COMPLEX FINANCIAL PLANNING RESEARCH

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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 submissions@mentor.edu.au

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	36	25
Total	312	218

Assessor’s Initials: ____________________

Assessment Date: ____________________

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: Reading the Assessment Task and case study. Type your answers to the assessment tasks into this template document (hand-written answers are not accepted) 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, please email the Mentor Support Team at service@mentor.edu.au
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: FNSFPL502: Conduct financial planning analysis and research, and FNSFPL508: Conduct complex financial planning research.

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

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
Income $ K $ K	Wife’s income:	/ 1
ii) Husband’s income:	/ 1
Tax	i) Wife’s annual tax:	/ 1
Husband’s tax:	/ 1
Expenses $ K $ K	i) Living expenses/mortgage:	/ 1
ii) Discretionary expenses (holidays etc):	/ 1

Subtotal / 6

continued

Assessment Task 1, continued

Information	What documents would you review to analyse the integrity of the information provided?	Marks
Wealth Creation
Super $ K $ K	i) Wife’s superannuation:	/ 1
ii) Husband’s superannuation:	/ 1
Investments ($ K)	i) Cash Investments Held:	/ 1
Debt Reduction ($ K) ($ K)	i) Mortgage:	/ 1
ii) Credit Cards:	/ 1
Wealth Protection
Personal Insurance $ K $ K	i) Wife’s current Life/TPD insurance :	/ 1
Husband’s current Life/TPD insurance :	/ 1
Estate Planning yes / no yes / no	i) Wife’s estate planning:	/ 1
ii) Husband’s estate planning:	/ 1

/9

continued

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
Term deposit
Cash Management Account
Total

/ 2

Superannuation Contributions (current situation)

	Base Salary	SG Rate	Amount
Donna
Dennis
Total

/ 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
Dennis
Total

/ 6

/ 10

continued

Assessment Task 1

1.2 Identify client objectives and expectations FNSFPLN502.1.2 FNSFPL508.1.2

From the scenario in your case study, write down one or more specific financial objectives and expectations for the generic needs provided, quantify the objective by expressing the amount in today’s dollars (PV- Present Value), and 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
Income				/3
Tax minimisation				/ 3
Expenses				/3
Wealth Creation
Superannuation				/ 3
Investment Planning				/ 3
Debt reduction				/ 3
Wealth Protection
Personal Insurance				/ 3
Estate Planning				/ 3

/ 24

Continued

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
Income		/ 3
Tax minimisation		/ 3
Expenses		/ 3
Wealth Creation
Superann-uation		/ 3
Investment Planning		/ 3
Debt Reduction		/ 3
Wealth Protection
Personal Insurance		/ 3
Estate Planning		/ 3

/ 24

continued

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		/1
2		/1
3		/1
4		/1

/ 4

Total / 77

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

Assessment Task 2, continued

Generic Needs	(a) What is the expected outcome for the clients? (Intended use or reason)	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?	Spreadsheet	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?			/ 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?			/ 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%?			/ 4

Subtotal / 14

continued

Assessment Task 2, continued

Generic Needs	(a) What is the expected outcome for the clients? (Intended use or reason)	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?			/ 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?			/ 4
Wealth Protection
Personal Insurance	Wealth protection without losing any current benefits	What other (if any) insurances are available under their current superannuation funds?			/ 4
Estate Planning	Estate protection	What do the clients know about having a valid will, powers of attorney, testamentary trusts etc?			/ 3

Total / 29

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)

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
How much tax is currently paid on the cash and fixed interest investments?	Income Tax rate Tax x = x =	N/A – Current situation	/ 3
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 x = x =		/ 3
How much would Donna save in tax if she salary sacrificed up to the concessional contribution cap?			/ 3
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)			/ 3

Subtotal / 12

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
Dennis
Total
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
Dennis
Total
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
Dennis
Total

/ 6 marks

Summary	Mark
	/ 3

Subtotal / 21

Continued

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
	Dennis
	Total
	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
	Dennis
	Total
	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
	Dennis
	Total

/ 6

Summary	Mark
	/ 4

Subtotal / 31

Continued

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
Dennis	$138,000
Total	$428,000						/10

Assessment Task 3.4, continued

Donna	Mark
Paste copy of Donna’s super simulation results here:	/ 1

Subtotal / 42

Continued

Assessment Task 3.4, continued

Dennis	Mark
Paste Dennis’ super simulation results here:	/ 1

Assumptions (% or $), Methodolgy and/or Risks	Mark
Salary Increase	/ 1
Rates of Investment Returns for an average market	/ 1
Fees	/ 1
Pension	/ 1
Today’s dollars	/ 1

Subtotal / 48

Continued

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
Provider			/ 1
Product name			/ 1
URL of PDS			/ 1
PDS version No. & issue date			/ 1
Experience			/ 1
Return 1 Yr			/ 1
Return 3 Yr			/ 1
Return 5 Yr			/ 1
All Fees (MER, admin, exit and entry)			/ 1
Investment options			/ 1
Risks			/ 1

Subtotal / 59

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.

Copy and paste the graph here.

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
	/ 2

Subtotal / 61

Continued

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
		/ 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
Keep their investments?	Yes / No	/ 1
Show your calculations		/ 1
By how much?		/ 1

Subtotal / 68

continued

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/ 2 2/ 2
Formula: FV = PV(1 + r)n
Uni Fees FV = = = $	2/ 2 2/ 2 2/ 2

Summarise what the future value of investment needs will be

Summary	Marks
	/ 3

Subtotal / 83

continued

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) = Interest rate expressed as a decimal (r) = Number of years (n) =	/ 1 / 1 / 1
Formula: Savings Required (PMT) = [FV x r] [(1 + r)n -1]
Calculation: Savings Required (PMT) = = =	/ 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		/ 1
LESS allocation for investment bonds		/ 1
Updated surplus income		/ 1

Subtotal / 92

continued

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
Provider			/ 1
Product name			/ 1
URL of PDS			/ 1
PDS version No. & issue date			/ 1
Experience			/ 1
Return 1 Yr			/ 1
Return 5 Yr			/ 1
All Fees (MER, admin, exit & entry)			/ 1
Investment options			/ 1
Risks			/ 1

Preferred Option: Why?	/ 5

Subtotal / 107

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 Mortgage6, 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) $ Interest Rate % Term 7 years New Repayments pa $ pa ( p/mth x 12 ) Current Repayments $ pa Net change $ pa	/ 1 / 1 / 1 /1 /1 /1
Do you think that 7 years to pay-out the home loan is: too short, too long, or appropriate. Provide a justification for the selection that you have made above:	/ 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
Net Change to repayments		/ 1
Updated surplus income		/ 1

Subtotal / 117

continued

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) = Interest rate per period (i) = Number of periods (n) =	/ 1 / 1 / 1
Formula:
Calculate investment savings: (Show your workings) FV = = = = $	/ 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 = $____________

Subtotal / 124

continued

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
	/3

Subtotal / 127

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.

1. What insurance cover do your client’s already have?

insurance cover	Marks
1		/ 1

1. 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)
Income Replacement (annual income times years until retirement, plus Dennis’ part time income)			/1
Grandchildren’s University Fees			/1
Funeral Costs			/1
Total			/1
LESS
Insurance currently held			/1
Superannuation currently held			/1
Additional Cover Required			/ 1
Total Cover (Insurance held + Additional)			/1

Subtotal / 136

Continued

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)			/1
	Income Replacement (annual income times years until retirement, plus Dennis’ part time income)			/1
	Home Modification/Medical Costs			/1
	Total			/1
	LESS
	Insurance currently held			/1
	Superannuation currently held			/1
	Additional Cover Required			/ 1
	Total Cover (Insurance held + Additional)

IV. What are your client’s Trauma insurance requirements? (assume $50K is required for medical expenses)

Notes	Donna	Dennis	Mark
Clear Debt			/2
Medical Expenses
Total

V. What are your client’s Income Protection insurance requirements?

Notes	Donna	Dennis
Income
Plus SG (9.5%)
Equals Insurable Income			/ 2
Maximum Monthly Benefit Available (75%)

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

1. Using the information provided in above stated table. Complete the quotation of the monthly cost for Trauma

Monthly Cost	Donna	Dennis	Mark
			/1

1. Using the information provided in the above stated table. Complete the quotation of the monthly cost for Income protection

Monthly Cost	Donna	Dennis	Mark
			/1

1. 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			/1
Annual cost for recommended Cover

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		/ 1
LESS annual cost of recommend insurance cover
Total surplus income

Subtotal / 153

Continued

Assessment Task 3.14

3.14 Identify insurance ownership FNSFPLN502.3 FNSFPL508.3

In the table below, indicate whether the insurance premiums would be: Fully tax deductible Partly tax deductible 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.

1. Tax Treatment of Insurance Premium

Policy Ownership	Life Insurance	TPD Insurance	Trauma Insurance	Income Protection
Super Fund
Personally

1. Policy Ownership

Policy Ownership	Life Insurance	TPD Insurance	Trauma Insurance	Income Protection
Donna
Dennis

1. 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
Mark	/1	/1	/1	/1

Subtotal / 156

Continued

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			/ 1
2. Experience/ reputation			/ 1
3. Product name			/ 1
4. PDS version number & release date			/ 1
5.Definition of Income Protection			/ 1
6.Definition of Trauma			/ 1
7.Claims process			/ 1
8. Cost of Income Protection			/ 1.5
9.Cost of Trauma			/1.5
10. Risks			/ 1

Subtotal / 167

Continued

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 7 on the Law Institute of Victoria website, identify the two specialists located near your clients who can help can provide appropriate advice.

1. List eight (8) local Wills & Estate Specialists

Local Wills & Estate Specialists	Marks
1
2
3
4
5
6
7
8		/ 1

1. List below the details of the 1^st female Wills & Estate Specialist

First Female Wills & Estate Specialists	Marks
1		/ 1

1. List below the details of the 2^nd female Wills & Estate Specialist

Second Female Wills & Estate Specialists	Marks
1		/1

Subtotal / 3

Total / 170

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

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 risk8 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
Income	Given the annual adjustment to the superannuation contributions contemplated in the tax minimisation strategy in 3.2, how would this affect surplus savings? How much surplus income is now available each year to invest?			/ 1 / 1
Tax minimisation	How much tax is paid on the cash and fixed interest investments? If the cash and fixed interest investments were transferred to Dennis’ name how much tax would be saved? How much tax would Donna save if she salary sacrificed to her super contribution limit? 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?			/ 1 / 1 /1 / 1
Expenses	How much can the interest rate on the mortgage potentially be reduced by? How much interest pa could potentially be saved if the cash and fixed interest funds were applied to the mortgage?			/ 1 / 1
Wealth Creation
Superann-uation	Given the contemplated salary sacrifice changes, how would this affect the annual superannuation savings (after tax)? What would be Donna and Dennis’ projected super savings in an average market on retirement in 7 years time? What would be Donna and Dennis’ target super savings to fund their desired retirement income? What superannuation shortfall will they have after all recommendations have been put place?			/ 1 / 1 / 1 / 1

Subtotal / 12

continued

Assessment Task 4.1, continued

Generic Needs	(a) Research Specifications / Question	(b) Answer	(c) Risk	Mark
Investment Planning	What is the future value of car on retirement (7 years)? What is the future value of $120K university fees in 12 years? How much do Dennis and Donna need to contribute each year towards the grandchildren’s education bonds to reach their goal? Once all recommendations have been put in place, what is their annual surplus income? 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? How much of these funds will need to be contributed towards super to make up the shortfall?			/ 1 / 1 / 1 / 1 / 1 / 1
Debt reduction	How long it would take to pay off the home loan if the new rate and additional repayments recommendation is followed? Is it financially better to retain the investment and put it into Dennis’ name or to use the funds to pay down the mortgage? By how much?			/ 1 / 1 / 1
Wealth Protection
Personal Insurance	How much Term Life insurance does Donna require? How much TPD insurance does Donna require? How much Trauma Insurance do Donna and Dennis require? What is the maximum amount of Income Protection Donna can apply for? What is the maximum amount of Income Protection Dennis can apply for? What would be the approximate monthly cost of their stand-alone insurance cover?			/ 1 / 1 / 1 / 1 / 1 / 1
Estate Planning	Who are the local will and estate specialists?			/ 1

Subtotal / 28

continued

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
Income	Are there are any potential additional sources of income, such as an inheritance?	/ 1
Tax Minimisation	Can we confirm with your accountant if there are any issues that should be considered in relation to the proposed strategy?	/ 1
Expenses	Do you think that your current expenses will continue to be appropriate into retirement?	/ 1
Wealth Creation
Superann-uation	Are you comfortable with Dennis’ superannuation being rolled into a more appropriate fund to match his risk profile?	/ 1
Investment Planning	Do you understand how Investment bonds work?	/ 1
Debt Reduction	Are there any other debts that should be considered in the plan (e.g. credit card debt)?	/ 1
Wealth Protection
Personal Insurance	Are there any insurance providers that you would prefer we not recommend?	/ 1
Estate Planning	Do you have your own solicitor that could help you with your Estate Planning requirements?	/ 1

Subtotal / 8

Total / 36

1http://calculators.ato.gov.au/scripts/axos/axos.asp?CONTEXT=&KBS=Medicare10.xr4&go=ok

2http://www.taxcalc.com.au/

3https://www.ato.gov.au/Rates/Key-superannuation-rates-and-thresholds/

4 https://www.amp.com.au/super/supersimulator/index.html#!/

5http://www.selectingsuper.com.au/

6http://www.yourmortgage.com.au/calculators/

7http://www.liv.asn.au/Specialists.aspx

8 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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