In relation to the clients William and Monique in the Case Study used in Assignment 1, students are required to provide written

answers to the following questions. As the assignment is advice to the client, your answers should be in a suitable format and use

appropriate language and be presented in a complying format. Clarity and conciseness are important but full explanation and

reasoning is required.

1. The clients are concerned about going to speak to an adviser. They have heard about the outcomes from the Royal Commission

(the 'Hayne' Report). What signs should they look for to tell if the adviser has their best interests at heart? Explain the educational and

professional standards under the FASEA code of ethics. Explain any potential conflict of interest issues for which they should also look

out. [LO2}

2. The clients want to set aside a sum of $25,000 to start their 'holiday' savings account. Which of the following options will give them

the highest value in 6 years? Show all workings. Assume an interest rate of 3% [LO3]

Invest $5,000 as a lump sum today

Invest a lump sum of $5,000 today and $1,000 and another $1,000 at the end of the year for the next five years ie $5,000 plus 5

amounts of $1,000 annually.

Invest $5,000 today and then $1,200 at the end of years 1, 3 and 5

3. The clients would like to add some direct shares as well to boost their under performing managed trust fund. They have heard

about Woolworths and Coles and have been told by friends that they pay 'good' dividends which can be re-invested. Analyse these

two shares. Which is the stronger company and which company, in your opinion, holds better promise for the future? Calculate as

many ratios as you see appropriate ( a maximum of 4 is sufficient) to support your recommendations to the clients. [LO4]

4. You, the adviser, are not convinced that the managed trust fund is the best fund for them. Conduct an internet search and select

two funds - an income fund and a growth fund - which you consider would suit William and Monique better. Briefly, explain how and

why you selected these funds, what asset do they own?, show the holding period rates of return over the last 3 and 5 years, provide a

risk estimate, and explain why you consider each fund would be suitable for them [LO3]