Mary Bishop (39 years of age) works full time as an Associate Professor of Chemistry at UWA, earning gross income of $100,000 p.a. plus Super Guarantee (SG) contributions. Her husband, Thomas Bishop (37 years of age) is a part-time office manager, earning gross income of $50,000 p.a. plus SG contributions and takes on primary caring duties of their daughter Roberta who is 3 years of age. Thomas has a superannuation balance of $28,000 and he is happy with the fund and the specific investment option he is in but would like advice on how he can build up the balance. Mary has superannuation savings in several super funds that have a total balance of $105,000. See Appendix A for details on her super funds. Mary would like advice on rolling her super savings into one of her existing funds. Mary and Thomas own their house currently valued at $980,000 and estimate that their house contents is worth approximately $50,000. They have a mortgage with a current balance of $450,000 and an interest rate of 3.33%. During the pandemic they were worried about losing their income and so on arrangement with their lender, they switched to interest only payments of $1,249 per month. They would like advice on what they should do to bring down the balance of their mortgage quicker. Mary and Thomas also have savings of $38,000 in a bank account earning 0.04% interest and are seeking advice on how they can better utilise these savings. Thomas also has a HECS/HELP debt of $13,500 remaining. They have each completed a risk profile questionnaire. Mary’s risk profile was assessed as being ‘high growth’ while Thomas was assessed as being in the ‘growth’ category. They prefer a hands-off approach to investing that is not too onerous on their time given that they are busy with their work and raising their daughter.

explain: (i) the strategy and what you considered in arriving at this recommendation (ii) how the strategy meets the client’s objectives (iii) how the strategy works (iv) benefits of the strategy (v) outcomes of the strategy (vi) risks that need to be considered (f) Assumptions (no more than 1 page) (g) Appendix (if necessary)

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Appendix A Mary's superannuation savings Amount Investment option Investment fee Investment return - 1 year Investment return - 5 years Silverleaf super fund Amber super fund $25,000 $50,000 Conservative Growth 1.33% 4.7% 0.35% 2.7% 3.3% 9.6% Magnolia super fund $30,000 High growth 1.15% 7% 10.3% Appendix A Mary's superannuation savings Amount Investment option Investment fee Investment return - 1 year Investment return - 5 years Silverleaf super fund Amber super fund $25,000 $50,000 Conservative Growth 1.33% 4.7% 0.35% 2.7% 3.3% 9.6% Magnolia super fund $30,000 High growth 1.15% 7% 10.3%

Answer rating: 100% (QA)

Answer Recommendation Based on the information provided and the clients objectives I recommend the following strategy 1 Consolidate Superannuation Fun... View the full answer