Saturday, June 22, 2013

Financial planning


Prepare a complete statement of Advice
Have you done enough?
AnSoA Checklist
As you are putting together your SoA you need to make sure that you have included all the relevant sections presented in Week 6: Writing a SoA for complex situations.Read again this important lecture.Remember you are writing this for and to your clients not for your course coordinator.  Here are some key questions to ask yourself and some key issues to tick off.
General:  Is my SoA clear and concise and readily understandable by the client? Have I written the SoA in the first person singular (e.g. Peter and Jenny I recommend…….).Have I used lots of headings, sub-headings, tables, pie charts to make it simple for the clients to understand? Have I explained all technical terms (e.g. salary sacrifice)?
Section 1:Have I written a covering letter to the client, a title page with all your licensing details and a table of contents? You can include an introduction here or make it a separate section (see lecture slides)
Section 2: Does my Executive Summary contain a summary of….?
  • The client’s particulars (especially their goals and objectives),
  • Their current financial situation
  • Your proposed strategies and why they are appropriate (not only financial but estate planning)
  • The recommended products (superannuation, insurance , investments etc.)
  • Fees and costs for your services and products
  • Ongoing service offerings
  • Necessary implementation the client must do (e.g. signing the Authority to Proceed)
Section 3: Does my section About You include?
  • Background information about both clients, their family situationand their concerns included detailed individual and joint goals and objectives (including their priority)– you get this from the Client Questionnaire
  • Their reasons for seeking advice (e.g. retirement, any issue with current investments or plans, personal insurances, willsetc.)
  • What the advice covers and what is left out
  • An explanation and summary of each client’s risk profile (so that THEY understand it) and why it is relevant to your recommendation. If you have modified their risk profile to achieve investment strategies you need to confirm that they have agreed to the change.
  • A comment on their current asset allocation and how it relates to the risk profile
  • Their current financial position – cash flow (income and expenditure), and net worth (assets and liabilities) – use tables and charts where possible.
  • Any savings ability and where this can come from


Section 4: Does my section on Strategies or Achieving your Goals contain?
  • A list of all strategies (for each client and/or joint where appropriate) to meet each stated client goal and objective(e.g. salary sacrifice, asset sales etc.). (Read lecture again Week 8 : Strategy Development)
  • Explain the basis for each strategy and the risk associate with each strategy
  • Include alternative strategies where necessary (e.g a strategy to achieve 96K per annum in retirement or 72K per annum) – or similar approach
  • A summary of how much money will be achieved in retirement .Summarize your spread sheet modelling (include the full spread sheet in the appendix).
  • A summary of how long their money will last (at least until life expectancy). Include the spread sheet to support this summary in the Appendix.
  • A summary of their new asset position after recommendations
  • Demonstrate what income they will receive in retirement (make sure you check this against their goals)- note that will  need to give them an alternative for the income goals if the 96K per annum cannot be achieved). Have they agreed to this?
  • Pie charts and tables and lots of headings
  • Recommendations for personal insurance (life, TPD, traumas and income as a minimum)- the actual product to be used is contained in the next section),CLICK HERE TO GET MORE.........
Section 5.  Does my section on “Products for You” or “Recommended Products” include?
  • A summary of all products selected with asset allocation explained if relevantwith the full name of the product and amount invested (use a table). (Read lecture again Week 10)
  • A link to each strategy. Why each product has been selected and what they will achieve (achieved against the stated goals and objectives)
  • Explain the advantages and disadvantages of each product and their risks
  • Any alternatives considered
  • What asset allocation is achieved? Remember to explain all technical terms – if lengthy put in appendix.
  • What costs are associated with each product (e.g. the premiums on insurance products)
  • An explanation if switching products (e.g. superannuation) and why the new product is better.
  • Information of product disclosure statements (there is no need to include PDSs in your submission simply state they have been provided)
Section 6: Does my section on Fees and Commissions or What it will Cost youinclude?
  • Compliance with current or future legislation
  • The cost of implementing your advice i.e. what the product providers charge – in dollars
  • What benefits you receive from the product providers (if any)- in dollar terms not percentages
  • Both establishment, initial fees and ongoing fees in a table form if relevant
 ,CLICK HERE TO GET MORE.........
Section 7: Does you section on Ongoing Service include?
  • An explanation of the importance of reviews and how long the SoA can be used as a relevant document
  • The level of future service offerings (e.g. annual or semi-annual  reviews , phone support etc)
  • How much it will cost the client
  • What services you do not provide
Section 8: Does your section on Implementation section include?
  • A detailed Authority to Proceed ready for the clients to sign that include a list of investment products to implement etc (Read carefully lecture slide on Implementation)
Section 9: Does your SoA include anAppendix and contain?
  • Explanation of all technical terms and explanation of investment risks
  • Spread sheet modelling for cash flow both before and after retirement
  • Spread sheet showing net asset position after recommendations
  • Detailed explanation of each risk profile (the summary is in the body of the SoA)
  • Product information (it is not necessary to include Product Disclosure Statements- PDS’s),CLICK HERE TO GET MORE.........

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