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    Finance

    FINANCIAL PLANNING

    Rating:
    FINANCIAL PLANNING


    FINANCIAL PLANNING

    Assessment Task 1

    1.0 Evaluate the client's current situation and identify the issues

    1.1 (a) Analysis of integrity of client information

    Information provided by client

    What documents would you review to confirm accuracy or analyse the integrity of the information provided?

    Marks

     

    Cash flow Management

    1. Income

    $95 K

     

    $ 45 K

    i) Wife’s income: According to Bačová et al. (2017, p.84), the documents reviewed while confirming information regarding income of wife’s (Donna) integrity or accuracy are based upon income type :

    For the income from the salary of Donna, she requires to present pay stubs that are recent. The paystubs must represent the earning of year-to-date of Donna. Through this document, the accuracy can be reviewed.

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    ii) Husband’s income: The documents reviewed while confirming information regarding income of husband’s (Dennis) integrity or accuracy are based upon income type :

    As Dennis works as custom furniture’s joiner maker, the documents reviewed should be the statement of loss and profit of recent quarters.

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    2.  Tax

    4% of their total salary

     

     

    i)  Wife’s annual tax: $ (95000*4/100) = $3800*12=$45600

    Donna’s annual tax is estimated to be $45600

    Document of return on service tax should be reviewed in this case.

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    ii) Husband’s tax: $ (45000*4/100)=$ 1800*12 =$

    On the other hand, Dennis annual tax amount is estimated to be $21600. According to Bruce et al. (2016, p.10), the document of return on service tax should be reviewed in this case.

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    3. Expenses

    $40K

    (Personal expense)

     

    $ 10K

    i) Living expenses/mortgage: The living expenses of Donna and Dennis are approximately $40000 per annum. Expense audit document should be reviewed in this case.

     

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    ii) Discretionary expenses (holidays etc): Statement of the bank should be reviewed in this case. This expenses amounting to $ 10000 has no direct effect on Donnas and Dennis business profitability.

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    Information

    What documents would you review to analyse the integrity of the information provided.

    Marks

     

    Wealth Creation

    1. Super

    $ 290 K

    $138 K

     

    i) Wife’s superannuation: The source document should be reviewed in this case. Superannuation of Donna is balanced in the fund of retail superannuation recently (MM Superannuation).

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    ii) Husband’s superannuation: The source document should be reviewed in this case. Superannuation of Dennis is balanced in the fund of PP Superannuation. These funds in the portfolio of capital stable are invested with lower growth allocation.

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    2. Investments

    (4%)

    $ 17120

     

    i) Cash Investments Held: Time card document of employees should be reviewed. The investment of cash held by Dennis and Donna includes 4% investment returns. The amount is determined on their superannuation fund and is estimated to be $17120.

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    3.Debt Reduction

    $ 110 K

    $ 68968

     

    i) Mortgage: According to Newton et al. (2015, p.25), the document of credit history should be reviewed in this case. Dennis and Donna have mortgage valued at $110000. This includes the rate of interest 5.5 %. Payment of interest made by them has amounted to $6050 each year.

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    ii) Credit Cards: Document of credit information should be reviewed for checking the integrity and accuracy of credit cards.

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    Wealth Protection

    4.Personal Insurance

    $300K

     

    $ 150K

     

    i) Wife's current Life/TPD insurance: The document of payout of TDP should be reviewed in this case. Within Donna's fund of superannuation, she has TPD insurance and term life is included.

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    ii) Husband's current Life/TPD insurance: The document of information that is generally about costs and benefit should be reviewed in this case.

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    5. Estate

    Planning

     

    yes

     

    Yes

    i) Wife’s estate planning: Documents related to signed cheques should be reviewed in this case.

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    ii) Husband’s estate planning: Same as above is required for estate planning of husband, as Dennis will help Donna in setting the planning of estates.

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