DEVELOP A FINANCIAL PLAN

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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
Target Mark
Pass Mark
Actual Mark
1
Establish plan objectives and scope
FNSFPL503.1
35
25

2
Develop strategic assumptions
FNSFPL503.2
21
15

3
Develop financial plan strategy
FNSFPL503.3
36
25

4
Develop financial plan
FNSFPL503.4
150
105

Total
242
170

Assessor’s Initials: ____________________
Assessment Date: ____________________
Introduction Name: ____________________
Objective
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.

Scope
To 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 1in relation to your assigned case study.

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.auDon’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

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. FNSFPL508.4.4 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 plan objectives and scope
This 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 Matrix
Generic Needs
(a) Client requirements and expectations
(b) Research Results
(strategies, products and markets analysed)
(c) Opportunities / Constraints
(of current
client situation)
(d) Desired market conditions
(e) Plan objectives
Mark
Cashflow Management
Income
Maximise Surplus Income
Approx $31,000 current surplus income, excluding interest income from cash & fixed interest investments Further $9,100 pa after tax available after mortgage is paid off
Further promotions/pay increases Donna could decide to continue working PT or defer retirement
Labour market and salaries continue to improve
Surplus income: Pay off mortgage Investment for grand children
Retirement Income: $40K pa from pension $25K from Dennis’s PT work

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Tax Minimisation

/ 5
Expenses

/ 5
Wealth Creation
Superan-nuation

/ 5
Continued / 15
Assessment Task 1, continued Name: ____________________
Plan Objectives Matrix continued
Generic Needs
(a) Client requirements and expectations
(b) Research Results
(strategies, products and markets analysed)
(c) Opportunities / Constraints
(of current
client situation)
(d) Desired market conditions
(e) Plan objectives
Mark
Investment Planning

/ 5
Debt Reduction

/ 5
Wealth Protection
Personal Insurance

/ 5
Estate Planning

/ 5
Total
/ 35
Assessment Task 2 Name: ____________________
Develop strategic assumptions
The 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 assumptions
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
Verification
Marks
Cashflow Management
Income

/ 1
Tax Minimisation

/ 3
Expenses

/ 2
Wealth Creation
Superannuation

/ 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 Needs
Assumptions
Verfication
Marks
Investment Planning

/ 2
Debt Reduction

/ 2
Wealth Protection
Personal Insurance

/ 1
Estate 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 strategy
The 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 strategy
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.

Strategic Option: Debt Free Home
Marks

Supporting arguments:
/ 6

Strategic Option: Save for University fees for Grandchildren
Marks

Supporting arguments:
/ 2

Strategic Option: Maximise growth of super savings
Marks

Supporting arguments:
/ 4
/ 12
Continued
Assessment Task 3 Name: ____________________
Strategic Option: Achieve target superannuation savings and retirement pension
Marks
Supporting arguments:
/ 4
Strategic Option: Insurance to protect client’s wealth
Marks
Supporting arguments:
/ 8
Strategic Option: Will and Power of Attorney to protect clients in case of death or loss of mental capacity
Marks
Supporting arguments:
/ 1
/ 13
Continued
Assessment Task 3 Name: ____________________
3.2 Rejected strategic options

As 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.

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Generic Needs
Inappropriate Options
Reason for rejection
Marks

Cashflow Management

Income
Donna 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
/ 2

Tax minimisation

/ 1

Expenses

/1

Wealth Creation

Superann-uation

/ 2

Debt reduction

/ 1

Investment Planning

/ 2

Wealth Protection

Personal Insurance

/ 1

Estate 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 plan
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 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 Plan
Using 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 Guideline
Paper 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 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 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 Allocation
Mark
Covering Letter
Include a covering letter:
/ 3
Thank you…, report attached, etc
/1
Time Limitation (Sunset Clause)
/1
Signed
/1
Introduction
Provide an introduction that includes:
/ 6
Cover Page
/1
Table of Contents
/1
Important Information that includes:

Role of the representative/adviser (detail how role complies with relevant acts, regulations and regulatory guidelines)
/1
Scope of Advice
/1
Disclaimer
/1
Disclosure
/1
Executive Summary
Provide a Summary of Recommendations of the financial plan in accordance with the client’s:
/ 9
Personal situation
/1
Financial situation
/1
Goals and Objectives
/1
Risk profile
/1
Cash-flow requirements
/1
f) Recommendations
/3
g) Projected Results
/1
Current Situation
Clients current situation includes:
/ 6
Personal Situation
/1
Goals and Objectives
/1
Financial Situation
/1
Income and Expenditure
/3
Risk Profile
The Client’s Risk Profile is:
/ 3
Identified and analysed
/1
Compared to all risk profiles
/1
Used to show an appropriate asset allocation relating to the financial solutions for the client,
/1
Information Resources
Investment information resources are reviewed, evaluated and used to develop investment strategies for the particular situation and may include as a minimum:
/ 6
Research
/1
Financial press/daily media
/2
Product disclosure statements and prospectuses
/1
Product provider summaries and performance charts
/2
Sub Total / 33
Continued
Assessment Task 4, continued Name: ____________________
Mark Allocation
Mark
Strategic Assumptions
Strategic Assumptions that were identified and tested include:
/ 4
Key client assumptions
/1
Key economic assumptions
/1
Legislative and regulatory requirements, including taxation assumptions
/1
Clarifications sought from client or other professionals as required
/1
Strategies
Strategies:
/ 17
Wealth Protection – Keeping what you have
/2
Wealth Accumulation – Building funds for retirement via superannuation
/2
Wealth Accumulation – Providing for your grandchildren’s future education
/2
Wealth Accumulation – Minimising the tax payable on your cash investments
/2
Wealth Accumulation – Paying off your mortgage before retirement
/2
Estate Planning
/2
Alternative strategies considered but not recommended and why
/5
Cashflow Requirements
Client cash-flow requirements to implement investment strategies are quantified in a table and explained. Include:
/16
Income
/1
Taxation
/1
Offsets
/1
Total out-goings
/1
Sufficient surplus income is identified in relation to meeting the recommendations; and
/1
Evaluated for effectiveness using qualitative measures
/5
Evaluated for effectiveness using quantitative analysis techniques (P/V, F/V)
/ 5
Disclaimer included re: tax calculations
/1
Insurance and Investment Product Selection
Financial products and/or services:
/ 27
Insurance Product Selection – key features, supporting documentation, products to be replaced (if any)
/2
Benefits – including price, level of cover, claims process, tax, inflation protection, management
/5
Lost benefits/consequences/disadvantages
/5
Investment Product Selection – key features (including qualitative and quantitative analysis) supporting documentation, products to be replaced (if any)
/2
Benefits – including capital accumulation, tax, access, flexibility, diversification, inflation protection, capital growth and management
/5
Lost benefits/consequences/disadvantages
/5
Financial asset allocation structure and justification why the recommendation is appropriate
/3
Sub Total / 64
Continued
Assessment Task 4, continued Name: ____________________
Mark Allocation
Mark
Disclosure
Disclosure of Commissions and Fees section includes:
/30
Total commissions payable – Risk and Investment
/10
Description of initial and trailing commission (risk and investment)
/10
SoA Preparation Fee, Entry/Exit fees (if applicable)
/3
Where 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
/1
Other benefits and interests
/2
Fund manager payments and sponsorships
/2
Portfolio Review
/2
Authorities/ Actions
Provide Authorities and Actions:
/15
Authority to Proceed
/10
b) Action to Proceed
/5
Additional Information
The following information should be included in the completed plan
/8
Disclaimer – including time limitation (sunset clause)
/3
Client Declaration
/2
Adviser Declaration
/2
Offer documents and research reports
/1
Sub Total / 53
Total
/ 150
The final Completed Financial Plan should be emailed to submissions@mentor.edu.au with this completed Assessment Task.
1

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