CASE STUDY: Bill English

You have recently commenced your career in financial planning, working towards the goal of owning your own business, and have accepted a role as Junior financial planner in a small financial planning practice assisting the owner and senior financial planner, Michelle Bell. The practice operates under the name Bell Financial Planning Pty Ltd and Michelle is an authorised representative of Trust Financial Services.

Michelle has agreed to mentor you while you are completing your Diploma of Financial Services, and as part of the duties of your role, you will be involved in the entire client process. As such, you will sit in with Michelle on initial and ongoing client meetings, prepare Statements of Advice in accordance with her instructions, and ensure that the paperwork required to implement the plans is dealt with appropriately.

Bill, age 36, has made a meeting to see Michelle as he has received a $400,000 payout from his late wife Lucy's superannuation fund, which included a payment from the life insurance she held through the fund. She was involved in a fatal accident just over six months ago, leaving Bill to care for their two daughters, Nerissa (8 years old) and Nadia (6 years old). As you would expect, the family is devastated but now that some time has passed since the funeral, Bill has started thinking about the future. He wants to ensure that he makes the most of the payment, and has been referred to Bill was working full-time for a Engineering company prior to the accident, but has had six months off work as personal and annual leave since the accident. He would like to spend more time with his daughters and feels he is ready to go SAG sag_clientcommskills_sem1_2016 v1.docx Version 3 – July 15 Page 6 of 11 Disclaimer: Printed copies of this document are regarded as uncontrolled. Please check http://sitwww.tafensw.edu.au to ensure this is the latest version.

RTO Code 90003 back to work on a reduced hour basis, which his employer has agreed to. He will work three days per week, 9 am to 5 pm, on two-thirds of his previous salary, so he expects to now earn $42,000 gross plus 9% p.a. superannuation. Bill has arranged for his parents to care for his daughters before and after school on the days that he works.

Bill would like to continue to work part time until Nerissa is 13 years old, and will then probably go back to full-time work. Ultimately, Bill expects he will retire at 65 and will need about $40,000 p.a. (in today's dollars) at that time to meet his Lucy's Will was last updated in 2003 and provided for all her assets to pass to Bill. Her estate has now been finalised so any assets that were in her name have passed to him. Bill's Will was also updated in 2003 and states that all his assets are to pass to Lucy; he wonders what will happen to his Will now. Bill and Lucy owned their home as joint tenants, which is valued at $520,000. There is currently $220,000 outstanding on the mortgage, which is currently paid off at $1,438 per month (interest is 6.15% variable over 25 years). Bill has a bank account with a balance of $412,000 (which includes the payment from Lucy's superannuation fund), as well as $5,000 in a fixed term deposit, which matures next week. He also holds a blue chip share portfolio which he has built up over the past ten years and is now valued at $40,000. He has accumulated $110,000 in superannuation but as his immediate concern is funding for his family. He does not require superannuation advice at this time.

Bill bought a car nine months ago – it is worth $32,000 and he has an outstanding loan of $22,000 with monthly repayments of $540. Lucy's car was owned outright and it is currently sitting in the garage, but Bill has agreed to sell it to a friend for its market value of $10,000. He expects the sale to take place in the next few weeks and will place the Bill would like to make sure that the money from Lucy's superannuation fund is invested in the best possible way. The girls attend public schools, and will do so for all of their primary schooling. They will attend the local independent school for their secondary years at a cost of $3,500 (in today's dollars) per student per year. Bill would also like to help them if they go to university and expects that to cost him at least $80,000 in total for both daughters to complete their degrees. Bill thinks living expenses for himself and his daughters will be about $450 a week (food, petrol, utilities etc.), and that annual bills, such as insurance, registration and rates, would be approximately $4,000 p.a. He would like to continue the annual family holiday to North Stradbroke Island and has budgeted about $1,500 for this on top of normal expenses. Bill has private health insurance for the family (premiums included in the living expenses above). He has life and total and permanent disability insurance cover in his superannuation fund of $300,000, and income protection insurance, which will provide 75% of his monthly income if he is ever unable to work through illness or injury. At this time he is not Bill would like to get the most income that he can and would like advice on how best to use the money from Lucy's life insurance so that he can bring up his daughters with the minimum of worry.

Please demonstrate the application of your knowledge in client communication skills and the first client meeting when Question 1 Client meeting preparation a) How would you prepare your room/office before seeing this client? b) Create a meeting Agenda for this client meeting. Question 2 The Financial Planning Process a) Provide a diagram of the financial planning process. (Hand drawn diagrams are preferred) SAG sag_clientcommskills_sem1_2016 v1.docx Version 3 – July 15 Page 7 of 11 Disclaimer: Printed copies of this document are regarded as uncontrolled. Please check http://sitwww.tafensw.edu.au to ensure this is the latest version.

RTO Code 90003 b) Provide a script showing the conversation for when you will step the client through this process to assist them Question 3 The Financial Services Guide

a) When will you present the FSG to the client at the first client meeting? Why?

b) Provide a script showing the conversation for when you will present your FSG to the client. Question 4 Your role as a financial planner a) What is your role as a financial planner? How can you assist this client? a) Discuss how you will facilitate the first client meeting to ensure you have rapport with the client. a) What happens if a client is not happy with your services or they have a complaint after they receive advice Question 7 The importance of effective communication skills a) What are effective communication skills in financial planning?

a) Mind map the clients' situation based on the information provided in your case study. Provide the hand drawn mind map on an A4 size piece of paper for this situation.

a) Write a list of 3 to 5 SMART Goals for this client.

Question 10 Financial Needs Analysis a) Which sections of the Financial Needs Analysis do you need to complete for this client's situation.