Financial Planning - Part 1


Emily and Joel are the clients who want to get there financial position in line. Various issues are related to their finances. Emily was not contributing towards her employer contribution and Joel is doing the same. According to their estimate, they are expecting $49000 to live after retirement. Both of them have a saving account for emergency that is bringing them .5% and also have share portfolios. They also have 2 children and are concerned about the future. They also own a property that is rental but are not making enough from that property. With that, they have certain mortgages and credit card bills that are to be paid by them.

The targeted Goals of Emily and Joel



1. $49000 to live

After the retirement, Emily and Joel need $49000 to live on for carrying out their life. So, they want enough money for the future.

2. University cost for children

Lauren aged 10 and Michael aged 8 are 2 children of Emily and Joel and they would like to fund their fees for university in the future.

3. To know the financial viability of the rented property.

Emily and Joel inherited a property that has cost $450000 which has now increased to $570000 but the return from the property is only 4% that is lower. They want to understand whether to keep the property or not.

4. Refinancing

Emily and Joel have a mortgage loan of $235000 which they are planning to get refinanced. They want to know whether it is appropriate or not.

5. Credit card

Emily and Joel also have a burden of credit card paid at an interest rate of 17.75%. They would like to end it.

6. Insurance cover

Emily and Joel do not have cover for insurance of income and trauma. They would like to attain some.

Present financial position



Salary of Emily

$81000 p.a.

Salary of Joel

$122000 p.a.

Super Guarantee balance at present of Emily


Super Guarantee balance of Joel


Emergency saving account balance

$25000 with .5% interest



Rental property cost


Yearly income from the property


Insurance of life and TPD of Emily


Insurance of life and TPD of Joel


Strategies for lifestyle as per the Goals



Actions to be taken

1. Reduce the expenses of credit card

Emily and Joel both have higher expenses. With their income, they also use their credit card. They are paying interest on that credit card unnecessarily and increasing their expenses.

Certain steps are to be taken to reduce the expenses by Emily and Joel

- They require to cut their unnecessary expenses. They can cut their outings for once a week that will help them in curbing some of the expenses.

- Also, they should stop using the credit card and reduce the amount that has been collected on it.

- When the expenses will be cut they will be able to save more, with that they can reduce the amount that in turn will reduce their interest expenses.

2. Insurance cover

Emily has lower life insurance with that both Emily and Joel have no insurance cover for their income and Trauma.

- Since both Emily and Joel have no insurance regarding their trauma and insurance it is suggested they purchase some.

- At present both are earning so, they should opt for level premium. This will charge a higher premium when the policy starts while on later stages the cost of premium will decline. This will help them in managing their costs over time.

- Also, Joel can take an insurance cover up to 3 times. So, Joel should take a life insurance cover for the family. This will cover all of them and will provide protection.

3. University fees for kids

Michael and Lauren will require money for further studies and both Emily and Joel should plan to cover it from now on.

- For this purpose, Michael and Joel should open an Education Savings account. The fees and other requirements will be known and according to that, a small amount can be invested accordingly. By reducing the expenses, they will have some extra money which can invest ion future education plans.

- Or they can use the annual income that is being generated from rental property to put that in the saving.

- This will require them to keep that property which is also good in other ways. Its value is increasing and it is expected to rise further. Later they can derive more money.

4. Refinancing

Emili and Joel on the house mortgage are planning to refinance the loan.

- They should opt for the process and contact the banks that are providing loans on lesser interest rates. This will help them in saving more.

5. Super guarantee contribution

Emily and Joel both do not contribute to the super guarantee funds due to which their funds are low.

- Emily and Joel should contribute to the funds by saving from the above as that will help them have enough funds in the future. Emily and Joel both should contribute the same percentage as the employer as this will double up their speed of savings.

6. Share returns

Emily and Joel have a portfolio that is making a return of 3% while there is a loan that is being taken backed by securities on which they are paying 8% interest.

- The portfolio should be diversified and accordingly returns should be increased. Certain blue-chip companies should be kept so that the appropriate amount is generated and with that, they should diversify some of it in riskier securities. This will help them in generating more returns. Thus, will help them cover the cost of interest.

Thus, the above scenario presents an overall view of Emily and Joel situation. Also, their present financial conditions and the goals they want to achieve are described. With that certain actions that can be taken for fulfilling their goals are suggested.

Assumptions made in Emily and Joel case

Certain assumptions have been made in the case of Emily and Joel that are as follows:

  • Emily and Joel like to go out often and spend unnecessary money on various items.
  • Emily and Joel use credit cards very frequently.
  • Joel can have an insurance cover that can afford the whole family.
  • Kids of Emily and Joel do not have any kind of insurance on their names.
  • It has been assumed that Emily and Joel have not started any funding for the college fees of the Kids.
  • It has been assumed that money that is being generated from the rented income is not being used in any form of activity and can be put to saving.
  • For the property that has been inherited, it has also been assumed that the property’s price will rise in the future and by holding it for some more time Emily and Joel will be able to keep it for some more time.
  • For the refinancing goal, it has been assumed that Emily and Joel have an option where they can get their low-interest loan to cover the prior loan that has been taken by them.
  • It has been assumed that Emily's and Joel's portfolios consist of a safe portfolio. They have only debt funds in their portfolio as that will provide guaranteed return.
  • It has been assumed that certain equities are prevailing in the market which have higher returns and can be purchased in an open market.

Thus, these are the basic assumptions that have been made regarding Emily's and Joel's situation and suggestions that have been provided.

List of Questions

Certain questions are to be asked before preparing a Statement of advice for the client:

Q1. What are the major financial concerns for which the client is looking for planning?

This will help in understanding the major requirements of the client and also the concerns that they need help with.

Q2. Does the client can reach its current goals?

This question will help in understanding the need for the client for financial advisor and also give an idea from where to state.

Q3: What are the expectation of clients that he wants to see in the future?

This will provide an idea of how the client wants their life in the upcoming time and accordingly, expenses can be planned.

Q4: How does the client picture his life in the next 10 years?

This will give an idea of how and what all are the things that client wants and is likely to spend shortly. This will provide an approximation of the amount required to buy those things.

Q5. Other than the monetary issues, what are the non-monetary concerns of the client?

This will help in understanding the other goals and worries like about their kids and their education, wellbeing etc. which will help inappropriate planning.

Q5. Does the client have a household budget and what are the spending habits?

This will give an idea about the spending and accordingly changes can be suggested to the clients.

Financial Planning - Part 2

Preparation for successful fact-finding meeting

To prepare for a successful fact-finding meeting certain requirements are requisite. The very first requirement for the successful fact-finding meeting is to know about the client. What is the client doing, who they are, and what major aspirations for the future are there? This will help in understanding the client in a better way.

Another important aspect is to know about their story of success as that will help in understanding their journey and the mindset that they might perceive. Like a client who has grown up in an environment where he suffered because of less money than he will be protective of the money and would like to adopt a conservative approach (Bandholm et al., 2017). While the person who has been affluent throughout life would like to take risk

For a successful meeting, it is also required to know about the family and who plays a major role or have a significant impact on their lives. Like a person having kids would like to focus more on their education and other stuff rather than planning holidays. So, in this manner, it will give an overall view.

It is also important to understand the requirements or the expectations that the client has from the life and how he is planning to achieve it. This is very important as the client will describe his expectations and requirements which will be a fact finder of all the needed information from the client (Komadt, Voss & Rothermund, 2018). It will help in understanding the behavior and also whether it will be possible to work with the client or not. It will also give an understanding of what ticks the client. Through fact-finding meeting preparation, a better view of the client can be presented, and accordingly, questions can be prepared for the client. All the relevant information regarding client loan's etc. should be collected and the value should be analyzed so that clients can be dealt with accordingly.

Legal Basis for fact-finding document

For the financial advisors, a template is provided by law to incorporate all the information about the client. There are various compliance that are to be followed by the while fact-finding by the licensee or the financial advisor or else it leads to failure of compliances. The very first legal basis as per the 961B of Corporations Act 2001, financial planners should include a section of the client's objectives that should include the subject matter of advice that is being sought for the needs of financial planning (Kiso & Hershey, 2017). If this is not present in the document, it will not be considered as an appropriate practice.

Also as per the 961b (2) (c), it is required that representatives are trained appropriately so that they can collect all the information that is related to the client. Appropriate documentation should be done and information should not be collected based on the face value of any client. This is required in the detailed filed notes for fact-finding sheets (Nathanson et. al., 2018). Thus, a fact-finding template is critical and representatives should have clear knowledge about the information that is to be recorded in the fact-finding statements.

Another important legal aspect of the fact-finding document is the maintenance of privacy policy. All the information that is collected by the client from the financial planner's in fact-finding sheet should be kept privately. This information should not be shared with anyone. This is an important legal requirement of the fact-finding document. And the client should be made aware of the purpose of the information and to whom the details will be shared. Thus, these are the requirements of a legal basis for the requirement of fact-finding.

Elements of successful fact-finding method

Various elements are to be required in the successful fact-finding method:

  • Defining the needs of clients: One of the basic aims of a financial planner is to attain the goals of the client. So, the basic element for a successful fact-finding method is to identify the needs of the client (Aggarwal & Singh, 2019). Fact-finding is adopted to know the needs of the client and when it is done, it can be concluded as successful. So, understanding or defining the needs of the clients is a major element.
  • Gathering all personal information: It is also an important element of fact-finding methods to be successful. When all the information regarding the client is collected about its personal needs, family ties etc. then it will be considered as a successful fact-finding method. SO, attaining all personal information is an important element for the fact-finding method.
  • Legal basis: Finding the fact method is also bound by certain legal requirements. A successful element for the fact finding method is to fulfill all the legal requirements of the documents. This will help in conducting an appropriate fact-finding. So, the legal basis is an important element for a successful fact-finding method.
  • Being neutral and investigating every information: This is an important element for successful fact-finding. The fact-finding method should be neutral for everybody and every information that is provided should be investigated in the same manner for every client. It should not be done on face value nor should it be biased towards anybody. Like if a planner gets an affluent client and then he eases the way for that client by not asking appropriate documents or not making him fill the documents etc. will not be considered as a successful method of fact-finding (Ponomarenko, 2019). Every person is treated equally and away from biasedness is considered as an important element of fact-finding method.

References for Financial Propinquity to Business Success

Aggarwal, N., & Singh, H. (2019). Women and wealth: Financial propinquity to business success. Australasian Accounting, Business and Finance Journal13(2), 69-87.

Bandholm, T., Christensen, R., Thorborg, K., Treweek, S., & Henriksen, M. (2017). Preparing for what the reporting checklists will not tell you: the PREPARE Trial guide for planning clinical research to avoid research waste. British Journal of Sports Medicine51(20), 1494-1501.

Kiso, H., & Hershey, D. A. (2017). Working adults’ metacognitions regarding financial planning for retirement. Work, Aging and Retirement3(1), 77-88.\

Kornadt, A. E., Voss, P., & Rothermund, K. (2018). Subjective remaining lifetime and concreteness of the future as differential predictors of preparation for age-related changes. European journal of ageing15(1), 67-76.

Nathanson, M. J., Craig, J. T., Geoghegan, J. A., Lee, N. G., Haber, M. A., Hieken, S. P & Stelljes, S. R. (2018). Finding the Right Advisors. In Personal Financial Planning for Executives and Entrepreneurs (pp. 157-167).

Ponomarenko, E. A. (2019). Research methodology for the assessment of the influence of organizational culture aspects on project success. Вестник Пермского университета. Серия «Экономика»= Perm University Herald. ECONOMY14(3), 495-512.

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