TFIN304 Personal Financial Planning: Report on Interview Transcript

Adviser

Client

strategies. For example, to meet your education funding objectives, we may recommend that a specific risk profile be applied to your this investment due to your timeframe, which may be different to other savings you have available.

investments myself. With Isabelle, I don’t really have the time to do this. Otherwise, I’m happy to go with what you recommend.

[Assume that as part of the discussions on risk / investment preferences, Rodger confirms that he is comfortable with shares as an investment class, provided he doesn’t have to manage these.]

Great. Now let’s talk more about your employment and income.

We collect details of your current employment as this information can affect your eligibility for certain insurances as well as the cost of your insurance premiums.

What are your employment arrangements?

I am employed on a permanent and full-time basis.

As I mentioned earlier, I’m employed as a junior project manager and my salary is $125,000 per year [before tax], and my employer pays the 9.5% superannuation guarantee on top of this as well.

Thanks for that. Is your salary your only source of income?

Yes, that’s correct. I do get a little bit of interest income but not a lot.

Great. Now I see from the bank statement you gave me earlier that you currently have $62,000 in a high interest savings account earning 2.0% interest. Do you have any other savings / bank accounts?

No this is my only savings account (a variable savings account). I do want to leave a minimum of $10,000 in this account as an emergency fund, though I’m happy to use the rest to achieve my goals previously mentioned.

Of course, it’s important to have access to some cash in case you were to need it urgently.

In terms of your cash flow, you said earlier that you now have a monthly surplus of $1,100, is this all available for investment / achieving your goals?

Yes, that’s correct. The $1,100 surplus is after all my expenses, credit card repayments etc.

Great. Other than your bank account do you have any other assets apart from superannaution?

A car that’s worth around $20,000 as well as some home contents worth around $30,000.

Great. Let’s look at your personal liabilities now. This section captures information about your personal liabilities so that we can consider the impact of these when providing advice to you.  

Do you have any personal labilities, such as personal or car loans, or credit card debts?

I do have a credit card, I have around $2,000 owing on it at the moment, though I pay everything off in full each month so I don’t pay any interest.

Ok great, just to confirm, you don’t currently owe any money on your car do you?

No that’s correct. I actually paid for this in cash several years ago now, my parents always encouraged me to pay for my cars in cash rather than use finance.

Sounds good! Let’s move on to insurance. What insurance cover do you currently have in place?

I’ve got comprehensive car insurance with NRMA and that’s it. I’ve also been considering getting private health insurance that includes Isa too, though I’ve heard quite a few ads about the price increasing recently, so I’m not sure. I have no insurance in my superannuation fund.

Is there a particular reason you’ve been considering private health insurance?

Well you never really know what’s going to happen or when you will need hospital cover. Children’s health care is quite expensive too… I can see Isaac costing me a lot of money in dentist bills!

Adviser

Client

Yes that’s always is a concern! We can look into this for you as well.

Great.

Do you have any particular health concerns that you are worried about or any family history that I should know about?

No, overall, both Isaac and I are pretty healthy.

However, there is a family history of prostate cancer on my dad’s side of the family. So I make sure I get tested regularly for this.

Ok great, sounds like you have it under control. Now, to help me understand how much insurance you need we need to talk about your requirements and do what is called an Insurance Needs Analysis. So let’s outline your key insurance requirements.

[Advisor goes through Insurance Needs Analysis with Rodger].

Ok sounds good.

[As part of this process, Rodger reiterates his concern of making sure that Isaac’s financially protected should he pass away, or become ill or injured and can’t work for a period of time.

Also, assume that as part of these discussions, Rodger advises that he has approximately 30 days of sick leave and 30 days of annual leave owing to him.

Before we finish up today, I want to ask what estate planning measures you have in place at current? This is an area often overlooked. Do you have a will and power of attorney in place? Or any other estate planning measures?

No – I haven’t really given much consideration to this. Are these things important?  

Yes, they definitely should be, particularly having a son.

Ok then, if you can please give me guidance that would be appreciated.

Ok, thanks for all of the information you have provided today. Now I have asked all the standard questions – and feel I have a strong understanding of your situation.

But I have just one last question …

Is there a question – related to your financial situation – that I haven’t asked – or one that you hoped I wouldn’t ask?

No – I think we’ve covered everything. I’m happy to proceed with the advice.

Great – so my job is to go away and analyse the information you have given me and prepare my recommendations based on this. In doing so, we may have further questions or may require further information from you. In either case, we will be in touch.

Once we have all of the required information, we will prepare your Statement of Advice. This will go through 2 compliance checks and will be ready in approximately 2 – 3 weeks’ time.

So, can we diarise the next appointment?

How would you like to pay for the Statement of Advice?

[Set the date, pay the deposit]

Thanks for that, until our next meeting here’s a little reading material – a couple of good news stories about people just like you – working effectively to create and protect their wealth.