The case study Section 1 — Meeting your client The first phone call John and Elsbeth Smyth are a young married couple with one child. Recently Chris, a business associate of Elsbeth, who also has a...

Hi,Could you please assist me with attached assignment for Financial planning? There is only 3 Sections that needs to be done.Please let me know how much it would cost?As i'm new to this so i don't know your quality of work.This assignment is big part of my grade so i really want some quality work. im happy to send lecture notes.
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The case study Section 1 — Meeting your client The first phone call John and Elsbeth Smyth are a young married couple with one child. Recently Chris, a business associate of Elsbeth, who also has a young family, was seriously injured in a vehicle accident that has resulted in uncertainty about his ability to return to work. John and Elsbeth have also learned that, due to inadequate insurance cover, the family of the injured work colleague is now under financial stress. They do have some insurance cover themselves, but are now unsure if it is adequate or suitable for their needs. Recalling a positive experience, she had with you a few years ago on another financial matter, John and Elsbeth call to see if you if you can help them with their insurance needs. Over the phone you explain to John and Elsbeth the financial planning process and why you will need to ask the couple for certain types of financial information. You stress that any information they give you will be treated confidentially and will only be used to help you recommend an appropriate course of action that the Smyths should consider to ultimately meet their needs. You give them information concerning privacy, and you and your firm’s capability, and mention that other disclosure issues are in the firm’s financial services guide (FSG) that you will send to them. You go on to explain that part of the information gathering will include the need to complete a financial profile. This means that they will need to tell you what they own, what they owe, what they earn and their living expenses. All this information will be recorded in a fact finder form which you will compile. You arrange a date and time for them to come to your office. You ask them to bring along as much financial information as they can to the meeting, including income details, expenses, insurance details, superannuation and investments. You also ask them to think about what specific financial goals they want to achieve and any issues they wish to discuss at the meeting. When you have concluded the call, you make a file note about the conversation including the date, the potential clients’ names, and any other items that were discussed. This is the start of your paper trail. You also complete some of the initial details in the data collection form as shown in Table 1. Finally, you write to Elsbeth and John, as promised during your initial conversation, and include the FSG and a checklist of the information they need to bring to the meeting. Table 1Personal details Client Client 2 Title Mrs Mr Surname Smyth (née Smeg) Smyth Given and preferred names Elsbeth John Home address 30 Crune St Caringbah NSW 2229 30 Crune St Caringbah NSW 2229 Business address n.a. n.a. Contact phone (02) 9544 7766 (02) 9544 7766 Age 32 36 Sex Male Female Male Female Smoker Yes No Yes No Expected retirement age Probably around the same time as John retires Probably around age 65 The first meeting John and Elsbeth arrive at your office for the meeting as arranged. After making them comfortable, you go through the key elements of your FSG and explain your role and capacity to assist them with their insurance needs. Collecting the data You gather the following information about John and Elsbeth through a process of thorough and polite questioning. From time to time, one or the other provides you with a relevant document to confirm their financial situation. You confirm the details in the fact finder as you proceed. John and Elsbeth’s current situation John, age 36, is married to Elsbeth, who is 32. Elsbeth follows netball and is a keen weekend player in a local competition. Elsbeth and John have one child, a boy named Harry, who was born 12 months ago. John and Elsbeth purchased their home about three years ago which is now worth around $975,000. They have a mortgage of $540,000. The mortgage is a variable interest loan with an interest rate of 4.5% p.a., which is linked to a bank offset account. (Note: An offset account is one that allows the credit balance of the offset account to offset the interest owing on an outstanding loan or mortgage, reducing the interest payable.) The mortgage has 22 years remaining and their minimum mortgage repayment is $2,700 per month. Any excess income they have is paid into the offset account. The current amount available in their offset account is $32,000. John works full-time as a chemical engineer for an agricultural supplies company that sells agricultural chemicals, seed and fertilisers and takes regular interstate business trips to rural and regional Australia. He has worked full-time for his employer for 10 years and earns $165,000 p.a. with additional superannuation guarantee (SG) contributions from his employer paid into the employer’s default fund. Elsbeth has recently returned to work on a part-time basis (3 days a week) following maternity leave. She is a marketing manager for a local engineering company and has also been with the same firm for 10 years. She earns $63,000 p.a. with additional SG contributions from her employer paid into the employer’s default fund. Elsbeth advises during the meeting that she feels she would like to change her current employment, and is considering starting up her own consulting business from home. This would enable her to spend more time with their son. They currently use a child care centre, as well as Elsbeth’s mother, to look after Harry when Elsbeth is at work. The child care fees are $88 per day (not including the Child Care Rebate), which Elsbeth utilises two days per week for 48 weeks per year. These expenses are not included in their day-to-day living expenses. Elsbeth’s mother minds Harry for one day a week at no cost. Once Harry starts school, Elsbeth and John hope to send him to the local independent school at a total cost of $65,000 for his whole school life. Other than their cash in the bank, superannuation holdings and house contents, the only other assets they have are their motor vehicles. Elsbeth drives a recent model Ford Focus, currently valued at $11,000, and John drives a late model Holden HSV performance vehicle, currently valued at $33,000. Both cars are fully paid off and are comprehensively insured. All motor vehicle expenses (except insurance) are included in the clients’ living expenses. Superannuation John has $260,000 in his employer’s default superannuation fund, the ASSF Super Fund, and is invested in a balanced portfolio. He joined the fund on 1 February 2004. Elsbeth has $114,000 in her employer’s default superannuation fund, the CISF Super Fund and is invested in a balanced portfolio. Elsbeth joined the fund on 19 January 2004. Neither Elsbeth nor John makes any additional contributions to their superannuation funds. Insurance John’s default superannuation fund provides a death and total and permanent disability (TPD) benefit which is currently equal to his annual income (excluding SG contributions). The premium for this cover is $1.25 p.a. for each $1,000 of cover or part thereof, and is deducted from his superannuation contributions. The ASSF Super Fund will allow a member to increase their benefit to twice the member’s annual salary at this premium rate. The fund will allow a further increase in cover to a maximum of $750,000. However, the premium will increase to $1.50 per $1,000 for any amount of cover that is over twice the member’s annual salary. John’s superannuation fund can provide income protection cover with a 30 to 90-day waiting period, and a two-year to age 65 benefit period. He has not taken out this cover. Elsbeth’s default superannuation fund also provides a death and TPD benefit and she currently has cover of $126,000 for each of life and TPD. The premium for this level of cover is $143 p.a. deducted from her superannuation contributions. The CISF Super Fund allows for members to further increase their cover to a maximum of $2 million and on the following premium scale: •≤$500,000 — $1.19 p.a. per $1,000 of cover •$500,001 to $1 million — $1.45 p.a. per $1,000 of cover •$1 million to $2 million — $1.65 p.a. per $1,000 of cover. Elsbeth and John have no other personal insurance cover (except health insurance as per below). They have full comprehensive insurance on their vehicles with a total annual premium of $2,800 p.a. Elsbeth and John also have combined home building and contents insurance cover of: •$100,000 home contents •$750,000 home building. Their home was built under an earlier version of the local building code. Additionally, the home was purchased in a much lower market than the current one and is estimated to cost much more than the $675,000 purchase price to replace. The policy has a contents excess of $500 and a building excess of $1,100. The policy also includes legal liability cover of up to $20 million. Elsbeth and John pay $145 per month for this insurance. The Smyths have adequate private health insurance cover; this is the family cover option and includes hospital cover with a $500 excess. They pay a premium of $270 per month for this cover. This premium includes the private health insurance rebate. The above vehicle, home and contents and health insurance payments are not included in their general living expenses. Other information John and Elsbeth have a credit card with a limit of $15,000 that they use for all their general expenses and entertainment. However, they never spend up to their limit and always repay within the interest-free period. They estimate their average monthly living expenses are $6,900 per month. John and Elsbeth used to go on regular annual holidays and spent over $10,000 per trip. However, since the start of their mortgage and the birth of Harry they now plan to take a holiday every two years spending about $5,000, in addition to their general living expenses. John advises he is quite healthy and has accumulated 78 days sick leave. However, he advises that he was diagnosed with asthma symptoms in the past for which he was prescribed medication. He has not experienced a return of these symptoms during the past couple of years. Elsbeth took all her accumulated annual and long service leave as part of her maternity leave. Other expenses include a donation by Elsbeth to the National Breast Cancer Foundation of $50 per month and John makes a tax-deductible donation to Plan B of $50 per month. They each make tax-deductible ‘bucket’ donations of $50 p.a. to disaster relief funds, and accountants’ expenses come to $150 p.a. each. These expenses are also in addition to their general living expenses. Needs and objectives During your conversation with John and Elsbeth, it becomes apparent that their main objective is to protect their home and to provide for
May 21, 2021
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