Introduction:

Below is a case study of a fictional family named Berman. They represent a typical family in the wealth building stage of their financial life; two income earners saving for their future and education for their two children at the same time. The case study will allow you to practice analyzing a situation, using financial calculations and writing suitable recommendations. Begin by reading their background and start making note of the Berman's goals and concerns.

Background:

Names:

Carl Berman (46), law school professor Matthew (14), son Naomi Berman (43), private junior high school principal Sarah (11), daughter

Financial situation:

Carl and Naomi have spent the majority of their working years focusing on being fiscally responsible with the healthy income they earn. They consider themselves "do it yourselfers" and have managed their money at local banks, Charles Schwab online and through their 401k's at work. Their only financial relationship is with their State Farm insurance agent who is also their neighbor.

Carl is a professor at the law school at the local university. Naomi is the principal of a private junior high school. They have two children, Matthew (14) and Sarah (11) and they hope to pay for their full college experience out of the savings they have been tucking away for the last ten years.

When they were first married, Carl and Naomi enjoyed a great deal of travel and leisure. Since their children were born they have made saving for the future their primary focus. Now, as they are entering their mid-forties with stable income, very good health and a net worth of over a half a million dollars, they are beginning to ask themselves if they are on track. They have found themselves wondering if fully financing their children's education is truly possible.

They currently own a home in Harrisonburg, VA valued at $450,000 and dream of one day owning a home in the historic district of the city. They would also love to own a small cabin in the Blue Ridge Mountains of Virginia where they could enjoy the outdoors during retirement. To this point, they have saved money for these accumulation goals into various accounts without any direction from a financial advisor. They are uncertain how much of their savings and future income must be allocated to each of these goals to make them attainable.

A co-worker of Carl's recently passed away leaving his family with very little life insurance. They do not want to fall victim to the same fate should something happen to one of them. They also have a very good understanding of the time value of money and agree that a loss of income, even temporary, could have a dramatic impact on the progress toward attaining their goals. They would like an advisor's recommendations on whether their current life and disability insurance coverage is adequate.If Carl was to pass away he wants Naomi to still be able to fund all of their goals. If Naomi passes, Carl wants the kid's education covered but would not purchase the cabin. In the event of a disability, they agreed that a reduction of current lifestyle would be priority, but would like to have the income replacement to remain on track with their goals. The Berman's were also embarrassed to admit that they have not yet drafted the appropriate estate documents.

Carl and Naomi were introduced to you by a friend of theirs, a current client of yours, who invited them to your retirement seminar that you hosted. After agreeing to a face-to-face meeting at your office, they prepared the following summary of their financial data and returned it to you.

The written plan should include the following:

Assess the clients' current financial condition.

Identify the major Strengths, Weaknesses, Opportunities, and Threats.(SWOT)

Identify and disclose specific assumptions used in analyzing each goal and need.

Discuss the resolution of any conflicts between the clients' goals and needs, and the ability to satisfy them due to financial or other constraints.

Identify the extent to which other professionals are required to implement any recommendations.

Identify the recommendations you would make to the clients and how to implement them