Prepare a financial plan for the following client and write a critical report for Joe considering the two possible devel
Posted: Thu May 12, 2022 8:44 am
Prepare a financial plan for
the following client
and write a critical report for Joe considering the two possible
developments in Joe’s life as listed below. The report must
explain and discuss the financial plan and provide the reasons for
the choices included in the plan.
10 years ago:
Joe was 23, he was studying journalism
at the University of Westminster in London. Joe hoped to graduate
that year and be able to start working shortly after that.
10 years on…:
You are a financial advisor who works for an independent
institution and Joe is one of your clients, you have to produce a
report with a financial plan used to advise Joe on how best to
manage his finances (property, investment and pension) according to
the two circumstances (scenarios) below:
Joe is considering buying his own
place.
Working as a freelancer, Joe is not in
any occupational pension scheme, nor in any personal scheme, he
would like to start contributing to a private pension but he is
wondering whether they are good value for money and if that would
allow him to live comfortably once he retires or whether he would
be better off with alternative arrangements such as buy a property
to let or investing in a mutual fund.
Joe has a credit card on which he pays
38% APR and which he rarely uses. He also has £54,000 in a saving
account from which he receives 1% annual interest rate and £25,000
in another saving account from which he receives 1.5% but has no
access to the money for 3 years. He would like to earn more
interest on his savings as well as gain accessibility to them but
does not know how, he is willing to take more risk. Joe is planning
to get married next year.
(45 marks)
He owns and lives in a small property
in Wimbledon, however he now needs to move into a bigger place as
his two children are 2 and 5 need more space. He hopes that both
his children will go to University.
All his savings (£50,000) are in a
savings account which provides him with 0.8% interest a year. He is
very risk averse but would like higher interest on his savings as
he is becoming concerned about how to pay for his children’s
education.
Joe also owns an expensive vintage car
he rarely uses and would be willing to sell.
He is also paying a mortgage (£1000 a
month), he has an interest-only mortgage and does not realise that
in 8 years he will have to pay back the capital he borrowed which
amounts to £240,000.
(45 marks)
Required:
For
both scenarios above advise Joe on how best to manage
his savings, property and pension contributions in order to
maximise his wealth in the medium term (next 5 to 10
years) and in the long term (20 to 25
years).
Please take into consideration his
personal circumstances as well as his attitude to risk, you need to
provide your own assumptions on salary growth, inflation rates,
expected return on investments.
Tax implications
should NOT be included.
the following client
and write a critical report for Joe considering the two possible
developments in Joe’s life as listed below. The report must
explain and discuss the financial plan and provide the reasons for
the choices included in the plan.
10 years ago:
Joe was 23, he was studying journalism
at the University of Westminster in London. Joe hoped to graduate
that year and be able to start working shortly after that.
10 years on…:
You are a financial advisor who works for an independent
institution and Joe is one of your clients, you have to produce a
report with a financial plan used to advise Joe on how best to
manage his finances (property, investment and pension) according to
the two circumstances (scenarios) below:
Joe is considering buying his own
place.
Working as a freelancer, Joe is not in
any occupational pension scheme, nor in any personal scheme, he
would like to start contributing to a private pension but he is
wondering whether they are good value for money and if that would
allow him to live comfortably once he retires or whether he would
be better off with alternative arrangements such as buy a property
to let or investing in a mutual fund.
Joe has a credit card on which he pays
38% APR and which he rarely uses. He also has £54,000 in a saving
account from which he receives 1% annual interest rate and £25,000
in another saving account from which he receives 1.5% but has no
access to the money for 3 years. He would like to earn more
interest on his savings as well as gain accessibility to them but
does not know how, he is willing to take more risk. Joe is planning
to get married next year.
(45 marks)
He owns and lives in a small property
in Wimbledon, however he now needs to move into a bigger place as
his two children are 2 and 5 need more space. He hopes that both
his children will go to University.
All his savings (£50,000) are in a
savings account which provides him with 0.8% interest a year. He is
very risk averse but would like higher interest on his savings as
he is becoming concerned about how to pay for his children’s
education.
Joe also owns an expensive vintage car
he rarely uses and would be willing to sell.
He is also paying a mortgage (£1000 a
month), he has an interest-only mortgage and does not realise that
in 8 years he will have to pay back the capital he borrowed which
amounts to £240,000.
(45 marks)
Required:
For
both scenarios above advise Joe on how best to manage
his savings, property and pension contributions in order to
maximise his wealth in the medium term (next 5 to 10
years) and in the long term (20 to 25
years).
Please take into consideration his
personal circumstances as well as his attitude to risk, you need to
provide your own assumptions on salary growth, inflation rates,
expected return on investments.
Tax implications
should NOT be included.