Type of paper:Coursework
Discipline:Business and Management : Investment
Format or citation style:Not applicable
Part A: detailed file note instructions
*complete the attachment-Template
*Base on attachment-Jonathon Interview
Client’s name: Jonathon Makin
Date of contact: 1 August 2020
Re: Initial Appointment
Wealth creation / lifestyle recommendations –outside superannuation
For Part A, for each wealth creation, and lifestyle goal that you are advising on, you need to detail your recommended strategy(s) which should be linked to the client’s objectives and the advantages and disadvantages of each strategy, i.e. why the recommended strategy is appropriate to the client and any potential costs / downsides.
You also need to include details of any alternative strategies considered and why these were not recommended. The specific requirements of each section are provided below.
1.Objective 1 [change the title to the client’s objective you are advising on – try to make these ‘SMART’ goals where possible]
State your recommended strategy to achieve this goal, i.e. what should Jonathon do? This may be multiple steps, if so; a separate bullet point should be used for each step.
Make sure you are specific about the type of investment; i.e. not he should invest in x or y – which one? (or both?) How much should he invest? For how long? Should the investment have any particular features?
Please be as specific as possible without actually recommending a particular product. Your advantages / disadvantages below should then be directly relevant to your recommendations (not just generic advantages / disadvantages that could apply to any client). Please refer to the ‘investment choices’ video for more information in this regard.
Overall, your recommendations must be clear on where his savings (both current and any monthly surplus) are being directed to achieve his specific goals.
Where your client does have a specific dollar ($) goal he is wanting to achieve, make sure your recommendations do give him a chance to achieve this goal.
For any goals greater than 1 year, you are required to prove your recommendations do give Jonathon a chance to achieve his goal. To do this, please either use the Future Value (FV) calculations (covered in Topic 2) or use an online calculator as shown in the Future Value calculations video [we recommend the latter]. For these calculations, you are required to use the rates and fees provided in Appendix 1 below. As noted there, for the purposes of this course, you are not required to adjust these to take tax and inflation into account, so please simply use the stated rates and fees provided below.
Show any workings / online calculators used (including your inputs) in Appendix 1 below. Before completing this,
Make sure you do actually provide recommendations on how Jonathon can achieve his goals – leaving it up to the paraplanner (the person who will receive your file note) or saying we will discuss this further with Jonathon is not acceptable.
The reasons for your recommendations should form part of your advantages below. This section is simply what Jonathon should do to achieve his first objective.
Advantages of strategy [reasons why]
This is where you need to include the reasons why you have recommended the strategy(s) above.
As per above and the marking rubric, please ensure you provide specific advantages for Jonathon, not just generic advantages that may apply to any client / investor in that particular product. You should be explaining each decision you have made.
Disadvantages of strategy
There are always disadvantages with any recommended strategy. For your recommended strategy(s) what are the disadvantages? Again, be specific rather than general. For example, rather than stating ‘taxation implications’ as a disadvantage you would need to explain what the taxation implications are and how this is a disadvantage for Jonathon.
If there are severe disadvantages with your recommended strategy that cannot be overcome, you should consider changing your strategy – particularly if your strategy means he cannot achieve his goals.
You need to consider all ‘reasonable’ alternatives and most importantly, why these where not recommended.
For example, if you are recommending a defensive investment option you should include other defensive investment options and why these were not recommended. Likewise, with any growth investment recommendations.
Typically, an alternative strategy is a strategy that still meets the client’s goal, but one you haven’t recommended for a particular reason(s). Please ensure you explain what these reasons are, so it is clear why your actual recommendation is more appropriate for your client.
Remember too, that one possible investment alternative is to do nothing. That is, leave the investment as is. If you are not recommending this, why not?