FPC009-Complex Financial Planning Analyses - Accounting & Finance Assignment Help

Assignment Task

Task 

Complex Financial Planning

Independent research
For some or all questions in this assignment, you will be required to complete independent research beyond the provided materials. You will also be expected to analyse this research and use it to support your own reasoned conclusions.
This includes:
• consideration of multiple sources beyond topic notes or other provided resources
• sources included are academically sound and credible
• analysing and understanding the argument or information the source presents
• using the material appropriately to directly support your conclusions.
Where significant independent research is required for a given question, it will be clearly indicated in the question instructions and the Criteria-Based Marking Guide. 

Task 1 - Scope of advice
Step 1 of the safe harbour process is to identify what advice the clients are seeking.
Based on the facts of the case study, analyse the areas where the clients are seeking advice. 
Consider the application of the Code of Ethics — for example, Standard 6.
In practice, a financial adviser may record this information in a file note. You do not need to complete or attach a file note to your SOA.

Task 2 Fact finding
Step 2 of the safe harbour process is to understand the clients’ objectives, financial situation and needs.
As you read the case study, make an organised list of the areas where they have asked for advice such as cash flow, debt reduction, investments and so on. You should make reasonable assumptions about the answers they give, consistent with the case study. Consider your obligations to gather sufficient information under the Code of Ethics. For instance, you might want to know more about Delilah’s decision to invest her inheritance or the clients’ attitudes or values about sharing their assets and income.
However, it would be unreasonable, for example, to make an assumption that the clients state they did not want trauma insurance.
In what other areas do you think they may need advice?

Task 3 Creating the SOA
In creating your SOA, you will be required to complete the following four sub-tasks, following the steps of the best interests duty, safe harbour and obligations under the Code of Ethics. The result of your inquiries and analysis will form elements of the SOA.
You should review your understanding of section D of RG 175, particularly (numbering refers to the June 2021 version):
• RG 175.183–175.185 — the need to provide enough information for the client to make a decision
• RG 175.213–175.217 – for the SOA to be clear, concise and effective
• RG 175.349–175.353 — replacement (switching) of a financial product
• RG 175.191–175.194 — information about the advice and the basis of the advice
• RG 175.170–175.172 — SOAs and the best interests duty and related obligations

Clients’ financial situation, needs and objectives
This is Step 3 of the safe harbour process where you refine and improve the clients’ current and future objectives and needs.
Set out the clients’ financial situation, objectives and needs in the SOA. Make sure you write clearly and in a language the clients will understand.
You should include an analysis of their current cash flow and net wealth as a couple.
Do not just repeat the objectives stated by the clients in the case study. Wherever possible, use the answers you assumed in Task 2 to make the objectives measurable and time bound. Better objectives will enable you to more easily demonstrate that your recommendations are in the clients’ best interests.

Strategy
Set out your strategy recommendations in the SOA.
You must justify your recommendations, explaining how the advice and recommendations are appropriate for the clients and are in their best interests, including the advantages, disadvantages and risks.
You should include an analysis of what their cash flow and net wealth as a couple will be if they follow your recommendations, as well as what the broader effects would be of the client acting on your advice and any implications the advice will have for the client and their family members (if applicable). Do not recommend specific products at this stage.

Outcomes
Set out the outcomes of your recommendations in the SOA.
Include in the SOA the assumptions you have made in making these projections.

Competence
This is Step 5 of the safe harbour process.
Explain in the SOA where you can give advice and where you would refer the clients to another adviser/specialist.

Financial product recommendations
This is Step 6 of the safe harbour process.
Set out your product recommendations in the SOA.
You must justify your product recommendations, explaining the advantages and disadvantages of these products and why they meet the clients’ needs and objectives.
If you recommend replacing a financial product, you must demonstrate why the new product is likely to put the clients in a better position.

Task 4 Complete the SOA
Complete the SOA by adding:

• an accompanying letter to the clients
• the front sheet of the SOA
• the executive summary
• fees and commissions (if any)
• disclaimers/warnings (Step 4 of the safe harbour)
• authority to proceed
• an implementation schedule detailing the timing of transactions to be implemented and actions that you, the client and others will need to take in ensuring a smooth implementation of the agreed strategies
• appendices of calculations, projections or additional information providing detail to support the analysis and recommendations.
• You have been provided with an example case study and SOA previously in this subject for reference purposes.

Task 5 Ongoing service
In the SOA, describe the components and costs of your ongoing service proposition.
To demonstrate the value of the review service, describe the clients’ critical issues and assumptions that will need to be revisited at a review.

Task 6 General instructions for constructing the SOA
You must list the assumptions used in your SOA for your assignment submission.

• These will generally include:

• any assumptions you have made regarding missing background information on the clients
• any assumptions you have used to calculate future returns from your recommended investments
• any assumptions used for fees relating to the products you have recommended.

• Assumptions that you cannot make include:

• new lump sums of money invested
• outside experts providing basic information that you should be able to provide, for example, ‘our insurance adviser will call you to analyse and resolve your insurance needs’
• the client’s goals will be dealt with at a later date, so you therefore fail to address them.

• In your SOA, you must address each of the goals listed in the case study and provide appropriate strategy recommendations.
• In support of the recommendations made, you must include:

• tax calculations for the redundancy
• a cash flow statement showing all income and tax payable for their current financial year and net disposable income
• a cash flow statement showing all income and tax after implementation of your recommendations, and net disposable income
• asset allocations for all their investments — current and recommended
• tax implications of any investment recommendations, including CGT
• full estate planning recommendations and how these interact with insurance recommendations, where relevant
• full insurance analysis and recommendations
• portfolio projections that show how your recommendations enable the clients to meet their goals.

• Specific product recommendations for the insurance, superannuation and estate planning recommendations are not required. You may recommend generic products to implement these strategies.
• You should recommend appropriate investment products to implement the advice you have provided in relation to any asset allocation, wealth accumulation or savings goals.
• It is not necessary to include product disclosure statements (PDSs) in your assignment for any products you recommend in your SOA.
• You must include detailed cash flow tables showing their situation before and after your recommendations. These should be included as Appendices 1 and 2 in your SOA (see templates below for your use).
• Use of software: You may use financial planning software to assist in modelling strategic options and making projections for the clients, provided you personalise the content and ensure that it is clear, concise and effective, conforming to the structural guidelines for an SOA contained in the course topics and RG 175.
• You should include cash flow projections for personal investment recommendations as Appendix 3 in your SOA. You may use a Microsoft Excel spreadsheet to calculate your projections. Copy the projections into the SOA appendix as a table.
• Hint: If using the FV formula in Excel to project account balances — Nper = either 1 for annual or 12 for monthly contributions; PV = the value of the investment at the end of the previous year and should be entered as negative; rate = the annual rate divided by the frequency of contributions; pmt is the contribution amount and should be negative when accumulating funds; type can be left blank and indicates that the payments happen at the end of each period.

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