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Question 3 of ELC (Kaplan)

Discussion in 'Financial Planning' started by MI$H, 20th Jan, 2009.

  1. MI$H

    MI$H Member

    Joined:
    17th Nov, 2008
    Posts:
    11
    Location:
    Newcastle NSW
    I am new to this course and not currently working in the industry but hoping to be.
    Does anyone have any idea of what is expected from question 3 of ELC.
    I am doing the course through Kaplan and can not seem to get any help from the support. mmm.

    If any one has any feedback for me about question 3 I would love to hear back from you.
    Please see Q3 below.
    Q3: Data analysis
    With reference to Vince and Zelda’s current situation, goals and objectives and risk profile, outline the process Sam should follow and factors which should be considered to determine whether the client’s current investments are appropriate for them to achieve their goals and objectives. Explain what action Sam should take and recommendations he should make if he determines current investments are not appropriate. Tip: You will need to consider more than simply risk profile and appropriate asset allocation.
    It would be appropriate to look at Modules 1 and 4 of your manual and refer to the balanced and growth tables provided (not limiting your answer to this module). Where any recommendations are made you should discuss any implications for implementing them.
     
  2. Nigel Ward

    Nigel Ward Team InvestEd

    Joined:
    10th Jun, 2005
    Posts:
    1,172
    Looks like you need to compare their current asset allocation against model allocations e.g. identify if say they are overweight residential property, underweight Australian shares in the context of their current cashflow needs, short, medium and long term goals as well as whether they are conservative or aggressive investors etc.

    Recommendations might include things like using deposits to pay off high interest non-deductible debt, moving assets which can be easily moved (e.g. cash) into lowest income earner's name etc etc.

    Read modules 1-4...it really all is in there.

    Cheers
    N.
     
  3. MI$H

    MI$H Member

    Joined:
    17th Nov, 2008
    Posts:
    11
    Location:
    Newcastle NSW
    Thanks Nigel,
    I will give it a go. I have tried to pie chart the existing investments but was not sure where to put certain assets, please see some examples below of what has been provided in the scenario:


    BT Balanced Return Fund $3,000 (What does this go under? Cash? Shares?)
    ING Savings Maximiser $16,000 (This would go under Cash)
    AMP Fixed Interest Fund $5,000 (Aus Fixed Interest)
    Commonwealth Property Securities $32,500 (Property?)
    ABN Amro Australian Equities $12,568 (Aus Shares)
    MLC Growth Fund $16,250 (Not sure where to put this)
    Transurban shares $14,997 (Aus shares or Intl Shares?)


    I just don’t seem to know where to put some of the above examples to enable me to analise the current investments. From what I can see from all of the investments in the scenario the client’s current strategy is 57% in low risk investments, 30% in high risk and the rest in med etc. Sorry if I sound naive I am however trying to get my head around it all.


    Thanks.
     
  4. Nigel Ward

    Nigel Ward Team InvestEd

    Joined:
    10th Jun, 2005
    Posts:
    1,172
    Transurban is an ASX listed Australian company - so Australian shares

    Perhaps you could split the $3k balanced fund and the mlc growth fund along balanced and growth allocation lines respectively?

    Cheers
    N