BAFI 1014 - Personal Wealth Management - Financial Need Analysis - Portfolio Theory - Finance Assessment Answer

Assessment Task:

BAFI 1014 Personal Wealth Management Finance Assessment Answer

Learning Outcomes

• Understand and perform simple financial need analysis. 
• Understand concepts associated with portfolio theory.
• Appreciate the effects of taxation on financial planning and calculate taxation liability 
• Develop and be able to critically evaluate a financial plan for an individual.
• Other objectives:  Research, problem-solving skills, communication skills, critical thinking, writing competence.
   

Assessment Task

Question 1: Case Study 

You are a financial adviser and the following information is an extract of data you gathered as part of fact-finding during an initial client consultation for a married couple Zhang (aged 53) and Amanda (aged 55) Wei.  Zhang works as a part-time senior teacher in a secondary school and Amanda, a CPA, is a public practitioner.  The couple has 3 children aged 28, 26 and 22.  Only the youngest child is still living at home but plans to move out within the next 1 or 2 years.

•    The Wei couple would like to know their net earnings after paying tax for the year ended 30th June 2019. They would also like advice on how to reduce their tax liability in the future.
•    10 months ago Amanda invested in equity.  She bought 550 shares in ANZ Bank at $30 a share and 150 shares in Macquarie Group $112 a share. She wants to sell her Macquarie Group shares (expected sale price $130) to lock in her profit and has come to you for advice.  
•    Zhang is concerned about his superannuation.  He would like to know how much return his superannuation is making.  He is 53 and describes himself as a conservative investor and is stressed observing the frequent change in the value of superannuation portfolio.

Itemised expenses per annum :
•    Travelling to and from work- $2500 (Amanda) and $2200 (Zhang)
•    FCPA (full year) Membership Fees $720 (Amanda)
•    Donations to registered Charity $1,500 (Zhang)

Required:

A.    Calculate Zhang and Amanda’s after-tax income for the year ended June 30th 2019. Explain how Zhang and Amanda could reduce their tax liability through splitting their income.  Show the effect this strategy would have had, if they had split income for the tax year ended 30 June 2019.  
B.    Calculate Amanda’s capital gains liability if she were to sell her Macquarie Group Shares.  Assume that Amanda will sell her shares and advise her on a strategy she could use to minimise her possible capital gain. Also, show the effect this strategy would have.
C.    Calculate the expected return for Zhang’s superannuation portfolio using the return for the year ended June 2019.  Explain to Zhang why his superannuation portfolio balance fluctuates more than he would like it to.  

Question 2: Infographic/poster 

You are required to design an infographic/poster that would be used on a financial planner’s website or displayed in their office. The purpose of the infographic/poster is to explain to investors how the differences and similarities between two shares which are in the same sector using fundamental analysis.  E.g. Compare ANZ bank to Bendigo, or compare NAB to Bank of Queensland Bank (BOQ).  

The poster should be self-explanatory and contain real information. So you need to conduct additional research because you will need to use actual investments.  

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