Mr. Joseph Lee aged 48 has been working for an international marketing company for the last 10 years with current income $90,000 per month. His wife, Cindy, aged 48 too is a full-time housewife. They have a son, Jason aged 13. Mr. Lee’s parents are financially independent and live in Australia with Joseph’s sister. Joseph would like Jason to study in Australia after completing his secondary school at age of 18. Joseph also gives financial support $6,000 each month, to Cindy’s parents, aged 72 and 70, respectively.

Since they do not know much about financial planning and investment, so far they just put their money in form of saving in the bank. Currently, they have about HKD500,000 fixed term deposit. They learned from their friends that it may be good to invest in index fund so Joseph would like to take advantage of investing in one of them.

Currently, the total monthly living expense for the Lam’s family is $30,000, while the monthly mortgage payment is $20,000 per month for 12 years more. As for retirement, Joseph would like to retire at age 60 and maintain about 60% of the current living standard. Joseph and Cindy would like to maintain an emergency fund HKD$1,500,000 on the day they retire. Regarding medical protection, currently, they have a medical scheme that covers the whole family by Joseph’s employer. Other than that, they have no other insurance protection.

As a financial planner, you are required to:

1. prepare a financial plan for Lee’s family to achieve their financial goals, including but not limited to education fund for Mark, retirement plan for Joseph and Mimi and insurance requirements for the family.

2. provide investment advices on the following ETFs and recommend one:

a. Tracker Fund of Hong Kong (stock code: 02800)

b. Hang Seng H-share Index Fund (stock code 02828)

3. highlight any other hidden concerns you think of and the way to cover them.

Assumptions

a. Estimated long term average annual rate of inflation for the whole period: 3% p.a.

Answer rating: 100% (QA)

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