Course Level Learning Outcomes

• Aware of the ethical principles and their applications in the financial advisory industry

• Discuss and assess risk profiles

• Set and assess financial goals

• Budget and create a saving plan

• Construct a financial plan

• Discuss the Australian taxation system and suggest tax effective ways build wealth

• Recommend appropriate asset allocation and long term investment strategies

• Understand the valuation and selection criteria of major investment products and financial securities to implement a financial plan

• Evaluate the investment value and select finance for residential properties

• Evaluate and arrange financial affairs to better access social security benefit

• Create and assess the effectiveness of retirement strategies such as superannuation funds and self managed superannuation funds

• Select appropriate insurance products to compensate financial risks

• Arrange for the creation of instruments to distribute estate and non-estate assets

• Consider the financial consequences of family relationship and instruments available to reduce uncertainty

Final Exam Information

• Length 2 hours

• Coverage Week 5 – 11

• Format

– 30 marks 30 MCQ

• 6 MCQ with some numerical values

– 30 marks 2 short essay questions

• 1x Managed Funds, Home Ownership and Debt

• 1x Insurance, Superannuation and Estate Planning

• Think of practical and relevant questions in studying the topics.

5

Lecture 5: Asset Allocation and Portfolio Construction

• Explain what is asset allocation and its importance.

• Describe the key asset classes and their investment characteristics.

• Explain the role of managed funds and derivatives for asset allocation.

• Explain the concept and purpose of investment policy statement (IPS).

6

• Perform graphic portfolio choice analysis using the efficient frontier when borrowing and lending rates are different.

• Discuss the theory, evidence and implication of time horizon for equity investment risk and asset allocation.

• Explain strategic, tactical, and dynamic asset allocation strategies.

7

• Discuss the implication of market efficiencies for market timing and asset allocation.

• Relate diversification, systematic risk and the GFC in the CAPM framework.

Lecture 7: Managed Funds, Selection and Strategy• Discuss the regulatory framework and

operational structure of managed investments.

• Distinguish between fund structure, style, asset class and share class.

• Differentiate between and explain the pros and cons of funds such as open-end, closed-end, exchange traded, hedge and private equity.

• Explain master trusts and wrap accounts.

• Explain the concept of mandate and implications for the sources of returns that can be expected from a fund.9

• Evaluate and interpret fund performance using benchmark and alternative risk adjustments.

• Explain different types of fund fees.

• Discuss the effect of fund charges and turnover on after-tax performance.

• Explain how the liquidity of the underlying asset and investment flow can impact on the viability of a fund.

• Discuss other qualitative variables in the fund selection process.

10

Lecture 8: Home Ownership and Credit

• Distinguish between different types and forms of property investments.

• Identify advantages and disadvantages of home ownership and property investment.

• Explain determinants of property prices and how to obtain information of property prices.

• Discuss the diversification benefits of property investment.

11

• Discuss historical and recent housing market performance and stability.

• Explain the home buying and selling process, and selection considerations.

• Explain First Home owner assistance.

• Explain taxation issues in home ownership.

• Discuss the property financing products and selection criteria.

• Discuss retirement strategies involving the main residence.

• Explain and compare alternative forms of consumer credit products.

• Explain the regulations of the consumer credit market.

• Explain bankruptcy and alternatives.

Lecture 9: Superannuation

14

• Explain the structure and regulations of the Australian superannuation system.

• Discuss different types of superannuation funds.

• Compare a regulated superannuation fund to a self-managed superannuation fund.

• Explain and apply superannuation investment standards.

• Discuss the rules and taxation of various types of superannuation contributions.

• Explain the preservation rules.

• Distinguish the taxation of a superannuation fund during accumulation and payout phase.

• Explain the rules and taxation of lump sum and different types of pension benefits.

• Explain what happens to superannuation on divorce, bankruptcy and death.

• Future of the Australian superannuation system.

15

Lecture 10: Insurance

• Discuss and apply the risk management process.

• Explain the regulation of insurance products.

• Assess the relative need of different insurance policies for potential clients at different life stages.

• Identify common features of life, property and health insurance policies, such as cover, premium, tax deductibility, exclusions and limitations.

• Estimate the value of cover required.

• Discuss policy terms and action required to benefit from insurance cover when needed.

16

Lecture 11 – Part 1: Social Security

• Eligibility criteria for age pension, disability and new start allowance

• Assets test

• Income test

• How to structure assets to improve assessment

Lecture 11 – Part 2: Estate Planning and Family Breakdown

18

• Discuss objectives in estate planning and potential client considerations.

• Explain the role of financial planners in estate planning.

• Discuss the effect of ownership method on assets distribution after death and the instruments used to specify asset transfer.

• Explain the concepts of estate assets and non-estate assets.

• Explain the asset distribution consequence of dying intestate.

• Explain how to construct a valid will and limitation in using a will for estate planning.

• Discuss the advantages and disadvantages of using testamentary and discretionary trusts for estate planning.

• Discuss who may receive superannuation benefits of a deceased.

• Explain different types of power of attorney.