Assessment Tasks
You are to write a financial plan in the form of a client report (2500 words) for the Williams family that covers the following:
You should base this plan on what you have learnt in this module and your own research. You should ensure that the plan is coherent and well communicated to the couple.
It should include:
a. Financial advice for the couple to include:
– A statement of the couple’s objectives over the short, medium, and long term.
– An assessment of the couple’s assets and liabilities and, based on your advice, how these will change between now and retirement (exclude potential inheritances from this assessment).
– Forecast annual income and expenditure between now and retirement based on your financial advice. You should prepare two alternative scenarios: Jennifer retiring at 60 and Jennifer retiring at 67 (William retiring at 60 in both cases). You may use excel and copy into the report as appendices. You must calculate the current net pay of William and Jennifer. Please use the information in the case and appropriate assumptions to support your forecasts. 16 marks
b. Specific advice regarding the 2014/15 pension reforms. You should make clear to the couple to which pensions they are relevant and what options the couple have as a result. You must provide specific recommendations for William as to the final salary scheme transfer, including the advantages and disadvantages of transferring his defined benefit scheme to a defined contribution scheme.
8 marks
c. Advice regarding all issues mentioned in the case study in relation to capital gains and inheritance taxation and estate planning. Your answer should include a calculation of the Capital Gains Tax (CGT) liability if Jennifer disposes of both assets in the current tax year. You should give advice as to how this could be mitigated and demonstrate how much tax could be saved with these measures. You should also calculate the potential Inheritance Tax (IHT) liability due on William and Jennifer’s parents’ estates and advise how this could be mitigated. You are expected to use 2022/23 tax year for your calculations. (You should assume that Jennifer has owned the property for 28 years in your calculations). State any other assumptions you make. 14 marks
d. Based upon the couple’s risk profile, recommend two separate investment portfolios for William and Jennifer. You should consider the funds available, clearly showing where these funds have come from. You should also attempt to model the performance of the portfolio between now and retirement. 14 marks
e. Provide mortgage advice to Helen. You should identify appropriate mortgage options and comment on their affordability as well as advising Helen about other costs (both one off and continuing) of buying a property. You should calculate Helen’s net pay and suggest a possible monthly budget that may help Helen manage her money in the first year of owning a property.
8 Marks
You should state any assumptions that you make, but you need to ensure these are from robust sources. You need to identify any information that you would need to seek clarification on from William and Jennifer. You are the financial advisor, and you should treat the information in the case as if it has been gathered from a first client meeting. Additional information and calculations should be included as appendices. However, these must relate specifically to the case study and support the financial plan you produce. Appendices or tables are not included in the word count.
You must base any calculations on the 2022/23 tax year.
Please note this is not an essay, it is a report for the client. You should write to the client in the report. You need to ensure that any sources are referenced in text and at the end in a reference list. You should use appropriate sections and clearly show this in a table of contents at the start of the report.
– Total 60 marks
