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Finishing off Kaplan FFP Walter Gannon

Discussion in 'Financial Planning' started by 1975faz, 3rd Nov, 2010.

  1. 1975faz

    1975faz New Member

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    Hi everyone, I reckon this site is awsome for all the study bugs out there! I am currently doing Kaplan FFP and hoping to get rid of it over this weekend as Im going overseas in 10 days and want to do the exam on my return. I have a few qs in regards to Walter Gannon case:

    With the fact finder, I have fully completed it with all my assumptions included, such as interest, dividend rate and home contents, made up personal info parts etc. I have also done the risk profile part, but left out all the super & insurance details, including insurance needs as he isnt wanting any advice for it (only filled in policy amounts). I just made up a quick list explaining what I did, anyone attack it that way? As I have assumed everything would be documented in the FF to support the SOA recommendations or that I would fill in the missing gaps at the interview.

    Also, have assumed that the $412K bank balance is $400k super + $10k car +$2k tax free interest (6mths) on Super. $5k TD is a seperate cash account.

    In regards to q3d and q4 followed the format like the case study, pretty much dribbled what I need too do with those headings and then explained the appropriatness of Tracey's strategy, such as type of investment, risk, tax, how it meets his timeframe.

    The SOA is easy, its a case of copying and pasting and then updating data into it, such as Tracey's investment strategy, cash flow projections etc. I reckon that was the easiest part, still finishing it off.

    Any tips would be appreciated with it. I have found this to be pretty dry and it takes ages to complete, as you feel like your second guessing yourself or the material provided isn't clear cut with info.
     
  2. ram10

    ram10 Member

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    Hi,

    I assumed it, $12000, Super & Car ($410000), Fixed term deposit($5000)+ interest.


    Hope this helps you.
     
  3. Silver_bullet

    Silver_bullet New Member

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    Hello,

    If you read it carefully it first says "Walter has a bank account with a balance of $412,000 (which includes Patricia's superannuation fund)" then it later says "Walter has agreed to sell Patricia's car to a friend for it's market value of $10,000. He expects the sale to take place in the next few weeks and will place the proceeds in his bank account."

    From this I would assume the $412,000 is $400,000 superannuation + $12,000 savings? Then the $10,000 for the car and $5,000+ interest would be added into the bank account soon.

    Q4 threw me off a bit because it said "provide details and an explainatain of any advice you would vary" however I think the advice she has provided was fine and didn't want to change anything. Did anyone else have a simular opinion?

    p.s. Faz, I fly out to Bali in 12 days and same as you plan to have this done before then ;)
     
  4. Classic

    Classic Member

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    Same and more doubts





    Hi, I think Q4 in walter case is about analysing tracy's recommendations and we have to say whether we accept or reject by quoting some of subject topics like balanced managed funds,investment bond and we have to justify why we r telling that.Ya i m also doing my assignments deadline is coming near.Its bit dry to write the assignment.have u written ur exams? I m still incomplete with my fact finder? Can u please tell about the shares whether it is fully franked or that too we have to assume?
     
  5. Classic

    Classic Member

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    Hi,

    I too think like u that her recommendations are fine but i m trying very hard to justify why i m telling it good to walter.have u got any idea on that?
     
  6. Classic

    Classic Member

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    Hi,
    Can u please tell me the amount of tax on taxable income u have got? It will be helpful for me to check mine.
    thanks
     
  7. ram10

    ram10 Member

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    FFP assignment is a lengthy one where you need to repeat a lot of informations. Most of the things go with assumptions, which include dividends cr. I got the tax on taxable income $ 7159 (2008/09) before implementing the strategy.

    Hope this helps you.
     
  8. Robert Blair

    Robert Blair New Member

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    Classic,
    I passed FFP not so long ago ...

    On agreeing / dis-agreeing with Tracy's recommendations I pretty much agreed with all of them, but in each case I said why I agreed (just restating why each is a good idea). In two cases I agreed, but added a 'but', eg, why put money into a special account if there appears to be plenty available in surplus income to cover that particular expense.

    On the taxable income amount any figure I give you would be misleading because I made all sorts of assumptions about earnings which all change the final income total. For instance I assumed that Walters shares were BHP, which paid two fully franked dividends of 46.7 and 48.4 cents in that year. Also the interest paid on his savings is whatever you decide - I calculated that although Walter has 412,000 in his account now, 400,000 of it has only been there 3 months, and 12,000 has been there all year. The interest rate you choose for that account, and the rate you choose for the fixed term deposit, all modify the final income total.

    The clearest tip I can give you is the right hand column in the Cash Flow statement - put full, clear and simple workings there for each item. Imagine each is an algebra problem that will be marked by a totally anal maths teacher who demands to see "all the working out written down!".

    And if you do the exam - remember it is an open-book exam. Become an expert an navigating the book - know where everything is so that when you get a question you're not sure of you can go straight to the right part of the book.
     
  9. Classic

    Classic Member

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    Thanks

    Hi Robert,

    Thanks for ur valuable information.I hope I can pass through this assignment. I have another doubt is how they view our assingment and what they expect for example i need to write more about the subject from notes, or i can write in the way we talk in day to day. Can u please suggest me something in terms of writing? Because you have completed it successfully so you know how they treat the assingment.

    thanks
     
    Last edited by a moderator: 2nd Dec, 2010
  10. Classic

    Classic Member

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    ram10,

    have u considered the dividend as fully franked or partly franked or unfranked dividend?
    I m asking in the Q3 fact finder template.
     
  11. ram10

    ram10 Member

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    hi,

    I assumed it as fully franked dividends.
     
  12. Classic

    Classic Member

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    Hi ram10,

    I also considered it as fully franked. I m bit confuseed with how to consider the amount 40000 which is told as share worth as now. So we have to take the dividend as $4 or $5 as our wish to calculate for it. I got stuck in that place. then i left the q 3 and went to q4 . Can u please suggest me in the dividend and imputation credit?

    Thanks
     
  13. Classic

    Classic Member

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    Hi Robert,

    In dealing with tracy's recommendation, U told u have added a but and told ur suggestions. I too feel in the same way in 3 cases, so whether u mentioned any product from current scenario which is in APL. For example any account name and bank name or in general as bank account that's what i m trying to know.

    Thanks
     
  14. ram10

    ram10 Member

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    Hi Classic,

    You have to consider the shares as the investment asset (asset and liability table in the q3). I calculated 3% return (assumption) from the share portfolio, i.e. Franked dividend $1200, franking (imputation) credits $ 514
    (1200 *30/70). For q3. You follow the case study given in the course material; it is almost the same way you are expected to complete the fact finder. However, make sure to mention your assumptions. Whatever info you have in the case study, try to fill the fact finder with that. Don’t worry about gaps in the fact finder.
     
  15. Robert Blair

    Robert Blair New Member

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    Classic,

    Firstly, you asked what type of language you should use. Given your posts here I think that is a good question.

    You should use standard business English. Try and be clear, to the point and do not assume the reader has any special knowledge. In short, assume you are writing to your client, who, while he is not a dill, he does not neccessarily understand financial terms.

    Copy the written style of the Kaplan manual and you will do well.

    I recommend that you practice that writing style at all times - it will become easier with practice. If you think to only write clearly for assignments and exams you will find it very difficult because you are too used to sloppy, confused and unclear writing.

    Secondly you asked what products I might have recommended as opposed to those Tracy had recommended. I didn't. Those things I disagreed with Tracy did not involve different products.
     
  16. Classic

    Classic Member

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    Robert,

    Thanks for your recommendations. I will try to improve it.

    Thanks
     
  17. Classic

    Classic Member

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    Hi ram10,
    I have also done in same way but different numbers,may be our assumptions are different.Anyway thanks for your reply and suggestions.
     
  18. Classic

    Classic Member

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    Hi ram10,

    Do you think walter is eligible to get LITO(Low income tax offset)?How much i have to consider as his salary 42,000 or full time salary.Because i m getting the net cash flow in negative. Please tell your suggestion.

    thanks
     
    Last edited by a moderator: 3rd Dec, 2010
  19. ram10

    ram10 Member

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    Yes, he is eligible for LITO of $645.44(2008/2009) considered his salary $42,000. I also ended up with negative cash flow appx $15429. After implementation of recommendation you will get net cash flow positive appx $16271. Both LITO and net cash flows will vary depends on your assumptions).
     
  20. Classic

    Classic Member

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    Hi ram10,

    In page 20 of case study,Investment attitude details,risk profile upto page 23 of it is filled by client.Do we have to fill it with our assumptions are we can leave it? I m bit confused when i saw jeff and julia case.Can you please reply for this?

    thanks