FINANCIAL PLANNING- INVESTMENT ADVICE
Financial planning is all about using sensible investment strategies to achieve your short-term and long-term goals. Without a plan, you can't ever guarantee you will get to where you want to go. Seeing a financial planner can sometimes help in getting the right advice you need!
Scenario
You are a financial planner working for Clever Choice Financial Consultants. Three clients have approached you for some advice on how to plan for their future:
• Robin Banks - is a conservative 55-year old grandmother, whose husband recently passed away, leaving her with funds of $110 000. She currently owns her own 3 bedroom home in Springwood (worth the median price), and has cash savings of $20 000. She works full time as a Retail Sales Manager and receives the median salary. Her current accumulated superannuation balance is $200 000. Robin will retire at the age of 60.
• Cash Money - a 30-year old recently divorced male and is currently employed as an Assistant Accountant at a Medium sized Accounting Firm in Cairns earning the median salary.
His current accumulated superannuation balance is $94 000. Cash is currently renting a 3 bedroom home on the Atherton Table Lands in North Queensland, and has cash assets after a divorce settlement totalling $370 000. He is known to his friends as the ‘risk taker'.
• Justin Debt - a 22 year old university student who has just commenced his fourth year of a double degree, Bachelor of Business / Bachelor of Commerce at Griffith University, Nathan Campus, currently with a HECS debt. He will take calculated risks and is a very ambitious person, achieving very high distinctions for his studies to date. On completion of his degree Justin will be seeking work as a Forensic Accountant and will work for a salary.
Currently he has part-time work at Nandos as a cashier and he is receiving the maximum wage where he works 20 hours a week. He received $47 000 from his recently deceased grandfather's estate. The only other assets owned by Justin are a car worth $6 000 and cash savings of $8 000.
During their initial consultation with you, you compiled a list of their short- and long-term goals:
Justin Debt Cash Money Robin Banks
Short-term goals Long-term goals Short-term goals Long-term goals Short-term goals Long-term goals
Complete university without a HECS debt
Get full-time employment after graduation
Buy a home in Tanah Merah QLD
($350 000 - $600 000) Get a promotion
AND
Re-establish stable living arrangements (doesn't want to rent) Buy a 3 bedroom home closer to work Retire in 5 years and live a reasonable lifestyle (She wants $35,000 per year) On retirement wants to purchase a new Toyota Corolla RZ, CVT automatic.
Build up savings for future holiday
($20 000)
Get a promotion
Wants to purchase a Dual Cab Hilux 4WD 2008 -2014 model (new or used)
Wants to buy a Honda Jetski/Seadoo Purchase a new Toshiba Laptop (4G) and is happy to spend up to $2 500. Travel:
Scenic Europe River Cruise for two weeks
Travel to Japan for 2 week holiday
Build up savings (approx $30 000)
AND
Have enough Superannuation for retirement (He wants $65 000 per year). Travel to New Zealand this year for a one (1) month holiday.
Build up savings of (approx. $20 000) AND Have enough superannuation to for retirement (He wants $55,000 per year) Build up savings of
(approx. $20 000) Pass on savings to her descendants (2 children - not dependent) You are requested to develop a financial strategy that will assist ONE of the three clients invest their funds so they can achieve their stated goals.
You are required to:
• prepare a report that outlines your financial strategies
• prepare a PowerPoint presentation that outlines your financial strategies
• prepare a script for your presentation and
• present your recommendations to your client (ie. the class) in a 5 - 7 minute oral presentation.
The financial planning aspects that should be covered in your presentation include:
? financial goals for each client;
? Budget ideas that will be used for each client's portfolio (budgeting and spending, goal setting, saving, debt/loan, banking products, risk management/income protection/insurance/assurance)
? the mix of investments (cash and cash equivalents - savings account, government bonds, term deposit, real-estate, shares, and superannuation)
? whether the investments are high or low risk;
? the amount of money allocated to each type of investment; (70% living, 20% saving and 10% fun). You can support this with graphs too if you like.
? a graphic display of the funds allocation -
? reasons why the money has been allocated in the recommended ratios;
? a brief estimate of the possible projected returns on funds each client may receive from each financial strategy; and
? a graphic display of projected returns.
Presentation Delivery
An innovative and interesting approach should be adopted in your presentation, using at least three (3) different types of visual aids to support your presentation (Charts, videos, YouTube clips, games etc - make sure you use Australian resources). Ensure you are conscious of the way you deliver your presentation, concentrating on your voice projection, pace and pitch stance and body language, and confidence.
Note: The class will act as your clients. You will therefore be required to address them during the presentation.
Criteria
Interpretation and Evaluation The student work has the following characteristics:
• thorough and effective analysis and interpretation of relevant accounting data and information
• development of logical and convincing arguments to thoroughly justify valid conclusions, decisions, judgments and recommendations
• effective communication of accounting information using appropriate modes for a variety of purposes.
The student work has the following characteristics:
• detailed analysis and interpretation of relevant accounting data and information
• development of reasoned and coherent arguments to justify valid conclusions, decisions, judgments and recommendations
• cohesive communication of accounting information using appropriate modes for a variety of purposes. The student work has the
following characteristics:
• analysis of accounting data or information
• development of reasoned arguments to justify conclusions, decisions, judgments and recommendations
• clear communication of accounting information using appropriate modes for a variety of purposes. The student work has the
following characteristics:
• basic explanation of accounting data or information
• presentation of simple arguments to make general conclusions or broad recommendations
• communication of accounting information often lacks clarity.
The student work has the following characteristics:
• reference to accounting data
• statement of conclusions or recommendations
• presentation of information using limited modes.