Assignment Task
Section 1: Overview
Your objectives
You have asked us to develop a strategy to achieve the following financial and lifestyle goals: [This section max 175 Words in total – excluding template]
Wealth Creation
[Articulate the client’s wealth creation goals]
You have also asked for information about the following matters:
Wealth Protection
[Articulate the insurance information the client wanted]
Estate Planning
[Articulate the estate planning issues the client has enquired about.]
Consequently, the strategies we have developed will be based on these needs, goals and objectives.
Section 1: Scope of the advice [Articulate what areas of financial planning this strategy paper covers]
Section 1: Your risk profile[Customise to the client’s risk profile]
Your responses to the risk profile questionnaire indicate that you are [Profile] investor. Along with the level of return that you desire from your investments, your [Profile] has an important impact on your investments, now and in the future. For instance, the relationship between risk and return is that where if you take a low amount of risk in investing, you can also expect a low return. Conversely, investments that offer high returns will generally also be more ‘risky’ in the sense that they will be subject to greater volatility, particularly over the short-term.
The approximate asset class allocations for a [profile] investor are:
[Insert pie chart to show the asset allocation relevant to the client’s risk profile type]
WHY THIS MIX OF ASSETS APPROPRIATE – Your tolerance was identified as that of a [Profile INVESTOR]
A [profile investor’s] primary objective is to achieve a mix of both capital protection and capital appreciation. This means your portfolio will usually contain around [xx%] in defensive assets such as fixed interest and cash with the remaining [xx%] is allocated to growth investments such as shares and property in order to provide capital growth. The minimum suggested timeframe for a [profile investor] is [x] years.
RISKS AND IMPLICATIONS
The risks and implications of your asset allocation are as follows:
Australian Equities, International Equities and Property are classed as growth assets and are therefore more likely to experience volatile investment returns than that of defensive assets such as Cash and Fixed Interest.
Fixed interest has traditionally been regarded as a defensive asset class however the changing nature of the asset class has introduced more volatility to returns. With fixed interest investments, it is important to understand that there is the potential for loss.
Hedge funds commonly form part of the alternatives asset class. Each hedge fund has its own investment strategy covering the types and methods of its investments and therefore each particular hedge fund has its own risk and return characteristics.
Section 1: Current financial situation This is a summary of your current financial situation.
ASSETS & LIABILITIESLifestyle Assets Owner Value
[Insert details] [Insert details] Sub Total Financial Assets – Non SuperOwner Value
[Insert details] [Insert details] Sub Total Financial Assets – Super Owner Value
[Insert details] [Insert details] Sub Total Assets Total Liabilities Owner Value
[Insert details] [Insert details] Liabilities Total Total Net Worth CASH FLOWIncome Owner Amount
[Insert details] [Insert details] Total Expense Owner Amount
[Insert details] [Insert details] Total Estimated Cash Surplus/Deficit LIFE INSURANCE[Insert details – this means if the client has insurance list each policy and associated details. If the client has no insurance, list the 4 main types of life insurance and state NIL]
Owner Insurance Provider Contract Type Benefit Amount Waiting Period Benefit Period Annual Premiums
ESTATE PLANNING[Insert details]
[Client 1] [Client 2]
Delete if only 1 client
Do you have a Will? Provision for testamentary trust Do you have a Power of Attorney? Type / Attorney’s name Binding Death Nominations GENERAL & HEALTH INSURANCE[Insert details]
Health Insurance Name of Provider Annual Premium OTHER
[Insert details]
Dependents Current Age D.O.B.
Section 2: Strategy overview [Client’s Name] this is a summary of the strategies we recommend.
Wealth Creation
To achieve your objective of [re-state the client’s #1 wealth creation goals] we recommend the following strategies:-
[Insert Step 1]
[Insert Step 2]
[Add other steps if necessary and customise to each client]
In terms of how you might achieve your [re-state the client’s #2 wealth creation goal], we recommend the following strategies:- [Word Count: 100 words – excluding template]
[Insert Step 1]
[Insert Step 2]
[Add other steps if necessary and customise to each client]
Wealth Protection
[Client’s Name] you also wanted know about [re-state the client’s request for information regarding insurance]. Therefore, based on our initial review of your objective to have adequate insurance cover, we recommend the following:- [Word Count: 75 words – excluding template]
[Insert step 1]
[Insert step 2]
[Add other steps if necessary and customise to each client]
Estate Planning
Finally, [client’s name], to take into account the changes to your financial circumstances and ensure your wealth is distributed as you wish, we recommend the following:
[Insert step 1]
[Insert step 2]
[Insert step 3]
Other
[Articulate other information the client may have requested or type ‘None’.]
Section 2: Wealth Creation Strategy Map
[Create a flowchart which illustrates how the wealth creation strategies will operate. Ideally the flow will follow the money trail and/or show transfers, changes, redemptions or additions to investment.]
Section 2: Strategy Discussion In this section we explain how the recommended strategies will be achieved and provide important information about the benefits and the risks associated with our recommendations.
Wealth Creation
[Client’s name], to achieve your objectives of [re-state the client’s #1 wealth creation goal] we recommend the following:
Step 1 describe the same as in the strategy overview
Step 2 describe the same as in the strategy overview
Step 3 etc. the same as in the strategy overview
How the strategy works
Inform and educate the client with background and supporting information related to each step. To optimise readability plan your response, use sub-headings to separate the information related to each step.
Why this is appropriate
[Define the benefits and articulate why step 1 is appropriate.]
[Define the benefits and articulate why step 2 is appropriate.]
[Define the benefits and articulate why step 3 is appropriate etc.]
The benefits and appropriateness must link specifically to the client’s goals and objectives. This section must show how the client’s situation has improved and/or met the objective.
There are times when a diagram or chart is useful to support the discussion in this section. You may find putting a chart in the appendix (and cross reference) helps to organise your discussion.
Risks and Implications
[Define the risks, articulate the implications and state how the risks are managed].
Alternatives considered
[Articulate/demonstrate a comparison based on your research. For instance if managed funds are recommended the alternative would be direct investments into shares and property.]
[Identify how the client is better off with specific reference to their goal/objective]
[Justify why you rejected the alternative and how it wasn’t appropriate. For instance, if taxation is greater with direct investments table a comparison as an example and show the client why the alternative is not tax effective.]
To achieve your objectives of [insert the client’s #2 goal] we recommend the following:
Step 1 describe
Step 2 describe
Step 3 etc
How the strategy works
[Articulate how each step works.]
Why this is appropriate
[Define the benefits and articulate why each step is appropriate.]
Risks and Implications
[Define the risks, articulate the implications and state how the risks are managed.]
Alternatives considered
[Articulate/demonstrate a comparison based on your research]
[Identify how the client is better off with specific reference to their goal/objective]
[Justify why you rejected the alternative and how it wasn’t appropriate]
Section 2: Look to the futureThe [graph/chart] shows an ‘at a glance’ outcome of our recommended strategy/s. For instance [articulate what the graph / illustration is indicating].
[Insert graph AND /OR projection developed using excel or XPLAN scenario functions. However, you are not restricted to using XPLAN.
If you are able to generate a ‘snapshot’ using a public website calculator and it performs a similar function i.e. provides an ‘at a glance’ outcome, then that alternative is aso acceptable].
[cite the Source i.e. the website or calculator or software used to generate the graph or illustration]
The following assumptions were made in preparing this illustration.
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