Fact_ Finder
Content
HOLMESGLEN FINANCIAL PLANNING
Fact Finder Private and Confidential
The information collected in this form is for the sole purpose of establishing or building a financial service relationship with you. Your personal and sensitive information is treated with the strictest of confidence and is only provided to third parties where you have consented. If you have any questions in relation to your Privacy rights or wish to access or correct personal information
Privacy Statement
CLIENT(S) NAME REPRESENTATIVE NAME
John and Jody Smith ALI OUAIDA
SIGNATURE
______________________________
2
Summary Personal Details
SELF Mr Title Mrs Miss Ms Mr PARTNER Mrs Jody Given Names John Miss Ms
Preferred Names Smith Surname 27-07-1968 Date of Birth Married Marital Status Married 12-03-1974 Smith
Tax File Number
411454130
154541211
Home Address 32 warrigal rd. Chadstone Suburb/Town: Chadstone State: Vic Postcode: 3148. Home Telephone (03)98785558 Preferred Contact No 0405878777 Email: [email protected]
Child/Dependant Details
Name: Paul Smith Relationship: Son Sex Male Female 3
Current Age: Five
Dependent
Yes
No
Name: Marie Smith Relationship: Daughter Current Age: One Sex Male Female Yes No
Dependent
Health Details
SELF Are you a Smoker? Yes No PARTNER Yes No
Do you or any member of your family suffer from any physical disability or health condition that may affect current or future Financial Services considerations? NO (If yes, give details) ................................................................................................................................... ...................................................................................................................................
4
Personal Goals and Objectives
Short term goals.
Set up accounts for children’s education and pay off finance on Jodie’s Mercedes. Change the way repayments are made so that house will be paid off sooner. Organise ‘Will’ and “power of attorney”. Reduce credit card balance. Consider salary sacrifice and other super contributions. Consider an increase in insurance, income protection increase,
Medium term goals.
Begin to contribute to children’s education fund, begin to contribute to super, have credit cards paid off, make significant payments to the house and assess whether or not short goals were achieved.
Long term goals.
Have the house paid off, have sufficient funds for children’s education, have the Mercedes paid off, make significant gains in superannuation funds
Employment Details
John Position Title Employer Name Work Address Director Esanda 85 Spring Street Melbourne Vic 3000 (03)99547875 27-11-1990 Jody Personal Assistant NAB Level 4 (UB4440) 800 Bourke St Docklands VIC 3008 (03)98557877 14-02-1989
Current Work Phone No: Start Date
5
Preferred Retirement Age Are you contemplating leaving your employer? Do you foresee any substantial change in your income in the next 2-5 years? After Retirement to you intend to work again either on a full time or part time basis?
58 No
57 No
No
No
No
No
Income Details
SELF Salary Investment Income Super/Annuity Income Deductible Amount Other Income $113,000 $2,400 PARTNER $80,000 6
Expense Details
Expenses per month $
Home loan Food Utilities Travel Clothing Rates Car loan Gym membership Jody health insurance Holiday to Queensland John’s credit card Jody’s credit card
3588 1400 500 400 500 500 764 83 83 416 175 200
Total expense
7652
Personal Balance Sheet
Fixed Assets
$ Principal Residence Contents Motor Vehicle/s $640,000 $50,000 $160,000 Further Details Four bedroom double story Chadstone property Includes all furniture and home theatre. HSV GTS and Mercedes C63 AMG
Total
$850,000
Are your assets adequately insured?
Yes No
7
Liabilities
Finance Provider
Date Commenc ed
Repayme nt Amount
Repayme nt Frequenc y
Interes t Rate
Balance Outstandi ng
Mortgage John’s Card Jane’s Card Credit Credit
NAB ANZ NAB Esanda -
20-0595 11-0801 24-0702 12-0508 -
$897 $175 $200 $764 $4727 per month
Weekly Monthly Monthly Monthly -
6.06 % 11.5 % 10.8 % 9% -
$350,00 0 $4,600 $8,000 $40,000 $402,60 0
Jane’s Car Loan Personal Loan Other Total
8
Employer Superannuation
Nam e Company Commenced Contribution Employer Annual Contribution Employee Annual Current Value
Jody John
CBUS AMP
14-021989 27-111990
$7,200 $11,000
$70,000 $105,00 0
Other information (e.g. pension versus lump sum, funded or unfunded) Jody is in a capital guarantee option and John is in an aggressive option in Australian equities.
Investment Portfolio
Investment Reference Number Date Invested Number of Units Current Value
Vanguard High Yield
25778
25-12-03
80,000
$80,000
Personal Insurance
Date Insurance Description Policy Number Commenced Sum Insured Premium Per month
LIFE AND TPD INCOME PROTECTION
45547 14-082003
$250,000
$40 $40
45546 14-08$5,000 PER 2003 MONTH MONTH
Other Adviser Details
Accountant
Name: Marc Jones Company: H&R BLOCK 9
Address: Shop Chadstone, VIC
271,
Chadstone
Shopping
Centre,
1341
Dandenong
Road,
Phone: (03) 9563 0277 Email: [email protected] Do we have authority to contact? Yes No
Solicitor
Name: Stephen Andrianakis Company: Stephen Andrianakis and Associates Address: 19 Lansdowne Street, Melbourne Vic 3000 Do we have authority to contact? Yes No
DETERMING YOUR PERSONAL RISK PROFILE
10
1. Which of the following best describes your current stage in life? a) Single with few financial commitments. You are keen to accumulate wealth for the future. Some funds must be kept available for enjoyment, such as cars, clothes, travel and entertainment. b) A couple without children. You may be preparing for the future by establishing and furnishing a home. There are certain things you need to buy. You are probably better off financially now than you may be in the future. c) Young family. This is the peak home purchasing stage. You have a mortgage and a very small amount of savings. Probably concerned with your financial position and the amount of money saved. d) Mature family. You are in your peak earning years and have got the mortgage under control. Your partner may also work and any children you may have are growing up and have either left home or are less financially dependent. You are starting to think about retirement, although it may be some years away. e) Preparing for retirement. You probably own your own home and have few financial commitments, however you want to ensure that you can afford a comfortable retirement, Interested in travel, recreation and self education. f) Retired. No longer working, you must rely on existing funds and investments to maintain your lifestyle. You may be receiving the pension and are keen to enjoy life and maintain your health.
Client
Partne r
Points
10
8
6
10
4
2
2. In light of current interest rates, what return do you reasonably expect to achieve from your investments? a) A return without losing capital. b) Current inflation rate plus 1-2% pa. c) Current inflation rate plus 3-5% pa. d) Current inflation rate plus 5-10% pa. e) Over 10% pa. 2 4 6 8 10 11
12
3. If you didn’t need your capital for more than 10 years, for how long would you be prepared to see your investment not performing well before you would change it? a) You would change if there was any loss in value. b) Up to 3 months. c) Up to 6 months. d) Up to 1 year. e) Up to 2 years. f) More than 2 years. 4. How familiar are you with the investment market? a) Very little understanding or interest. b) Not very familiar. c) Have enough experience to understand the importance of diversification. d) Understand that the markets may fluctuate and that different market sectors offer different income, growth and taxation characteristics. e) Experienced with all investment sectors and understand the various factors which may influence performance. 2 4 6 8 0 2 4 6 8 10
10
5. The greatest tax savings are generally obtained from investments which may be more volatile. Which balance do you feel most comfortable with? a) Preferably guaranteed returns, before tax savings. b) Stable, reliable returns, minimal tax savings. c) Some variability in returns, some tax savings. 2 4 6
13
d) Moderate variability in returns, reasonable tax savings. e) Unstable, but potentially higher returns, maximising tax savings.
8 10
14
6. What would your reaction be if in 6 months after placing your investments you discover that, in line with what is happening in the financial markets generally, your portfolio has decreased in value by 20%. a) Distress. Security of your capital is critical and you did not intend to take risks. b) You would redeem your investment and transfer your money into more secure investment sectors. c) You would be concerned, but would wait to see if the investment improves. d) This was a calculated risk and you would leave the investments in place, expecting performance to improve. e) You would invest more funds to lower your average investment price, expecting future growth. 2
4
6
8
10
7. Which of the following best describes your purpose for investing? a) You want to invest for longer than 5 years. You understand investment markets and are mainly investing for growth in assets such as shares and property to accumulate long term wealth. b) You are nearing retirement, have surplus funds to invest and you are aiming to accumulate long term wealth from a balanced portfolio, comprising of shares, property, fixed interest and cash. c) You have a lump sum (for example, an inheritance or an ETP from your employer) and you are uncertain about what secure investments are available. d) You are nearing retirement and you are investing to ensure you have sufficient funds available to enjoy your retirement. e) You have some specific objectives within the next 5 years for which you want to save 10
8
6
4
2 15
enough money. 8. For how long would you expect most of your capital to be invested before you would need to access it? (Assuming you and/or your financial adviser has made plans to meet short term financial goals and to handle emergencies?) a) Less than 2 years. b) Between 2 and 3 years. c) Between 3 and 5 years. d) Between 5 and 7 years. e) Longer than 7 years. 76 42 2 4 6 8 10
Total Investor Profile Score
16
Investor Risk Profile Summaries
CONSERVATIVE You are a Conservative investor. Risk must be very low and you are prepared to accept lower returns to protect capital. The negative effects of tax and inflation will not concern you, provided your initial investment is protected. MODERATELY CONSERVATIVE You are a moderately balanced investor with some understanding of investment market behaviour. You don’t want to see all your capital eaten away by inflation and tax and whilst generally cautious you are prepared to accept some short term volatility in order to achieve some longer term capital growth. BALANCED You are a Balanced investor who wants a balanced portfolio to work towards medium to long term financial goals. You require an investment strategy which will cope with the effects of tax and inflation. Calculated risk will be acceptable to you to achieve good returns. MODERATELY AGGRESSIVE You are a moderately aggressive investor, probably earning sufficient income to invest most funds for capital growth. Prepared to accept higher volatility and moderate risks, your primary concern is to accumulate assets over the medium to long term. You require a balanced portfolio, but more aggressive investments may be included. AGGRESSIVE You are a Growth investor prepared to compromise portfolio balance to pursue potentially greater long term returns. Your investment choices are diverse, but carry with them a higher level of risk. Security of capital is secondary to the potential for wealth accumulation.
TOTAL POINTS
0-30
31-45
46-55
56-70
>70
The risk profile asset allocation is the benchmark to commence the investment portfolio. Upon review, the asset allocation may change by mutual agreement 17
between client and advisor. Taking into consideration the portfolio position and investment time frame.
Investor Risk Profile Selected John- Aggressive Jane- Moderately Conservative
I/We believe that the above rating reflects my/our attitudes and would be pleased to consider a portfolio that reflects my/our risk portfolio.
x John Smith Signature Date
x Jane Smith
27/07/2010 Signature
18
Tax File Number Authorisation
I/We give permission for my/our tax file number(s) as provided, to be held by Holmesglen Financial planning and be forwarded to financial institutions as requested or as necessary.
John Smith Signed
Jane Smith Signed
27/07/10 Date
Client Statement/Authorisation
I/We hereby declare that the information set out in this form is true and correct to the best of my/our knowledge. I/We are not aware of any other information and have not disclosed to the person to whom this form is given any other information which would be relevant to the making of a recommendation by a Holmesglen Financial Planning Representative.
I/We give permission for this information to be used for the preparation of my financial plan and I/We understand that the investment recommendations will be based solely on the information supplied in this form.
John Smith Signed
Jane Smith Signed
27/07/10 Date
Client Limited Advice Statement/ Authorisation
19
Legislation requires that the Holmesglen planner must ‘know the client’ before making certain recommendations. However, there is provision that in certain circumstances a client may be supplied with limited advice.
If you are seeking limited advice of a particular nature you must make this known at the time of the interview and you should recognise that the recommendations will only relate to that limited advice being sought and may not be appropriate considering your overall situation and objectives.
I/We require only limited advice as specified below: * Insurance * Share Portfolio * Superannuation * Budget Planning * Retirement planning
x John Smith Signed
x Jane Smith Signed
x 27/07/10 Date
20
Engagement Application
I/We request that Holmesglen Financial Planning investigate, research and provide suitable options to the financial objectives outlined in this questionnaire.
I/We understand that the preparation fee of $700 is payable for the work to be undertaken and this will be credited against any establishment fees should I/We proceed to implement any of the recommendations provided with Holmesglen Financial Planning.
I/We have elected to take advantage of the Titanium Service Package and understand that I/We will be charged in line with this package.
John Smith Signed
Jane Smith Signed
27/07/10 Date
Ali Ouaida
27/07/10 Date
Representative Signature
21
Statement of Advice
Prepared for John and Jody Smith by Ali Ouaida authorised representative of
Holmesglen financial planning
ABN 43 435 443 234 Australian financial services licence no. 43433 21 warrigal road, Chadstone, 3000 Ali Ouaida on (03) 93578575 [email protected]
27 July 2010
22
Disclaimer
This statement of advice has been prepared for John Smith and Jane Smith. This statement of advice has been prepared using detailed information regarding their current financial situation. While every attempt at accuracy has been made to ensure accuracy Holmesglen financial planning will not be held liable for any incorrect advice (other than unconscionable advice). The information that has been collected is considered correct and true however if there are any errors please contact Ali Ouaida on (03) 93578575 immediately. This statement of advice covers the following areas: • • • • • • • • • Financial Goals Financial issues Personal balance sheet ( Assets and liabilities) Superannuation including co- contributions Insurance Powers of attorney and wills Risk management Retirement planning Fees, charges and commissions
Statement of Advice
The statement of advice in essence is the financial plan strategy. After thoroughly analyzing the fact finder given to the clients, a list of strategies will be formulated
What this document is about John and Jody, you have asked for my advice to create a financial plan that will empower you to live a financially independent retirement and how you can protect your family in case either of you should die or become sick or injured.
This document explains my advice. At the front of the SOA, I highlight the key points of my advice, but please make sure you read each section of the SOA. A pointer symbol like this highlights something important
My contact details You can contact me on: (03) 93759575 My email address is: [email protected] 23
Postal address: 21 Warrigal Road, 3148
Summary of my advice What my advice is I recommend that John gets: • • • • • • • $800,000 of Life & TPD Cover from his super fund if he is unable to work because of illness, accident or injury. I recommend that Jody gets $230,000 Life & TPD Cover from her super fund. I recommend that you use the $20,000 in your term deposit to pay off credit cards I recommend that you set up a trust account for the education of you children I recommend that you set up a will and appoint an executor for that will either a member of your family or your solicitor. I recommend that you appoint someone to act as your authorised representative to act on your behalf if you travel I recommend that you set up a budget to forecast all expenses and liabilities so that you can plan for them and make sure that they are taken care of when they are due. I recommend that the superannuation plan for John be moved into a growth plan as he is a highly aggressive investor with an appetite for risk. I recommend that a salary sacrifice be made for the amount of $20,000 for John to go towards the mortgage and for Jane to salary sacrifice $10,000 to go towards her car loan I recommend that a savings plan should be implemented to finance the family holiday instead of purchasing the holiday with their credit card. I recommend to John to reinvest his dividends back into his managed fund to compound his investment I recommend that john takes out health insurance for the whole family as opposed to individual cover for himself and Jody
• •
• • •
What products I recommend
24
Why my advice is appropriate
After thoroughly analysing the fact finder I have made these recommendations based on the information I have been given. As for the insurance, adequate protection is essential because if for whatever circumstance you are unable to work, coverage will be there to service the mortgage, pay bills and cover expenses such as hospital, dental and other medical cost. More detail will be provided later.
As for the investments, by reinvesting dividends, it compounds, or multiples the portfolio significantly and thereby when it’s to retire a large portfolio will be waiting. If for whatever reason funds are required urgently, you can sell units as like shares and it is a great way if liquidity is a necessity.
I recommend paying of the mortgage as quickly as possible because once it is paid off it will remove a major financial burden and that money can be used for other things. For example I tell many of our clients that once the mortgage is paid the money that they pay for the mortgage can then be put towards their superannuation. It is money that they had already allocated and thus it won’t be missed. Again by regularly contributing to superannuation the ‘compounding’ effect will take place. And as in the managed fund this will be a nice surprise come time for retirement.
Risks in my advice
All managed funds (including the managed funds I have recommended carry some risk. Having said that the risk of having insufficient money come time for retirement is far greater and to maintain a comfortable lifestyle investment that have a great track record usually don’t carry as much risk as people think. In the case of high risk products John has a high appetite for risk and is considered an aggressive investor. By having this strategy and careful monitoring of the market it can be hopped that the risk will pay off. As an aggressive investor john, you are aware of the risk vs. reward principle.
What my advice doesn’t cover
My advice does not cover the wills, executors of the wills and other legal matters that need to be addressed by your solicitor. 25
My advice does not cover any extenuating circumstance such as a new child in the family and if that occurs I would recommend another consultation and another plan.
My advice does not cover general tax issues and this can be obtained by a qualified accountant.
Fees and commissions
The fee for my advice and for preparing this SOA is $700.
Where to go from here
To decide whether to follow my advice, you should: • make sure you understand the advice given • ask me any questions you have.
To follow my advice, complete the authority to proceed at the end of this document and return it to me.
26
Fact Finder Private and Confidential
The information collected in this form is for the sole purpose of establishing or building a financial service relationship with you. Your personal and sensitive information is treated with the strictest of confidence and is only provided to third parties where you have consented. If you have any questions in relation to your Privacy rights or wish to access or correct personal information
Privacy Statement
CLIENT(S) NAME REPRESENTATIVE NAME
John and Jody Smith ALI OUAIDA
SIGNATURE
______________________________
2
Summary Personal Details
SELF Mr Title Mrs Miss Ms Mr PARTNER Mrs Jody Given Names John Miss Ms
Preferred Names Smith Surname 27-07-1968 Date of Birth Married Marital Status Married 12-03-1974 Smith
Tax File Number
411454130
154541211
Home Address 32 warrigal rd. Chadstone Suburb/Town: Chadstone State: Vic Postcode: 3148. Home Telephone (03)98785558 Preferred Contact No 0405878777 Email: [email protected]
Child/Dependant Details
Name: Paul Smith Relationship: Son Sex Male Female 3
Current Age: Five
Dependent
Yes
No
Name: Marie Smith Relationship: Daughter Current Age: One Sex Male Female Yes No
Dependent
Health Details
SELF Are you a Smoker? Yes No PARTNER Yes No
Do you or any member of your family suffer from any physical disability or health condition that may affect current or future Financial Services considerations? NO (If yes, give details) ................................................................................................................................... ...................................................................................................................................
4
Personal Goals and Objectives
Short term goals.
Set up accounts for children’s education and pay off finance on Jodie’s Mercedes. Change the way repayments are made so that house will be paid off sooner. Organise ‘Will’ and “power of attorney”. Reduce credit card balance. Consider salary sacrifice and other super contributions. Consider an increase in insurance, income protection increase,
Medium term goals.
Begin to contribute to children’s education fund, begin to contribute to super, have credit cards paid off, make significant payments to the house and assess whether or not short goals were achieved.
Long term goals.
Have the house paid off, have sufficient funds for children’s education, have the Mercedes paid off, make significant gains in superannuation funds
Employment Details
John Position Title Employer Name Work Address Director Esanda 85 Spring Street Melbourne Vic 3000 (03)99547875 27-11-1990 Jody Personal Assistant NAB Level 4 (UB4440) 800 Bourke St Docklands VIC 3008 (03)98557877 14-02-1989
Current Work Phone No: Start Date
5
Preferred Retirement Age Are you contemplating leaving your employer? Do you foresee any substantial change in your income in the next 2-5 years? After Retirement to you intend to work again either on a full time or part time basis?
58 No
57 No
No
No
No
No
Income Details
SELF Salary Investment Income Super/Annuity Income Deductible Amount Other Income $113,000 $2,400 PARTNER $80,000 6
Expense Details
Expenses per month $
Home loan Food Utilities Travel Clothing Rates Car loan Gym membership Jody health insurance Holiday to Queensland John’s credit card Jody’s credit card
3588 1400 500 400 500 500 764 83 83 416 175 200
Total expense
7652
Personal Balance Sheet
Fixed Assets
$ Principal Residence Contents Motor Vehicle/s $640,000 $50,000 $160,000 Further Details Four bedroom double story Chadstone property Includes all furniture and home theatre. HSV GTS and Mercedes C63 AMG
Total
$850,000
Are your assets adequately insured?
Yes No
7
Liabilities
Finance Provider
Date Commenc ed
Repayme nt Amount
Repayme nt Frequenc y
Interes t Rate
Balance Outstandi ng
Mortgage John’s Card Jane’s Card Credit Credit
NAB ANZ NAB Esanda -
20-0595 11-0801 24-0702 12-0508 -
$897 $175 $200 $764 $4727 per month
Weekly Monthly Monthly Monthly -
6.06 % 11.5 % 10.8 % 9% -
$350,00 0 $4,600 $8,000 $40,000 $402,60 0
Jane’s Car Loan Personal Loan Other Total
8
Employer Superannuation
Nam e Company Commenced Contribution Employer Annual Contribution Employee Annual Current Value
Jody John
CBUS AMP
14-021989 27-111990
$7,200 $11,000
$70,000 $105,00 0
Other information (e.g. pension versus lump sum, funded or unfunded) Jody is in a capital guarantee option and John is in an aggressive option in Australian equities.
Investment Portfolio
Investment Reference Number Date Invested Number of Units Current Value
Vanguard High Yield
25778
25-12-03
80,000
$80,000
Personal Insurance
Date Insurance Description Policy Number Commenced Sum Insured Premium Per month
LIFE AND TPD INCOME PROTECTION
45547 14-082003
$250,000
$40 $40
45546 14-08$5,000 PER 2003 MONTH MONTH
Other Adviser Details
Accountant
Name: Marc Jones Company: H&R BLOCK 9
Address: Shop Chadstone, VIC
271,
Chadstone
Shopping
Centre,
1341
Dandenong
Road,
Phone: (03) 9563 0277 Email: [email protected] Do we have authority to contact? Yes No
Solicitor
Name: Stephen Andrianakis Company: Stephen Andrianakis and Associates Address: 19 Lansdowne Street, Melbourne Vic 3000 Do we have authority to contact? Yes No
DETERMING YOUR PERSONAL RISK PROFILE
10
1. Which of the following best describes your current stage in life? a) Single with few financial commitments. You are keen to accumulate wealth for the future. Some funds must be kept available for enjoyment, such as cars, clothes, travel and entertainment. b) A couple without children. You may be preparing for the future by establishing and furnishing a home. There are certain things you need to buy. You are probably better off financially now than you may be in the future. c) Young family. This is the peak home purchasing stage. You have a mortgage and a very small amount of savings. Probably concerned with your financial position and the amount of money saved. d) Mature family. You are in your peak earning years and have got the mortgage under control. Your partner may also work and any children you may have are growing up and have either left home or are less financially dependent. You are starting to think about retirement, although it may be some years away. e) Preparing for retirement. You probably own your own home and have few financial commitments, however you want to ensure that you can afford a comfortable retirement, Interested in travel, recreation and self education. f) Retired. No longer working, you must rely on existing funds and investments to maintain your lifestyle. You may be receiving the pension and are keen to enjoy life and maintain your health.
Client
Partne r
Points
10
8
6
10
4
2
2. In light of current interest rates, what return do you reasonably expect to achieve from your investments? a) A return without losing capital. b) Current inflation rate plus 1-2% pa. c) Current inflation rate plus 3-5% pa. d) Current inflation rate plus 5-10% pa. e) Over 10% pa. 2 4 6 8 10 11
12
3. If you didn’t need your capital for more than 10 years, for how long would you be prepared to see your investment not performing well before you would change it? a) You would change if there was any loss in value. b) Up to 3 months. c) Up to 6 months. d) Up to 1 year. e) Up to 2 years. f) More than 2 years. 4. How familiar are you with the investment market? a) Very little understanding or interest. b) Not very familiar. c) Have enough experience to understand the importance of diversification. d) Understand that the markets may fluctuate and that different market sectors offer different income, growth and taxation characteristics. e) Experienced with all investment sectors and understand the various factors which may influence performance. 2 4 6 8 0 2 4 6 8 10
10
5. The greatest tax savings are generally obtained from investments which may be more volatile. Which balance do you feel most comfortable with? a) Preferably guaranteed returns, before tax savings. b) Stable, reliable returns, minimal tax savings. c) Some variability in returns, some tax savings. 2 4 6
13
d) Moderate variability in returns, reasonable tax savings. e) Unstable, but potentially higher returns, maximising tax savings.
8 10
14
6. What would your reaction be if in 6 months after placing your investments you discover that, in line with what is happening in the financial markets generally, your portfolio has decreased in value by 20%. a) Distress. Security of your capital is critical and you did not intend to take risks. b) You would redeem your investment and transfer your money into more secure investment sectors. c) You would be concerned, but would wait to see if the investment improves. d) This was a calculated risk and you would leave the investments in place, expecting performance to improve. e) You would invest more funds to lower your average investment price, expecting future growth. 2
4
6
8
10
7. Which of the following best describes your purpose for investing? a) You want to invest for longer than 5 years. You understand investment markets and are mainly investing for growth in assets such as shares and property to accumulate long term wealth. b) You are nearing retirement, have surplus funds to invest and you are aiming to accumulate long term wealth from a balanced portfolio, comprising of shares, property, fixed interest and cash. c) You have a lump sum (for example, an inheritance or an ETP from your employer) and you are uncertain about what secure investments are available. d) You are nearing retirement and you are investing to ensure you have sufficient funds available to enjoy your retirement. e) You have some specific objectives within the next 5 years for which you want to save 10
8
6
4
2 15
enough money. 8. For how long would you expect most of your capital to be invested before you would need to access it? (Assuming you and/or your financial adviser has made plans to meet short term financial goals and to handle emergencies?) a) Less than 2 years. b) Between 2 and 3 years. c) Between 3 and 5 years. d) Between 5 and 7 years. e) Longer than 7 years. 76 42 2 4 6 8 10
Total Investor Profile Score
16
Investor Risk Profile Summaries
CONSERVATIVE You are a Conservative investor. Risk must be very low and you are prepared to accept lower returns to protect capital. The negative effects of tax and inflation will not concern you, provided your initial investment is protected. MODERATELY CONSERVATIVE You are a moderately balanced investor with some understanding of investment market behaviour. You don’t want to see all your capital eaten away by inflation and tax and whilst generally cautious you are prepared to accept some short term volatility in order to achieve some longer term capital growth. BALANCED You are a Balanced investor who wants a balanced portfolio to work towards medium to long term financial goals. You require an investment strategy which will cope with the effects of tax and inflation. Calculated risk will be acceptable to you to achieve good returns. MODERATELY AGGRESSIVE You are a moderately aggressive investor, probably earning sufficient income to invest most funds for capital growth. Prepared to accept higher volatility and moderate risks, your primary concern is to accumulate assets over the medium to long term. You require a balanced portfolio, but more aggressive investments may be included. AGGRESSIVE You are a Growth investor prepared to compromise portfolio balance to pursue potentially greater long term returns. Your investment choices are diverse, but carry with them a higher level of risk. Security of capital is secondary to the potential for wealth accumulation.
TOTAL POINTS
0-30
31-45
46-55
56-70
>70
The risk profile asset allocation is the benchmark to commence the investment portfolio. Upon review, the asset allocation may change by mutual agreement 17
between client and advisor. Taking into consideration the portfolio position and investment time frame.
Investor Risk Profile Selected John- Aggressive Jane- Moderately Conservative
I/We believe that the above rating reflects my/our attitudes and would be pleased to consider a portfolio that reflects my/our risk portfolio.
x John Smith Signature Date
x Jane Smith
27/07/2010 Signature
18
Tax File Number Authorisation
I/We give permission for my/our tax file number(s) as provided, to be held by Holmesglen Financial planning and be forwarded to financial institutions as requested or as necessary.
John Smith Signed
Jane Smith Signed
27/07/10 Date
Client Statement/Authorisation
I/We hereby declare that the information set out in this form is true and correct to the best of my/our knowledge. I/We are not aware of any other information and have not disclosed to the person to whom this form is given any other information which would be relevant to the making of a recommendation by a Holmesglen Financial Planning Representative.
I/We give permission for this information to be used for the preparation of my financial plan and I/We understand that the investment recommendations will be based solely on the information supplied in this form.
John Smith Signed
Jane Smith Signed
27/07/10 Date
Client Limited Advice Statement/ Authorisation
19
Legislation requires that the Holmesglen planner must ‘know the client’ before making certain recommendations. However, there is provision that in certain circumstances a client may be supplied with limited advice.
If you are seeking limited advice of a particular nature you must make this known at the time of the interview and you should recognise that the recommendations will only relate to that limited advice being sought and may not be appropriate considering your overall situation and objectives.
I/We require only limited advice as specified below: * Insurance * Share Portfolio * Superannuation * Budget Planning * Retirement planning
x John Smith Signed
x Jane Smith Signed
x 27/07/10 Date
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Engagement Application
I/We request that Holmesglen Financial Planning investigate, research and provide suitable options to the financial objectives outlined in this questionnaire.
I/We understand that the preparation fee of $700 is payable for the work to be undertaken and this will be credited against any establishment fees should I/We proceed to implement any of the recommendations provided with Holmesglen Financial Planning.
I/We have elected to take advantage of the Titanium Service Package and understand that I/We will be charged in line with this package.
John Smith Signed
Jane Smith Signed
27/07/10 Date
Ali Ouaida
27/07/10 Date
Representative Signature
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Statement of Advice
Prepared for John and Jody Smith by Ali Ouaida authorised representative of
Holmesglen financial planning
ABN 43 435 443 234 Australian financial services licence no. 43433 21 warrigal road, Chadstone, 3000 Ali Ouaida on (03) 93578575 [email protected]
27 July 2010
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Disclaimer
This statement of advice has been prepared for John Smith and Jane Smith. This statement of advice has been prepared using detailed information regarding their current financial situation. While every attempt at accuracy has been made to ensure accuracy Holmesglen financial planning will not be held liable for any incorrect advice (other than unconscionable advice). The information that has been collected is considered correct and true however if there are any errors please contact Ali Ouaida on (03) 93578575 immediately. This statement of advice covers the following areas: • • • • • • • • • Financial Goals Financial issues Personal balance sheet ( Assets and liabilities) Superannuation including co- contributions Insurance Powers of attorney and wills Risk management Retirement planning Fees, charges and commissions
Statement of Advice
The statement of advice in essence is the financial plan strategy. After thoroughly analyzing the fact finder given to the clients, a list of strategies will be formulated
What this document is about John and Jody, you have asked for my advice to create a financial plan that will empower you to live a financially independent retirement and how you can protect your family in case either of you should die or become sick or injured.
This document explains my advice. At the front of the SOA, I highlight the key points of my advice, but please make sure you read each section of the SOA. A pointer symbol like this highlights something important
My contact details You can contact me on: (03) 93759575 My email address is: [email protected] 23
Postal address: 21 Warrigal Road, 3148
Summary of my advice What my advice is I recommend that John gets: • • • • • • • $800,000 of Life & TPD Cover from his super fund if he is unable to work because of illness, accident or injury. I recommend that Jody gets $230,000 Life & TPD Cover from her super fund. I recommend that you use the $20,000 in your term deposit to pay off credit cards I recommend that you set up a trust account for the education of you children I recommend that you set up a will and appoint an executor for that will either a member of your family or your solicitor. I recommend that you appoint someone to act as your authorised representative to act on your behalf if you travel I recommend that you set up a budget to forecast all expenses and liabilities so that you can plan for them and make sure that they are taken care of when they are due. I recommend that the superannuation plan for John be moved into a growth plan as he is a highly aggressive investor with an appetite for risk. I recommend that a salary sacrifice be made for the amount of $20,000 for John to go towards the mortgage and for Jane to salary sacrifice $10,000 to go towards her car loan I recommend that a savings plan should be implemented to finance the family holiday instead of purchasing the holiday with their credit card. I recommend to John to reinvest his dividends back into his managed fund to compound his investment I recommend that john takes out health insurance for the whole family as opposed to individual cover for himself and Jody
• •
• • •
What products I recommend
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Why my advice is appropriate
After thoroughly analysing the fact finder I have made these recommendations based on the information I have been given. As for the insurance, adequate protection is essential because if for whatever circumstance you are unable to work, coverage will be there to service the mortgage, pay bills and cover expenses such as hospital, dental and other medical cost. More detail will be provided later.
As for the investments, by reinvesting dividends, it compounds, or multiples the portfolio significantly and thereby when it’s to retire a large portfolio will be waiting. If for whatever reason funds are required urgently, you can sell units as like shares and it is a great way if liquidity is a necessity.
I recommend paying of the mortgage as quickly as possible because once it is paid off it will remove a major financial burden and that money can be used for other things. For example I tell many of our clients that once the mortgage is paid the money that they pay for the mortgage can then be put towards their superannuation. It is money that they had already allocated and thus it won’t be missed. Again by regularly contributing to superannuation the ‘compounding’ effect will take place. And as in the managed fund this will be a nice surprise come time for retirement.
Risks in my advice
All managed funds (including the managed funds I have recommended carry some risk. Having said that the risk of having insufficient money come time for retirement is far greater and to maintain a comfortable lifestyle investment that have a great track record usually don’t carry as much risk as people think. In the case of high risk products John has a high appetite for risk and is considered an aggressive investor. By having this strategy and careful monitoring of the market it can be hopped that the risk will pay off. As an aggressive investor john, you are aware of the risk vs. reward principle.
What my advice doesn’t cover
My advice does not cover the wills, executors of the wills and other legal matters that need to be addressed by your solicitor. 25
My advice does not cover any extenuating circumstance such as a new child in the family and if that occurs I would recommend another consultation and another plan.
My advice does not cover general tax issues and this can be obtained by a qualified accountant.
Fees and commissions
The fee for my advice and for preparing this SOA is $700.
Where to go from here
To decide whether to follow my advice, you should: • make sure you understand the advice given • ask me any questions you have.
To follow my advice, complete the authority to proceed at the end of this document and return it to me.
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