financial planning assignment, Financial Management

School of Business
BUACC1521 Personal Financial Planning

ASSIGNMENT

1. General information

As detailed in the Course Description, the assignment constitutes 30% of the total assessment in this course and is due in week 10 of semester.

Students are required to prepare a report based on the requirements detailed in section four of this handout. It is also the responsibility of students enrolled in this course to form working groups of three to prepare the assignment.

2. Requirement

The assignment must comply with the presentation requirements of the University’s General Guide for the Presentation of Academic Work. For full details of this document, please refer to the University of Ballarat handbook (www.ballarat.edu.au/aasp/student/handbooks/2011/highered) and the University of Ballarat Mt Helen School of Business Undergraduate or Postgraduate Program Handbooks available at www.ballarat.edu.au/ard/business/handbooks.shtml.

The APA/Harvard system of referencing must be used. The expected length for the assignment is approximately 2,000 words (excluding calculations). Assignments that are substantially in excess of this word limit (excluding title page, abstract/synopsis, appendices and bibliography) will be penalised.

3. Assessment criteria

In assessing submitted assignments consideration will be given to:

• Overall neatness, completeness and quality of presentation. Degree level students are expected to achieve a satisfactory standard with respect to this criterion as a matter of course and for this reason no credit will be granted for achieving it. However, assignments that fail to achieve the minimum standard in connection with this criterion will be penalised. The expected standard concerning this criterion is contained in the attached ‘Presentation check-list’.

• Timeliness of submission. Degree level students are expected to be able to meet reasonable deadlines for the submission of assessable work as a matter of course. For this reason no credit will be given for submitting the assignment by the due date. However, assignments that are submitted late will be penalised at the rate of 10% per weekday that the assignment is late.

• Demonstrated skill in identifying and calculating relevant formulas and other indicators of financial performance including the depth and scope of research undertaken. This criterion relates specifically to the requirement to prepare a schedule of relevant calculations, quantitative assessments and research in the appendices and carries a weighting of 10 marks out of the 25 available for the assignment.

• Demonstrated understanding of financial planning reports, financial performance indicators, taxation implications, depth and originality of advice. This criterion relates specifically to the requirement to submit a financial plan/report and carries a weighting of 15 marks out of the 25 available for the whole assignment.

A single copy of the assignment should be submitted, for which the three students who prepared it will usually receive the same mark. This is based on the expectation that each student will have contributed equally to the preparation of the assignment. Where this expectation has not been satisfied separate marks may be allocated.

Selected students may be invited to discuss their assignment with the person responsible for marking it. This discussion will only be taken into account in marking assignments where it provides evidence that the integrity of students’ work has been compromised. This may, for example, be evidenced by students being unable to explain the meaning of their assignment, being unable to explain why certain information has been included and so on.

4. Assignment task

The basic requirement is the preparation of a financial plan/report that provides specific advice for your clients whose details are outlined below.

The aim of this assignment is to encourage students to apply their learning to a real life investment scenario.

Client profile:

Jossiah and Jemima Benson have recently married and in planning their future have decided to solicit the services of a financial advisor with the aim of implementing their short and long term lifestyle goals and financial plans. Jossiah and Jemima are both aged 28.

For their immediate future they have decided they want to purchase a new house and a new car. The house they want has a value of $400,000 and they are very excited as both Jossiah and Jemima have never owned a home before. They would also like to buy a new car for $60,000, however are unsure whether to purchase the car outright or salary sacrifice in order to obtain the car. They expect to travel approximately 35,000 km per year.

Their longer term plans involve establishing a fairly aggressive investment portfolio with the aim of directly purchasing an investment property and investing in a share portfolio of some sort amongst other strategies that you may recommend. They have also heard from a friend that margin lending can be a profitable and expedite way to achieve their goals.
Jossiah works as a minister for a local church and earns $70,000 gross income, while Jemima works for a kindergarten and earns $55,000 gross income. They also enjoy taking holidays and plan to have a holiday each year to the value of $5,000 with an around the world trip planned for five years time to the value of $20,000. Jossiah and Jemima are also keen to retire early and are quite willing to take on additional risk if this assists in them achieving their lifestyle goals faster. They have managed to save between them $180,000 in cash and are looking forward to your advise on how they should go about planning for their future lives together.

Your report /financial plan should include:

Details of any assumptions made on the client’s behalf in relation to investment strategies, client background data or any other relevant information other than those provided.

Specific identification of any risks associated with the financial plan and investment advice, possibly including a SWOT (strengths, weaknesses, opportunities, threats) analysis based on the current investment climate and realism of expected returns aligning with historic performance.

Quantitative assessment and calculation of expected returns and the tax implications that are relevant to your advice utilising the formulas provided in the formula sheet (where all required data is not available from the client profile, students may insert relevant assumptions).

Detailed background research that will form a significant component of this assignment. Students are encouraged to source additional information from the financial press, business magazines, journals, reports and the internet. Under no circumstances are students to make direct personal contact with the company or its officers (for example by telephone, fax, letter or email) in an attempt to gather further information. All advice should be based on real life products, investments, securities, interest rates and economic data. For investment performance returns, students may assume that the expected returns, growth rates and price of investments and securities will be based on recent historic performance. For example, relevant research in relation to interest rates will require you to explore the marketplace and find the best loan or package of loans that will provide the Anderson’s with the means to undertake there investment and lifestyle requirements. In doing this you would need to identify the expenses they will encounter in arranging these facilities, on-going costs that will arise and associated risks. A similar line of research will need to apply to any other financial strategies or investments that you recommend.

It is expected that the bibliography will include a wider range of readings than is included in the course suggested readings. Relevant calculations, quantitative assessments and research data should be incorporated in your appendixes.

5. Presentation

The ‘Presentation check-list’ (see attached appendix) indicates the requirements and expected standards concerning presentation. An assignment that complies with the guidelines highlighted in this check-list would normally be expected to achieve the required presentation standard (see assessment criteria below). If further guidance is required, students should in the first instance refer to the General Guide for the Presentation of Academic Work. If additional clarification is necessary, students should discuss the matter with the staff member responsible for conducting their BUACC1521 tutorial.

6. Plagiarism

Plagiarism is the presentation of the expressed thought or work of another person as though it is one’s own without properly acknowledging that person. The University’s Statute 6.1 Student Discipline and Regulation 6.1 Student Discipline make it clear that plagiarising is a breach of student discipline and may incur a range of penalties. Students are referred to the following web address for more guidance on this matter:

https://www.ballarat.edu.au/ard/learningandteaching/internal/Avoiding_Plagiarism_Guidelines_for_Students.doc

Appendix: Presentation check-list

As indicated above, the assignment for course BUACC1521 is to be presented in accordance with the University’s General Guide for the Presentation of Academic Work and proper presentation is part of the assessment criteria for the assignment. To assist students in achieving the required standard the following check-list is provided.

It is highly recommended that students read through the following items before they commence work on the assignment so that they have a general understanding of what is expected concerning presentation. An assignment that complies with the guidelines highlighted in this check-list would normally be expected to achieve the required presentation standard (see the assessment criteria above).

Prior to submitting their assignments students should read carefully through the following statements and tick the ‘Completed’ box for each item only when they are satisfied that their assignment meets the specified presentation standard.

Section references are to the University’s General Guide for the Presentation of Academic Work (revised edition, 2009). All students should ensure that they have a copy of this document before commencing work on the assignment.

Completed

1. We have read section 1.1 and understand why the proper presentation of academic work is important.
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2. We have read and understood section 1.3 dealing with plagiarism.
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3. We have read section 2.2 concerning ‘Format’ and complied with its guidelines. Please note that ‘1.5’ or ‘double’ spacing is required for the written sections of this assignment.
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4. Our assignment has a title page that contains the information specified in section 2.3.2 (and includes the BA506 tutorial group of each student).
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5. Our assignment has an abstract (or synopsis or summary) prepared in accordance with the instructions contained in section 2.3.3.
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Note
As per section 2.3.3, the abstract follows immediately after the title page and ‘should summarise or précis the content of the work’. Note that the abstract or synopsis should not simply be a restatement of the topic, nor a table of contents in prose form.

6. If our assignment contains a table of contents, it has been prepared in accordance with the guidelines contained in section 2.3.4.
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7. If our assignment contains appendices, they have been prepared in accordance with the guidelines contained in section 2.3.6.
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8. We have read section 3 dealing with general standards of writing and endeavoured to comply with the guidelines it contains.
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9. We have read section 5.1 and understand the importance of properly acknowledging the use of other writers’ works. Section 5.1 identifies four alternative standards for reference and citation. For this assignment the Australian (author-date system) is required to be used.
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10. We have read and understood section 5.2 dealing with the use and presentation of quotations in academic work.
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11. We have read section 5.4 which deals with the Australian style, and used the Australian (author-date) system in our assignment.
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Note
In an assignment of this nature the need to acknowledge sources by ‘author-date’ references may be limited. This is on account of the technical knowledge and skills required to complete the assignment being taught as part of the course content. However, where students quote or use ideas from a particular source (for example, a newspaper article or a textbook) this should be acknowledged. Some judgement is needed in this matter. For example, if a current ratio is calculated there is no need to acknowledge the source of the formula used since the current ratio forms part of general accounting knowledge. However, if a particular author is quoted, or a particular author’s ideas concerning, for example, an appropriate current ratio, are used, then an acknowledgment using an ‘author-date’ reference (see examples in section 5.4.2) will be required. The proper acknowledgment of sources is very important in academic work and it is worth investing some time in learning to do it correctly, as the benefit will be enduring.

12. Our assignment contains a reference list prepared in accordance with section 5.4.3.
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13. We have carefully proofread our assignment prior to submitting it. (Simply running the assignment through a spell-checker, while helpful, is not a substitute for a careful proofreading). When proofreading our assignment we endeavoured to identify and correct all spelling, punctuation, grammatical and other similar errors.
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14. We understand that the staff member(s) responsible for taking our tutorials is(are) available to answer questions relating to the presentation of our assignment. If we were uncertain of how to achieve the proper presentation standard we asked a staff member for advice.
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BUACC1521 SUGGESTED ASSIGNMENT FORMAT GUIDE

REPORT FORMAT:
Complete financial plan/report in an appropriate format. Possible headings amongst others may include:

• Executive summary
• Financial plan components
o Lifestyle plan
o Goal setting
o Investment plan
o Taxation plan
o Retirement plan
o Insurance plan
o Estate plan
• Analysis/Findings/Advice
• Recommendations: Short-term/long-term
• Other: Limitations, etc
• Appendix
• Bibliography - academic
• Bibliography - internet sites utilised

ANALYSIS APPROACH
SWOT Analysis
Strategic ramifications

ADVICE AREAS:
New home
New car – salary sacrifice
Investment property
Investment portfolio – securities, managed funds, other
Financing/banking requirements
Superannuation
Other as deem necessary

POSSIBLE CALCULATION AREAS
Savings annuities (Topic two)
Ratios - savings, liquidity, net worth, debt service (Topic two)
Taxation calculations (Topic three)
Managed fund performance/returns (Topic five)
Fundamental security investment yields (Topic six)
Salary packaging (Topic eight)
Leveraged investments/ gearing ratios (Topic eight)

APPENDIX:
Calculations - footnote assumptions were appropriate
Research findings

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