Subject Code : FSC521
Assignment Task:

Task:

Learning outcomes
This assignment assesses the following learning outcome:
• Evaluate the suitability of common products/services to meet client needs.
Instructions
• Submit all your answers in one document.
• Write the number of each part of the question you are answering.
• Create a header with your name, student number and assignment number, and number your pages.
• This assignment covers a hypothetical case study of your clients Brett and Sara, who contact you to discuss their financial needs.
• You are required to complete all four tasks.

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• You will be assessed on your overall presentation. Eachanswer should be presented in a professional manner. This means:
o Minimal spelling and grammatical errors
o Written in terms that clients with little financial knowledge will understand.
• For each task, we have provided a suggested word count. Note that the word count is for guidance only and you will not be penalised for being under or over the suggested word count, as long as you fully complete the task.

• If you use sources to support an argument, make sure you acknowledge them with references in your discussion and a References list at the end of your assignment.
• Keep a copy of your assignment.

Submission

Submit your work through the online assessment submission link. Upload your assessment, then use the Save and Submit assessment buttons. You will get an electronic receipt and your work is then logged and tracked through our system. Assessments emailed directly to lecturers will not be accepted.

Referencing and plagiarism
Refer to Referencing and avoiding plagiarism for information on APA referencing and avoiding plagiarism.

Case study: Brett and Sara

Brett (30) and Sara (31) are a de facto couple with two children at primary school. Sara works part-time as a dental nurse and earns $20,000 per annum. Brett is a business analyst and earns $85,000 per annum. He also benefits from his employer’s fully subsidised health insurance scheme, which provides comprehensive health insurance cover for all the family

Both make contributions to a ‘default’ KiwiSaver Scheme, which they were automatically enrolled in when they started their current jobs. Neither has any knowledge about financial markets and they do not understand the benefits KiwiSaver offers as a vehicle for retirement provision.

Currently they rent a two-bedroom house. They have contents insurance which covers their personal possessions and public liability for any damage caused to the landlord’s property. They own a car valued at $25,000, for which they have third-party property damage car insurance. There is $11,000 outstanding on a personal loan they took out to help finance the car purchase.

They have no other financial products except a transactional account with their bank.

Currently they have no savings, but Brett has just received an unexpected $30,000 inheritance. He wants to put the money on term deposit for 12 months, and then use it as part of the deposit for the couple’s first home. They have two financial goals:

1. Purchase their first home in 12 months’ time.

2. Save at least $10,000 over the next 12 months to put towards the deposit for purchasing their first home.

While Sara is well-disciplined with her money, Brett tends to overspend. Both will have to be very disciplined when the new home is purchased, as the new mortgage will stretch their budget, money will be tight, and they will have very limited savings to fall back on in the short-term.

Task 1: Financial goals

a) Advise Brett and Sara on financial goal 1: Purchase their first home in 12 months’ time.

You are required to:

• Go to the website of any lending provider currently operating in the New Zealand financial services industry. State the name of your chosen provider and provide an URL link to their home loan webpage. (If you haven’t done this before, just copy the URL – that’s the address bar at the top of the web page – and paste it into your assignment.)

• Compare and contrast five features of the different home loan options offered by your chosen provider. We recommend you provide this in table format. For example:

Features.JPG

• Obtain one market commentary on home loan rates and summarise the current outlook for home loan rates. Provide an URL link to the webpage where you sourced your market commentary.

• Recommend the most suitable home loan option for Brett and Sara and justify your choice. You are required to comment on both their cash flow situation and the current outlook for home loan rates.

b) Advise Brett and Sara on financial goal 2: Save at least $10,000 over the next 12 months to put towards the deposit for purchasing their first home.

You are required to:

• Go to the website of any New Zealand financial institution that provides the required solution.

• Select the product you would recommend to Brett and Sara and describe at least two features that will help them achieve this financial goal.

• State the name of your chosen provider and provide a link to the webpage where you sourced your information.

Task 2: Lifestyle protection
a) Asset protection

You are not satisfied that Brett and Sara’s current motor vehicle insurance cover is the most suitable for their needs.
You are required to:
• Explain the limitations of third-party property damage cover and the risks Brett and Sara are exposed to.
• Recommend, with justification, an alternative type of motor vehicle insurance cover.
• Describe the risks covered by your recommended cover.

b) Income protection
You identify that Brett and Sara have no protection from loss of income through death, disability or illness.
You are required to:
• Go to the website of any insurance provider.
• Select four products you would discuss with Brett and Sara and describe how each will help protect them from loss of income through death, disability or illness.
• Do not list all the features and additional benefits each product provides; describe only the key purpose and main benefit payable for each product.
• State the name of your chosen provider and provide a link to the web page where you sourced your information.

Task 3: Retirement provision

While you are satisfied with Sara and Brett’s decision to invest in KiwiSaver, you are concerned that both have left their funds in default schemes and that neither understands the benefits KiwiSaver offers as a vehicle for retirement provision.

a) Describe the benefits of investing in KiwiSaver as a means of saving for retirement.
You are required to consider:
• Three benefits of investing in a managed fund
• Three specific benefits of investing in KiwiSaver compared to other types of managed investments.

b) Discuss the issues arising from Brett and Sara leaving their funds in a default scheme. What can you do to help in this situation?
You are required to:
• Include the following investment concepts in yourdiscussion:
o Fund types, particularly in relation to defaultKiwiSaver Schemes
o Asset classes
o Diversification
o Risk and return.
• Explain the process you would go through with Brett and Sara to determine if it’s appropriate to leave their funds in default schemes.

Task 4: Estate planning
You determine that neither Brett nor Sara have a will or an Enduring Power of Attorney (EPA) in place.
a) Evaluate the suitability of these two estate planning tools fortheir situation. For each tool you must:
• Consider both their advantages and disadvantages
• Provide a combined total of five advantages anddisadvantages.
b) Explain how a valid will and a valid EPA are created and which type of financial services provider Brett and Sara should approach tohelp set them up.
You are required to:
• State which type of financial services provider Brett and Sara should approach.
• Explain the three criteria for creating a valid will.
• Explain the three criteria for creating a valid EPA.

 

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  • Uploaded By : Pearl
  • Posted on : July 19th, 2019

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