Initial Interview

Assessment 1 (part 1) – Initial Interview

Initial interview

What is your name? Kenneth Bartlett
What is your age? 23
What is you marital status? In a relationship
What is home address 6 Douglas Avenue, Bentley, WA
Do you have dependants No
Do you have insurance cover? No
Are you employed Yes
What is your employer’s name CarsRus
Are you pensionable Yes
What is your annual income $85,000 pa
What is your annual expense $23,480 pa
What is the value of your assets and liabilities $161, 018
What is your next monumental expenditure? Building a family home worth $450,000
500,000
How do you expect your annual earnings to grow? Significantly
Which investment plans would you prefer? That is why I need the financial adviser to help
me out
What are your goals and objectives? Pay off personal loan, start a business and build a family
home
What are you concerns and purposes for seeking advice? To understand whether or not I can
afford a home and the amount I can borrow, to understand government benefits, what
investments are suitable for me, how to save money towards my business, to understand
whether or not I need insurance cover, and lastly how I can engage the super account.

Summary of client position
Ken is a 23-year-old mechanic, at CarsRus. He has been raised up by his grandmother
and loves Go-karting when free. He is also a member of Go-karting Australia and races every
fortnight. He has an annual income of income and expense is $85,000 and $23,480 respectively.
He has a personal loan from Go-Kart Company. On the other hand, his employer pays a super
contribution of 9 percent of his income. While his parents died when he was still young, his
grandfather died recently. He received an inheritance and invested kept part of the some in the
bank account while the rest into CBA shares. However, he is not sure what to do with it.

Background notes

Ken has been living with his grandmother and wants to move out and buy his first home.
He is a member of Go-karting Australia and races every fortnight. He has a Personal loan that
came with the promoter of the Go-Kart company during an exhibition. He has been in a
relationship for less than two years and does not intend to get married soon. His parents died
when he was young. The grandfather died recently, and he became the heir, part of which was
kept in the bank and the rest into the CBA shares. In a nutshell, Ken is not sure how to invest.
Furthermore, Ken has no extra future expenses apart from house purchase. He also gives money
to his grandmother to pay for food and bills on a weekly basis. He does not have an insurance
cover or budget.
A budget is important especially to get accurate expenses to determine whether or not to
establish a buffer. He has been a chronic smoker since high school; he smokes 2.3 packets per
week. He had a knee injury on the left knee two years ago from the Go-Karting accident and has
recovered. Also, Ken is happy with his current job and does not want to consider other options.
He has started as an apprentice and open to various types of investments. Nonetheless, he is
particularly interested in shares, and he is not sure about the risk associated with investing and
needs professional advice.

Client’s goals and objectives

Set up a saving strategy to
 Pay off persona loan in 1 to 2 years, or immediately
 Start a business so as to allow him plan as well as ascertain success in 3 to 6 years
 Build a family home in a year’s time worth $450,000 to 50,000

To grow as well as retain savings security.
To boost retirement savings in superannuation and increase your personal wealth
To realize adequate retirement income for 60 years.
To seek expert advice to get a health insurance cover to safeguard your savings
To put in order your estate plan and implement the power of attorney
To continue Go-karting membership and race every fortnight

Client’s concerns and purpose for seeking advice

Ken, your primary concern is how to manage your personal loan
Whether he can afford your first home and how much you can borrow
Government benefits he is entitled to
Suitable investments
Boost savings towards your business
The need for insurance policy and what to do with his super accounts

4
Assessment 1 (part 2) – Terms of Engagement
(Clarify)

XXX Financial Planners
Mr. Abc Xxx
Brooklyn 123
New York
USA
15 th October
Mr. Kenneth Bartlett
6 Douglas Avenue
Bentley, WA
USA
Dear Mr. Ken:
I am grateful to meeting you. I take this moment to appreciate you for the trust bestowed to
working with you as your financial planner. This letter of engagement highlights particular
terms and conditions of the financial planning engagement between:
XXX Financial Planners and Mr. Ken
In the event that the scale or terms of engagement are altered, they should be put not only in
writing but all parties should consent to it. All your personal details will be kept private. During
the engagement process, I may, at some point, be expected to seek opinion from other third
parties. However, this can only be done with your permission to divulge your private detail. As
deliberated in our first session, the engagement will incorporate services needed to create your
financial plan:
 To review and prioritize your goals and objectives
 To draft an overview of your financial background as it is currently by factoring in net
worth statement, cash flow summary, and insurance analysis
 Assessing you outlay portfolio and create an wealth management approach
 Formulate a financial control approach that includes financial forecasts of assets expected
at an approximated retirement period.
 Evaluate net estate value
 Determine tax planning approaches to enhance financial status
 Draft a properly written financial plan. It will encompass propositions geared to meeting
your stipulated goals and objectives, underpinned by the appropriate fiscal synopsis.
 Create an action plan to execute propositions agreed upon
 Obtain informed expertise from other experts as needed to help with the execution of the

action plan
 To help you execute the financial plan
 Determine whether or not your financial plan should be revised accordingly
This wills a continuous professional corporation. At least, we will meet yearly to make sure that
the plan is still suitable based on your goals and objectives. Our services will be a flat rate
charge. We will charge $5500 for creating SOA, $1,320 for yearly review, $540 for
implementation assessment meeting and $400 for any other business. Kindly present a check of
$5500 with copy of TOE. Another $ 1,320 will be charged at our next meeting. You consent to
pay any outstanding fee within two weeks. Please make all checks payable to XXX Financial
planners. Kindly note that we do not receive any referral charges from other experts that we may
refer you to.
To make sure that the financial plan has good recommendations; it’s your duty to supply us with
correct as well as full data about your personal and financial condition, with your objectives and
goals, issues and concerns, insurance cover, employment, retirement and important legal
information. The list is not complete, and any additional information should be provided on time.
It is also your duty to make sure that
It is also your duty to make sure that any modification to the above conditions should be reported
to us immediately because they can significantly affect the recommendations. We have no
conflict of interest in accepting this TOE. We will advise accordingly in case of any arising
conflict of interest. We acknowledge the duty to comply with XXX Financial Planners’ codes
and federal rules. During this process, we will prioritize your goals in offering professional
services. Because the TOE comprise of financial planning, we have the responsibility to serve as
fiduciary.

We look forward working with and realizing your financial goals and objectives.
Faithfully,

Abc Xxx
XXX Financial planner: Client: Kenneth Bartlett
I accept the terms of this engagement letter. I accept the terms of this engagement letter.

Assessment 2

Covering Letter

Mr. Abc Xxx
Certified Representative
XXX Financial planners
Brooklyn, 123
New York
15 th Oct 2015

Mr. Kenneth Bartlett
6 Douglas Avenue
Bentley, WA
Dear Mr. Ken
Statement of Advice
In our meeting on 14 th Sep 2015, you requested for my financial advice. For that reason, I have
created and attached your SOA, which comprises of; the executive summary, basis for advice,
recommendations, outcomes, disclosure, disclaimer, review, implementation schedule authority
to proceed, fees and commission.
To start with, go through the document before we continue. Take time as much as needed. In
case, you have any concerns or changed your mind since we last met, please inform us as it can
affect the entire process. Do not ignore the attached appendix, because it contains important
information including; assets, liabilities, net wealth income, and expenses, after-tax
surplus/deficit.
In the case of any issues or questions email us at XYZ or call us on 1111111111. For more
details about XXX Financial Planners, check us at www. xxfinancialplanners.com.
We look forward working with you
Yours faithfully
Abc Xxx
Financial Planner

Cover Page

Financial plan including a Statement of Advice

Prepared for:

Kenneth Bartlett
6 Douglas Avenue
Bentley, WA
15 th Oct 2015

Prepared by:
Abc Xxx
Certified Representative
XXX Financial planners
Phone: 1111111111
Fax: 1111111111
Kindly run through the document with a detailed eye. In the case of any question feel free to
contact a financial planner. Also, you should go through that you understand other documents
you have been provided, such as Financial guide as well as disclosure documents. In case, you
consent to put into action the propositions presented in this document, do so only with the
recognition that you have made the financial decision to assume the suggestions and you are
accountable for any issue that may arise.

Important notice
You have the right to get a Statement of Advice anytime we provide you with personal
information. Personal fiscal guidance is a suggestion that puts into consideration your needs,
financial condition or goals.
A Statement of Advice is an account of guidance offered to you and entails details
regarding the reason upon which the advice is provided, remuneration information we may get
such as charges, commission and other forms of benefits, interests, connections that are likely to
affect the recommendation I offer you.
Read this document carefully. In case, detailed information was not presented or
consented that certain objectives should be included, investment risk or insurance plan that does
not meet your needs and objectives. You should then evaluate if the advice offered is suitable
with regards to your personal conditions, goals, and financial requirements. The instructions you
provided us do not put any hindrances on the level of our recommendation. You are willing to
assess your whole financial condition.
If informed to buy a financial service or product, we will provide you with the Disclosure
Statement. You must read it keenly and in case you have issues or concerns make sure they are
addressed to your fulfillment prior to buying the product. Also, you must make sure that you
carefully go through other documents we provide you such as Privacy Policy and Financial
Guide.
Since stock markets, economy and legal structures can vary remarkably while your
personal financial condition can also change, our advice is valid for 30 days beginning from the
date of the Statement of Advice. In case you fail to implement this recommendation in this time
frame, we can assess and if need be, modify our recommendation prior to implementation.
We do not give any warranties on investment results, but, particular providers may
provide such warranties. We base our forecasts on reasonable assumptions about potential
returns. When economic situations become unfavorable, income, as well as capital returns, can
be lowered something that can be harmful.
Our advice is based on the existing taxation guidelines. Nevertheless, we are competent
when it comes to giving tax recommendations. Prior to making the decision to invest, you must
ask for independent certified taxation and legal information.

Executive Summary

Kenneth Bartlett, this section presents you with an overview of the advice we are
offering, the target objectives, specific recommendations and forecasted results if the complete
recommendation is executed. All these parts will be discussed in detail in this Statement of
Advice. As such, it’s of great importance that you carefully go through it because it presents
decisions as well as the course of actions to take.

a. Personal details
Kenneth Bartlett, you are 23 years old. You have been living with your grandmother and
loves go-karting when free. You are not ready to get married. You are also a member of Go-
karting Australia, and you race every fortnight. Ken, you are a mechanic at CarsRus. Your
income is $85,000 p.a and you have a personal loan from Go-Kart Company. Your employer
pays a super contribution of 9 percent of your income. You parents died when you were young.
Your grandfather recently died, and you received an inheritance. You invested some into a bank
account and rest into CBA shares. However, you are unsure what to do with it.

b. Goals and objectives

Set up a saving strategy to build your first home, start a business and pay off a
personal loan.
To grow as well as retain savings security.
To boost retirement savings in superannuation and increase your personal wealth

To realize adequate retirement income at 60 years.
To seek expert advice to get a health insurance cover to safeguard your savings
To put in order your estate plan and implement the power of attorney
To continue Go-karting membership and race every fortnight

c. Recommendations

We present detailed assessment concerning the recommendations and how to implement
them.
Insurance cover- you should seek expert advice to get life and disability coverage. Ken to
increase income cover to supplement his present super fund.
Estate planning- seek legal advice to write a Will and implement the power of attorney.
Talk about some of the effective strategies to transfer assets into the Will and their value.
Retirement savings- Ken to start salary sacrifice his income into a superannuation account.
In this approach, when you turn 60 years, you can implement a retirement transition tactic where
you will balance your working hours and continue contributing your income in the
superannuation, to fulfill any gap in the income.
Personal investments- deposit money in your Westpac Savings Account. In addition,
start investments to boost your wealth.

d. Expected outcomes/projections

Insurance Cover; you will have enough coverage to fulfill your financial effects of
death or incapability to work, to ensure that your retirement objectives are realized.
Estate planning; this will present extra security such that all your requests will be
accomplished, and your assets will be transferred in the right way.
Retirement savings; with your increase super savings and without involvement in
retirement transition, we foresee that you super savings will be adequate to fund your retirement.

Table of Contents
Assessment 1 (part 1) – Initial Interview 1
Assessment 1 (part 2) – Terms of Engagement (Clarify) 4
Assessment 2 6
Covering Letter 6
Cover Page 7
Executive Summary 9
a. Personal details 9
b. Goals and objectives 9
c. Recommendations 10
d. Expected outcomes/projections 10
Table of Contents 12
Basis for Advice 12
a. Full Client Details 12
b. Goals and Objectives 13
c. Concerns and Issues 15
d. Risk Profile 16
e. Assumptions 17
Recommendations 17
a. Debt & Cash flow management 17
b. Wealth creation & investment advice 19
c. Taxation planning 19
d. Risk management & insurance advice 20
e. Estate Planning 24
f. Retirement & Superannuation 26
Outcomes 27
Fees and Commissions 28
Disclosures 29
Disclaimers 29
Review 31
Implementation Schedule 32
Authority to Proceed 33

Basis for Advice
a. Full Client Details

Kenneth Bartlett, you are 23 years old. You have been living with your grandmother and
loves go-karting when free. You are not ready to get married. You do not have a budget
indicating that you are not able to get an accurate expenditure figure, as such you may need to
establish a buffer. You also have high credit card balance amount. You are also a member of Go-
karting Australia, and you race every fortnight.
Ken, you are a mechanic at CarsRus. Your income is $85,000 p.a and you have a
personal loan from Go-Kart Company. Your employer pays a super contribution of 9 percent of
your income. You parents died when you were young. Your grandfather recently died, and you
received an inheritance. You invested some into a bank account and rest into CBA shares.
However, you are unsure what to do with it.

The table below illustrates your assets as well as liabilities;
Table 1: Assets and Liabilities
Asset Market
value

Liability Net
value

Notes

Motor Vehicle – Holden
Astra 2006

$6,000 Nil $6,000 –
Sodi Go Kart ST32 DD2 $10,000 ‘ 10,000 –
Personal effects $15,000 15,000
ING Savings Maximiser
Account

$65,000 ‘ 65,000 –

Westpac Savings
Account

$5,000 ‘ 5,000 No interest

Westpac Savings
Account

$50,000 ‘ 50,000 fully franked dividends,
dividends reinvested

CBA Personal loan (3
years

$8,000 ‘ $5,518 15.15% Interest, P&I, paid
monthly, 23 months remaining

14
CBA Credit card $10,000 ‘ $4,500 Pays off the balance every month
Superannuation $16,000 ‘
Net worth 161,018

Figure 1: Graph showing assets and liabilities

0
10000
20000
30000
40000
50000
60000
70000

Market value

Figure 2: Graph showing net value of assets and liabilities

0
20000
40000
60000
80000
100000
120000
140000
160000
180000

Net value

b. Goals and Objectives

We have divided your objective and goals into main sections to assess each while making
necessary recommendations about goal attainment.

Current lifestyle
You need $23,480 p.a to meet your current expenses and its necessary to leave about
$10,000 buffer; therefore you require $163,070 after income tax pa.

Wealth creation
You want to generate extra money through personal investments. By the time you are 60
years, you anticipate generating extra money after you retire. You are interested in building your
first home, start a business and pay off a personal loan. We recommend you make regular
payments of your personal loan to reduce the interest rat

Retirement income
The actual retirement income source is the money you save in super accounts. As you
already understand, superannuation is taxable and when you retire you will get tax-free
retirement income. Since you are 23 years old, save as much as you can 1 dollar saved at this
your age is significant at 65 years. Ken, we recommend that you save about 10% of your income.
On the other hand, your employer will keep on making superannuation guarantee payments. You
will contribute $8, 500 per annum into your superannuation account.

Risk tolerance

16
Ken, different individuals, have varied views about investment risks. Others are
conservative, valuing stability of cost as well as income of investment over the ability to make
significant returns based on time. Some individuals aim at balancing these objectives, look for
stability of cost and income for a section of their investment portfolio and after that prepared to
acknowledge the volatility of income and cost for the remaining part, in search of equilibrium
between security and asset increase. You have CBA shares as your reserve in case of an
emergency.
Estate planning
You should have a legal Will and grant power of attorney effectively. Because you have
not provided the exact proportion you want to give your beneficiaries, you would wish to give to
a particular level. Ken, these objectives all connect and realizing them requires that you set up a
financial plan that integrates them.

c. Concerns and Issues

Ken, your primary concern is how to manage your personal loan. You would also like to
adjust work and while continuing to go-karting. In addition, you would like to know if you can
afford your first home and how much you can borrow; government benefits you are entitled to;
suitable investments; savings towards your business; the need for an insurance policy; and what
to do with your super accounts. Nonetheless, these objectives are largely reliant on the ability to
meet you present income needs while attaining security. You have gone a step further by
amassing wealth and super accounts. We have created a financial strategy that will;
 Maximize your savings in super accounts;
 Maintaining a suitable insurance policy

 Maintaining your capability to fulfill your ongoing urgent expenses;
The advice in this Statement of Advice will act as the basis for establishing your financial
strategy. On a yearly, we will adjust your progress and make the necessary changes. Much as we
will provide a long-term strategy, the Statement of Advice will simply make solid advice for
those amendments that you must execute instantaneously.

d. Risk Profile

We have reviewed your information, and we recommend that;

You might be able to use the money you have invested in less than twelve months.
With respect to current interest rates, you expect to realize 4 to 6% of your
investments for a given time frame.
For a poorly performing investment, you will be expected to give it ut to 5years
before caching as this may be due to market volatilities.
You are also not very familiar with investment markets, something that is very risk.
For that reason, you need to read carefully all the documents we provide you and in
case you decide to invest, please call us to help you make the right investment
decision.
When it comes to tax efficiency in investment you are conformable with higher
variability, but potentially higher returns, maximizing tax savings.
You believe that six months after placing investment, you learn that market
conditions your portfolio reduce by 20%, whereas you would be concerned, but
would wait to see if the investments improve.
You want to invest mainly because you have a significant amount of money

e. Assumptions

It is not easy cannot forecast the future, however, it is important we formulate
assumptions regarding what is likely to take place. Nonetheless, change is invariable- fluctuation
in investments, tax products among others. Moreover, there will be fluctuations in your life that
we cannot anticipate. The good aspect of assumptions is that they can assess annually and
modified where need be. The chart below illustrates assumptions we used in making your
recommendations. For that reason, it’s necessary you comprehend that implications of such
assumptions and ask for clarity where you are not sure.
Table 2: Assumptions
Your current superannuation savings offer retirement
income products.

The return for a balance fund will
be constant at about 15.15%

Your employer will permit you to minimize working
hours while your salary will increase consequently.

Your employer will pay for your car
loan

You are ready to use your inheritance to build your first
home

Inflations rates will remain constant
while wages will increase
Retirement savings will not be taxable Existing regulations about
retirement will be in place.

Recommendations
Now let us discuss every section of your financial plan, describe the tactic, suggested
actions and their implications.

a. Debt & Cash flow management
Ken, the basis of continuous wealth creation is the management of cash flow. Of great
importance is the effective application of cash flow. Sadly, not so many people know how to
manage their funds and thus remain in debt. The main basis building wealth is reducing spending
than your income. While this is easier to say than to implement, some individuals live within the
means and other beyond means. Cash flow management will help you secure your financial
objectives and appropriate use of debt to progress further such objectives.
As such, you should begin by understanding what you are spending. This is particular
when it comes to developing a good budget to assist you in attaining short as well as long-term
objectives. We are aware that it is hard to make a budget. Therefore, we have recommended
strategies and programs for managing money that will help you follow your budget without
getting into debt. Furthermore, we have designed a personalized approach to assist you eliminate
debt and use good debts wisely. Some of the strategies we have recommended to assist you in
effective management of your debt and cash flow; Cash flow techniques; we have developed a
suitable budget and then execute methods that will allow you manage your funds effectively.
Budget coaching; we understand that appropriate cash management requires spending a

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long time creating money initiatives. We have integrated the aspect of real-time with face to face
training to make sure that you understand ways of controlling your funds immediately while
creating effective long-term money practices. Debt reduction approaches; because you have high
credit card balance amount, we have recommended a personalized debt management approach to
keep you out of debt. Debt recycling; we have developed a sensible technique to help you start a
business and build your first home, which will be important in building an investment portfolio.
Investment gearing; we advise you to create a tax-effective investment approach to assist you in
leveraging your cash flow.

b. Wealth creation & investment advice
With respect to wealth creation, it will involve addressing your risk profile and capacity
to invest or make savings. Since you do not have a mortgage or retirement savings, we suggest
that you buy one so that we can reduce your mortgage speedily to fulfill your financial
objectives. While it’s prudent to boost your investments to realize your retirement income, it can
be carried in different borrowing techniques that in turn bring tax efficiency to bear with.
Based on your risk profile, we had developed a personalized strategy to make sure that
your investment portfolio meets your requirements as a lifestyle. It is also prudent for you to go
for a managed fund and security to manage your investments. This strategy presents you not only
proven but also predictable wealth generation technique. You should reduce your expenses while
concentrating n the cash flow, an aspect that will be important in managing your debt and realize
your financial objectives.

c. Taxation planning

Ken, you have right of arranging your funds to ensure that your taxes are minimum, that
is tax-effective manner. Tax planning is legal only when you do it based on the law. Nonetheless,
certain tax arrangements require us to evaluate whether they are legal or not. According to the
information you provided us, you have high credit card balance and. For that reason, you should
make regular payments to the lender say after every two weeks rather than monthly payments. If
you strictly pay, it will minimize your accumulated interest rate as payment will regularly be
applied. You also have a personal loan from Go-Kart Company; therefore, you may be eligible
for penalty reductions.
Moreover, investing entails using your financial resources to generate more. Recognizing
how the tax is done based on investment implies that you do not have to pay high than required.
You should understand that profits on your investments are computed as a proportion of your
income for purposes of taxation. You need to plan your investments in a way that is tax-effective
and you do not pay higher than needed. You would also decrease your tax income by harmfully
gearing assets or sacrificing salary. Ken, you would claim reductions of some of your expenses
especially, those associated with earning income such as personal loan to buy shares. However,
be careful of these opportunities and conceal your investment or unnaturally increase your
deduction.

d. Risk management & insurance advice
Risk management is normally assumed in the financial plan. Nevertheless, it’s important.
For many years, major risks including, legal issues, loss of job, risk investments bad tax
planning, health and bad cash flow management have been major issues when it comes to
realizing wealth. Ken, based on the information you provided us, you do not have health
insurance cover, which is risky. We are insurance advisors, whereas these covers are sufficient,
you must discuss with an insurer to get one.
The basis of your financial strategy is your ability to generate funds; if your assets lose
value in turn, you lose the capacity to create wealth. For instance, death is the unforeseen
outcome; it can be distressing to those left behind. Unforeseen diseases or disability can
adversely affect your financial plan. Therefore, we recommend that you seek assistance from
insurance expert and apply for life insurance, critical disease cover, disability cover, and long-
term health care. For instance, changing from permanent employment to self-employment
structure would result in the assessment of your income security needs.
Investment risk can affect your ability to create wealth. You can lose significant money
if you are not adequately diversified. We recommend you balance your portfolio with large parts
in shares, invest in emerging markets, small-cap stock among others. Addition, we suggest that it
would be prudent to go for an adequately balanced portfolio of corporate bonds, large cap stocks
as strategies for safeguarding you against market volatility.
Moreover, we understand that you smoke. As such, you need a health insurance cover. As
you grow older, you will need care, so it is only necessary that you get an insurance cover. In the

23
case of any issues, we can discuss before making any adjustments. Health cover requires a
substantial amount o that health care expenses are fulfilled. The aim of insurance is all about
fulfilling the financial charges when you die, unable to work or physically challenged. As you
have no financial obligations, the primary goal of your insurance is ensuring that retirement
objectives are attained and medical bills are fulfilled. There various insurance cover that you
should put into consideration including life policy, disability cover and income protection.
Life policy provides important risk management b creating wealth, income, protect assets
when the insured diagnosed with the terminal disease and can die within one year. This money is
not taxable. Ken, you have $50,000 life cover in your superannuation. When you pass on, your
beneficiaries will get your superannuation fund value as well as cover insurance value. However,
will this money guarantee the comfort of your beneficiaries? Your beneficiaries will get a lump
sum of $100,000 tax-free cash. The easiest approach would be for the beneficiaries to give
maximum personal contribution based on their ability.

Table 3: Income after Tax

After-tax income 77350
Expenses (pa)
Rent 12,000
Food 1,200
Household item 1,200
Electricity Bills 600
Sport 1,800
Vehicle fixed costs 1,500
Vehicle running cost 3,200
Gifts 500
Holiday 400
Entertainment 1,080
Total expenses 23,480
Cash flow surplus/deficit 53840

24
If Ken makes a contribution of $ 230,000, the retirement income will be adequate for his
beneficiaries. Another insurance cover that you should consider is disability insurance. This
policy is paid in lump sum, and it’s not taxable. However, this insurance takes a long time for
one to get payment as the insurer has to make sure that the insured is completely and
permanently disabled. Moreover, it’s crucial to comprehend some of the clarifications. We have
examined the clarifications; compensation will be made in the event you prove that you are in a
position to work. Because the above insurance plans are normally not adequate for the
permanently employed; self-employed people have no cover; it frequently characterizes
uninsured risks.
We recommend that when assessing your financial plan, it is necessary to put into
consideration these covers as main elements of wealth generation approach. Ken, in case you
become completely and permanently physically challenged, you have $50,000 life cover in
superannuation; therefore, you will be paid $100,000. This payment would be non-taxable. You
are likely to be eligible for income protection insurance. Various approaches can be implemented
for these payments.
Table 4: Income

Salary/income 85,000
ING Savings Maximiser Account 65,000
Westpac savings 5,000
CBA shares 50,000
Total income 205,000
Tax 18450
Income after tax 186,550
Expenses (pa)
Rent 12,000
Food 1,200
Household item 1,200
Electricity Bills 600
Sport 1,800
Vehicle fixed costs 1,500
Vehicle running cost 3,200
Gifts 500
Holiday 400
Entertainment 1,080
Total expenses 23,480
Cash flow surplus/deficit 163,070

Figure 3: Income Bar Graph

In this case, you have a surplus as your expenses have reduced. If you need more income,
you can get from ING Savings Maximiser Account and the Westpac savings. On the other hand,
your superannuation savings would increase. Again, we anticipate that your CBA shares would
significantly increase. By and large, these assets would generate more income.

Much as this scenario generates a significant cash flow, it will be available for a short
period, and Ken will be required to offset his expenses. He can manage, however; there would be
no opportunity for unanticipated emergency other than getting income from inheritance or CBA
shares. To take such a risk, we suggest that Ken take more insurance cover with a 50 percent of
her income. We have also evaluated some insurers, and we believe that Ken would be getting a
good insurance at market rates.

e. Estate Planning

26
Estate planning commences once your wishes have been computed, the remaining will be
created while keeping in mind such wishes. Much as you do not have a Will, based on the data
you have given us you do not have the power of attorney. We are experts in estate planning;
therefore, we suggest that you discuss with your legal adviser and assess your estate. The
discussion below will assist you to put into consideration issues to discuss and outcomes you
prefer.
As you already know, a Will is a legal document that serves various purposes. They
appoint a person to take up the responsibility of performing your wishes-executor. Appointing an
extremely qualified individual for his post is essential since the responsibility can be complex as
well as challenging. In addition, the Will identifies sources of funding and administration and
how to divide the estate. Since you are single, you estate planning will not put into consideration
spouse or children, maybe entitlement of other individuals will be considered. Prior to meeting
with your legal experts, you must know who to appoint as your executor, assets that form your
estate and how to allocate them.
But in your case, the legal adviser will advise accordingly regarding the establishment of
Will trusts. In addition, our issue is not complicated as you do not have beneficiaries. Another
issue you should deliberate with your legal adviser is getting a long-term power of attorney. The
power of attorney is a means of giving another individual the responsibility to take steps to you
in legal issues. Nonetheless, the power of attorney is permissible once the grantor (the individual
bestows the power of attorney) is considered legal experienced. If the grantor becomes
psychologically or physically ill, such power is void.

The important issue is who takes the responsibility once the grantor becomes
psychologically or physically ill? This is when the long-term power of attorney becomes

27
important. The power of attorney ensures if an individual is not legally skilled. Apparently, due
care should be put into consideration in giving such power.
In most cases, a spouse can give another spouse a long-term power of attorney.
Nevertheless, it’s possible to give long-term power of attorney to either child of a legal
representative. But in such case you require to make sure that you are aware of the functioning of
long-term power of attorney and who to give. You should discuss with your legal counsel before
granting such power. In general, the charges for setting up a Will and long-term power of
attorney are low. We have suggested $500 in the estimated cash flow for to cover such charges.
We recommend you show a copy of your financial plan to your legal counsellor to help you in
creating your estate plan. In case, you legal adviser wishes to discuss with us, we are ready.

f. Retirement & Superannuation

According to the information you provided us, you have assets to fund your retirements,
such as CBA shares, Westpac Savings and ING Savings Maximiser Account. However, the
actual retirement income source is the money you save in super accounts. As you already
understand, superannuation is taxable and when you retire you will get tax-free retirement
income. Since you are 23 years old, save as much as you can 1 dollar saved at this your age is
significant at 65 years. Ken, we recommend that you save about 10% of your income. On the
other hand, your employer will keep on making superannuation guarantee payments. You will
contribute $8, 500 p.a into your superannuation account. Based on this approach, you have the
significant flexibility of retiring when you wish, instead of relying on the financial issues. We
suggest that you add saving into your superannuation fund and continue for the next three years.
During the annual evaluation, we will go through your alternatives and decide the type of

employment- full time or part time.
We are not suggesting that you retire from work; however, it will be appropriate for you
to comprehend it. While it’s simple, there are cash flow-related impacts that we will need to
consider. In general, retirement transition involves two legal alternatives. To start with is the
capability to “sacrifice salary” your income into superannuation account. In this approach, when
you turn 60 years, you can implement a retirement transition tactic where you will balance your
working hours and continue contributing your income in the superannuation, to fulfill any gap in
the income. We will estimate and work out your cash flow requirements. At the moment, we are
interested in increasing your super account balance so that you get flexibility at 60 years.

Outcomes
To help the client have a clearer monetary/lifestyle perspective
To help the client to walk through life and retirement free from monetary apprehension
To protect the client’s hard-earned affluence
To present our competence to listen to the client to be able to comprehend his individual
values and goals
To help create a tailored beneficial scheme for the client’s future
To assist the client navigate the intricate annuity and venture options at the junctions in life
To help the client interpret the complexities involved in personal financial planning for easy
following
To help the client support the documentation process with rigorous planning
To help the client underpin the scheduling process with meticulous record-keeping

To safeguard the client against unwarranted tax fines.
To provide the client with the needed confidence when it comes to making prudent
judgments using accurate information
To present results for the client as soon as possible.
Fees and Commissions

We understand that objectivity of advice is a critical element and the reason our clients
seek our services. Our firm is not linked to any fiscal providers, or service purveyor. As
financial planners we don’t receive commissions, allowances or any recompense from financial
providers. While we do not remit payments to third parties, we also do not receive referral
recompense to third parties like estate planners or indemnity suppliers.

Table 5: Our Fee is scheduled as Follow

Fee Cost Inclusive of GST ($) Agreed Payment Method
Drafting the Statement of
Advice

$5500.00 Invoiced with this
report

Payment upon receipt of the
report
Execution meeting Incorporated in the above cost
Annual assessments $1320 pa Debited to your bank account
Execution Assessment
meeting

$540 Debited to your bank account

Extra SOA of other reports To be discussed before

dispatch

Debited to your bank account
Any other business $400 per hour Debited to your bank account

30
The fee for drafting the Statement of Advice and a follow-on execution convention will
be $4400 (inclusive of Tax). A tax Invoice is attached to the SOA. Once you subcontract our
services, all future charges will be debited to your bank account.

Disclosures

I am an employee of XXX Financial Planners. With respect to Section 947 of the
Corporations Act 2001, we divulge that XXX Financial Planners and its employees and their
household members, firms and trusts might have a fiscal interest in any of the investments or
securities incorporated in this document. Where this is the scenario, it will be revealed before
acknowledging our recommendation.
XXX Financial Planner’s top management and representatives are pensionable workers
of XXX Financial Planners. We do not receive commissions, rebates or any reimbursement from
any provider whatsoever. Where presumptions have been made concerning future events or
outcomes, this has been done in a considerable manner. These presumptions will be tested on the
long haul and also during yearly assessments.
We have presented you with several papers such as the Statement of Advice. It’s also
your duty to read the report for yourself and comprehend the content here in. You are also
expected to append your signature on this Statement of Advice, and equally confirm that you
understand the propositions. Kindly ensure that all manner of ambiguity has been resolved, and
that you will only append your signature for the execution of the recommendations as a
confirmation that you’ve understood the risks that come with your undertaking.

Disclaimers
According to section 947 of the Corporations Act 2001, recommendations made to the client
should be in tandem with your monetary needs and goals have a reassured basis of counsel. In
this regard, the content of this report is purely anchored on the information you presented. If you
hold the view that we have misunderstood or disregarded pertinent details you should, bring this
to the fore on paper, before executing the proposal.
This document has been drafted with respect to the content you supplied as being
accurate; in this regard, we are under no obligation in the event that the information provided is
found to be untrue or incorrect. While this document has been tailored to meet your needs, it
must not be used by any third party, to whom XXX Financial Planners or any of its
representatives do not acknowledge accountability.
XXX Financial Planners is dedicated to ensuring privacy as well as the security of you
personal data as stipulated by the doctrine of the Confidentiality Amendment (Private Sector)
Act 2001 (Privacy Act). As expected under the Privacy Act, a copy of our Confidentiality Policy
has been presented to you, which highlights the handling of you basic data. Additional details
about our data management process can be acquired by contacting our Confidentiality Officer.

Time Constraints
The proposals in this document are anchored on your current individual conditions,
lifestyle as well as financial objectives, and present economic, venture and legal circumstances.
The propositions in this document remain current for 30 days from the date the report is drafted.
In the event, you wish to execute these propositions after this time-line you should get in touch

32
with us before any action to ascertain that the variables above have changed and that the
propositions remain perfect to you.

Review
You will get a call from XXX Financial Planners inviting you to meet him to assess any
current reports you may have compiled. It is essential to prepare for the future; nonetheless, as
individual circumstances change over time, it is paramount to reexamine the document after
three years to update the content therein.

Reasons the report should be evaluated include:

 To determine whether or not a person mentioned in your will or trust is dead.
 Determine whether or not you or next of kin gave birth or adopted a child
 To put on the record whether you’ve married, remarried or divorced in the recent past.
 To review it in line with current State laws and also establish whether you reside in a
different state.
 You intend to have different trustees or representatives
 Determine if you intent to add a corporate trustee to your trust
 Your children have attained the age of 18 since the last update
 To determine whether or not the value of estate has made remarkable profits or the
opposite.
 To factor in whether you procured or sold off a significant asset in terms of a home,
investment property or business.

 To determine whether charities you support have been altered
 Whether you have acquired a new business
 To determine whether or not you have taken dissemination from your superannuation
accounts or you may be approaching 70.

Above all, this is the basis you may require an expert to assess your documents. Plan for
a meeting with XXX Financial Planner experts to peruse through the documents in your
possession and make suggestions that could enhance the status of your estate plan.

Implementation Schedule

In the event that you accept our propositions, the schedule below will offer an action plan.
Table 6: Implementation Schedule

Date Who Action Documents Outcome
Immediately Ken Meet with your
financial advisor
to formulate a
plan on how you
will pay off a
personal loan, and
start a business

Carry a copy of
the statement of
advice

You ought to have
a professionally
written Will to get
access to the
powers of the
attorney

Immediately Ken Ken, you need to
apply for
insurance cover

This requires
you to carry a
copy of the
statement of
advice with you

Ken, should you
agree your
insurance firm’s
advice; you will
need extra income
indemnity that will
offer benefit
payments.

Immediately Ken Ken, you need to
talk to CarsRus
(your employer)
to start income
sacrificing.
Maintain your

This might
require you to
sign forms
provided by
CARsRus. Keep
a duplicate and
Your
superannuation
savings will go up
with a peripheral
drop in your after-
tax income.

investment
objective to
starting a new
venture

bring us a copy
of the same

Immediately Ken

Request your fund
manager (First
Choice Employer
Super) to
automatically
reinvest all
distributions.

Ken, you should
also sign a
form,
FirstChoice
which manages
your fund will
indicate to your
is the
requirement is
necessary

While you will earn
income and be able
to grow, you will
not be exempted
from taxes.

Immediately Ken Call me so we can
schedule a
meeting to
examine how to
procure a
retirement plan

Familiarize self
with product
Disclosure
Statement. I
will present you
with Statement
of Additional
Advice.

Ken, you also need
to set up a savings
scheme to make
enough savings for
your business.

In six
months’
time

Life
Planning

Expect a call from
us so we can
organize for an
assessment

$500 meeting
fee

Assess
implementation
results and make
any alterations
needed.

Authority to Proceed

This is a significant document for you and your financial planner. It constitutes part of the
Statement of Advise. It is also an official confirmation that you comprehend and accept the
proposals put forward. This document should be appended to your signature without which I will
be under no obligation from you to commence with reference and no defense in case of an
objection. In case you have a venture that is under the partner’s name, all parties involved are
expected to sign Authority to continue. Implicitly, Authority to proceed should be signed by the

35
financial planner and all parties involved. Suppose you consent to accept our proposition, you’re
under obligation to implore us to fill up the Authority to Proceed form, include the date and
append your signature to it.
The appended signature will act as confirmation that:
 your individual financial information and other pertinent data is correct
 You comprehend and agree to the provisions of the Confidentiality Policy, and
 You recognize that you are privy to proceeding as proposed or proceed with the
disparities from the advice suggested.
Thus, it is a commonplace practice for clients to confirm the recommendations and
minimize a number of insurances. If this transpires, all details should be put in writing and
appended to a signature. Suppose you do not agree to move on with disparities to our
recommendations, and then this should be outlined coherently on paper. While the client is given
a copy of the Authority to proceed, the original document should be filed.

Bibliography

36
Taylor, S. Financial Planning in Australia: Advice & Wealth Management, 7th Edition.
Chatswood, N.S.W. LexisNexis Butterworth’s. 2015

Appendices
Appendix 1: Table 1: Assets and Liabilities
Asset Market
value

Liability Net
value

Notes

Motor Vehicle – Holden
Astra 2006

$6,000 Nil $6,000 –
Sodi Go Kart ST32 DD2 $10,000 ‘ 10,000 –
Personal effects $15,000 15,000
ING Savings Maximiser
Account

$65,000 ‘ 65,000 –

Westpac Savings
Account

$5,000 ‘ 5,000 No interest

Westpac Savings
Account

$50,000 ‘ 50,000 fully franked dividends,
dividends reinvested

CBA Personal loan (3
years

$8,000 ‘ $5,518 15.15% Interest, P&I, paid
monthly, 23 months remaining
CBA Credit card $10,000 ‘ $4,500 Pays off the balance every month
Superannuation $16,000 ‘
Net worth 161,018

Appendix 2: Table 2: Assumptions
Your current superannuation savings offer retirement
income products.

The return for a balance fund will
be constant at about 15.15%

Your employer will permit you to minimize working
hours while you salary will increase consequently.

Your employer will pay your car
loan

You are ready to use your inheritance to build your first
home

Inflations rates will remain constant
while wages will increase
Retirement savings will not be taxable Existing regulations about
retirement will be in place.

Appendix 3: Table 3: Income after Tax

Appendix 4: Table 4: Income

Appendix 5: Table 5: Our Fee is scheduled as Follow

39
Fee Cost Inclusive of GST ($) Agreed Payment Method
Drafting the Statement of
Advice

$5500.00 Invoiced with this
report

Payment upon receipt of the
report
Execution meeting Incorporated in the above cost
Annual assessments $1320 pa Debited to your bank account
Execution Assessment
meeting

$540 Debited to your bank account

Extra SOA of other reports To be discussed before

dispatch

Debited to your bank account
Any other business $400 per hour Debited to your bank account

Appendix 6: Table 6: Implementation Schedule

Date Who Action Documents Outcome
Immediately Ken Meet with your
financial adviser
to formulate a
plan on how you
will pay off a
personal loan, and
start a business

Carry a copy of
the statement of
advice with you

You ought to have
a professionally
written Will to get
access to the
powers of the
attorney

Immediately Ken Ken, you need to
apply for
insurance cover

This requires
you to carry a
copy of the
statement of
advice with you

Ken, should you
agree your
insurance firm’s
advice; you will
need extra income
indemnity that will
offer benefits.

Immediately Ken Ken, you need to
talk to CarsRus
(your employer)
to start income
sacrificing.
Maintain your
investment
objective to
starting a new
venture

This might
require you to
sign forms
provided by
CARsRus. Keep
a duplicate and
bring us a copy
of the same

Your
superannuation
savings will go up
with a peripheral
drop in your after-
tax income.

Immediately Ken

Request your fund
manager
(FirstChoice
Employer Super)

Ken, you should
also sign a form,
FirstChoice
which manages

While you will
earn the income
and be able to
grow, you will not

0
10000
20000
30000
40000
50000
60000
70000

Market value

to automatically
reinvest all
distributions.

your fund will
indicate to your
is the
requirement is
necessary

be exempted from
taxes.

Immediately Ken Raise me on
phone so we can
schedule a
meeting to
examine how to
procure a
retirement plan

Familiarize self
with product
Disclosure
Statement. I will
present you with
Statement of
Additional
Advice.

Ken, you also need
to set up a savings
scheme to make
enough savings for
your business.

In six
months’
time

Life
Planning

You will get
phone a call from
us so we can
organize for an
assessment

$500 meeting
fee

Assess
implementation
results and make
any alterations
needed.

Appendix 7: Graph showing assets and liabilities

Appendix 8: Graph showing net value of assets and liabilities

0
20000
40000
60000
80000
100000
120000
140000
160000
180000

Net value

Appendix 8: Income Bar Graph

Scholar Papers

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