FPC003 - Case study A: Francesca And Robert Kincaid Assignment

Assignment Task

Learning outcomes (LO) mapping 

LO1 Analyse key elements of superannuation including the contribution, accumulation and payment of benefits. 

LO2 Identify retirement planning strategies and formulate solutions for client situations. 

LO3 Construct and present a statement of advice (SOA) in an ethical and professional manner.

Case study A: Francesca and Robert Kincaid

It is 1 July 2023 and you are assisting Francesca and Robert Kincaid. Robert (age 78) has been finding it hard to manage at home since he suffered a stroke which has resulted in the onset of dementia. The disease makes Robert aggressive at times, and it is unpleasant for Francesca (age 69) who is not capable of looking after him at home. They have investigated home care and do not want to take up that option. Although they do not want to be separated, they have agreed that the best solution for them both is for Robert to enter an aged care facility. Francesca has been granted an enduring power of attorney (POA) from Robert, so she is able to make decisions on his behalf if needed. At this stage, however, Robert is still capable of understanding advice on most days and should be included as a client. (Note: You are not expected to deal with this aspect of authority in the statement of advice (SOA), but your outline of their current situation should include acknowledgement of this concern.)

Robert and Francesca have discussed the situation with their three adult children, and they all agreed and encouraged Robert to move into an aged care facility near the family home. Francesca has found a room at an aged care facility near her that she and Robert liked. The required lump sum entry contribution (refundable accommodation deposit or RAD) for this room is $550,000.

Robert and Francesca own a small house with no mortgage and an old car. They are unsure about what to do with the house but ideally Francesca would like to stay there until she too needs to go into care, although she doesn’t expect that to be any time soon as she is relatively fit and healthy.

Robert and Francesca’s primary goals in order of priority are:

• Optimise their situation to make aged care affordable.
• Francesca to remain in the family home, and Robert to move to residential aged care.
• Obtain some age pension to assist with their situation.
• Francesca would like to maintain her current lifestyle and estimates she would need about $39,000 per annum to do so (see details in Table 3).
• Leave an estate benefit for their three children and two grandchildren. Although they want to live comfortably in their retirement, they have both always intended to leave something for their children.

Currently, all income comes from their two ABPs. Most expenses are split evenly with the exception of medical care, which has been higher for Robert, and spending on clothing, which is higher for Francesca. Discussions with Francesca indicate that should Robert go into care; she believes she could cut her spending on groceries and recreation by half, but that most other expenses would remain the same for her. In all, she believes she could manage on income of around $39,000 per year.

Question 1 Prepare a statement of advice (SOA) for the clients

Refer to Case study A: Francesca and Robert Kincaid and prepare a statement of advice (SOA) for the clients regarding the strategy to get Robert into aged care. The SOA should provide a recommended strategy(ies) and alternatives, and clarify for the clients what options are available and what is the best option(s) for them based on their needs, wants, goals, constraints and limitations.

Your SOA must include the following:

• scope of the advice
• executive summary of the advice
• analysis of client's current situation, needs, goals, wants, constraints
• detailed discussion of your advice to the clients
• any recommended products
• fees and charges
• actions to proceed
• client acceptance and authority to proceed
• appendices and attachments:

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