BAFI 1014 PERSONAL WEALTH MANAGEMENT Semester 1, 2019 Practical Assessment— Case Study Assignment Individual Due date: Friday 3rd May 11:59 pm 2019 Weighting: Case Study and Poster - 30% Word Length:...

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BAFI 1014PERSONAL WEALTH MANAGEMENTSemester 1, 2019Practical Assessment— Case Study AssignmentIndividual Due date:Friday 3rd May 11:59 pm 2019Weighting:Case Study and Poster - 30%Word Length:No more than 2000 words (part A only). Content CoverageLecture Materials 1 to 7.Learning outcomesUnderstand 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 taskQuestion 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 value of superannuation portfolio.Income for year ended 30th June 2019: Income type (ownership)AmountGross Salary- (Amanda)$124,000ANZ Savings Account- Interest 3.00%- (Amanda & Zhang)$540ANZ Bond Fund- Distribution 4.50% (Amanda)$900ANZ Bank Dividend- Dividend $3.60 per share- (Amanda)$1980+ $848.57 Imputation CreditMacquarie Group Dividend- Dividend $5.25 per share- (Amanda)$787.50+ $337.50 Imputation CreditGross Salary- (Zhang)$62,000Itemised 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)Assets and Liabilities Assets (Ownership)Current valuation $Liability (Ownership)Current valuation $Home and Contents (Joint)950,000Mortgage540,000Cars (Joint)42,000Credit cards (Joint)Includes the annual interest cost7,000Bank Account:ANZ Savings Account (Joint)16,000Investments:ANZ Bond Fund- (Amanda) ANZ Bank Shares 550- (Amanda)Macquarie Group Shares 150- (Amanda)Superannuation- (Amanda)Superannuation- (Zhang)20,00016,50016800400,000160,000Zhang’s Superannuation asset allocationInvestment Asset AllocationPerformance p.a. after taxAustralian Shares50%3% Cash & Fixed Interest15%1.4 %International Shares25%10.80%Property10%3.10%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. Important Note:While answering questions that involve calculations, you are expected to describe your approach and explain your calculations. If assumptions are made, these assumptions must be clearly stated.Formula to calculate portfolio return:· Ri is the return for each asset i;· Pi is the proportion of the each asset in the portfolio; and· i counts the number of assets.(5 + 5 + 5 = 15 marks)Question 2: Infographic/poster You are required to design an infographic/poster that would be used on 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. Make sure to reference your sources in the poster. The aim of the poster is to communicate essential information about equities to an audience with limited financial knowledge on this topic.Here are some useful website references:Infographic/poster websites:, you can use Adobe Photoshop or PowerPoint to design the infographic/poster.Website for information on shares:Yahoo Finance Index of assignment:The infographic/poster can be submitted as an image or by providing a web link. It is your responsibility to ensure that the examiner can accurately view the poster/infographic. (15 Marks)In order to answer requirements of this assignment, you may need to access resources other than the set text. All sources used in your assignment must be clearly referenced, but there is no set referencing style for this course.Marking criteriaThe marking criteria for the total assignment are as follows:Case Study MarksQuestion 1 A5Question 1 B5Question 1 C5Question1 Sub-total15Question 2:Presentation (i.e. layout)5Content 10Question2 Sub-total15Overall mark30Question 2: Marking guide for Infographic/PosterQuestionPossible marksCriterionQuestion 2Presentation(i.e. layout)55 marksExcellent use of graphics and data. Arrangement of information is coherent with an appeal to the audience.4 marksGood use of graphics and data. Arrangement of information can be followed but may require more effort by the audience.3 marksGraphics and data are presented but limited or ill suited. The presentation can be understood but is not audience friendly.0-2 marksPresentation lacks graphics and/ or information. Arrangement of information does not consider the audience.Question 2 Content 108 - 10 marksVery clear, thoroughly researched and referenced. Key similarities and differences identified and an excellent understanding demonstrated.6.5 - 8 marksClear, researched and referenced. Most similarities and differences identified and a strong understanding demonstrated.4.5 - 6 marksAdequate information but not as thoroughly researched and referenced. Not all similarities and differences identified and only partial understanding shown.0 - 4 marksPoor information, with little research and references. Does not show a clear understanding of similarities and differences. Not to undergraduate standard.166
Apr 08, 2021BAFI1014

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