Your required to develop and present a compliant Statement of Advice (SOA)

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ACCT 2288: Assignment

This assignment requires you to develop and present a compliant Statement of Advice (SOA) based on the case study provided. You are required to read carefully the assignment (Case Study), which requires the preparation and submission of a compliant Statement of Advice (SOA) and address the questions and tasks relating to the key case issues, the clients’ goals and objectives, the impact of new financial planning legislation, preparation of a risk tolerance questionnaire and client questionnaire.

 

 

Case study introduction:

 

Peter (30) and Fred (29) are married.

 

They are currently renting at a cost of $600 a week.

 

Peter works as a project manager earning $105,000 per annum plus Super Guarantee (SG) contribution. Fred is a Fitness Instructor earning $33,000 plus SG.

They have come to you as they both want to take a career break and travel through Europe in 2025.

You have had a comprehensive meeting with them and have completed relevant sections of the fact find document (refer attached).

The budget discussion you had with them reveals they expect to be able to save approximately $12,000 per annum.

They have each completed a risk profile with you that included a detailed discussion about their individual risk profiles as well as their joint investment risk profile.

Both Peter and Fred have expressed their desire to get their immediate financial issues sorted as a priority.

 

 

Primary goals:

 

Peter and Fred would like to take a career break and travel through Europe in 2025 at an estimated cost of $60,000.

Peter has accumulated three funds due to job changes over his career and hasn’t exercised superannuation choice to date.

Peter doesn’t want to be “sold a new fund”, he just wants you to provide advice on which of his current funds is most suitable for the others to be consolidated into.

Peter also sees himself as an “Balanced Profile or 70% Growth assets” investor and also wishes to align his superannuation funds to his preference to risk and return.

Peter’s father – John, has been diagnosed terminally ill and wishes to provide Peter the balance of his superannuation fund ($300,000) to help him financially. Peter would like your advice on potential issues and strategies around this.

Peter and Fred want help on strategies to pay off their debts before they go on their career break holiday in 2025.

Peter and Fred haven’t given much thought to personal insurances in the past as they felt they were too fit and healthy for it to be a need. They would however be interested in your professional opinion as to whether there are any gaps or opportunities you can identify for their situation.

Details of their circumstances are set out in the Client Data Form in the attached document.

 

REQUIREMENTS

You are required to prepare and present a compliant Statement of Advice containing your recommendations to Peter and Fred.

 

  • As this is a fictional case study, you may make reasonable assumptions to complete the details of the clients’ situation, but you should not alter any of the information provided in the case

 

  • In making assumptions, they should be REASONABLE assumptions and they should be consistent with the information already provided. There is to be no “front end loading” with assumptions to make an outcome more achievable, that is, DO NOT make assumptions about windfalls such as lottery wins or inheritances (apart from the $200,000 inheritance that Lisa is to receive shortly as already detailed in the Client Data Form).

 

  • Your assignment submission should include a list of ALL assumptions that you have incorporated

 

 

Scope of advice:

Your clients have limited the scope of your advice to include the following:

 

  • Advice on saving for their European trip in 2025
  • Rollover Peter’s superannuation accounts into one of his existing funds
  • Advice on John’s intention to provide his superannuation fund proceeds to Peter
  • Pay off their remaining debts as soon as possible
  • Provide Peter and Fred an insurance needs analysis based on their current situation

You will not recommend any specific investments, investment products or insurance products (aside from selecting one of Peter’s existing super funds as his recommended fund). You may recommend generic product groups e.g. managed funds, insurance bonds, income protection etc. These recommendations can only include generic product features available across this group of products.

 

Your licensing conditions:

You are a fully qualified and accredited financial adviser. You are an employee and representative of “The Practice” which is licensed by AMP Financial Planning. You receive a salary and bonus based on achieving agreed key performance measures.

You have agreed on a flat fee for service to provide this advice to Peter and Fred. That fee is $3,300, including GST and has already been paid by your clients.

Your Financial Services and Credit Guide (FSCG) was provided to your clients at your first meeting. This enabled you to cover all legislative and compliance requirements.

 

 

 

Many students will note that this case study has many similarities to the case study assignment that you may have undertaken in ACCT2286 – Superannuation & Retirement Planning. You are free to apply recommendations from that earlier assignment as the basis of your recommendations in this current assignment. The emphasis in this current assignment is the production of a properly drafted SOA.

So while your recommendations to the client are a very important element, marking will also focus on the structure of the SOA. (A marking guide is included as the final page of this document.)

 

 

 

Your SOA should include the following as a minimum:

 

  • A compliant SOA cover page, incorporating all ASIC requirements
  • An executive summary covering no more than 2 pages
  • Cash flows and balance sheet
  • Recommendations
  • Anticipated outcomes
  • Appropriate disclosures and disclaimers, including details of your remuneration
  • Action to Proceed
  • Authority to Proceed

 

 

NOTE: Given that the emphasis on this case study is on pre-retirement planning, it is acceptable, if you choose, to advise your clients that you will introduce them to another specialist professional if there is a need for them to have any insurance. However, it is very important that if you identify any insurance needs as part of developing your recommendations that you explain those insurance needs in your SOA and the type/s of insurances required before then offering them a referral.

 

 

GUIDE: Whilst there is no word limit or page limit on your submission, to be an effective SOA, it is expected that most submissions will have a page count of 15-20 pages, with up to 6 additional pages as appendices if required. Please DO NOT submit any investment product sheets or Product Disclosure Statements with your assignment, even though that is a requirement with SOAs in real life circumstances. Submissions which significantly exceed this guide may be considered to be not “clear, concise and effective” and will accordingly suffer significant marking penalties.

 

 

Based on this case study, students are required to submit a compliant Statement of Advice. It is important that all legal and professional requirements and expected standards must be followed. This is the capstone course in Financial Planning and a very high standard is required and you will need to attain an advanced level of detail in your Statement of Advice in order to pass this course.

 

 

 

You are expected to demonstrate your effective communication skills and technical knowledge by presenting a comprehensive SOA that is focused on client needs and in line with ethical, professional and legal expectations and requirements.

 

Your SOA will be assessed not only from client and compliance perspectives, but also in line with the expected standards and course guidelines, which are detailed in the Course Profile. Although you are required to prepare a complying document, you need to be aware that your final assignment must also meet the very high expectations of this capstone course.

 

To achieve a pass level, you will need to attain an advanced level of detail when writing your comprehensive SOA. Students are expected to devote sufficient time to the preparation of a Statement of Advice which encompasses both, the essential elements and structural elements, covered throughout the course work modules. You are expected to produce an original assignment of a high academic standard. Remember that clear and concise writing will be rewarded, and penalties apply for poor presentation, and spelling, grammar and punctuation errors.

 

This assignment is worth 50% of your final marks (the assignment is marked out of 100 and scaled back to 50%).

 

Please spend some time on the detailed marking guide provided to you within this document.