General Instructions Background You are a financial planner and are approached by a client, Serena Hollingsworth....

 

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General Instructions Background You are a financial planner and are approached by a client, Serena Hollingsworth. You are to present her with a Statement of Advice (as indicated in Section G). Serena is 23 years old. She is single and is seeing a young man, Ramesh Jain who is 26 years old. They are planning to get married in Melbourne after the pandemic has passed and are looking towards the year 2022. They have begun planning their financial future together. Ramesh works as an accountant earning $ 90,000 per year before tax and Serena is currently completing her final year of studies in the Bachelor of Accounting program at Holmesgien. She currently works part-time as a book-keeper, earning $ 20,000 per year before tax. She will move to a full-time position within her current firm next July and will be earning $65,000 per year before tax. Both Serena and Ramesh are only expected to get inflation-linked increases in their salaries throughout their working lives. They are both planning on purchasing a home in Melbourne in 2025 and want to save up a sizeable deposit for it. They have also advised that they would like to build up their wealth outside superannuation so that they can have access to it throughout their lives. Both Ramesh and Serena have clarified that, after hearing the Storm Financial story, they want to limit their investments to online savings accounts and managed funds. Their personal balance sheet as at 30 June 2020 is as follows: ASSETS Home (Primary Residence) Contents (Combined) Cash - Online Savings Account (Combined) Motor Vehicles (2) Superannuation - Ramesh Superannuation Serena TOTAL ASSETS: LIABILITIES Credit Cards (19% nominal) Car Loan TOTAL LIABILITIES: NET WORTH: NIL 20,000 20,000 15,000 10,000 3,000 68,000 10,000 4,000 14,000 54,000 Further information: Serena and Ramesh currently have expenses of $3,500 per month. Their expenses are expected to stay at their current level for the next 2 years after which it will rise with inflation. Ramesh estimates that they will need $ 50,000 as a deposit on a house. They plan to live in Ramesh's rental unit until they buy their own home. The rental is currently $250 per week. All figures are stated at today's values. Their current investment strategy involves the purchase of a residential owner occupied property on which they will be repaying principal and interest. They do not wish to invest in any other property. They want to ensure that their wishes are carried out when they pass away. Section B: Cash Flow Projections The person responsible for this section of the assignment is required to project Ramesh and Serena's Cash Flows from 1 July 2020 to 30 June 2030. Projections should include, but is not limited to, the following: Salaries. • Expenses. Mortgage reayments. Investment Income outside of the Superannuation Funds Proceeds from sale, if any, of Non-Superannuation Assets. • Any lump sum payment from Superannuation following a condition of release. Section C: Investment Alternatives Investments outside of their Superannuation Funds are limited to managed funds and online savings accounts. You are not required to make recommendations for investments within their Superannuation Funds as Ramesh and Serena will continue to use their employers' Superannuation Funds. You must take into account the superannuation contributions that they receive from their respective employers. Section D: Personal Risk Insurance Ramesh and Serena currently have no Life, TPD, Income Protection nor Trauma Insurance other than what is standard in their Superannuation Funds. The cover that they have via their Super is minimal and can be ignored. You are required to determine the types of Personal Risk Insurance they require for themselves and their dependents but not the premium amount of the policies. You are not required to source the appropriate policies online. Premiums of $2,000 per annum may be assumed in the projections. The couple have adequate Private Health Insurance. General Instructions Background You are a financial planner and are approached by a client, Serena Hollingsworth. You are to present her with a Statement of Advice (as indicated in Section G). Serena is 23 years old. She is single and is seeing a young man, Ramesh Jain who is 26 years old. They are planning to get married in Melbourne after the pandemic has passed and are looking towards the year 2022. They have begun planning their financial future together. Ramesh works as an accountant earning $ 90,000 per year before tax and Serena is currently completing her final year of studies in the Bachelor of Accounting program at Holmesgien. She currently works part-time as a book-keeper, earning $ 20,000 per year before tax. She will move to a full-time position within her current firm next July and will be earning $65,000 per year before tax. Both Serena and Ramesh are only expected to get inflation-linked increases in their salaries throughout their working lives. They are both planning on purchasing a home in Melbourne in 2025 and want to save up a sizeable deposit for it. They have also advised that they would like to build up their wealth outside superannuation so that they can have access to it throughout their lives. Both Ramesh and Serena have clarified that, after hearing the Storm Financial story, they want to limit their investments to online savings accounts and managed funds. Their personal balance sheet as at 30 June 2020 is as follows: ASSETS Home (Primary Residence) Contents (Combined) Cash - Online Savings Account (Combined) Motor Vehicles (2) Superannuation - Ramesh Superannuation Serena TOTAL ASSETS: LIABILITIES Credit Cards (19% nominal) Car Loan TOTAL LIABILITIES: NET WORTH: NIL 20,000 20,000 15,000 10,000 3,000 68,000 10,000 4,000 14,000 54,000 Further information: Serena and Ramesh currently have expenses of $3,500 per month. Their expenses are expected to stay at their current level for the next 2 years after which it will rise with inflation. Ramesh estimates that they will need $ 50,000 as a deposit on a house. They plan to live in Ramesh's rental unit until they buy their own home. The rental is currently $250 per week. All figures are stated at today's values. Their current investment strategy involves the purchase of a residential owner occupied property on which they will be repaying principal and interest. They do not wish to invest in any other property. They want to ensure that their wishes are carried out when they pass away. Section B: Cash Flow Projections The person responsible for this section of the assignment is required to project Ramesh and Serena's Cash Flows from 1 July 2020 to 30 June 2030. Projections should include, but is not limited to, the following: Salaries. • Expenses. Mortgage reayments. Investment Income outside of the Superannuation Funds Proceeds from sale, if any, of Non-Superannuation Assets. • Any lump sum payment from Superannuation following a condition of release. Section C: Investment Alternatives Investments outside of their Superannuation Funds are limited to managed funds and online savings accounts. You are not required to make recommendations for investments within their Superannuation Funds as Ramesh and Serena will continue to use their employers' Superannuation Funds. You must take into account the superannuation contributions that they receive from their respective employers. Section D: Personal Risk Insurance Ramesh and Serena currently have no Life, TPD, Income Protection nor Trauma Insurance other than what is standard in their Superannuation Funds. The cover that they have via their Super is minimal and can be ignored. You are required to determine the types of Personal Risk Insurance they require for themselves and their dependents but not the premium amount of the policies. You are not required to source the appropriate policies online. Premiums of $2,000 per annum may be assumed in the projections. The couple have adequate Private Health Insurance.

Answer rating: 100% (QA)

Dear Serena I am pleased to present you with this Statement of Advice You are currently 23 years old and have recently started a relationship with Ram... View the full answer