Develop a Financial PlanAssessment TaskFNSFPL503 Your details: Name:Address:Phone:Company nameEmail: Your assessment task Keep a copy of your assessment task for a period of 12 months. Submit your assessment to our Education Team via [email protected] 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. TaskAssessmentsElementsTarget MarkPass MarkActual Mark1Establish plan objectives and scopeFNSFPL503.135252Develop strategic assumptionsFNSFPL503.221153Develop financial plan strategyFNSFPL503.336254Develop financial planFNSFPL503.4150105Total242170 Assessor’s Initials: ____________________ Assessment Date: ____________________ Introduction Name: ____________________ ObjectiveThe 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.ScopeTo achieve this objective, you will need to: 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 processStart 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 [email protected]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 [email protected]Related AssessmentsWhen 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 This assessment will be conducted together with the presentation requirements in relation to implementation FNSFPL504 and ongoing service FNSFPL505Upon 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 plan objectives and scopeThis first assessment task requires you to establish plan objectives and scope. It requires you to: review and compare research results to client requirements and expectations, analyse current client situation to determine opportunities and constraints, identify and assess desired financial resource and market parameters, and 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 MatrixGeneric Needs(a) Client requirements and expectations(b) Research Results(strategies, products and markets analysed)(c) Opportunities / Constraints(of currentclient situation)(d) Desired market conditions(e) Plan objectivesMarkCashflow ManagementIncomeMaximise Surplus IncomeApprox $31,000 current surplus income, excluding interest income from cash & fixed interest investments Further $9,100 pa after tax available after mortgage is paid offFurther promotions/pay increases Donna could decide to continue working PT or defer retirementLabour market and salaries continue to improveSurplus income: Pay off mortgage Investment for grand childrenRetirement Income: $40K pa from pension $25K from Dennis’s PT workTax Minimisation/ 5Expenses/ 5Wealth CreationSuperan-nuation/ 5 Continued / 15 Assessment Task 1, continued Name: ____________________ Plan Objectives Matrix continuedGeneric Needs(a) Client requirements and expectations(b) Research Results(strategies, products and markets analysed)(c) Opportunities / Constraints(of currentclient situation)(d) Desired market conditions(e) Plan objectivesMarkInvestment Planning/ 5Debt Reduction/ 5Wealth ProtectionPersonal Insurance/ 5Estate Planning/ 5Total/ 35 Assessment Task 2 Name: ____________________ Develop strategic assumptionsThe next step involves developing and testing your strategic assumptions, which requires you to: 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 Name: ____________________ 2.1 Develop & test strategic assumptionsIn 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 NeedsAssumptionsVerificationMarksCashflow ManagementIncome/ 1Tax Minimisation/ 3Expenses/ 2Wealth CreationSuperannuation/ 7 Note: to receive each mark, you must have both the assumption and a related source for verification Subtotal / 13 Continued Assessment Task 2 Name: ____________________ Generic NeedsAssumptionsVerficationMarksInvestment Planning/ 2Debt Reduction/ 2Wealth ProtectionPersonal Insurance/ 1Estate Planning/ 3 Note: to receive each mark, you must have both the assumption and a related source for verification Subtotal / 8 Total /21 Assessment Task 3 Name: ____________________ Develop financial plan strategyThe next step involves developing and testing your strategic assumptions, which requires you to: develop initial strategic options based on strategic assumptions and client specifications analyse and model strategic options, with any inappropriate options rejected develop supporting arguments for each final strategic option and include in a draft overall strategy, and 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 Name: ____________________ 3.1 Develop plan strategyIn 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.Strategic Option: Debt Free HomeMarksSupporting arguments:/ 6Strategic Option: Save for University fees for GrandchildrenMarksSupporting arguments:/ 2Strategic Option: Maximise growth of super savingsMarksSupporting arguments:/ 4 / 12 Continued Assessment Task 3 Name: ____________________ Strategic Option: Achieve target superannuation savings and retirement pensionMarksSupporting arguments:/ 4 Strategic Option: Insurance to protect client’s wealthMarksSupporting arguments:/ 8 Strategic Option: Will and Power of Attorney to protect clients in case of death or loss of mental capacityMarksSupporting arguments:/ 1 / 13 Continued Assessment Task 3 Name: ____________________ 3.2 Rejected strategic optionsAs a final review of your Strategic Plan, list below the inappropriate strategic options that you rejected. 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 NeedsInappropriate OptionsReason for rejectionMarksCashflow ManagementIncomeDonna and Dennis extends retirement age (e.g. from 7 to 11 years) Donna continues to work PT into retirement.Not in line with client wishes There will be sufficient super/ 2Tax minimisation/ 1Expenses/1Wealth CreationSuperann-uation/ 2Debt reduction/ 1Investment Planning/ 2Wealth ProtectionPersonal Insurance/ 1Estate Planning/ 1 Note: To receive each mark, you must provide a reason why an option was rejected / 11 Total /36 Assessment Task 4 Name: ____________________ 4.0 Develop preliminary financial planIn 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 develop recommendations for changes to income and taxation arrangements, including referral advice to accountants or lawyers as appropriate, develop recommendations on risk management strategies and products and incorporate in the plan, incorporate anticipated fees and charges into the plan, with information on internal and external complaint resolution procedures available to the client, and document the financial plan according to organisation guidelines and procedures.150 Marks Assessment Task 4, continued Name: ____________________ 4.1 Develop a preliminary Financial PlanUsing the Financial Plan Template, prepare a Financial Plan, based on the Complex Financial Planning Assessment Task and spreadsheet you prepared earlier in relation to your case study. Your Financial Plan will need to include: Covering Letter Cover Page Introduction Executive Summary Current Situation Risk Profile Information Resources Strategic Assumptions Strategies Cashflow Requirements Insurance Products Selection Investment Products Selection Disclosure of Commissions and Fees Portfolio Review Authority to Proceed Action to Proceed Disclaimer Client Declaration Adviser Declaration Appendix If there are other matters you consider are relevant then you should include them. However, you need to include all the topics listed above. Assessment Task 4, continued Name: ____________________ Assessment Presentation GuidelinePaper orientation Use portrait unless otherwise specified.Cover page Cover page to include your details Name Postal address Phone Company Name Email addressFont style Type all body text in black Arial font, size 12.Margins Set your margins at: Top / bottom / left / right – 2cm Header / footer – 1cmHeaders 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 CitizenThe 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 20Spacing: Use single spacing within your paragraphs. Use double spacing between your paragraphsLayout: 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: ____________________ Mark AllocationMarkCovering LetterInclude a covering letter:/ 3Thank you…, report attached, etc/1Time Limitation (Sunset Clause)/1Signed/1IntroductionProvide an introduction that includes:/ 6Cover Page/1Table of Contents/1Important Information that includes:Role of the representative/adviser (detail how role complies with relevant acts, regulations and regulatory guidelines)/1Scope of Advice/1Disclaimer/1Disclosure/1Executive SummaryProvide a Summary of Recommendations of the financial plan in accordance with the client’s:/ 9Personal situation/1Financial situation/1Goals and Objectives/1Risk profile/1Cash-flow requirements/1f) Recommendations/3g) Projected Results/1Current SituationClients current situation includes:/ 6Personal Situation/1Goals and Objectives/1Financial Situation/1Income and Expenditure/3Risk ProfileThe Client’s Risk Profile is:/ 3Identified and analysed/1Compared to all risk profiles/1Used to show an appropriate asset allocation relating to the financial solutions for the client,/1Information ResourcesInvestment information resources are reviewed, evaluated and used to develop investment strategies for the particular situation and may include as a minimum:/ 6Research/1Financial press/daily media/2Product disclosure statements and prospectuses/1Product provider summaries and performance charts/2 Sub Total / 33 Continued Assessment Task 4, continued Name: ____________________ Mark AllocationMarkStrategic AssumptionsStrategic Assumptions that were identified and tested include:/ 4Key client assumptions/1Key economic assumptions/1Legislative and regulatory requirements, including taxation assumptions/1Clarifications sought from client or other professionals as required/1StrategiesStrategies:/ 17Wealth Protection – Keeping what you have/2Wealth Accumulation – Building funds for retirement via superannuation/2Wealth Accumulation – Providing for your grandchildren’s future education/2Wealth Accumulation – Minimising the tax payable on your cash investments/2Wealth Accumulation – Paying off your mortgage before retirement/2Estate Planning/2Alternative strategies considered but not recommended and why/5Cashflow RequirementsClient cash-flow requirements to implement investment strategies are quantified in a table and explained. Include:/16Income/1Taxation/1Offsets/1Total out-goings/1Sufficient surplus income is identified in relation to meeting the recommendations; and/1Evaluated for effectiveness using qualitative measures/5Evaluated for effectiveness using quantitative analysis techniques (P/V, F/V)/ 5Disclaimer included re: tax calculations/1Insurance and Investment Product SelectionFinancial products and/or services:/ 27Insurance Product Selection – key features, supporting documentation, products to be replaced (if any)/2Benefits – including price, level of cover, claims process, tax, inflation protection, management/5Lost benefits/consequences/disadvantages/5Investment Product Selection – key features (including qualitative and quantitative analysis) supporting documentation, products to be replaced (if any)/2Benefits – including capital accumulation, tax, access, flexibility, diversification, inflation protection, capital growth and management/5Lost benefits/consequences/disadvantages/5Financial asset allocation structure and justification why the recommendation is appropriate/3 Sub Total / 64 Continued Assessment Task 4, continued Name: ____________________ Mark AllocationMarkDisclosureDisclosure of Commissions and Fees section includes:/30Total commissions payable – Risk and Investment/10Description of initial and trailing commission (risk and investment)/10SoA Preparation Fee, Entry/Exit fees (if applicable)/3Where the recommendation includes replacement of any product, comparison of the benefits of the new and replacement product includes: disclosure of the remuneration to the adviser, the cost to the client, such as: exit fees or penalties, entry fees and implementation fees/1Other benefits and interests/2Fund manager payments and sponsorships/2Portfolio Review/2Authorities/ ActionsProvide Authorities and Actions:/15Authority to Proceed/10b) Action to Proceed/5Additional InformationThe following information should be included in the completed plan/8Disclaimer – including time limitation (sunset clause)/3Client Declaration/2Adviser Declaration/2Offer documents and research reports/1 Sub Total / 53 Total/ 150 The final Completed Financial Plan should be emailed to [email protected] with this completed Assessment Task. 1


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