afc3440 unit guide 2013 s2-1

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Business and Economics

Unit Guide

Australia Malaysia South Africa Italy India

AFC3440 Pension and financialplanning

SYNOPSIS: Topics covered include superannuation economics and demographics, industrystructure and regulation, products available from fund managers, life offices and superannuation

trusts, actuarial mathematics, the mortality table, factors affecting selection, endowments,assurances, single, joint and longest life annuities, application to comparative evaluation ofcommercial retirement products, financial planners and the financial planning function, accreditation,responsibilities and duties, determination of client objectives and risk profiles, and strategies forsuperannuation and social security

Mode of delivery: ON-CAMPUS

Workload: This is a six credit point unit with three hours class contact per week over12 teaching weeks. It is expected that you will spend, on average, ninehours in self-directed study each week, in addition to the three hours ofclass contact. Self-directed study for a particular unit may exceed nine

hours during weeks preceding an in-semester test, submission of a majorassignment or final examination.

Prerequisites: AFC2240

Prohibitions: AFF3111

Chief examiner: Professor Phillip Gray

Campus: Clayton

Lecturer: Tony Cusack

Email: [email protected]

Co-ordinating Tutor: Elizabeth OoiCampus: Clayton Phone:

Email: [email protected]

SEMESTER 2 2013

HANDBOOK ENTRY:http://www.monash.edu.au/pubs/handbooks/units/AFC3440.html
http://www.monash.edu.au/pubs/handbooks/units/AFC3440.htmlhttp://www.monash.edu.au/pubs/handbooks/units/AFC3440.htmlhttp://www.monash.edu.au/pubs/handbooks/units/AFC3440.htmlhttp://www.monash.edu.au/pubs/handbooks/units/AFC3440.html

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Copyright Monash University 2013 2

ACADEMIC OVERVIEW

Learning objectives

The learning goals associated with this unit are to:

1. describe financial planning activities, and legal compliance requirements for financial planners

2. demonstrate specialist skills required for interaction with financial planning clients3. demonstrate generic knowledge of the Australian and global investment environments, together

with specialist knowledge in the areas of superannuation, financial planning, securities andmanaged investments

4. prepare financial plans for clients with different financial objectives

5. apply critical thinking, problem solving and presentation skills to individual and/or groupactivities dealing with pension and financial planning and demonstrate in an individualsummative assessment task the acquisition of a comprehensive understanding of the topicscovered by AFC3440.

Graduate attributes

Monash prepares its graduates to be:

1. responsible and effective global citizens who:

a) engage in an internationalised world

b) exhibit cross-cultural competence

c) demonstrate ethical values

2. critical and creative scholars who:

a) produce innovative solutions to problems

b) apply research skills to a range of challenges

c) communicate perceptively and effectively

Assessment summary

ASSESSMENT TASK DUE DATE VALUE

Mid-semester test Week 6 5%

Preparation of a financial plan 5:00pm Friday, 27 September (Week 9) 25%

Final Examination (3 hours) Official Examination Period 70%

TOTAL 100%

Hurdle requirementThere is a hurdle requirement for this unit.

The learning outcomes of this unit require you to demonstrate a comprehensive understanding ofthe topics covered in the unit. Hence the hurdle requirement for this unit requires that you mustattain a mark of at least 50% in the final examination. If you fail the unit solely because of failure tosatisfy the hurdle requirement, a mark of 48N will be determined by the faculty's Board of Examinerson the recommendation of the unit's Chief Examiner.

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The outcome from application of the hurdle requirement is often misunderstood by students who areawarded 48N. For example, some students mistakenly believe that 48N means they failed the finalexamination by two marks and that a second re-mark of their examination paper might find twoextra marks. Whereas 48N does not provide any indication of the mark attained in the finalexamination other than a mark less than 50% was awarded.

The following example should make the application of the hurdle requirement clear. In this unit 30%of the assessment regime is allocated to in-semester assessment and 70% to the final 3-hourexamination. A student enrolled in this unit might achieve 24 out of 30 for their in-semesterassessment and 30 out of 70 for the final examination. While the overall total of these marks is 54Pthe final examination mark is five marks below the required 50%. Consequently a mark of 48N willbe determined by the faculty's Board of Examiners on the recommendation of the unit's ChiefExaminer.

Second markingWhere an assessment task is given a fail grade by an examiner, that piece of work will be markedagain by a second examiner who will independently evaluate the work, and consult with the firstexaminer. You will not be awarded a fail grade for an assessment task or unit without a second

examiner confirming the result.Note: Exceptions to this are individual pieces of assessment contributing 10% or less of the finalmark, unless the total of such pieces exceeds 30% of the final mark.

Return of final marks for the unitFaculty policy states that the final mark that a student receives for a unit will be determined by theBoard of Examiners on the recommendation of the Chief Examiner taking into account all aspects ofassessment.

The final mark for this unit will be released on the date nominated in the University's Principal DatesCalendar found at:http://www.adm.monash.edu.au/execserv/about/principal-dates/

In Semester 2, 2012 your results will be accessible through my.monash portal at URL:

https://my.monash.edu.au/on Monday, 9 December 2013.Exam viewingFeedback on student performance in examinations and other end-of-semester assessment isrequired, in accordance with the University procedures on Unit Assessment. For more information,please see the following URL:http://www.buseco.monash.edu.au/aaf/student/exam-view/index.html.

Learning and teaching approachThis unit will be taught as a two-hour lecture and a one-hour tutorial each week for 12 weeks. Youare expected to attend all lectures and tutorials.

The lectures will not cover every aspect of each topic listed in the Unit Schedule on pages 6 to 9 as

you are expected to acquire a comprehensive understanding by undertaking the prescribed andrecommended reading and by completing the week-by-week tutorial activities and other in-semesterassessment tasks.

The tutorials provide an opportunity for you and your peers to discuss the current topic(s) and tocompare your completed assessment tasks with other studentswork and/or model answers. Whiletutorials provide an opportunity for you to demonstrate the application of your knowledge and skillsthere is also an opportunity for you to ask the tutor to clarify your understanding of the topics andassociated concepts covered to date.

In general you are expected to spend two to three hours of self-directed study for each hour inclass. Some of this time should be devoted to discussions with other students. The benefit of suchdiscussions will be enhanced if you have completed relevant prescribed and recommended reading

and/or started or completed the current assessment task(s). The prescribed and recommended
http://www.adm.monash.edu.au/execserv/about/principal-dates/http://www.adm.monash.edu.au/execserv/about/principal-dates/http://www.adm.monash.edu.au/execserv/about/principal-dates/https://my.monash.edu.au/https://my.monash.edu.au/http://www.buseco.monash.edu.au/aaf/student/exam-view/index.htmlhttp://www.buseco.monash.edu.au/aaf/student/exam-view/index.htmlhttp://www.buseco.monash.edu.au/aaf/student/exam-view/index.htmlhttp://www.buseco.monash.edu.au/aaf/student/exam-view/index.htmlhttps://my.monash.edu.au/http://www.adm.monash.edu.au/execserv/about/principal-dates/

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readings are listed in this guide and on the unit's Moodle website. The Moodle website providesaccess to material including past examination papers and model answers. These resources willenable you to develop a mastery of the topics covered by the unit.

To ensure a high probability of successfully completing this unit, you need to manage your time andstudies in a systematic way. At a minimum this should involve:

reading prescribed and selected recommended material prior to attending lectures;

completing week-by-week tutorial activities tasks prior to attending tutorials;

attempting relevant questions from past final examination papers and in-semester tests;

discussions with past and present students; and

revision of the semester's work during the SWOT-Vac and prior to the final examination.

Feedback

Our feedback to youStudents will be provided with feedback in the following manner:

written comments on the group financial plan

individual and class feedback in tutorials

Your feedback to usMonash University's statement of purpose endorses its commitment toexcellence in research andscholarship, education and management. The University regularly seeks feedback from students,employers and staff. One of the key formal ways students have to provide feedback is throughStudent Evaluation of Teacher and Unit (SETU). The Universitys student evaluation policy requiresthat every unit is evaluated each year. You are encouraged to complete the surveys. The feedbackis anonymous and provides the department and faculty with evidence which underlies and enablescontinuous improvement.

For Monash Universitys statement of purpose go to URL:http://www.monash.edu.au/about/monash-directions/directions.html

and for the University's Student Evaluation Policy go to URL:

http://www.policy.monash.edu/policy-bank/academic/education/quality/student-evaluation-policy.html.

Previous student evaluations of this unit

Student feedback has highlighted the following strengths in this unit:

it gives them an industry accreditation, enabling immediate employment prospects in financial

services

it reinforces finance concepts from previous units.

Student feedback has also contributed to continuous improvements, including: ongoing provision ofup-to-date superannuation legislation, which changes continuously; and reduction of the amountand modification of the nature of unit material used.

If you wish to view previous Unit Evaluation Reports, please go to URL:

https://emuapps.monash.edu.au/unitevaluations/index.jsp.
http://www.monash.edu.au/about/monash-directions/directions.htmlhttp://www.monash.edu.au/about/monash-directions/directions.htmlhttp://www.monash.edu.au/about/monash-directions/directions.htmlhttp://www.monash.edu.au/about/monash-directions/directions.htmlhttp://www.policy.monash.edu/policy-bank/academic/education/quality/student-evaluation-policy.htmlhttp://www.policy.monash.edu/policy-bank/academic/education/quality/student-evaluation-policy.htmlhttp://www.policy.monash.edu/policy-bank/academic/education/quality/student-evaluation-policy.htmlhttps://emuapps.monash.edu.au/unitevaluations/index.jsphttps://emuapps.monash.edu.au/unitevaluations/index.jsphttps://emuapps.monash.edu.au/unitevaluations/index.jsphttp://www.policy.monash.edu/policy-bank/academic/education/quality/student-evaluation-policy.htmlhttp://www.policy.monash.edu/policy-bank/academic/education/quality/student-evaluation-policy.htmlhttp://www.monash.edu.au/about/monash-directions/directions.htmlhttp://www.monash.edu.au/about/monash-directions/directions.htmlhttp://www.monash.edu.au/about/monash-directions/directions.html

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Required resources

Prescribed text available from the University Bookshop

CCH. (2012). The Australian master financial planning guide 2012/13(15th ed.). CCH.

Superannuation legislation changed very significantly during 2007 with consequential changes insuperannuation and financial planning strategies in subsequent years. Earlier editions of the CCHtext are not acceptable. Note that only this edition can be taken into the examination.

Virtual learning environment (VLE): MoodleMaterial used in class together with other information of importance to you will be published onlinevia the units site on Moodle. In order to access information about this unit in Moodle you must beenrolled in the unit and have a valid student account with authorised username and password.Moodle is accessed through my monash portal at URL:https://my.monash.edu.au/.

When you log in to my.monash portal you access Moodle in the home page by clicking on theMoodle 2 link under "Online systems".

Q ManualWork submitted for assessment must be consistent with the guidelines set down in the Q Manual,

which is the faculty's student guide for producing quality work on time. Copies of this manual can bepurchased at the bookshop or accessed online at URL:http://www.buseco.monash.edu.au/publications/qmanual/qmanual.pdf.

CalculatorsElectronic devices (including calculators) are not permitted in tests and examinations in this unitunless identified with an approved for use label.

These labels are available from: Caulfield Campus: Accounting and Finance Reception Desk (Building H, Level 3) Clayton Campus: Accounting and Finance General Office (Building 11, Level 10)

Recommended resources

Recommended texts and readingsAdditional references will be provided in lectures. However, any serious student of business shouldread The Aus tral ian Financial Reviewdaily. It is available at Clayton campus bookshop at half-price.
https://my.monash.edu.au/https://my.monash.edu.au/https://my.monash.edu.au/http://www.buseco.monash.edu.au/publications/qmanual/qmanual.pdfhttp://www.buseco.monash.edu.au/publications/qmanual/qmanual.pdfhttp://www.buseco.monash.edu.au/publications/qmanual/qmanual.pdfhttps://my.monash.edu.au/

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UNIT SCHEDULE

WEEK BEGIN SYLLABUS WEEKLY ACTIVITIES

ORIENTATION WEEK 21 26 JULY

1 29 JUL Topic 1:Pension and financial planning inAustralia

1. Introduction to pension schemes

2. Administrative matters including RG 146compliance details for financial advisers

3. Financial planning industry in Australia

4. Nature of financial planning

5. Devising a Financial Plan: Assignment

6. Pension plans in other countries

Read Topic 1 notes and referencestherein; tute 1. Note that you areexpected to understand and recall allabbreviations and acronymscustomsand usages used in the financeindustry,

2 6 AUG Topic 2: Australias private pensionscheme: The Superannuation GuaranteeScheme (SGS)

1. Need for a nationally coordinatedscheme

2. Legislative landscape for three phasesof super (accumulation, transition toretirement, retirement)

3. Taxation of super after Simpler Super

4. Compliance requirements for advisers

Read Topic 2 notes and referencestherein; tutes 1 and 2. Role playinggroups formed.

3 12 AUG Topic 3:Financial plans, compliance issuesand assignment requirements

1. ASIC compliance requirements forfinancial planners

2. Assignment details; skills through role-playing

3. Compliancean overview

4. Advisers and their role

5. Compliance, ethics and professionalstandards

6. Fiduciary duty, disclosure

7. Know your client, know your product

8. Documentation, FSG, SoA, PDS9. Licensing, fair trading, privacy,

complaints

Read Topic 3 and references therein;

tutes 2 and 3. Role playing in tutes to

commence.

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4 19 AUG Topic 4:Social security, age pension andsuper

1. Social security, the age pension andsuper, taxation


tutes 3 and 4.

Role playing in tutes.

5 26 AUG Topic 5:Revision of investment concepts,portfolio theory, asset class performanceand managed funds; & the MVE strategy.

1. Review of investment and portfoliotheory, operation of securities markets

2. Economic factors affecting securitiesmarkets

3. Application of fundamentals to developnew theory for optimal conversion of alump sum to an income stream: Mean-

variance efficient (MVE) strategies.4. Application of MVE (case study)

5. How is MVE affected by financial marketmeltdown (GFC)?By current volatility?

Read Topic 5 and references therein;tutes 4 and 5.

Role playing in tutes.

6 2 SEP Topic 6:Transition to retirement, retirementwithdrawal of benefits, retirement incomestream options

1. Outline of TTR concept

2. Taxation of retirement lump sums andpensions

3. Funding retirement:

what are retirees doing to fundretirement?

the fixed income market; a usefulbenchmark.

4. Characteristics and comparative costs ofthe different RIS options; use of anactuarial basis to price life annuities

Read Topic 6 and references therein;tutes 5 and 6. Role playing in tutes.

7 9 SEP Topic 6:continued

4. Characteristics and comparative costs ofthe different RIS options; use of an

actuarial basis to price life annuities

Read Topic 6 and references therein;tutes 5 and 6

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8 16 SEP Topic 7:Small Funds: Self ManagedSuperannuation Funds (SMSFs) and SmallAPRA Funds (SAFs)

1. How retirees survive financially; SGS torun in tandem with Centrelink indefinitely

2. Survey results on what is needed forfinancial adequacy in retirement,compared with what is generallyavailable.

3. More and more retirees turning to use oftheir own small fundswhat are theperceived benefits?

4. SMSFs and SAFs

5. Five people who run their own smallfund

6. Rules governing small funds,establishing a fund: chores and costs.

7. SISA, ATO, Trust deed, trustee duties,investment, taxation.

8. Devising an investment strategy

9. Use of a SMSF in Estate planning

10. Effect of Global Financial Crisis onmanagement of small funds


tutes 6 and 7. Role playing in tutes.

9 23 SEP Topic 8:A. Planning for the family & B.Family breakdown

A. Planning for the Family1. Budget planning

2. Cost of raising and education of children

3. Government assistance

B. Divorce and Family Breakdown

1. Complexity of family financialarrangements

2. Family Court approach to propertysettlement

3. CGT and stamp duty on transfer of assetsbetween divorcing parties

4. Binding financial agreements

5. Child and spouse maintenance

6. What it means to be in a couple


tutes 7 and 8. Role playing in tutes.

Assignment due at the end of this week(by COB Friday, 21September).

IN-SEMESTER BREAK 30 SEPTEMBER 4 OCTOBER

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10 7 OCT Topic 9:Estate Planning

1. The importance of estate planning

2. Control during the clients lifetime

3. Family provision legislation4. Intestacy and letters of administration

5. Estate planning vehicles

6. Role of Legal Personal Representative

7. Superannuation and estate planning

8. Tax implications on death

9. Estate planning implications for social securityrecipients

10. Business succession planning

11. Miscellaneous, death trusts, disposal of private

companies.

Read Topic 9 and referencestherein;

tutes 8 and 9

11 14 OCT Topic 10:Asset Protection

A. Life Insurance

1. ASIC requirements for specialist knowledge inlife insurance

2. Asset protection by protecting/affirmingownership

3. Life insurance markets

4. Features of life insurance products, standardand impaired lives

5. Aspects of policy ownership, making a claim

6. Life underwriting

7. Changing demand for products

8. With profits policies

B. General Insurance

1. ASIC requirements for specialist knowledge ingeneral insurance

2. Types of general insurance product

3. Its all about contracts!

4. Standard / qualified premiums

5. Taxation

6. Making a claim

7. Underwritingfat and thin tailed risk

8. Evolution of new products

Read Topic 10 and referencestherein;

tutes 9 and 10

12 21 OCT REVISION REVISION

SWOT-VAC: 28 OCTOBER 1 NOVEMBER

OFFICIAL EXAMINATION PERIOD: 4 NOVEMBER 22 NOVEMBER

EXAMINATION RESULTS RELEASED: MONDAY 9 DECEMBER

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ASSESSMENT TASK (Finance questions and Assignment)

Assessment Task 1: Mid-semester test

Weighting:5%.

Learning objectives assessed:This assignment is designed to test your achievement of learning objectives 1 and 3.

Date:Week 6

Assessment Task 2: Investment Concepts and Preparation of Financial Plan

Weighting:25%.

Learning objectives assessed:This assignment is designed to test your achievement of learning objectives 2, 4 and 5.

Due date:5:00pm Friday, 27 September (Week 9)

Extensions of timeApplications for an extension of time allocated to an assessment task must be made by completingthe application form found at URLhttp://www.buseco.monash.edu.au/student/exams/speccon.html.The form must be submitted to the Chief Examiner for approval.Penalty for late lodgementLate submissions without an approved extension will not be accepted. A penalty of 100%of the totalmark allocated to this assessment task will be deducted if the assignment is not handed in by thedue date.

Task details:The assignment has three sub-tasks. Tasks 1 and 2 are individual assignments, while task 3 is agroup assignment. The tasks are specifically designed to meet ASIC RG 146 compliancerequirements in the specialist knowledge category of Financial Planning and Skills. You are requiredto construct a financial plan for clients that is, a Statement of Advice (SoA). However it involves apreliminary exercise, as explained below and encapsulated in Document 1.

A primary objective of the assignment is to ensure that you are aware of all the com pl iance issuesattaching to any financial plan. You must provide two documents.

Document 1 (for Task 1) involves answers to questions.

Document 2 (for Task 2)is a Statement of Advice for the clients.

The third task involves Role Playingdesigned to focus on Planners interaction with clients,and is conducted in tutes. You will be assigned to groups in tutes for this purpose.

Task 1: 8 marks

Document 1: Answering finance questions, outlining main features of different strategies.

A retiree couple both aged 65 have $650,000 super assets in a SMSF. The assets are invested withapproximately 50% in dividend producing shares (three banks, Telstra) and 50% in Comsecs Cash
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account (paying 5% p.a.). However, these holdings change frequently as they actively trade the dayvolat i l i tyon the ASX.

They own their home, have $100,000 in lifestyle assets, and their married children, son anddaughter, are financially independent of them. They are just embarking on retirement, and consultyou for assistance in determining a suitable retirement income stream strategy.

Questions:

1. What might you conclude about this couples attitude to risk?

2. What total net annual income (approximately) does their current portfolio provide if their equityholding benchmarks are as follows?

2000 ANZ Fully paid ordinary shares @ $23.00 per share

5000 NAB fully paid ordinary shares @ $24.50 per share

5000 WBC fully paid ordinary shares @ $22.00 per share

14000 TLS fully paid ordinary shares @ $3.32 per share.

Note that al l these sh ares pay fu l ly franked div id ends. Find th e value of 2011/2012 FYdiv idends for each comp any. Give cons iderat ion to the not ion that th is ret i rement incom e

port fo l io (tak ing the cash h old ing in to account) may be di f f icu l t to improv e upon!

3. The couple frequently t rade the dai ly vo lat i li tywith their bank shares.

What does this mean? Give an example of such a trade. Why not trade the day-to-day volatility ontheir Telstra shares?

4. Provide details (cost, amount of starting annual annuity) for the following strategy:

Spend $600,000 on a Challenger Financial Services indexed guaranteed annuity of 30 years. Theannuity is indexed at 3% p.a. and payable monthly in arrears. It has zero residual value. Theremaining $50,000 is invested in an All Ordinaries Accumulation Index Fund over the guaranteedincome years to provide emergency capital or capital in the event the retiree outlives the 30-yearannuity. You will need to:

(i) find the yield on annuity purchase price currently being offered by Challenger to provideaccurate information about this option, and

(ii) provide evidence for the long-term expected investment yield on the All OrdinariesAccumulation index in order to provide accurate information about this strategy.

What sort of attitude to risk is likely to be associated with such a strategy?

5. Some retirees use an investment portfolio and take pension by drawdown. Explain the meaningof this. What sort risk profile is implied by use of this strategy?

6. Provide details about use of the following strategy (annuity cost, annuity starting amount):Implement a Mean-Variance Efficient (MVE) strategy with an annuity period of eleven years. Theannuity is indexed at 3% p.a. and payable monthly in arrears. The class of MVE strategies isdiscussed in detail in Topic 5 notes, where some comparisons with drawdown are made. How doesuse of higher indexation (compare g = 0.035 with g = 0.03) affect the implementation of the MVEstrategy?

7. On the basis of the couples equity holdings (and implied cash flow) can the couple obtain anyAge Pension now? If so, how much?

Currently, for about two-thirds of Australian retirees, the Age Pension is the principal source ofretirement income.

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NOTE:Since the interaction of superannuation assets and retirement income with Age Pensionentitlements is an important component of the course, it is in your own interests to include itsdetermination in your clients plan. It will help you to familiarise yourself with the issues involved.Essentially this means being able to work out Age Pension entitlements by applying CentrelinksAssets Test and Income Test. You can find current information on the governments means testingof Age Pension onwww.centrelink.gov.au

Task 2: 22 marks

Document 2: construction of a financial plan.

Construct a financial plan to accommodate the retiree couple in Task 1. You will need to providethem with financial objectives to construct an SoA for them.

The plan (of no more than 15 pages) must contain:

(i) on the cover, the names and contact details of financial planner(s), their professionalqualifications, the company ABN, and the Australian Financial Services Licence number

under which the principal(s) operate. A statement to the effect that the financial planner isspecifically qualified to provide advice to trustees of SMSFs.

(ii) within, a statement confirming that a Financial Services Guide (FSG) was given to clients atthe earliest opportunity (and your financial plan contains a copy of the FSG as an appendix).

(iii) a section containing client objectives as elicited from the clients (this should be an agreeddocument, signed and dated by both clients and planners).

(iv) an outline of client financial circumstances (another agreed document, signed and dated).

(v) a section outlining the financial planners assessment of the clients attitude to risk, and howit was determined.

(vi) the plan/advice.

The SoA should:

be designed to meet client objectives.

be predicated on clients current and projected financial position, preferences and riskprofiles.

be capable of explanation in plain language to the clients (and contain this explanation insummary form).

outline the nature of strategy and products recommended and point out possible risks.

Taxation issues should be clearly explained. have a definite initial timeframe in mind, and provide projections as to how the financial

prospects of the clients might be expected to evolve over that period. (If you advise yourclients to invest in an ASX index fund (for instance as a part of a drawdown strategy, or anMVE strategy) you may find it useful to use the ASX data for 109 years of annual returnsprovided on the link (provided by AXA Australia):http://www.crcfs.com.au/uploads/file/109%20years%20of%20All%20Ords%20returns.pdf

contain a summary of how the plan is expected to achieve the clients objectives.

contain a declaration of any associations, commissions, etc. which any person associatedwith the provision of the plan might receive, which might influence the objectivity of theadvice.
http://www.centrelink.gov.au/http://www.centrelink.gov.au/http://www.centrelink.gov.au/http://www.crcfs.com.au/uploads/file/109%20years%20of%20All%20Ords%20returns.pdfhttp://www.crcfs.com.au/uploads/file/109%20years%20of%20All%20Ords%20returns.pdfhttp://www.crcfs.com.au/uploads/file/109%20years%20of%20All%20Ords%20returns.pdfhttp://www.centrelink.gov.au/

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contain a clear statement of fees charged for each phase of service. If specialist advice (e.g.actuarial, taxation or legal) is required, information as to how this can be obtained and atwhat cost, should be provided.

contain an outline of the dispute resolution mechanism available to clients.

NOTE: When constructing an SoA, you must supply clients with a Financial Services Guide at theearliest convenient time. This would usually be at the initial client interview.

In order to pass th e ass ignm ent your bound copy of the f inanc ia l p lan m ust state that you

have supp l ied cl ients with an FSG.

Planners are encouraged to consult closely with clients on details of the plan throughout itsconstruction. The plan would then be scrutinized by the clients who may identify any shortcomings.

Referencing requirementsWork submitted for assessment must be consistent with the guidelines set down in the Q Manual,which is the faculty's student guide for producing quality work on time. Copies of this manual canbe purchased at the bookshop or accessed online at URL:

http://www.buseco.monash.edu.au/publications/qmanual/qmanual.pdf.Marks may be deducted where in-text citations and/or the reference list is not consistent with theAmerican Psychological Association (APA) style, which is illustrated in the Q Manual.

PlagiarismIn order to ensure the academic integrity of your submission and to deter others from copying yourwork, your submission may be processed by a plagiarism checker such as Turnitin. The University'splagiarism policy can be found at URL:http://www.policy.monash.edu/policy-bank/academic/education/conduct/plagiarism-policy.html.

Submission details:Assignments should be submitted via the department assignment box on the tenth floor of theMenzies building (Building 11) at Clayton campus.Work submitted for assessment must be accompanied by a completed and signed assignmentcoversheet, available at URL:http://www.buseco.monash.edu.au/student/forms/assessment-coversheet.doc.

Return of marks:Marked assignments will be returned to you during tutorials in week 12. If you do not attend thetutorial in week 12you may collect your assignment from your tutor during consultation times. Youshould retain the marked copy of your submission until the final results for the unit are released.

Criteria for assessment:Overall, the work submitted for assessment will be graded in accord with the table showing

examples of grades and corresponding achievement levels published in the Q Manual (2012, p.6).

Task Three (Role Playing)In tutes, all role-playing groups will be asked to enact (one of) an initial interview presentation and explanation of the Statement of Advice

explanation of unrealistic income expectations given the lump sum size

description of how social security top-up might be obtained

description of cost of life annuity compared with a fixed term annuity

explanation of cost and characteristics of general insurance
http://www.buseco.monash.edu.au/publications/qmanual/qmanual.pdfhttp://www.buseco.monash.edu.au/publications/qmanual/qmanual.pdfhttp://www.policy.monash.edu/policy-bank/academic/education/conduct/plagiarism-policy.htmlhttp://www.policy.monash.edu/policy-bank/academic/education/conduct/plagiarism-policy.htmlhttp://www.buseco.monash.edu.au/student/forms/assessment-coversheet.dochttp://www.buseco.monash.edu.au/student/forms/assessment-coversheet.dochttp://www.buseco.monash.edu.au/student/forms/assessment-coversheet.dochttp://www.policy.monash.edu/policy-bank/academic/education/conduct/plagiarism-policy.htmlhttp://www.buseco.monash.edu.au/publications/qmanual/qmanual.pdf

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explanation of cost and characteristics of life insurance

description of advantages and disadvantages of drawdown strategies

similar topics as might arise in the course of the unit (e.g. explanation of the MySuperproduct during accumulation or retirement).

In AFC3440 you cannot obtain Specialist Skills accreditation without these enactments i.e. withoutthe role playing com ponent, Special ist Ski l ls accredi tat ion would b e avai lable to no o ne!

For example, in respect of an in i t ia l interviewrole playing might include:

(i) The parties introduce themselves to each other

(ii) The clients explain their initial requirements, and sketch their financial (and as far as relevant,social) circumstances in broad outline. In an initial interview, only the essentials can be elicited.

(iii) The financial planners reveal their qualifications, explain the basis on which a financial plan canbe constructed (know your client, know your product), in particular, the need for agreed objectives,and agreed assessment of financial position.

(iv) Given that the parties approve of each other, an agenda for detailing information, constructionof the financial plan and its presentation to clients can be outlined. If the financial planner is to havea continuing role in implementation of the plan, the nature of the continuing relationship includingfees must be documented.

Summary of activities in the development of the financial plan

By Week 3:Role-playing group memberships to be completed.

By Week 5:By the end of week five you should have submitted an outline (no more than one page) of theclients financial scenario to me [email protected] as a Word Document attached to an

email. This scenario should be the basis of the financial plan. While some departure from thisoutline is permissible, you should try to adhere to it as far as practicable.

By the end of Week 9 RECAP:

For assessment purposes, a bound and s igned copy of both:

Docum ent 1 (answ ers to quest ions); and

Docum ent 2 (the f inancial plan)

is required by th e end of w eek 9

Throughout Semester:

In this unit there is ongoing role-playing in which client interviews are enacted. For instance initialinterviews are simulated, finalised statements of advice are presented, explained and criticised, andclient questions are fielded.

The notion of RG 146 compliance will be discussed in Topics 1 and 3, The SuperannuationGuarantee Scheme in Topic 2, and Social Security in Topic 4. Mean-Variance Efficient retirementincome portfolios are treated in Topics 5 and 6. Challenger Financial Services term annuity unitcosts are available from their website (www.challenger.com.au).
mailto:[email protected]:[email protected]://www.challenger.com.au/http://www.challenger.com.au/http://www.challenger.com.au/http://www.challenger.com.au/mailto:[email protected]

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Final examination

Weighting: 70%

Learning objectives assessed:This assessment task is designed to test your achievement of learning objectives1, 2, 3, 4 and 5.

Duration: 3-hour examinationTask details:The final examination will be aclosed book examination (notes may not be u sed, however TheAus tral ian master f inancial planning guid e 2012/13 15th Edit ion may b e used)and approvedcalculatorswillbe permitted.

Date and location:The final examination will be held during the official examination period. Information aboutexamination schedule can be accessed through my.monash portal at URL:https://my.monash.edu.au/.

The Semester 2 examination period is Monday 4 NovemberFriday 22 November 2012.

Materials examinable:Any course material covered in lectures, topic notes and tutorials is examinableOverall, the work submitted for assessment will be graded in accord with the table showingexamples of grades and corresponding achievement levels published in the Q Manual (2012, p.6).

NOTE:You are expected to understand and recall all abbreviations and acronyms encountered inthis unit customs and usages used in the finance industry. Many of these will appear on theexam.
https://my.monash.edu.au/https://my.monash.edu.au/https://my.monash.edu.au/

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OTHER INFORMATION

Policies

Monash has educational policies, procedures and guidelines, which are designed to ensure thatstaff and students are aware of the Universitys academic standards, and to provide advice on howthey might uphold them. You can find Monashs Education Policies at:http://policy.monash.edu.au/policy-bank/academic/education/index.html.

Key educational policies include: Plagiarism; Assessment in Coursework Programs; Special Consideration; Grading Scale; Discipline: Student Policy; Academic Calendar and Semesters; Orientation and Transition; and Academic and Administrative Complaints and Grievances Policy.

Student services

The University provides many different kinds of support services for you. Contact your tutor if youneed advice and see the range of services available atwww.monash.edu.au/students

The Monash University Library provides a range of services and resources that enable you to savetime and be more effective in your learning and research. Go tohttp://www.lib.monash.edu.auor thelibrary tab in my.monash portal for more information.

Students who have a disability or medical condition are welcome to contact the Disability LiaisonUnit to discuss academic support services. Disability Liaison Officers (DLOs) visit all Victoriancampuses on a regular basis Website:http://adm.monash.edu/sss/equity-diversity/disability-liaison/index.html Telephone: 03 9905 5704 to book an appointment with a DLO Email:[email protected] Drop In: Equity and Diversity Centre, Level 1 Gallery Building (Building 55), Monash University,

Clayton Campus.
http://policy.monash.edu.au/policy-bank/academic/education/index.htmlhttp://policy.monash.edu.au/policy-bank/academic/education/index.htmlhttp://www.monash.edu.au/studentshttp://www.monash.edu.au/studentshttp://www.monash.edu.au/studentshttp://www.lib.monash.edu.au/http://www.lib.monash.edu.au/http://www.lib.monash.edu.au/http://adm.monash.edu/sss/equity-diversity/disability-liaison/index.htmlhttp://adm.monash.edu/sss/equity-diversity/disability-liaison/index.htmlhttp://adm.monash.edu/sss/equity-diversity/disability-liaison/index.htmlmailto:[email protected]:[email protected]:[email protected]:[email protected]://adm.monash.edu/sss/equity-diversity/disability-liaison/index.htmlhttp://www.lib.monash.edu.au/http://www.monash.edu.au/studentshttp://policy.monash.edu.au/policy-bank/academic/education/index.html

afc3440 unit guide 2013 s2-1

Documents