After analysing the completed Fact Finder, in addition to your recollection of the meeting, you determine that Maeve and Margot are each aged 42, and have been married for 12 years. They have two young children Emily (daughter) and Neddy (son) aged 8 and 4 respectively. Emily attends the local Catholic primary school, Currently Neddy is in preschool 3 days per week costing $100 per day after government rebates but will join Emily at her same school next year. Maeve and Margot have tentatively booked both children into an expensive independent school for their high school years from 12-18 years of age. Maeve and Margot also anticipate that the children will attend university in the future. The couple have given a lot of thought to the costs involved for the children's education and estimate that private schooling would be on average $18,000 pa for each child for each of the 6 years of high school. They are having difficulty even thinking about the high costs of tertiary education. If necessary, the children may have to support themselves and pay their own university fees. They will support them domestically from ages 18-21 by providing $200 per week each if they are studying at university etc.

Maeve and Margot have given due consideration to the scenario of how the children would be supported and cared for if something untoward were to happen to either or both of them. So they would like to factor in childcare and domestic support for their children till the youngest reaches age 15 (they really have no idea what the cost of this would be so you will have to do some relevant research on which to base your assumptions). Margot would like to return to work at some time in the future but is not keen on this option at present - if possible, she sees her role predominantly as a "stay at home mum". Once the children are independent at say age 18, she would be happy to reskill and re-join the workforce. Margot has always had the desire to be a teacher.

Maeve is the primary income earner for the family. She owns and runs a highly popular physiotherapy practice (as a sole trader) with rooms attached to a local Allied Health Practice in a nearby suburb earning net business income of $250,000 pa of which $180,000 pays her salary (plus 10% super guarantee). She employs an additional remedial therapist (on a part time basis) and a part time receptionist. Margot is a qualified nurse but has not worked full time for the last 10 years. She of course assists Maeve with some receptionist duties and other part time assistance at the practice when required, usually on Tuesday and Thursday afternoons. This is because Margot's godmother Yvonne (68 years old) is able to look after the children for them at these times. The whole family love Yvonne very much and expect that Yvonne will come and live with them fulltime from next year. They currently support Yvonne financially by supplementing her own income with approximately $300 per month. They would continue to do so once she comes to live with them.

Maeve and Margot have a stunning home on a half-acre in a leafy though highly bush fire prone area in Sydney's outer suburbs. They have a mortgage of $350,000 still owing on their home which was recently valued at $1.85 million. They built this home 12 years ago when they moved from a cramped terrace in the inner city. They sold this previous home for a good price and also received an inheritance from Maeve's father of $300,000 when he died, which of course helped them to greatly reduce the size of their current home borrowing. They both own reasonably new cars; Maeve has a large, 18-month-old 4-wheel-drive Land Rover (market value $80,000) which she needs for the business and to transport the children around in and Margot drives a 3-year-old SUV. The cars are valued at $130,000 in total. The cars have a combined total outstanding personal loan balance on them of about $60,000. They have no comprehensive insurance on the cars as they consider the cost of premiums to be prohibitive. They are now quite nervous in this regard and are rethinking the necessity for comprehensive cover on the cars. Maeve and Margot also have outstanding credit card debt of $15,000 which seems to always be there - like a noose around their necks!! Their other assets include some paintings by well-known artists valued at $80,000, a new share portfolio, mostly bank shares (valued at $300,000), household contents of roughly $300,000, a CBA term deposit (1 month remaining, earning 2% pa) of $50,000 and some cash at hand of $10,000 for emergencies (they think they may require more than this). Both Maeve and Margot have superannuation accounts with balances of $350,000 and $55,000 respectively They would like to retire by age 65 or earlier if possible!! They have not done any estate planning to date. The couple estimate that they spend $5,000 per month on their combined living expenses (not including the mortgage or debt repayments). and an additional $50 per week for each member of the family living in the home.

Margot's health is a concern as she was recently diagnosed with early-stage breast cancer and carries the BRCA1 gene mutation (as did her mother and grandmother). Maeve also has elevated cholesterol and blood pressure issues which are being treated with medication and lifestyle changes - this has come as quite a shock to both. Margot is on a continual treatment regime which costs $1,000 per month for special drugs. Maeve has had to make some dedicated lifestyle changes such as determining to lose 10 kgs of excess weight, reduce stress levels and adhere to a dedicated exercise program. Aside from the breast cancer Margot is in reasonably good health, and neither of the couple smokes.

Maeve and Margot have always been wary of insurance - both the products and the salespeople - and have been known to make very vocal and strident comments that it is just a scam to take your money!! Their view on insurance has been that it is a waste of money and hence they do not have an appropriate risk management plan in place which is relevant to protect their lives and income, their property, or their health status. Currently the only insurance they have in force is for business related cover for Maeve's practice and some basic car insurance (not comprehensive). They have now come to a stage in their lives where they are certainly changing their minds about the need for risk protection and insurance - that is why they have come to you seeking professional assistance in the specialised field of risk management. They both acknowledge that they require a complete risk analysis of their situation. They have been referred to you by a close friend who says you have the credentials, experience, and knowledge to recommend the most appropriate protection plan for their current circumstances.

You may assume current life expectancy for females to be 85 years and for males 80 years.

The client provided the following answers to in your discussion about their attitudes to risk:

Neither was interested in being too safe they wanted a mix of income and long term growth, especially to protect against inflation which they feel is very important right now. Both felt about 50% of their investments could be exposed to risk taking and they have no need of their investment money in the next 10 years. Maeve is comfortable with one negative return every 3 years, while Margot would prefer every 5 years or less. If their investment dropped 10% Margot would want to buy more but Maeve would want to wait and see. Both like the current mix of investment types they currently own.

Requires:

1. Risk analysis (Identify the risks and threats to the client's objectives. Consider using a table to capture the issues effectively. Add extract of the excel insurance needs analysis)

2. Ideas regarding potential risk managment strategies (calculation of insurance needs, identification of appropriate insurance product types for client needs)