Group Assignment Case Study Guidelines

This guideline provides a high level overview of your clients' situation. It should be read in conjunction

with the supplied Financial Needs Analysis (FNA) which is the primary source of information you should

rely on for client details.

John and Amy Allen are 32 and 28 years of old respectively and married with a five-year-old daughter

named Tina. They live in a two-bedroom apartment on the North Shore of Sydney and pay rent of $650

per week.

John works at a software company earning $100,000 per annum plus 9.5% Super Guarantee (SG)

contribution. Amy is a manager of a childcare center earning $90,000 plus 12% SG. Due to the current

economic climate John is somewhat concerned about his job security. By contrast, Amy has a

permanent contract with the current employer with little chance of redundancy.

They have come to you for advice on how they can achieve their dream of buying their first home. They

prefer the areas of their current address due to the famous scenery view of the North Shore. Also they

want to send their daughter Tina to a good private and the area they currently live has some the best schools in Sydney. You have had a first meeting and discussion with them and completed the relevant

sections of the FNA document. Due to limited meeting time, you have noted down their 4 most

important goals in the relevant FNA section. However, you know there are other goals mentioned and

recorded in the FNA.

The budget discussion you had with them reveals that they expect to be able to save approximately

$4,600 per month. They are hoping to use this extra money to save for a home deposit. However, this

does not take into account their credit card debt.

They have each completed a risk profile with you which included a detailed discussion about the

differences in their risk profiles.

Primary goal:

John and Amy want to buy a property on the North Shore of Sydney, in a four to five years' time. They

do not however have purchase price or type of property in mind (i.e. home or strata) and are very

flexible in this regard. However, Amy is very disciplined with her budgeting and has calculated the most

they are prepared to pay in monthly mortgage repayments (principal and interest) is $4,500 per month.

They want to have a 20% deposit for the property. They are both very firm in these beliefs and are

prepared to wait longer to buy a property which meets these criteria.

They want to know:

How to best use their cash flow to save for this deposit

The size of the deposit possible in five years' time, and

How much they could afford to spend on a property based on their cash flow.

Scope of advice:

Your clients have limited the scope of your advice to include the following:

Saving a 20% deposit to buy a property to live in

Maintaining most of their current lifestyle goals e.g. international holiday

Saving for their daughter's private high school education

Debt management (credit card and car loan)

Consolidation of Amy's superannuation funds (including keeping current levels of insurance)

Insurance options and protection for risk of heart attack for John.

You need not recommend any specific investments, investment products or insurance products. You will

recommend generic product groups e.g. managed funds, insurance bonds, income protection etc. These

recommendations can only include generic product features available across this group of products.

The following specific advice areas are also not in the scope of your advice:

Self-managed superannuation funds

Direct shares, derivatives (including structured products) of any kind or discretionary accounts.

Estate planning

Retirement planning (other than those related to superannuation)

Your licensing conditions:

You are a fully qualified and accredited financial planner. You are an employee and representative of

"Prosperity Financial Advisors" which holds an Australian Financial Services License. You have agreed a

flat fee for service to provide this advice to John and Amy. That fee is $3,000, including GST and has

already been paid by your clients. Your Financial Services Guide (FSG) was provided to your clients at

your first meeting. This enabled you to cover all legislative and compliance requirements.

Key points in developing your strategic advice:

The key is to provide advice which meets your clients' goals.

The most important part of the advice is the strategy itself. What strategies have you

considered, what have you recommended and why? How do they meet your clients' goals and

what are the risks of implementing (or not implementing) the advice?

The asset allocation you recommend needs only to distinguish the split between defensive and

growth assets as per the risk profile summary as detailed in the FNA.

Do not refer to any specific products. Do not include or attach any product information,

research profiles, product brochures or prospectuses or any other advertising material.

Explanations should be clear and concise, and in terms that your clients will understand.

Appropriate tone and style should be used for the client document. Use plain English and write

in a manner that will maximise the understanding for your clients.

Please note, appendices only support your strategic advice and will not be separately assessed.

An appendix could, for example, include details of any financial projections you have used. A set

of standard economic and investment assumptions can also be included.