The objective of the assignment is to develop an understanding of a client’s investment risk
profile and implications of this for investment choice. The assignment requires researching,
reasoning logically and presenting written work of an appropriate academic standard in a
clear, concise and coherent manner suitable for presentation to a client.
You are required to prepare an Investment Report (Note: you are not required to produce a
compliant Statement of Advice SoA. Your clients require that the investment report you
prepare be understandable, useful and practical. Your completed investment report should
be focussed on key areas which will help both to make an informed decision about the
investment recommendations given.
Your report should not exceed a maximum length of 15 pages (12 font size, 1.5 line spacing).
The required framework for your investment report is as follows:
o Cover letter to client (1 page).
o Investment report cover page (1 page).
o Executive summary (1 page).
o Table of contents (1 page).
o Client questions and assumed answers (1-2 pages).
o Summary of client’s current situation including goals, current financial situation,
relevant issues and concerns (1 page).
o Client investment risk profile (3 pages).
o Investment recommendations including assumptions used to develop the advice,
justification of how recommended strategies address goals and concerns, summary
of recommendations (max 6 pages).
o Reference list to acknowledge all source material (not included in page length).
o Appendices (not included in page length).
Your investment report should include appropriate yet judicious use of subheadings where
required. Ensure all subheadings used are logical and relevant to the case study.
Subheadings should appear in the table of contents.
This is not a group assignment. Students are not to copy other student’s work or collude
with other students in the production of the assignment. Any cases where this occurs may
result in charges of academic misconduct. All source materials must be acknowledged. The
use of financial planning software is prohibited.
Case Study Details
You are an authorised representative (your no. is your student ID) for a medium-sized
accounting firm, Accounting and Financial Concepts Pty Ltd (AFC Pty Ltd) which also has an
Australian Financial Services Licensee (No. 226513) and ABN 12 345 678 900. 6 The main
office and registered address of the practice is located at; Level 2, 121 Baker St. Parramatta
NSW 2124 Tel: 02 8234 7377, Company website www.AFC.com.au and Email:
You have 6 years’ industry experience in the accounting and financial planning industry and
hold the CFP designation. Your current educational qualifications are a Bachelor of Business
(WSU) and an Advanced Diploma of Financial Services (Financial Planning). As an authorised
representative of AFC, you can provide advice in relation to financial planning, investment
and wealth creation, superannuation and retirement planning, managed funds, direct
shares, risk assessment and management and general and life insurance products.
There are no costs associated with the production of this preliminary investment report.
Any costs will be included when the Statement of Advice is subsequently developed at some
About your Client…..
David Wheeler is 64 years old (DoB: 4/2/1955) and intends to cease work in the next 4
weeks. He has worked with an educational institution where he was responsible for
running the English language program for international students and was in that role for the
last 12 years. David had originally intended to work for another 2-3 years, however a
restructure at his workplace made him uncomfortable with his new role so he decided to
Before making his decision to leave work, he did not really consider his financial position
and is now a little concerned about his decision. He has come to you for advice on what she
should do financially now that he will no longer be working. His main concern is whether he
can generate enough income to retain the lifestyle ‘to which he has become used to’.
His address for mail is 8/195 Bayview Street, Potts Point NSW2011. His other contact details
are 0411 544 583 and his email is email@example.com
David is single (and intends to remain so) and has no financial dependents.
He owns his own unit in Potts Point which he thinks is worth about $1.4m based on what
other units in the block have recently sold for. He has lived here for over 5 years and has
no debt on this property. Insurance cover for the building is provided through the strata of
the building and he has his contents insured with AAMI for $220,000 replacement value.
He does not have a car and is happy to continue to use public transport once he stops work.
David has been given an estimate of his payout from his employer. His payout includes
unused annual leave as well as a small amount of Long Service leave. After tax, this
amount works out to be about $65,000 and will be paid on his final day of employment.
While working David enjoyed a salary of $135,000 and was paid 10% superannuation in
addition to his salary.
Although, he has not really given it much thought, David feels that in retirement he needs
effectively the same level of income (after tax) as when he was working. He cannot see
that he will make many changes to his lifestyle including taking at least one overseas trip
each year. David has used his employment income to fund his lifestyle including the
overseas trips and has never really “saved” much from his income in the last 5 years or so.
David has previously worked overseas where he earned significant tax-free income which he
has used to pay off his mortgage and accumulate some savings. David has also recently
received an inheritance from his father’s estate.
As David has been quite busy with work he has just put the funds he received from his
father’s estate into his everyday personal bank account which is earning about 0.50%
interest. The Commonwealth Bank has been calling him every few weeks asking him to
come in to discuss “options” for the $460,000 balance he has in this account. This includes
his savings of $60,000 and the $400,000 cash he received from his father’s estate.
David’s last superannuation statement shows a balance of $720,000 and is invested in the
MLC Masterkey Super – MLC Horizon 3 Conservative Growth Portfolio. He believes that
when he leaves work and the final contributions are made by his employer, the balance will
be closer to $765,000.
David also has a small defined benefit superannuation pension from work he did before he
worked offshore paid by State Super. This currently pays him a guaranteed income of $455
per month and is payable for his lifetime and is indexed to inflation each year. While the
income from this fund will be payable for his lifetime he is unable to access any lump sum
from this account. Benefits paid from this fund have been made since he reached age 55
and as he did not need the income he has directed all payments to a managed fund, the
Perpetual Industrial Share Fund. He is pretty happy with the return on this account as the
account balance is now $76,500 but he is not really sure if it is suitable now that he is
David has acquired direct shareholdings from various sources and basically ignores them
and is not clear about how good they are as investments. He is not emotionally attached to
any of these holdings and is happy to hear options for what he could do with them.
Currently, dividends simply go into his CBA cash account. He has looked up the current
holding details and confirms he has the following:
? 1,225 AMP (ASX:AMP) shares which he received when they demutualised and he
held an AMP insurance policy (long since cancelled)
? 835 IAG (ASX:IAG) shares from his membership with NRMA when they
? 1,000 Telstra (ASX:TLS) share he bought when they floated initially (the T1 offer)
? 1,398 NIB Holdings (ASX:NHF) shares he was given when they floated based on
his private health insurance membership
? 35,000 Australian Pharmaceutical shares (ASX:API) that were transferred to him
from his father’s estate
During your discussions David tells you he