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FNSFPL503 Develop A Financial Plan

Develop a Financial Plan Assessment Task FNSFPL503 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 submissions@mentor.edu.au No handwritten responses will be accepted.

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

1 2

FNSFPL503.1 FNSFPL503.2

Establish plan objectives and scope Develop strategic assumptions

Target Mark 35 21

Pass Actual Mark Mark 25 15

3 Develop financial plan strategy 4 Develop financial plan Total

FNSFPL503.3 FNSFPL503.4

36 150 242

25 105 170

Assessor’s Initials: ____________________ Assessment Date: ____________________ Introduction

Objective

Name: ____________________

The objective of this assessment is to develop and prepare a financial plan that meets the client’s needs as described in the case study assigned to you.

To achieve this objective, you will need to:

Scope

·

establish plan objectives and scope,

·

develop strategic assumptions,

·

develop financial plan strategy,

·

develop preliminary financial plan,

· ensure compliance of financial plan with regulatory and organisational requirements, and ·

produce completed plan.

The assessment tasks in this assessment require you to have successfully completed the Complex Financial Planning Research Spreadsheet [1] in relation to your assigned case study.

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 submissions@mentor.edu.au Don’t forget to keep a copy and retain it for 12 months.

Need help?

If you have any questions or would like to request a digital copy of this assessment task, please email the Mentor Support Team at service@mentor.edu.au

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. FNSFPL508.4.4 Related Assessments

This assessment will be conducted together with the presentation requirements in relation to implementation FNSFPL504 and ongoing service FNSFPL505

Upon successful completion of these assessments, you will be awarded the unit competency Develop and Prepare Financial Plan FNSFPL503

Assessment Task 1

Name: ____________________

1.0 Establish This first assessment task requires you to establish plan objectives and plan objectives scope. and scope It requires you to:

路 review and compare research results to client requirements and expectations, 路 analyse current client situation to determine opportunities and constraints, 路 identify and assess desired financial resource and market parameters, and 路 develop plan objectives for asset growth, income, risk, taxation and any other objectives developed in consultation with the client.

For this activity, you should refer to the Financial Planning Research Spreadsheet you prepared in the previous Assessment Task and complete your answers in the space provided in the following page. An example has been provided in the first line.

35 marks Assessment Task 1, continued ____________________

Name:

Plan Objectives Matrix

(a) Client requirements Generic Needs and expectations

Cashflow Management 1. Income i. Maximise Surplus Income

(b) Research Results (strategies, products and markets analysed)

(c) Opportunities / Constraints (of current client situation)

(d) Desired conditions

i.

Labour salaries cont i. Approx $31,000 current i.

Further surplus income, excluding promotions/pay increases improve interest income from cash & fixed interest investments ii. Donna could decide to continue working PT ii. Further $9,100 pa after or defer retirement tax available after mortgage is paid off

2. Tax Minimisation

3. Expenses Wealth Creation 4. Superannuation

Continued / 15

Assessment Task 1, continued ____________________

Name:

Plan Objectives Matrix continued

Generic Needs

(a) Client requirements and expectations

5.

Investment Planning 6. Debt Reduction Wealth Protection 7. Personal

(b) Research Results (strategies, products and markets analysed)

(c) Opportunities / Constraints (of current client situation)

(d) Desired m conditions

Insurance

8. Estate Planning Total

Assessment Task 2

Name: ____________________

The next step involves developing and testing your strategic assumptions, which requires you to: · Develop strategic assumptions

develop and test client related and economic key assumptions,

· identify and test legislative and regulatory requirements, including taxation assumptions, and · seek clarifications from client or other professionals as required and document strategic assumptions for client review.

For this activity, you should refer to the Plan Objectives you prepared in the previous Assessment Task.

21 Marks Assessment Task 2

2.1 Develop & test strategic assumptions

Name: ____________________

In the second column in the table below, list the key ‘Assumptions’ you have used to develop your plan objectives, considering: ·

legislative and regulatory assumptions requiring verification,

·

taxation assumptions requiring verification,

·

client assumptions requiring clarification from your clients,

·

other assumptions requiring clarification from other professionals

Now list in the third column of the table below titled ‘Verification’, the information sources you will research and the stakeholders you will consult to verify the assumptions made. (Website addresses etc.)

Generic Needs Assumptions Cashflow Management 1. Income

Verification

Marks /1

2. Tax Minimisation

/3

3. Expenses Wealth Creation 4.

Superannuation

/2 /7

Note: to receive each mark, you must have both the assumption and a related source for verification Subtotal

/ 13

Continued Assessment Task 2

Generic Needs Assumptions 5. Investment Planning 6. Debt Reduction Wealth Protection 7. Personal Insurance

Name: ____________________

Verfication

Marks /2 /2

/1

8. Estate Planning

/3

Note: to receive each mark, you must have both the assumption and a related source for verification Subtotal Total

/8

/21

Assessment Task 3

Name: ____________________

The next step involves developing and testing your strategic assumptions, which requires you to: 路 develop initial strategic options based on strategic assumptions and client specifications Develop financial plan strategy

路 analyse and model strategic options, with any inappropriate options rejected 路 develop supporting arguments for each final strategic option and include in a draft overall strategy, and 路 make any necessary client checks or consultations to verify the plan strategy.

Complete your answers in the space provided in the following pages.

36 Marks Assessment Task 3

3.1 Develop plan strategy

Name: ____________________

In this activity, you are required to develop the final Plan Strategy that you will use to prepare the Financial Plan.

This will involve you developing the supporting arguments for each strategic option, based on the analysis and modelling undertaken in the Paraplanning Research Report

To successfully complete this task, you will have needed to undertake all ‘Verification’ of ‘Assumptions’ developed in the previous activity.

(a) Strategic Option: Debt Free Home

Marks

Supporting arguments: /6

(b) Strategic Option: Save for University fees for Grandchildren

Marks

Supporting arguments: /2

(c) Strategic Option: Maximise growth of super savings

Marks

Supporting arguments: /4

/ 12 Continued

Assessment Task 3

Name: ____________________

(d) Strategic Option: Achieve target superannuation savings and retirement pension Marks Supporting arguments:

/4

(e) Strategic Option: Insurance to protect client’s wealth

Marks

Supporting arguments: /8

(f) Strategic Option: Will and Power of Attorney to protect clients in case of death or Marks loss of mental capacity Supporting arguments: /1 / 13 Continued Assessment Task 3

Name: ___________________ As a final review of your Strategic Plan, list below the inappropriate strategic options that you rejected.

3.2 Rejected strategic options

In answering this question, you should refer back to the strategic options you developed earlier in section 1.3 (a) as a brief for the Financial Planning Research Report Type your answers below in the space provided. An example has been provided in the first line below.

Generic Needs Inappropriate Options Cashflow Management a) Income 1. Donna and Dennis extends retirement age

Reason for rejection

Marks /2

1.

Not in line with

(e.g. from 7 to 11 years)

client wishes

2. Donna continues to work PT into retirement.

2. There will be sufficient super

b) Tax minimisation c) Expenses Wealth Creation d) Superannuation e) Debt reduction f) Investment Planning Wealth Protection g) Personal Insurance h) Estate Planning

/1 /1 /2 /1 /2

/1 /1

Note: To receive each mark, you must provide a reason why an option was rejected / 11 Total

/36

Assessment Task 4

4.0 Develop preliminary financial plan

Name: ____________________

In this assessment task, you will need to develop a Financial Plan for assessment. This will require you to: ¡ select specific products and options to meet agreed strategy with cash flow, liquidity and capital preservation or estate planning requirements incorporated as required, ¡ develop recommendations for financial asset allocation structure, including where provision is required for equities, trusts,

partnerships, allocated pensions, and superannuation and planned capital expenditure 路 develop recommendations for changes to income and taxation arrangements, including referral advice to accountants or lawyers as appropriate, 路 develop recommendations on risk management strategies and products and incorporate in the plan, 路 incorporate anticipated fees and charges into the plan, with information on internal and external complaint resolution procedures available to the client, and 路 document the financial plan according to organisation guidelines and procedures.

150 Marks

Assessment Task 4, continued

Name: ________

Assessment Task 4, continued

Name: ____________________

Assessment Presentation Guideline

Paper orientation Use portrait unless otherwise specified.

Cover page

Cover page to include your details ·

Name

·

Postal address

·

Phone

·

Company Name

·

Email address

Font style Type all body text in black Arial font, size 12.

Margins Set your margins at: ·

Top / bottom / left / right

·

Header / footer

- 2cm - 1cm

Headers and footer Use headers and footers on each page. · The header should be in Arial font and contain your full legal name and the name of the organisation you work for, eg.

RG146 Training Australia Mary Citizen

· The footer should be in Arial font and contain the name of the assessment task and the page number, eg.

Assessment Task 4

page 5 of 20

Spacing: ·

Use single spacing within your paragraphs.

·

Use double spacing between your paragraphs

Layout: This is a document that you would hand to your client so ensure that it is presented in a professional manner and addressed to the clients in the first person. Ensure all instructions to you (as the student) is deleted and there is no ‘red’ text remaining before you submit your document for assessment.

Assessment Task 4, continued

Name: _______Sub Total

/3

Continued Assessment Task 4, continued

Name: ________________

Mark Allocation Strategic Assumptions that were identified and tested include: Strategic a) Key client assumptions Assumptions b) Key economic assumptions c) Legislative and regulatory requirements, including taxation assumptions d) Clarifications sought from client or other professionals as required Strategies

Strategies: a) Wealth Protection – Keeping what you have b) Wealth Accumulation – Building funds for retirement via superannuation c) Wealth Accumulation – Providing for your grandchildren’s

Mark /4 /1 /1 /1 /1 / 17 /2 /2 /2

future education d) Wealth Accumulation – Minimising the tax payable on your cash investments e) Wealth Accumulation – Paying off your mortgage before retirement f) Estate Planning g) Alternative strategies considered but not recommended and why Client cash-flow requirements to implement investment strategies are quantified in a table and explained. Include: a) Income b) Taxation Cashflow Requirements c) Offsets d) Total out-goings e) Sufficient surplus income is identified in relation to meeting the recommendations; and f) Evaluated for effectiveness using qualitative measures g) Evaluated for effectiveness using quantitative analysis techniques (P/V, F/V) h) Disclaimer included re: tax calculations Financial products and/or services: a) Insurance Product Selection – key features, supporting documentation, products to be replaced (if any) b) Benefits – including price, level of cover, claims process, tax, inflation protection, management c) Lost benefits/consequences/disadvantages Insurance and d) Investment Product Selection – key features (including Investment qualitative and quantitative analysis) supporting documentation, Product products to be replaced (if any) Selection e) Benefits – including capital accumulation, tax, access, flexibility, diversification, inflation protection, capital growth and management f) Lost benefits/consequences/disadvantages g) Financial asset allocation structure and justification why the recommendation is appropriate

Sub Total

/ 64

Continued Assessment Task 4, continued

Name: ____________________

/2 /2 /2 /5 /16 /1 /1 /1 /1 /1 /5 /5 /1 / 27 /2 /5 /5 /2 /5 /5 /3

Mark Allocation Disclosure of Commissions and Fees section includes: Disclosure h) Total commissions payable – Risk and Investment i) Description of initial and trailing commission (risk and investment) j) SoA Preparation Fee, Entry/Exit fees (if applicable)

Mark /30 /10 /10 /3

k) Where the recommendation includes replacement of any product, comparison of the benefits of the new and replacement product includes: a.

disclosure of the remuneration to the adviser,

b.

the cost to the client, such as:

/1

i. exit fees or penalties, ii. entry fees and iii.

implementation fees

l) Other benefits and interests m) Fund manager payments and sponsorships

/2 /2

n)

/2

Portfolio Review

Authorities/

Provide Authorities and Actions: a) Authority to Proceed

/15 /10

Actions

b) Action to Proceed

/5

Additional Information

The following information should be included in the completed plan a) Disclaimer - including time limitation (sunset clause) b) Client Declaration c) Adviser Declaration d) Offer documents and research reports

Sub Total Total

/8 /3 /2 /2 /1

/ 53 / 150

The final Completed Financial Plan should be emailed to submissions@mentor.edu.au with this completed Assessment Task.