FP2 Group Assignment - Winter 2022 The Group Assignment is due by ed of day Monday February 21st. Marks for the assignment will be as follows: Question #1 - 26 marks Question #2-24 marks Question #3-5 marks Presentation quality - 5 marks Total = 60 Work as a team to complete Step 3 and Step 4 of the Financial Planning Process with your new clients as outlined in the Case Study below. In PowerPoint presentation format, create a financial plan (no more than 10 pages) for the clients to address the 3 questions below, capturing any supporting calculations and assumptions in the appendices. Use this PowerPoint presentation as the basis for the Financial Planner and team to present their analysis and recommendations to the clients for the presentation portion of the project. Case Study Ritu who is 28 and Daniel who is 32 years old, have just welcomed their new, healthy baby boy Liam into this world. They are a happy family, but the financial responsibilities of having a son have sunk in and they need help to figure out what to do to ensure Liam is taken care of should anything happen to them. They called their branch and were connected with the Financial Planner who has met with the couple and collected the following information: Description Annual Earnings Home Mortgage Condo Fees Property Taxes Assets Liabilities $425,000 $320,000 Line of Credit ($15,000) 10,000 (used to reno the baby's room) Car $10,000 Student Loans Savings Account $20,000 $5,000 (joint) Daniel's RRSP $25,000 (contributing $2,000/yr) Income Daniel $75,000/yr +up to $10,000/yr bonus) Ritu $50,000 (currently on mat leave so only receiving half her salary) Couples tax rate 21% Expenses/Payments $1,680/mo $400/mo $200/mo 500/mo $500/mo Ritu's RRSP Group life insurance policies Credit card limit of $10,000) General Expenses $15,000 (contributing $1500/yr) Daniel $75,000 (employee benefit) Paid in full monthly Minimum payment 5%/mo Groceries $400/mo Personal care/ Baby $150/mo Miscellaneous Expenses (dining out, travel, entertainment $400/mo Question #1 Assess Ritu and Daniel's current financial situation using all applicable financial formulas and ratios. Then complete a SWOT analysis to determine the couple's financial strengths, weaknesses, opportunities, and threats. How are they doing financially? Question #2 Ritu and Daniel need to determine the amount of life insurance they require to minimize financial hardship and ensure Liam is looked after if anything ever happened to one or both of them. If one spouse passed, they would want insurance proceeds to eliminate any debt and provide for Liam until age 25 as if both were still alive (ie. sports, activities, education). Currently Daniel's income is greater than Ritu's and is projected to be that way for the foreseeable future, therefore lost family income should be addressed if Daniel passed away at a rate of 50% of his current total income. Daniel's brother and his wife have agreed to be Liam's guardian should both Ritu and Daniel pass away prior to Liam turning 25. Their wishes are that Liam has an education fund of $75,000 and receives annual income of $25,000 until age 25. Question #3 Provide 2 the couple 2 other opportunities that address any of their financial weaknesses, opportunities, or threats (ie. how could they improve their net worth, cash flow etc.) Advise them why these recommendation/options were made, provide the detailed calculations in the appendix and request any information/questions you may have of the clients while outlining next steps