research - Case

This assignment presents a financial planning research report based on a case study involving clients Dennis and Donna Barker. The study evaluates their current financial situation, including income, expenses, assets, and liabilities. It identifies key issues and objectives related to cash flow management, tax minimization, wealth creation through superannuation and investments, debt reduction, and wealth protection via insurance and estate planning. The research involves analyzing the integrity of client-provided information, calculating investment income, superannuation contributions, and surplus income after tax. Client objectives are quantified in present value terms and verified for viability. The assessment includes reviewing relevant documents such as pay slips, tax returns, bank statements, and insurance policies to ensure the accuracy of the financial data used for planning.

Conduct Complex Financial Planning Research
Assessment Task
FNSFPL502 and FNSFPL508
Your details:
Name:
Address:
Phone:
Company name
Email:
Your Assessment Task
Keep a copy of your assessment task for a period of 12 months.
Submit your assessment to our Education Team via [e-mail]
Plagiarism Statement
All assessments must be your own work and not a result of plagiarism or collaboration
with other students or workmates.
Assessment
The pass mark is 70% for each element. If you do not achieve this, you will receive
feedback via your email address and be asked to resubmit your assessment for a second
marking. Assignments will not be returned to you.
Task Assessments Elements Target
Mark
Pass
Mark
Actual
Mark
1 Evaluate client’s current situation & identify issues FNSFPL502.1 & 508.1 77 54
2 Identify research requirements and parameters FNSFPL502.2 & 508.2 29 20
3 Extract and analyse information FNSFPL502.3 & 508.3 170 119
4 Summarise and present results of research FNSFPL502.4 & 508.4 35 25
Total 311 218
Assessor’s Initials: ____________________
Assessment Date: ____________________
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Introduction
Objective The objective of this first assessment is to develop a Research Report for
the practical client situation described in the case study assigned to you.
Scope To achieve this objective, you will need to:
 Evaluate client’s current situation and identify issues,
 Identify research requirements and parameters,
 Extract and analyse information, and
 Summarise and present results of research.
The assessment tasks in this assessment will allow you to demonstrate
your knowledge and skills in these elements
Assessment
process
Start by:
1. Reading the Assessment Task and case study.
2. Type your answers to the assessment tasks into this template
document (hand-written answers are not accepted)
3. Submit your completed document by emailing it to
[e-mail]
Don’t forget to keep a copy and retain it for 12 months
Need help? If you have any questions, please email the Mentor Support Team at
[e-mail]
Related
Assessments
When you have completed all written assessment tasks in this program of
study (Statement of Advice series), you will then need to undertake one
other related assessment:
 Skills Assessment (telephone simulation) to assess your
communication and interpersonal skills in relation to presenting your
research findings to the financial planner. FNSFPL508A.4.4
This assessment will be conducted together with the presentation
requirements in relation to preparing a financial plan, FNSFPL503A
implementation FNSFPL504A and ongoing service FNSFPL505A
Units of
competency
Upon successful completion of these assessments, you will be awarded
two units of competency for:
1. FNSFPL502: Conduct financial planning analysis and research,
and
2. FNSFPL508: Conduct complex financial planning research.
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Assessment Task 1
1.0 Evaluate
the client's
current
situation and
identify the
issues
FNSFPLN502.1
FNSFPL508.1
The first assessment involves the evaluation of the case study allocated
to you, to assess the client's current situation and identify the issues.
This requires that you:
 undertake an analysis of the integrity of information provided by the
client,
 identify and quantify the client objectives and expectations and test
them for viability, and
 establish the basis for strategy development based on confirmed
objectives.
For this activity, refer to the case study and complete your answers to
these assessment tasks in the space provided in the following pages.
Marks / 77
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Assessment Task 1
1.1 (a)
Analysis of
integrity of
client
information
FNSFPLN502.1.1
FNSFPL508.1.1
From the scenario in your case study, list in the table below what
documents you would review to analyse the integrity of the information
provided by the client.
Enter your answers in the space provided below.
Information
provided by client
What documents would you review to confirm accuracy or analyse the
integrity of the information provided?
Marks
Cashflow Management
1. Income
$ 90 K
$ 45 K
i) Wife’s income: In order to verify the income which is generated
by wife, (Donna), it is essential that the her pay slip, income
statement and her tax filling returns are assessed / 1
ii) Husband’s income: In a similar manner the income of the
husband (Dennis) can be assessed by reviewing his pay slips,
income statement to identify his income, tax returns which he files
to review the amount which is shown by Dennis to tax authorities. / 1
2. Tax i) Wife’s annual tax: The assessment of tax for Donna can be done
by reviewing the tax file which is maintained by her and also the
tax returns which are filed by her. / 1
ii) Husband’s tax: Information regarding the tax payments made by
Dennis can be acquired from the tax file which is maintained by
dennis. / 1
3. Expenses
$ 40 K
$ 10 K
i) Living expenses/mortgage: In order to assess the living
expenses of the clients, assessment should be made for the day
to day expenses of the client such as grocery bills, medical bills
and other kind of bills. The living expenses also covers different
expenses which are incurred for maintenance of the property. For
instance, mortgage coverage can be assessed from the loan
amount which is provided in the first place and other bank related
documents. / 1
ii) Discretionary expenses (holidays etc): In order to ascertain the
discretionary expenses which are incurred by the client can be
related to travelling tickets, hotel bills and other miscellaneous
expenses which are undertaken by the business. / 1
Subtotal / 6
continued
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Assessment Task 1, continued
Information What documents would you review to analyse
the integrity of the information provided?
Marks
Wealth Creation
4. Super
$ 220 K
$ 51 K
i) Wife’s superannuation: The verification of the superannuation
fund can be easily done by assessing the documents like
superannuation fund trust deed, Credentials of the beneficiary of
the trust as well as that of the trust manager. In addition to this,
further assessment can be done of the payments to
superannuation funds / 1
ii) Husband’s superannuation: In a similar manner, for the purpose
of assessing the superannuation of Dennis, evaluation the documents
like superannuation fund trust deed, Credentials of the beneficiary of
the trust as well as that of the trust manager. The monthly payments or
receipts bills should also be assessed. / 1
5. Investments
($ 12 K)
i) Cash Investments Held: In order to assess the cash
investments held by the clients several documents need to be
considered such as bank records, documents relating to
investment of the client and certificate of investment
/ 1
6. Debt
Reduction
($ 130 K)
($ 8 K)
i) Mortgage: The case which is shown for the client reveals that
value of the client’s property is around $ 750,000 and the same
has a mortgage value of $ 130,000. In this aspect reviewing the
document papers for the property for Dennis and Donna is crucial
along with other bank documents. In addition to this, documents
relating to mortgaged is also to be assessed. / 1
ii) Credit Cards: The best way to check the balances for credit
cards is by assessing the credit card authenticity. In addition to
this, the credentials of the credit card provider, bills or receipts of
the transactions done by credit card are also to be assessed. / 1
Wealth Protection
7. Personal
Insurance
$ 100 K
$ Nil K
i) Wife’s current Life/TPD insurance : The case shows that Donna
has a term life and TPD insurance cover of $ 100,000 which is
within the superannuation cover. The personal insurance cover of
Donna is with her superannuation. All documents relating to
insurance and monthly installment of the same is to be assessed. / 1
ii) Husband’s current Life/TPD insurance : The case shows that
Dennis does not have any insurance and therefore no documents
needs to be assessed for such a purpose. / 1
8. Estate
Planning
yes
no
i) Wife’s estate planning: The case shows that Donna is entitled to
some payments which would be on annual basis from the estate
for her aunt and the amount will be $ 17,000. The documents of
her entitlement, tax returns and documents for hidden costs are to
be checked. / 1
ii) Husband’s estate planning: It is not required to develop estate
planning for Dennis as he has not inherited anything from any
estate as per the case study. / 1
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/9
continued
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Assessment Task 1
1.1 (b)
Analysis of
integrity of
client
information
FNSFPLN502.1.1
FNSFPL508.1.1
Use the http://www.taxcalc.com.au/1 and a current tax rate to calculate
Dennis and Donna’s:
 Investment income
 Superannuation contributions, and
 Surplus income after tax.
Use the Financial Planning Research spreadsheet provided to assist you
in your calculations and then enter your results in the table below. You
should use the copy and paste function to copy the calculations from the
spreadsheet in to the tables below.
As your clients have private health insurance, the Medicare Levy
surcharge does not apply. Also, assume that investments are jointly held
so that 50% of the income is earned by each.
Investment Income
Investment Amount Rate Income
Bank Account $ 9,000 4 % $ 360
Term deposit $ 15000 4 % $ 600
Cash Management Account $ 12,000 5 % $ 600
Total $ 36,000 $ 1,560
/ 2
Superannuation Contributions (current situation)
Base
Salary
SG Rate Amount
Donna $90,000 $8,550 $8,550
Dennis $45,000 $4,275 $4,275
Total $ 135,000 $ 12,825 $ 12,825
/ 2
Surplus Income (current situation)
Base
Salary
Investment
Income
Taxable
Income
Tax on
Income
Medicare
levy
Tax Payable
(incl LITO)
Expenses
(incl
mortgage
payment)
Surplus
income
Donna $90,000 $780 $90,780 $21,220 $1,816 $23,036 $29,550 $38,194
Dennis $45,000 $780 $45,780 $6,426 $916 $7,342 $29,550 $8,888
Total $135,000 $1,560 $136,560 $27,646 $2,731 $30,377 $59,100 $47,083
/ 6
/ 10
continued
1 http://calculators.ato.gov.au/scripts/axos/axos.asp?CONTEXT=&KBS=Medicare10.xr4&go=ok
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Assessment Task 1
1.2 Identify
client
objectives
and
expectations
FNSFPLN502.1.2
FNSFPL508.1.2
From the scenario in your case study,
a) write down one or more specific financial objectives and expectations
for the generic needs provided,
b) quantify the objective by expressing the amount in today’s dollars
(PV- Present Value), and
c) Describe how you would verify each objective.
Generic Needs (a) Specific client objectives
and time frames (if applicable)
(b)
Amount
(PV)
(c) How would you verify the
amounts in (b) or test for
viability? (No calculations are
required)
Marks
Cashflow Management
1. Income  The identification and
incorporation of the
different sources of
income properly and
incorporate the same in
their portfolio
 The client needs client
needs to seek
appropriate sources of
funds for the purpose of
increasing their funds
Donna -
$
90,000
Dennis
- $
45,000
Verification of Income statements or
tax returns.
/3
2. Tax
minimisation
 The client should adopt
policies that will help
them to minimize the
taxes effectively on the
income generated.
 The clients need to
invest in instruments for
the purpose of minimize
the tax
Donna -
$ 5,939
Dennis
- $
2,630
Assessment of the Tax returns
/ 3
3. Expenses  The clients need to
identify the areas where
maximum expenses are
incurred for any purpose
 The clients also need to
develop a proper plan for
minimizing the expenses
of the clients
Total
expens
e - $
68,200
Verification of bills, invoices and
other receipts which depicts day to
day expenses.
/3
Wealth Creation
4. Superannuati
on
 The client need to
develop plans for
enhancing the funds
established in their trust.
Donna -
$
220,000
Dennis
- $
51,000
Verification of the superannuation
trust deed and other related
documents.
/ 3
5. Investment
Planning
 The client needs to make
more investments in
Donna -
$
Assessing the superannuation deed
/ 3
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superannuation trust for
the purpose of
enhancing the revenue
of the clients.
16,675
Dennis
- $
8,000
6. Debt
reduction
 The clients must settle
their loans as soon as
they can so that they
obligations are reduced.
$
130,000
Verification of the loan documents
and other bank account details
/ 3
Wealth Protection
7. Personal
Insurance
 The client need to have
an appropriate option
regarding insurance plan
so that their return can
be enhanced
$
100,000
Verification of the document relating
to trust deeds and insurance needs
to be done.
8. Estate
Planning
 The client needs to
assess the payments
which are to be received
from the estate which is
inherited.
$
17,000
Verification of the documents
relating to estate which is to be
inherited by Donna.
/ 3
/ 24
Continued
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Assessment Task 1, continued
1.3 a) Develop
strategic
options
FNSFPLN502.1.3
FNSFPL508.1.3
From the scenario in your case study, establish the basis for strategy
development by identifying the strategic options for each generic need.
You should develop a minimum of three options for each generic need
which would act as a hypothesis for you to investigate further.
Generic Needs Possible Options Marks
Cashflow Management
i) Income  Dennis and Donna can contribute a part of their income to certain investment
products which can then enhance their revenues.
 Investment can also be made in stock market
 The couple also has the option of part time work for generating more revenue / 3
ii) Tax
minimization
 Investment in instruments which are tax efficient and provided exemption for the
same.
 More investment in insurance policy is very essential as well.
 Investment in medical insurance which have tax benefits / 3
iii) Expenses  Identify the activity which incurs most cost for the couple.
 Reduces expenses in order to save more and enhance their net earnings
 Reduce expenses related to car / 3
Wealth Creation
iv) Superannuati
on
 Investment in superannuation funds.
 Search for alternative trust funds which would be better than the current
investment plan.
 Invest more in insurance coverage under superannuation funds. / 3
v) Investment
Planning
 Set out strategies for investment in different polices.
 Invest more in share market.
 Enhancing the investment in superannuation funds. / 3
vi) Debt
Reduction
 Adopt practices which would reduce expenses of the client
 Repayment of the loan which is taken by the client.
 Minimizing the use of debts in future period. / 3
Wealth Protection
vii) Personal
Insurance
 Invest more in superannuation funds which provide insurance coverage
 Look for alternative insurance plans which can be better than the current one
which is adjust.
 Reduction in procurement of loans in future period. / 3
viii) Estate
Planning
 Maintaining the documents which is related to the estate which is being inherited
by Donna.
 Identify the hidden cost that relates to current estate plan
 In addition to this, identification of the other benefits which are associated with the
estate which is inherited by the client. / 3
/ 24
continued
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Assessment Task 1, continued
1.3 b) Develop
strategic
options,
continued
FNSFPL508.1.3 (b)
From the various options that you have given in 1.3 (a), please list four
(4) options / alternatives that you would want to present to the clients to
get their approval before conducting detailed research.
For example, you might start this discussion to confirm objectives with “I
understand that you have a preference to do X, but if I could show you a
significant advantage in doing Y, would you consider it?”
Would you consider: Marks
1
Analysing the estate which is being inherited by Donna and identification of other
benefits associated with the same.
/1
2 Both clients can contribute a part of their income to certain investments plans which
would enhance the revenue of the clients
/1
3 Reduction of Procurement of Future loans /1
4 More investment in insurance policies which are under the superannuation fund /1
/ 4
Total / 77
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Assessment Task 2
2.0 Identify
research
requirements
and
parameters
FNSFPLN502.2
FNSFPL508.2
The next step in the Financial Service Advice Process includes the
identification of research requirements and parameters.
This requires that:
 Aims and objectives of research including strategy, product and
performance parameters are established against client requirements
and expectations with all issues identified,
 Intended use of the research information is clearly established
 A wide range of relevant internal and external information resources
required for the research are identified and accessed,
 Information requirements not met by regular sources are identified and
strategies developed to access them legitimately, and
 Timeframes are established and requests for information prioritised to
ensure milestones are met.
Complete your answers to this assessment task in the space in the table
provided:
The first column you are required to fill in is (b) - What are some research
questions that you could ask to determine the clients’ aims and
objectives?
You are required to provide 1 or 2 additional Research Questions for each
generic need, but no calculations or sums are required at this stage.
The second column you are required to fill in is (c) - Where would you find
this information?
You are required to provide some examples of websites, on-line calculators
type of spreadsheet etc. you could utilise to answer the questions in part (b).
The final column (d) - Priority requires you to allocate a level of importance
to each generic need.
Use the numbers 1 – 3 with 1 being the highest priority.
An example of a research question is provided in the first row for each
generic need.
Marks / 29
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Assessment Task 2, continued
Generic Needs (a) What is the
expected outcome
for the clients?
(Intended use or reason)
(b) What are some research questions that you could ask to
determine the clients’ aims and objectives?
(Please provide 1 or 2 additional research questions for each)
(c) Where would you find this
information?
(e.g. websites, calculators, spreadsheets etc)
(d)
Priority
1 - 3
(1 being
highest)
Marks
Cashflow Management
 Income  Maximise savings
 Maintain current
level of income
 How much of the surplus income can be allocated to other investments to
maximize savings over the next 7 years?
 Identify the current sources of income which can be assessed for tax
purposes under the head salary income?
 Spreadsheet
 Websites
1
/2
 Tax Minimisation  Pay lower rate of tax
 Identify cost of
paying off mortgage
 Obtain tax benefits
 How much tax is currently being paid in the cash and fixed interest
investments?
 What are the available options which needs to be considered for the
purpose of minimizing the tax implications on the client?

 Spreadsheet
 Websites
/ 4
 Expenses  Reduce after tax
costs
 Is the client’s estimate of $40,000 pa for living expenses and $10,000 pa for
holidays an accurate estimate?
 Are there any other expenses which the client needs to undertake?
 Spreadsheet
 Websites
/ 4
Wealth Creation
 Superannuation  Maximise growth of
fund
 Identify contributions
required to achieve
retirement income
 Is there a portfolio within Dennis’ current superannuation fund that is more
in line with his risk profile and more likely to have an average annual return
of more than 4%?
 Are there any other portfolios which would interest Dennis and Donna and
which would attract investments from them?
 Spreadsheet
 Websites
/ 4
Subtotal / 14
continued
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Assessment Task 2, continued
Generic Needs (a) What is the expected
outcome for the
clients?
(Intended use or reason)
(b) What are some research questions that you could ask to
determine the clients’ aims and objectives?
(Please provide 1 or 2 additional research questions for each)
(c) Where would you find this
information?
(e.g. websites, calculators, spreadsheets etc)
(d)
Priority
(1 – 3 with
1 being the
highest )
Marks
 Investment
Planning
 Establish investment for
grandchildren’s future
education costs
 Will the clients need access to these funds before the 12 year time frame?
 What are the investments policies which are being considered by the client
for meeting their objectives?
 Spreadsheet
 Websites
/ 4
 Debt
Reduction
 Clear non-deductible
debt before Donna
retires
 How long it would take to pay off the home loan if a lower rate is obtained?
 Assessing the current situation, Will the clients require additional debts in
future period?
 Spreadsheet
 Websites
/ 4
Wealth Protection
 Personal
Insurance
 Wealth protection
without losing any
current benefits
 What other (if any) insurances are available under their current
superannuation funds?
 Is Dennis planning to make investment in insurance cover under the current
superannuation plan?
 Spreadsheet
 Websites
/ 4
 Estate
Planning
 Estate protection  What do the clients know about having a valid will, powers of attorney,
testamentary trusts etc?
 What other benefits can be identified from the current estate planning which
Donna is trying to implement?
 Spreadsheet
 Websites
/ 3
Total / 29
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Assessment Task 3
3.0 Extract
and analyse
information
FNSFPLN502.3
FNSFPL508.3
The next step in the Financial Service Advice Process includes the
extraction and analysis of information according to research requirements
and parameters.
This requires that:
 Data extraction criteria are established that are relevant to intended
use and client requirements and do not unduly limit the scope of
research,
 Trends are identified to provide meaningful information on
performance of possible strategies, products and markets,
 Financial products are analysed within appropriate timeframes to
ensure currency of decision making and comprehensive risk
assessment is made of products identified through the research,
 Obtained information is prioritised according to client requirements
and expectations, and
 Issues that require specialist research or advice are identified and
appropriate advice obtained.
Complete your answers to this assessment task in the spaces provided in
the following pages.
(Marks 170)
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Assessment Task 3.1
3.1 Research
tax
minimisation
FNSFPLN502.3
FNSFPL508.3
Referencing the Tax Calculator2 research the four (4) different tax
minimisation options specified below and calculate the potential annual
tax that could be saved by your clients.
Use the Financial Planning Research spread sheet provided to assist you
in your calculations and then enter your results in the table below. You
should use the copy and past function to copy the calculations from the
spreadsheet in to the tables below.
Complete your answers in the space provided below.
Tax Minimisation
Options
Calculations Potential Tax
saving (pa)
Marks
1. How much tax is
currently paid on
the cash and fixed
interest
investments?
Income
Tax
rate Tax
Donna=
780 x 39% = $304.2
Dennis=
780 x 34% = 265.20
$569
NA
/ 3
2. If the cash and
fixed interest
investments were
transferred from a
joint ownership to
Dennis’ name how
much tax would be
saved?
Income
Tax
rate Tax
Donna=
780 x 39% = $304.2
Dennis=
780 x 34% = -265.20
$39
$2250
/ 3
3. How much would
Donna save in tax if
she salary
sacrificed up to the
concessional
contribution cap?
$16675 * 15% = $2501.25 $2501.25
/ 3
4. How much extra
Low Income Tax
Offset would
Dennis be entitled
to, if he salary
sacrificed to meet
the 19% marginal
tax rate?
(Note: Do not include
investment income)
$8000 * 32.5% = $2600. $2600.
/ 3
Subtotal / 12
2 http://www.taxcalc.com.au/
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Assessment Task 3.2
3.2 Research
surplus
income
FNSFPLN502.3
FNSFPL508.3
Using the previous Tax Calculator for the current financial year, Calculate the tax payable and surplus income
available if the client were to implement the tax minimization options identified in the previous assessment task.
Do not include the interest income in this calculation and complete your answers in the space provided
below.
In your summary, consider the changes to total tax payable, surplus income and increased superannuation
contributions.
Table 1- Surplus Income (current)
Base
Salary
Salary
Sacrifice
SG (9.5%) Total Super
Contribution
Taxable
Income
Tax on
Income
Medicare
levy
Tax payable (incl
LITO)
Expenses (incl
mortgage
payment)
Surplus
income
Donna $90,000 $0 $8,550 $8,550 $90,000 $20,932 $1,800 $22,732
Dennis $45,000 $0.00 $4,275 $4,275 $45,000 $5,847 $900 $7,072
Total $135,000 $0 $12,825 $12,825 $135,000 $26,779 $2,700 $29,479
Table 2-Surplus Income (after salary sacrifice)
Base
Salary
Salary
Sacrifice
SG (9.5%) Total Super
Contribution
Taxable
Income
Tax on
Income
Medicare
levy
Tax payable (incl
LITO)
Expenses(incl
mortgage
payment)
Surplus
income
Donna $90,000 $16,675 $8,550 $25,225 $73,325 $15,378 $1,467 $16,844 $29,550 $26,931
Dennis $45,000 $8,000 $4,275 $12,275 $37,000 $3,127 $740 $4,312 $29,550 $3,138
Total $135,000 $24,675 $12,825 $37,500 $110,325 $18,505 $2,207 $20,711 $59,100 $30,514
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Table 3-Change between above
Base
Salary
Salary
Sacrifice
SG (9.5%) Total Super
Contribution
Taxable
Income
Tax on
Income
Medicare
levy
Tax Payable(incl
LITO)
Expenses(incl
mortgage
payment)
Surplus
income
Donna $90,000 -$16,675 $0 -$16,675 $16,675 $5,554 $334 $5,888 $0 $10,787
Dennis $45,000 -$8,000 $0 -$8,000 $8,000 $2,720 $160 $2,760 $0 $5,240
Total $135,000 -$24,675 $0 -$24,675 $24,675 $8,274 $494 $8,768 $0 $15,907
/ 6 marks
Summary Mark
It is noted that currently both Donna and Dennis make a total tax savings of $ 15,907. / 3
Subtotal / 21
Continued
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Assessment Task 3.3
3.3 Research
super
contributions
FNSFPLN502.3
FNSFPL508.3
Calculate the NET impact of the contemplated salary sacrifice strategies
on annual superannuation savings (after tax).
You should refer to the Key super rates and thresholds3 on the ATO
website to identify the current contribution tax and cap on contributions.
In your summary, consider the impact of the proposed changes in annual
contributions on accumulated superannuation, contribution tax paid by
the funds in relation to the change in surplus income.
Superannuation (Current)
Annual
Contribution
(SG)
Concessional
Contributions
Tax
Amount over
Concessional
Cap
Tax on
amounts over
the cap
Total Tax
Payable
Annual
Contribution
(after tax)
Donna $8,550 $1,283 $0 $0 $1,283 $7,268
Dennis $4,275 $641 $0 $0 $641 $3,634
Total $12,825 $1,924 $0 $0 $1,924 $10,901
Superannuation (after salary sacrifice)
Annual
Contribution
(SG and salary
sacrifice)
Concessional
Contributions
Tax
Amount over
Concessional
Cap
Tax on
amounts over
the cap
Total Tax
Payable
Annual
Contribution
(after tax)
Donna $25,225 $3,784 $0 $0 $3,784 $21,441
Dennis $12,275 $1,841 $0 $0 $1,841 $10,434
Total $37,500 $5,625 $0 $0 $5,625 $31,875
Net change between above 2
tables Annual
Contribution
Concessional
Contributions
Tax
Amount over
Concessional
Cap
Tax on
amounts over
the cap
Total Tax
Payable
Annual
Contribution
(after tax)
Donna -$16,675 -$2,501 $0 $0 -$2,501 -$14,174
Dennis -$8,000 -$1,200 $0 $0 -$1,200 -$6,800
Total -$24,675 -$3,701 $0 $0 -$3,701 -$20,974
/ 6
Summary Mark
The salary sacrifice which is done Dennis and Donna is to be diverted to Superannuation
contribution. This reduces the marginal tax rate on the salary sacrifice to 15%. The amount which is
shown under concessional contribution tax reflects the tax benefits received from super
contribution. The It is noted that currently both Donna and Dennis make a total tax savings of $
1,778 which is due to the superannuation contribution. / 4
Subtotal / 31
Continued
3 https://www.ato.gov.au/Rates/Key-superannuation-rates-and-thresholds/
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Assessment Task 3.4
3.4 Research
super target
FNSFPLN502.3
FNSFPL508.3
Using the Super Simulator 4 on the AMP website, calculate both Donna
and Dennis’:
https://www.amp.com.au/super/supersimulator/index.html#!/
 Projected savings in an average market (on Donna’s retirement in
7 years),
 Target super savings required to generate their desired retirement
income (i.e. $30K+- pa for Donna and $10K+-pa for Dennis).
Additional Information
 Move the Blue Slider to align the above amounts of required
income in retirement
 Remember to set the clients retirement age
 Do not projected Dennis’s superannuation after he moves to
part-time work
 Your projection should use Dennis’s proper risk profile
Use the ‘Print Screen’ command on your computer to copy the image of
the projected super savings for both Donna and Dennis and paste in the
space provided below. Then read the Assumptions and Methodology
section and list the key assumptions used by the Super Simulator under
the headings provided.
Superannuation (after salary sacrifice strategies)
Current
Savings
Projected
Savings over
7 years in
average
markets
Projected
Income
generated in
average markets
Target
Savings
Target
Income
Generated
Savings
Gap
Mark
Donna $290,000 $ 516,922 $27,842 $873.971 $47,073 $357,059
Dennis $138,000 $ 187,191 $ 10,082 $485,934 $ 26,173 $298,743
Total $428,000 $704,113 $ 37,924 $ 1,359,905 $ 73,246 $ 655,802 /10
4 https://www.amp.com.au/super/supersimulator/index.html#!/
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Assessment Task 3.4, continued
Donna Mark
/ 1
Subtotal / 42
Continued
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Assessment Task 3.4, continued
Dennis Mark
/ 1
Assumptions (% or $), Methodolgy and/or Risks Mark
1. Salary Increase
3.5%
/ 1
2. Rates of Investment Returns for an average market
6.00% for balanced investment mix
/ 1
3. Fees
0.69% for balanced investment mix
/ 1
4. Pension
Projection are run on the first day of the financial year and age is taken to be the current age for the entire
financial year
/ 1
5. Today's dollars
Computed by discounting of figures taking inflation of 3.5%
/ 1
Subtotal / 48
Continued
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Assessment Task 3.5
3.5 Compare
superannuation
funds
FNSFPLN502.3.3 and 3.4
FNSFPL508.3.3 and 3.4
Compare two alternative superannuation funds of your choice (refer to Personal Super Fund Profiles 5 on the Rainmaker website to
find fund if required). In your analysis, you should consider the security of the fund in terms of the reputation of the product provider,
their experience in the superannuation market, the long-term average return and whether the investment options match Dennis’ risk
profile. On the following page recommend one fund that will enable Dennis to receive a return in line with his risk profile.
Question Fund 1 Fund 2 Marks
1.Provider First State Super Prime Super / 1
2.Product name First State Super Prime Super-Personal / 1
3.URL of PDS https://firststatesuper.com.au/content/dam/ftc/digital/pdfs/member/
pds/PDS_Personal.pdf
https://www.primesuper.com.au/assets/Documents/PDS-and-Member-
guides/PRIME21-PDS-Super-FINAL.PDF
/ 1
4. PDS version No. &
issue date
30 September 2017 10 May 2018 / 1
5.Experience Established in 1992 as a not for profit fund. Manages over $90 billion
on behalf of over 760,000 members. It has AAA credit rating.
Provider of superannuation products and services for over 20 years.
Manages over $3.5 billion in funds for approximately 115,000 members.
Rated AAA according to selecting super.
/ 1
6.Return 1 Yr 9.07% 7.35% / 1
7.Return 3 Yr 6.71% 7.67% / 1
8.Return 5 Yr 7.44% 8.16%6 / 1
9.All Fees (MER,
admin, exit and entry)
Investment management costs 0.32%
Performance-related costs 0.14%
Explicit transaction costs 0.05%
Other fees and costs 0.11%
Total investment fees 0.62%
Total Investment fees 0.77%
/ 1
10. Investment options Pre-mixed options: Conservative Growth Conservative investment option / 1
5 http://www.selectingsuper.com.au/
6 https://www.selectingsuper.com.au/browse/fund/prime_super_personal
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11. Risks First State Super Prime Super / 1
Subtotal / 59
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Assessment Task 3.5, continued
Graph Returns
Create a graph using the Financial Planning Research Spreadsheet (Excel Worksheet)
comparing the last year’s return of the two funds on the previous page to Dennis’ current
fund. Copy and paste it in the space below.
Current Fund First State Super Prime Super
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
10.0%
Comparati ve Returns
Recommend a fund, either Dennis existing super fund or one of the funds that you
researched. Ensure that the investments are in line with Dennis risk profile. Explain your
reasons to justify your recommendation, but not based on just investment returns alone.
Given that there is limited information on Dennis existing fund you are allowed to make
your own assumptions in comparing it against the ones that you researched.
Recommend a fund Mark
The first state super fund is recommended to Dennis as the same generates the maximum
returns. The risks of the option is also shown to be lower than Prime Super which makes it more
favourable for Dennis and follows a balanced approach in risk. The fund would effectively meet all
the requirements for Dennis.
/ 2
Subtotal / 61
Continued
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Assessment Task 3.6
3.6 Research
using
investments
to pay down
mortgage
FNSFPLN502.3
FNSFPL508.3
Calculate whether your clients would be better off in after tax dollars:
 Using their investment monies ($36,000) to pay down their
mortgage; or
 Retaining the investments
You will need to calculate comparison savings in after tax dollars over the
next 7 years to clear the debt before Donna retires.
Interest saved
(by using investment to pay down mortgage)
Interest earned
(by retaining investments in Dennis’ name)
Marks
The investment which the client has invested in
earns an interest income of $ 1,560 p.a which is
mainly due to amount of mortgage is $9,100 per
annum. In case the client decides to use the
investment for paying the mortgage than the
mortgage liability would be reduced by $ 36,000.
Still a significant portion of the loan would be
remaining which can be covered by taking a
loan.
The interest savings that the client would be able
to make is
= $ 36,000* 7% = $ 2520* 7 years
= $ 17,640.
Therefore, the savings in interest would be $
17,640 in case the client decides to make the
down payment.
In case the client decides not to use the
investment amount for paying off mortgage than
the client would be able to retain the full amount
of interest which would be of $ 1,560. If it is
adjusted by the tax implication, the net amount of
interest earned would be $991.
/ 4
Would Dennis and Donna be better off keeping their investments (bank account,
term deposit and cash management account) or use the funds to pay down their
mortgage? By how much?
Keep Investments OR Pay Mortgage? Marks
1. Keep their investments? No / 1
2. Show your calculations Yearly payment of mortgage instalments = $ 9,100
If the clients decide to pay off the mortgage through
investment, then it would reduce the interest income by
$(17600-9100) = $ 8500
/ 1
3. By how much? Mortgage will be paid by $ 36,000 and the remaining
amount would be debt of $ 94,000. / 1
Subtotal / 68
continued
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Assessment Task 3.7
3.7 Calculate
the future
value of
investment
needs
FNSFPLN502.3
FNSFPL508.3
Using the ‘ Compound Interest Formula’ , calculate the future value of
your client’s investment needs, assuming a:
 3% pa rate of inflation (net of inflation), and
Complete your answers in the table provided below bearing in mind the
different timing requirements for funds. Show calculations using 8
decimal places, but the final results in two decimal places.
Then summarise your findings in terms of the future values (FV) arrived
at, in relation to the client’s stated present values (PV).
Calculations Marks
Uni Fees
Present Value (PV) = $120,000
Inflation rate per year (r) = 3%
Number of years (n) = 12
/ 2
/ 2
/ 2
Formula:
FV = PV(1 + r)n
Uni Fees
FV = $120,000 * (1+0.03)12
= $120,000 * (1.03)12
= $171,091.
/ 2
/ 2
/ 2
Summarise what the future value of investment needs will be
Summary Marks
The UNI fees which is computed above is shown to be $ 171,091
/ 3
Subtotal / 83
continued
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Assessment Task 3.8
3.8 Calculate
the future
investment
needs
Using the formula provided below to calculate the regular investment
required to create a future value from the previous page, determine how
much Donna and Dennis would need to invest each year for 12 years into
an Investment Bond so as to provide for their grandchildren’s university
education (Show calculations using eight decimal places, but the final
results in two decimal places..
In your calculation, assume
 a 6% pa return (after management fees),
 no entry fee (rebated), and
 compounded annually.
Provide your answers in the space provided below
Calculations Marks
Variables:
Future Value (FV) = $171,091
Interest rate expressed as a decimal (r) = 0.06
Number of years (n) = 12
/ 1
/ 1
/ 1
Formula:
Savings Required (PMT) = [FV x r]
[(1 + r)n -1]
Calculation:
Savings Required (PMT) = (10265.46) / (1+0.06)12
= $10,142
/ 1
/1
/ 1
The advantage of Investment Bonds:
Add this annual amount to the total expenses in the second table in task 3.2 to give
you an updated surplus income figure.
Calculations Amount Marks
Surplus income after current expenses and tax minimisation $ 30,514 / 1
LESS allocation for investment bonds $ 10,142 / 1
Updated surplus income $ 20,372 / 1
Subtotal / 92
continued
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Assessment Task 3.9
3.9 Compare
investment bonds
Click on the below links to research Investment Bonds in order to make a recommendation for the clients. All the information
required to answer the questions below can be found by clicking on appropriate links and downloading the Product Disclosure
Statements when in the websites:
https://www.commbank.com.au/personal/investments/investment-growth-bond.html
http://centuria.com.au/wp-content/uploads/2017/12/0692-CLL-Investment-Bonds-standard_A4-PDS-FormsSPDS_Dec17.pdf
In your analysis, you should consider the security of the fund in terms of the reputation of the product provider, their experience in
the investment bond market, the long term average return and whether the investment options match your client’s risk profile.
Question Product 1 Product 2 Marks
1.Provider CommInsure (Commonwealth Bank of Australia) Centuria / 1
2.Product name Investment Growth Bond Centuria Investment Bonds / 1
3.URL of PDS PDS:
https://www.commbank.com.au/content/dam/commbank/personal/a
pply-online/download-printed-forms/investment-growth-bond-
CIL392.pdf
Performance report:
https://www.commbank.com.au/content/dam/commbank/personal/a
pply-online/download-printed-forms/IGB.pdf
PDS:
https://centuria.com.au/wp-content/uploads/2018/02/0692-CLL-
Investment-Bonds-standard_A4-PDS-FormsSPDS_Feb18.pdf
Return and fees:
https://centuria.com.au/investment-bonds/portfolio/balanced-bond-
fund/
/ 1
4. PDS version No. & issue date 19 January 2018 30 July 2017 / 1
5.Experience The company has been providing investment and insurance
services for over 140 years with a customer base of over 4 million.
ASX listed company with an asset base of $4.9 billion. The company
has experience of more than 20 years as a property funds manager.
/ 1
6.Return 1 Yr 5.22% 7.50% / 1
7.Return 5 Yr 4.25% 6.75% / 1
8.All Fees (MER, admin, exit & entry) 1.30% per annum 1.875% / 1
9.Investment options Diversified portfolio option Balanced Bond Fund / 1
10. Risks Medium to high Moderate risks / 1
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Preferred Option: Why? / 5
Considering the risk profile of the client, investment bonds options provided by CommInsure would be the best choice. The company is a reliable company and has
an experience of more than 140 years. The company has provided stable and secure investments and is completely reliable.
Subtotal / 107
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Assessment Task 3.10
3.10 Calculate
mortgage
payments to
pay-out home
loan
FNSFPLN502.3
FNSFPL508.3
After researching their current home-loan, Donna and Dennis would save
money by considering lowering the interest rate on their mortgage to
4.5%.
Using the Home Loans Repayment Calculator from Your Mortgage7,
calculate what their current repayments would need to be increased to so
as to pay-out the home loan over 7 years.
Complete your answers in the table provided below.
Calculations Marks
Variables:
Loan Amount (after strategy in task 3.6) $ 94,000
Interest Rate 6%
Term 7 years
New Repayments pa 16,838* pa ( 1403/mth x 12 )
Current Repayments $ 9,100 pa
Net Increase $ 7,738 pa
/ 1
/ 1
/ 1
/1
/1
/1
Do you think that 7 years to pay-out the home loan is:
o too short,
o too long, or
o appropriate.
Provide a justification for the selection that you have made above:
The time period which is considered for the purpose of paying off the loans is appropriate
and the client can easily manage to payoff principle as well as interest amount
appropriately.
/ 1
/1
Calculations
Using the Net Change amount show the effect this will have on the cash-
flow table after Task 3.8 to update the total expenses and surplus income
figures.
Amount Marks
Surplus income after current expenses and tax minimization, LESS allocation
for investment bonds
$ 20,372
Net Change to repayments $ 7,738 / 1
Updated surplus income $ 12,634 / 1
7 http://www.yourmortgage.com.au/calculators/
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Subtotal / 117
continued
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Assessment Task 3.11
3.11
Calculate the
value of
investments
on retirement
FNSFPLN502.3
FNSFPL508.3
Using the Future Value of a Cashflow formula, calculate the gross value
of potential additional savings of $2,000 every 6 months assuming:
 Additional savings will continue until Dennis retires at 65, and
 An investment return of 8% pa compounding.
For the purpose of this calculation, you will need to calculate the number
of periods until Dennis retires and the 8% interest rate will be
compounded half yearly (ie. 4% per period)
Complete your answers in the table provided below.
Calculations Marks
Variables:
6 monthly contribution (PMT) = $ 2,000
Interest rate per period (r) = 8 % p.a. i.e. 4% per period
Number of periods (n) = 26
/ 1
/ 1
/ 1
Formula:
FV =PMT ´ ( 1+ r ) n−1
r
Calculate investment savings:
(Show your workings)
FV = 2,000 X [{(1.04) ^26-1} / 0.04]
= 2,000 X (2.772-1) / 0.04
= 2,000 X 44.3
= $ 88,600_____________
/ 1
/ 1
/ 1
/ 1
Will these additional savings assist the clients with meeting any previous goals or
objectives identified? Please explain and complete an updated cash flow table.
Updated cash-flow table:
Net cashflow after Task 3.10 less annual amount required above = $12,634 - $4,000= $ 8,634
Subtotal / 124
continued
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Assessment Task 3.12
3.12
Additional
super
contributions
FNSFPLN502.3
FNSFPL508.3
Would non-concessional super contributions be better than Education
Bond for saving for the grandchildren’s university education?
In this activity, you are required to explain the subjective reasons why an
alternative strategy to Investment Bonds, namely making non-
concessional superannuation contributions may be a better option for
saving towards university fees for your client’s grandchildren.
Mark
The case shows that the clients want to make investments in bonds that would help in
generating revenue for helping in their grandchildren’s education. The client should invest
in certain insurance policies to cover the needs of the education of the children as well as
provide them with future benefits.
/3
Subtotal / 127
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Assessment Task 3.13
3.13
Research
insurance
needs
FNSFPLN502.3
FNSFPL508.3
Determine the personal insurance needs for your clients, considering
their current insurance, appropriate policy ownership and changing needs
as they transition towards retirement.
Since there are a number of methods that can be used by you to
calculate insurance needs, you will be assessed on whether you can
provide a reasonable basis for your calculations. Therefore, it is important
to provide details of your calculations and to fully explain your method of
calculation.
I. What insurance cover do your client’s already have?
insurance cover Marks
1
The clients hold insurance for private health cover, car, house and content. Donna holds a personal life
and TPD cover provided under the superannuation fund. / 1
II. What are your client’s Term Life insurance requirements?
In your calculations, you should assume that the:
 remaining spouse continues working to retirement as planned,
 deceased bequeaths all assets to the remaining spouse,
 remaining spouse is the beneficiary of existing insurance held,
 no provision in the life insurance calculation needs to be made for topping
up superannuation, and
 Donna is able to increase her Life and TPD cover under her current
superannuation fund, and Dennis can establish Life and TPD cover under
his superannuation fund.
How much should Donna’s life insurance cover be increased by?
How much Life insurance does Dennis require?
Notes Donna Dennis Marks
Clear Debt (after strategy in Task 3.6) 94,000 94,000
Income Replacement (annual income
times years until retirement, plus Dennis’
part time income)
630,000
($90,000 per
annum*7)
465,000
($45,000*7+$25,000*6)
/1
Grandchildren’s University Fees 171,091 171,091 /1
Funeral Costs 7,449 7,449 /1
Total nil nil /1
LESS
Insurance currently held 100,000 nil /1
Superannuation currently held 220,000 51,000 /1
Additional Cover Required 582,540 686,540 / 1
Total Cover (Insurance held + Additional) 94,000 94,000 /1
Subtotal / 136
Continued
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Assessment Task 3.13
III. What are your client’s TPD insurance requirements?
(Assume $100K Home modification, medical costs)
Notes Donna Dennis Marks
Clear Debt (after strategy in Task 3.6) 94,000 94,000 /1
Income Replacement (annual income times years
until retirement, plus Dennis’ part time income)
630,000
($90,000 per
annum*7)
465,000
($45,000*7+
$25,000*6)
/1
Home Modification/Medical Costs 100,000 100,000 /1
Total 30,000 nil /1
LESS
Insurance currently held 100,000 nil /1
Superannuation currently held 220,000 51,000 /1
Additional Cover Required 534,000 608,000 / 1
Total Cover (Insurance held + Additional) 94,000 94,000
IV. What are your client’s Trauma insurance requirements? (assume $50K is required
for medical expenses)
Notes Donna Dennis Mark
Clear Debt 94,000 94,000
/2
Medical Expenses 50,000 50,000
Total 144,000 144,000
V. What are your client’s Income Protection insurance requirements?
Notes Donna Dennis
Income 90,000 45,000
Plus SG (9.5%) 8,550 4,275
Equals Insurable Income 98,550 49,275 / 2
Maximum Monthly Benefit Available (75%) 73,913 36,956
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ADDITIONAL INFORMATION
Assume you have obtained 3 Trauma & 3 Income Protection insurance quotes from
3 different Product Providers
COMPANY TRAUMA ($ per-month) INCOME PROTECTION ($ per-
month)
Donna Dennis Donna Dennis
A Life Insurance Company 153.07 181.24 182.58 121.87
Ins at its best co 155.84 180.16 181.44 120.55
AMP 152.06 179.14
Zurich 179.37 118.05
Please pick the quotes from the company that has quoted you the lowest premium and
use this information to complete the assessment task 3.13.
Subtotal / 149
Continued
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VI. Using the information provided in above stated table. Complete the quotation of the
monthly cost for Trauma
Monthly Cost Donna Dennis Mark
331.2 152.06 179.14 /1
VII. Using the information provided in the above stated table. Complete the
quotation of the monthly cost for Income protection
Monthly Cost Donna Dennis Mark
297.42 179.37 118.05 /1
VIII. What is the total annual cost of insurance cover proposed? (Monthly premiums
x 12 for Trauma and Income Protection)
Donna Dennis Mark
Total Monthly Insurance cost 331.43 297.19
/1Annual cost for recommended Cover 3977.16 3566.28
IX. Complete an updated cash-flow analysis after all of your previous recommendations have
been taken into consideration and comment on the final outcome:
Calculations Amount Marks
Surplus income after Task 3.11 $8,634
/ 1
LESS annual cost of recommend insurance cover $ 7,543.44
Total surplus income $ 1,090.56
Subtotal / 153
Continued
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Assessment Task 3.14
3.14 Identify
insurance
ownership
FNSFPLN502.3
FNSFPL508.3
In the table below, indicate whether the insurance premiums would be:
a) Fully tax deductible
b) Partly tax deductible
c) Not tax deductible.
Then make a recommendation on whether which insurance policies
should be held by your clients’ superannuation fund or personally and
state your reasons.
a) Tax Treatment of Insurance Premium
Policy
Ownership
Life
Insurance
TPD
Insurance
Trauma
Insurance
Income
Protection
Super Fund Fully tax
deductible
Partly tax
deductible
Not tax
deductible
Fully tax
deductible
Personally Fully tax
deductible
Partly tax
deductible
Not tax
deductible
Fully tax
deductible
b) Policy Ownership
Policy
Ownership
Life
Insurance
TPD
Insurance
Trauma
Insurance
Income
Protection
Donna Super Super Personally Personally
Dennis Super Super Personally Personally
c) Why?
Indicate in the table below the reason why you chose the above ownership structure:
Policy
Ownership
Life
Insurance
TPD
Insurance
Trauma
Insurance
Income
Protection
Reason These are tax
deducible
This caters to
superannuation
and thus is tax
deductible
These policies
are not covered
under tax
deductions
These policies
are covered
under tax
deductions
Mark /1 /1 /1 /1
Subtotal / 156
Continued
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Assessment Task 3.15
3.15 Compare Life
Insurance
products
FNSFPLN502.3.3 and 3.4
FNSFPL508.3.3 and 3.4
Using information obtained from the previous activity, analyse the respective insurance products offered by both AMP Elevate
Insurance and Zurich Futurewise. In your analysis you should consider the experience of the product provider, definitions of Income
Protection and Trauma, their claims process and the cost of insurance.
To ensure that you are dealing with the current PDS, please provide the internet link (URL), version number and release date.
Please refer to attached AMP & Zurich PDS to complete this section
Question AMP Macquarie Marks
1. Provider/Underwriter AMP Elevate insurance Zurich FutureWise / 1
2. Experience/
reputation AMP limited was established in 1849 as a non-profit insurance company.
It provides all kinds of insurance covers to its large customer base.
Zurich insurance was founded 146 years ago. It is one of most trusted
public company for insurance services.
/ 1
3. Product name Trauma insurance Income protection / 1
4. PDS version number
& release date
10 June 20178 1 October 20169 / 1
5.Definition of Income
Protection
Income protection provides cover for temporary disability where the
person is unable to work due to sickness and injury. Income protection
policy generally provides monthly cover against loss of income of an
individual through income replacement.
/ 1
6.Definition of Trauma Trauma includes medical treatment and after-illness or injury
adjustments. Trauma insurance provides lumpsum cover against medical
consequences
/ 1
7.Claims process In accordance with the terms and condition mentioned in the deed but
notification about the event or situation should be given as soon as
In accordance with the terms and condition mentioned in the deed / 1
8 https://www.amp.com.au/content/dam/product/elevateinsurance/07316B_AMP_Elevate_insurance_product_disclosure_statement.pdf
9 https://www.zurich.com.au/content/dam/au-documents/personal/life-insurance/zurich-futurewise-pds.pdf
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possible.
8. Cost of Income
Protection $179.37 per month for Donna and $118.05 per month for Dennis / 1.5
9.Cost of Trauma $152.06 per month for Donna and $179.14 per month for Dennis /1.5
10. Risks Market risks as applicable Risks not applicable / 1
Subtotal / 167
Continued
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Assessment Task 3.16
3.16
Research
estate
planning
needs
FNSFPLN502.3.6
FNSFPL508.3.6
Your clients have expressed a preference to see a female wills and
estate specialist who lives relatively close to them in Hurstbridge Victoria
(postcode 3099) to help them establish a will and power of attorney for
your clients.
Using the Accredited Specialist Directory 10 on the Law Institute of
Victoria website, identify the two specialists located near your clients who
can help can provide appropriate advice.
a) List eight (8) local Wills & Estate Specialists
Local Wills & Estate Specialists Marks
1 Kew: Natoli, Paul
2 Kew: Van Otterdyk, Charlotta
3 Hawthorn: Haley, Luke
4 Hawthorn: Labiris, Michael
5 Eltham: Guyett, Naomi
6 Ringwood: Briffa, Tanya
7 Ringwood: Sunderland, Clare
8 Kew: Jones, Suzanne / 1
b) List below the details of the 1st female Wills & Estate Specialist
First Female Wills & Estate Specialists Marks
1 Ringwood: Sunderland, Clare / 1
c) List below the details of the 2nd female Wills & Estate Specialist
Second Female Wills & Estate Specialists Marks
1 Kew: Jones, Suzanne /1
Subtotal / 3
Total / 170
10 http://www.liv.asn.au/Specialists.aspx
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Assessment Task 4
4.0
Summarise
and present
results of
research
FNSFPLN502.4
FNSFPL508.4
The next step in the Financial Service Advice Process includes the
extraction and analysis of information according to research requirements
and parameters.
This requires that:
 Information on financial strategies and products is collated and
checked against research specification,
 Written performance, trend and risk analyses are prepared and
checked against research specification,
 Any qualifications or issues for further research are described and
documented, and
 Research findings are presented to the financial planner.
Complete your answers to this assessment task in the space provided in
the following pages.
Marks / 36
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Assessment Task 4.1
4.1 Check
findings
FNSFPLN502.4.1 and 2
FNSFPL508.4.1 and 2
For each one of the Research Questions that you investigated in relation
to the case study, summarise your:
 answer to the research question, and
 assessment of risk11 on a scale of 1 to 3 (where 1 is high)
Provide your answer in the table provided below.
Generic Needs (a) Research Specifications / Question (b)
Answer
(c)
Risk
Mark
Cashflow Management
1. Income 1. Given the annual adjustment to the superannuation
contributions contemplated in the tax minimisation
strategy in 3.2, how would this affect surplus savings?
2. How much surplus income is now available each year to
invest?
1. Reduces
the income
2. $30,514
1
2
/ 1
/ 1
2. Tax
minimisation
3. How much tax is paid on the cash and fixed interest
investments?
4. If the cash and fixed interest investments were
transferred to Dennis’ name how much tax would be
saved?
5. How much tax would Donna save if she salary sacrificed
to her super contribution limit?
6. How much extra Low Income tax Offset would Dennis be
entitled to if he salary sacrificed all of his income above
the 19% tax bracket?
3. $569
4. $39
5.$2,501.2
5
6. $249
2
/ 1
/ 1
/1
/ 1
3. Expenses 7. How much can the interest rate on the mortgage
potentially be reduced by?
8. How much interest pa could potentially be saved if the
cash and fixed interest funds were applied to the
mortgage?
7. 1%
8. $1,560
1
/ 1
/ 1
Wealth Creation
4. Superann-
uation
9. Given the contemplated salary sacrifice changes, how
would this affect the annual superannuation savings
(after tax)?
10. What would be Donna and Dennis’ projected super
savings in an average market on retirement in 7 years
time?
11. What would be Donna and Dennis’ target super savings
to fund their desired retirement income?
12. What superannuation shortfall will they have after all
recommendations have been put place?
9. The
annual
superannu
ation
savings
would
increase
10.
$697,111
11.
$1,376,180
12.
$680,676
3
/ 1
/ 1
/ 1
/ 1
11 Notes:
(1) there should be only one risk assessment per Generic Need.
(2) Risk to the client refers to the risk associated with the products or services that are being investigated in relation to each
Generic Need.
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Subtotal / 12
continued
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Assessment Task 4.1, continued
Generic Needs (a) Research Specifications / Question (b)
Answer
(c)
Risk
Mark
5. Investment
Planning
13. What is the future value of $120K university fees in 12
years?
14. How much do Dennis and Donna need to contribute
each year towards the grandchildren’s education bonds
to reach their goal?
15. Once all recommendations have been put in place,
what is their annual surplus income?
16. What future value of investment savings can be
generated if they save an additional $2,000 every six
months at a rate of 8% pa compounded six monthly?
17. How much of these funds will need to be contributed
towards super to make up the shortfall?
13.
$171,091
14. $10,142
15.
$1090.56
16. $88,600
17. $88,600
3
3
2
3
1
1
/ 1
/ 1
/ 1
/ 1
/ 1
6. Debt
reduction
18. How long it would take to pay off the home loan if the
new rate and additional repayments recommendation
is followed?
19. Is it financially better to retain the investment and put it
into Dennis’ name or to use the funds to pay down the
mortgage?
20. By how much?
18. 7 years
19. Use the
funds to pay
down the
mortgage
20. $36,000
2
2
2
/ 1
/ 1
/ 1
Wealth Protection
7. Personal
Insurance
21. How much Term Life insurance does Donna require?
22. How much TPD insurance does Donna require?
23. How much Trauma Insurance do Donna and Dennis
require?
24. What is the maximum amount of Income Protection
Donna can apply for?
25. What is the maximum amount of Income Protection
Dennis can apply for?
26. What would be the approximate monthly cost of their
stand-alone insurance cover?
21.
$582.540
22.
$534,000
23.
$144,000
each
24. $73,913
25. $36,956
26. $628.62
(Donna:
$331.43
Dennis:
$297.19)
1
1
3
2
2
3
/ 1
/ 1
/ 1
/ 1
/ 1
/ 1
8. Estate
Planning
27. Who are the local will and estate specialists? 28.
Ringwood:
Sunderland,
Clare and
Kew: Jones,
Suzanne
2
/ 1
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Subtotal / 27
continued
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Assessment Task 4.2
4.2 Further
research
FNSFPLN502.4.3
FNSFPL508.4.3
In the space provided below, detail:
 At least one additional research question that you believe needs
answering, and
 If specialist research or advice is required.
You should consider the above in relation to each of the eight generic
needs specified.
Generic Needs Additional Research Questions Mark
Cashflow Management
1. Income  Are there are any potential additional sources of income, such as an
inheritance?
 Identifying the current potential sources of revenue for Dennis and
Donna?
/ 1
2. Tax
Minimisation
 Can we confirm with your accountant if there are any issues that should
be considered in relation to the proposed strategy?
 What are the most viable options which are available to the client for
minimizing the tax implications?
/ 1
3. Expenses  Do you think that your current expenses will continue to be appropriate
into retirement?
 State the ways in which expenses relating to post retirement can be meet
effectively?
/ 1
Wealth Creation
4. Superann-
uation
 Are you comfortable with Dennis’ superannuation being rolled into a more
appropriate fund to match his risk profile?

/ 1
5. Investment
Planning
 Do you understand how Investment bonds work?
 Is there any plans for undertaking further investments by taking on new
portfolios?
/ 1
6. Debt
Reduction
 Are there any other debts that should be considered in the plan (e.g.
credit card debt)?

/ 1
Wealth Protection
7. Personal
Insurance
 Are there any insurance providers that you would prefer we not
recommend?
 Is there any plan to take additional funds in the form of borrowings in
future?
/ 1
8. Estate
Planning
 Do you have your own solicitor that could help you with your Estate
Planning requirements?
 Are you satisfied with the current plan which is developed on estate
entitlement?
/ 1
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Subtotal / 8
Total / 35
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