Question 2 - Disclosure documents Marks allocated: 10 marks Jonathon is an existing, long standing client aged 50. In 2012, you established a self- managed super fund for him with recommendations documented in an SOA dated 23 February 2012. The fund now has $500,000 in assets. In 2012 Jonathon stated that he intended to retire in 5 years and that he would not expect to access the funds before then. The plan provided an asset allocation strategy for the fund. Jonathon was made aware at the time that there may be a need to change some of the managed funds from time to time. Since 2012 you have provided Jonathon with a review of the managed funds every 6 months. These reviews have included changes to the investment portfolio by way of portfolio re- weighing and changing fund managers from time to time. The risk profile and asset allocation strategy has not changed. For each of the following situations occurring this financial year, explain whether you could provide the client with a Record of Advice (ROA) or whether a Statement of Advice (SOA) would be required, explaining your answer for each. a) In July, the fund has available cash of $40,000 to invest. You recommend that Jonathon allocates the cash among his existing investment products based on maintaining his agreed asset allocation. (24 marks) b) In August, your research provider issues a sell on the State Australian share fund. During your next review, you recommend that Jonathon sells his holding in the share fund, worth $50,000 and invest the proceeds into the Capital Australian share fund, which Jonathon hasn't invested in previously. (272 marks) c) In September during discussions with Jonathon he expresses a desire to reduce the tax he pays and undertake some sort of gearing strategy (he hasn't previously geared before). You recommend a protected structured loan through the ABC Bank. (272 marks) d) In November, upon turning age 55, you recommend to Jonathon that he implements a transition to retirement strategy. This involves him rearranging his affairs to salary sacrifice to the super fund and to commence drawing a pension from the fund. (272 marks) Question 2 - Disclosure documents Marks allocated: 10 marks Jonathon is an existing, long standing client aged 50. In 2012, you established a self- managed super fund for him with recommendations documented in an SOA dated 23 February 2012. The fund now has $500,000 in assets. In 2012 Jonathon stated that he intended to retire in 5 years and that he would not expect to access the funds before then. The plan provided an asset allocation strategy for the fund. Jonathon was made aware at the time that there may be a need to change some of the managed funds from time to time. Since 2012 you have provided Jonathon with a review of the managed funds every 6 months. These reviews have included changes to the investment portfolio by way of portfolio re- weighing and changing fund managers from time to time. The risk profile and asset allocation strategy has not changed. For each of the following situations occurring this financial year, explain whether you could provide the client with a Record of Advice (ROA) or whether a Statement of Advice (SOA) would be required, explaining your answer for each. a) In July, the fund has available cash of $40,000 to invest. You recommend that Jonathon allocates the cash among his existing investment products based on maintaining his agreed asset allocation. (24 marks) b) In August, your research provider issues a sell on the State Australian share fund. During your next review, you recommend that Jonathon sells his holding in the share fund, worth $50,000 and invest the proceeds into the Capital Australian share fund, which Jonathon hasn't invested in previously. (272 marks) c) In September during discussions with Jonathon he expresses a desire to reduce the tax he pays and undertake some sort of gearing strategy (he hasn't previously geared before). You recommend a protected structured loan through the ABC Bank. (272 marks) d) In November, upon turning age 55, you recommend to Jonathon that he implements a transition to retirement strategy. This involves him rearranging his affairs to salary sacrifice to the super fund and to commence drawing a pension from the fund. (272 marks)