Susan goes to see a financial adviser. The adviser takes the time to understand what Susan wants to achieve and offers to put together a financial plan for $1,450, and implement the advice for a further $1,200. The adviser also tells Susan that there may be other fees for the products that have been recommended for Susan's $250,00 investment funds. Susan agrees to pay for the financial plan. At the next meeting, Susan receives the plan which also outlines the additional fees for implementing the advice. The fees include:
– 0.50% a year payable to the adviser for reviewing Susan's investments
– 0.75% a year for access to the investment platform administration fees
– 0.60% a year payable to the investment managers for managing Susan's investments
– a further $1,375 a year for an annual income protection policy that Susan requested. Susan is advised that a 20% commission is payable to the adviser.
Susan asks the adviser to set out the total amount she is paying in fees, and who's receiving each fee.
Complete the table below, to present the client with a comprehensive fee analysis.
(Compare and contrast: financial forecasting techniques; methods of presenting financial data).
Activity 3 Answer
Q1 – Read Scenario 1: What issues will you need to discuss with Thomas as you review his financial plan?
Q2 – Read Scenario 2. Identify and discuss some strategies that Alexis might consider to qualify for an aged pension?
Q3 – Read Scenario 3. Identify and discuss some of the financial plan issues that may arise as a consequence of the divorce of a financial planning client(s)?
Q4 – Read scenario 3. You are a financial planner who is advised that two of your clients, husband and wife, have separated and are planning a divorce. The last SoA you provided, and all the client records, are in joint names. What issues do you anticipate, and how should you advise your clients?
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