Case Study of Adam and Clare McKenzie – Accounting and Finance Assignment Help

Assignment Task

Task

Introduction:

Adam and Clare approach your financial planning practice for some advice. The couple are aged in their 50’s and expect to work until they turn 65 years of age, but both would like to be in a position to be able to retire when Adam turns 63. The couple own investments held outside of superannuation as well as their superannuation accounts. The couple have seen a financial planner previously who has now retired, and they were introduced to you by your client.

Personal details.

Clare is aged 51 (DOB 01/01/1971) and Adam is aged 54 (DOB 03/04/1968). The couple have been married for 15 years

Adam is a Software Engineer and earns an income of $200k. The following are his employer super contributions for the past 3 financial years:

FY19 – $19,000 
FY20 – $19,000 
FY21 – $20,000

Clare is a Dentist and earns a salary of $150,000 working 3 days a week. She had taken time off work when the children were younger and is slowly transitioning back to work. She is open to working 4 days per week if necessary. The following are her employer super contributions for the past 3 financial years:

FY19 – $14,250 
FY20 – $15,000 
FY21 – $15,000

Both Adam and Clare do not currently salary sacrifice or make any additional contributions to super.

Clare and Adam have 3 children – Carly age 12 who is in year 7, and Zack and Mack, twins aged 10 who are in Year 5 this year. They all attend a nearby public school and will continue public school for their secondary school years.

Both Adam and Clare are in good health and are non- smokers.

The couple have lived in their family home for the past 15 years. The house cost them $850,000 and is currently worth $1,600,000. The couple took out a mortgage for $650,000 at the time of purchase.

The couple are making the minimum mortgage repayment each month. Their contents are worth around $120,000 and they have 2 cars. One car (a BMW X5) is used by Adam to commute to work and is worth $90,000 (owned by Adam) and the other car driven by Clare is a Toyota Kluger worth around $30,000.

The couple also own two investment properties worth $1,800,000, they borrowed $1,300,000 for the investment properties, and own a share portfolio.

Apart from the property loans, they have a portfolio loan secured against their principal place of residence that was used to purchase the share portfolio. The only other liability the couple have is a credit card that typically has around $10,000 owing but is normally paid off at the end of each month to avoid an interest charge. All property loans are held with the Bank of Melbourne.

Clare’s mother lives close to them. She is 80 years old and have just been diagnosed with Dementia. They will have to place her in an Aged Care facility for better care. She is on aged care pension and has $300k in financial assets (Term Deposit and Cash). Her house is worth $800k. She has no other assets.

The couple’s financial details are provided below:

Unit Learning Outcome:

ULO 1: Communicate with clients effectively to obtain personal information, including negation where appropriate.

ULO 2: Analyse and critically evaluate a comprehensive set of client circumstances as it applies to satisfying the needs and objectives of a client.

ULO 3: Construct a compliant comprehensive Statement of Advice (SOA) via a popular financial planning software program to meet client requirements in an ethical and professional manner.

ULO 4: Present and defend financial planning recommendations.

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