Assignment Part 1 (10 marks) 1. Review the assigned case. Apply the SIP steps to your case 2. Write up 3-4 page report describing this individual's (or family) situation. Be sure to include all information pertinent to establishing Know Your Client detail. Include at a minimum (you may have to invent missing details...use google/text): a. Birth date (s) b. Age(s) c. Marital status? Kids? d. Employment (s) (re both partners if a couple) e. Income, expenses (Set-up a cash flow statement) f. Owns own home? Rents? Market value? Mortgage? (Set-up a net worth statement)? Existing investments, savings etc HINT: What is their 'Lifestyle'? g. Desire to leave an estate? (Who gets what when I/we die) h. KYC critical: Goals(SMART)/Objectives, investment experience, time lines and risk tolerance, available savings etc re: Demographic profile of clients i. Is your KYC, CFR compliant? 3. Establish a risk profile. See e-centennial Investor Profile Questionnaire. Augment with "interview" information. 4. How much does this client need to save each month? (Goals will help to prioritize). Based on the risk profile, what kinds of investments Schemes? Eg RESP, RRSP, TFSA and risks can your client(s) consider? 5. Submit written report in drop box. Also submit the completed Investor Profile Questionnaire (Posted ecentennial - print Investor Profile Questionnaire before interview \& complete it; then scan to computer for drop box submission). 6. Rubric: a. 5 pts for organizing information and questionnaire with an appropriate risk/return profile; SMART goals \& Obj, recommended schemes, CFR compliant b. 4 pts for Net Worth \& Cash Flow statement (organize the data...put in appendix) c. 1 Well written report, grammer \& spelling (tell a great story) Bill is 26 years old, a freelancer whose $48,000 annual income vanished overnight. "I've been a freelance photographer for seven years," Bill writes in an e-mail. He is also involved in producing music. "After high school and university, I neglected taxes entirely. I didn't start making money until the last three years, and when I did, I paid rent and invested in other creative projects. I never saved. I never budgeted. I never invested. I didn't even charge my clients HST (sales tax) or set up a business number. I have a lot of regrets about how I spent my time and money over the last seven years." Last year, Bill filed five years' worth of overdue tax returns. "I owed the Canada Revenue Agency $20,000 in personal income tax and HST payments and interest," Bill writes. "I was just turning the corner on getting caught up. I had settled on a monthly payment plan with the CRA. I feel like I had just gained financial literacy and overall perspective on money, saving, budgeting, and investing. I felt optimistic and in control of my finances and my future." Then the economy shut down. "Because of the coronavirus, my income has been reduced to zero," Bill writes. "Not only am I worried about how I'm even going to attract clients in the coming months, I'm worried about falling back into the debt hole I sacrificed so much to chip away at. It's hard to budget for a $0/ month income. Any advice on navigating the next year would be greatly appreciated." CLIENT SITUATION: The person: Bill, age 26 The problem: His income sources have disappeared. Monthly net income: Negligible Assets: Chequing account \$4,130; PayPal account \$2,500; eBay account \$140; TFSA (2019 tax reserve) $7,740. Total: $14,510 Monthly outlays: Rent $830; electricity $55; transit $135; groceries $360; clothing $40; CRA $500; eating out $30; subscriptions $15; phone $120; internet $45. Total: $2,130 Liabilities: Credit card \$450; unpaid rent $830; back taxes (other than HST) \$5,500; HST \$3,000. Total: $9,780 Surplus cash $4,730 Assignment Part 1 (10 marks) 1. Review the assigned case. Apply the SIP steps to your case 2. Write up 3-4 page report describing this individual's (or family) situation. Be sure to include all information pertinent to establishing Know Your Client detail. Include at a minimum (you may have to invent missing details...use google/text): a. Birth date (s) b. Age(s) c. Marital status? Kids? d. Employment (s) (re both partners if a couple) e. Income, expenses (Set-up a cash flow statement) f. Owns own home? Rents? Market value? Mortgage? (Set-up a net worth statement)? Existing investments, savings etc HINT: What is their 'Lifestyle'? g. Desire to leave an estate? (Who gets what when I/we die) h. KYC critical: Goals(SMART)/Objectives, investment experience, time lines and risk tolerance, available savings etc re: Demographic profile of clients i. Is your KYC, CFR compliant? 3. Establish a risk profile. See e-centennial Investor Profile Questionnaire. Augment with "interview" information. 4. How much does this client need to save each month? (Goals will help to prioritize). Based on the risk profile, what kinds of investments Schemes? Eg RESP, RRSP, TFSA and risks can your client(s) consider? 5. Submit written report in drop box. Also submit the completed Investor Profile Questionnaire (Posted ecentennial - print Investor Profile Questionnaire before interview \& complete it; then scan to computer for drop box submission). 6. Rubric: a. 5 pts for organizing information and questionnaire with an appropriate risk/return profile; SMART goals \& Obj, recommended schemes, CFR compliant b. 4 pts for Net Worth \& Cash Flow statement (organize the data...put in appendix) c. 1 Well written report, grammer \& spelling (tell a great story) Bill is 26 years old, a freelancer whose $48,000 annual income vanished overnight. "I've been a freelance photographer for seven years," Bill writes in an e-mail. He is also involved in producing music. "After high school and university, I neglected taxes entirely. I didn't start making money until the last three years, and when I did, I paid rent and invested in other creative projects. I never saved. I never budgeted. I never invested. I didn't even charge my clients HST (sales tax) or set up a business number. I have a lot of regrets about how I spent my time and money over the last seven years." Last year, Bill filed five years' worth of overdue tax returns. "I owed the Canada Revenue Agency $20,000 in personal income tax and HST payments and interest," Bill writes. "I was just turning the corner on getting caught up. I had settled on a monthly payment plan with the CRA. I feel like I had just gained financial literacy and overall perspective on money, saving, budgeting, and investing. I felt optimistic and in control of my finances and my future." Then the economy shut down. "Because of the coronavirus, my income has been reduced to zero," Bill writes. "Not only am I worried about how I'm even going to attract clients in the coming months, I'm worried about falling back into the debt hole I sacrificed so much to chip away at. It's hard to budget for a $0/ month income. Any advice on navigating the next year would be greatly appreciated." CLIENT SITUATION: The person: Bill, age 26 The problem: His income sources have disappeared. Monthly net income: Negligible Assets: Chequing account \$4,130; PayPal account \$2,500; eBay account \$140; TFSA (2019 tax reserve) $7,740. Total: $14,510 Monthly outlays: Rent $830; electricity $55; transit $135; groceries $360; clothing $40; CRA $500; eating out $30; subscriptions $15; phone $120; internet $45. Total: $2,130 Liabilities: Credit card \$450; unpaid rent $830; back taxes (other than HST) \$5,500; HST \$3,000. Total: $9,780 Surplus cash $4,730