Jossiah and Jemima Benson have recently married and in planning their future have decided to solicit the services of a financial advisor with the aim of implementing their short and long term lifestyle goals and financial plans.
Jossiah and Jemima are both aged 28. For their immediate future they have decided they want to purchase a new house and a new car. The house they want has a value of $400,000 and they are very excited as both Jossiah and Jemima have never owned a home before. They would also like to buy a new car for $60,000, however are unsure whether to purchase the car outright or salary sacrifice in order to obtain the car. They expect to travel approximately 35,000 km per year.
Their longer term plans involve establishing a fairly aggressive investment portfolio with the aim of directly purchasing an investment property and investing in a share portfolio of some sort amongst other strategies that you may recommend. They have also heard from a friend that margin lending can be a profitable and expedite way to achieve their goals.
Jossiah works as a minister for a local church and earns $70,000 gross income, while Jemima works for a kindergarten and earns $55,000 gross income. They also enjoy taking holidays and plan to have a holiday each year to the value of $5,000 with an around the world trip planned for five years time to the value of $20,000.
Jossiah and Jemima are also keen to retire early and are quite willing to take on additional risk if this assists in them achieving their lifestyle goals faster. They have managed to save between them $180,000 in cash and are looking forward to your advise on how they should go about planning for their future lives together.
Your report /financial plan should include:
Details of any assumptions made on the client's behalf in relation to investment strategies, client background data or any other relevant information other than those provided. Specific identification of any risks associated with the financial plan and investment advice, possibly including a SWOT (strengths, weaknesses, opportunities, threats) analysis based on the current investment climate and realism of expected returns aligning with historic performance.
Quantitative assessment and calculation of expected returns and the tax implications that are relevant to your advice utilising the formulas provided in the formula sheet (where all required data is not available from the client profile, students may insert relevant assumptions). Detailed background research that will form a significant component of this assignment.
Students are encouraged to source additional information from the financial press, business magazines, journals, reports and the internet. Under no circumstances are students to make direct personal contact with the company or its officers (for example by telephone, fax, letter or email) in an attempt to gather further information.
All advice should be based on real life products, investments, securities, interest rates and economic data. For investment performance returns, students may assume that the expected returns, growth rates and price of investments and securities will be based on recent historic performance.
For example, relevant research in relation to interest rates will require you to explore the marketplace and find the best loan or package of loans that will provide the Anderson's with the means to undertake there investment and lifestyle requirements. In doing this you would need to identify the expenses they will encounter in arranging these facilities, on-going costs that will arise and associated risks. A similar line of research will need to apply to any other financial strategies or investments that you recommend.It is expected that the bibliography will include a wider range of readings than is included in the course suggested readings. Relevant calculations, quantitative assessments and research data should be incorporated in your appendixes.