Case Study-7 FPSB® Integrated Financial Planning Course

Case Study-7
Issue date: 15-September-2022
Jasneet Wadhwa is a 35-year-old investment banker working with a foreign multinational. He
has been working in the same organization for about 10 years. His current designation is
Vice President. He is a bachelor, staying with his senior citizen parents at Navi Mumbai.
Jasneet has recently taken transfer to Mumbai from Bengaluru. Jasneet has approached you
to make a financial plan for the family.

Jasneet is the youngest of three siblings, his two elder sisters are married. The eldest sister
is settled in New Zealand and has two kids. His husband is a pharmacist. The other sister is
married to a businessman at Noida near Delhi in India. Jasneet follows Hindu religion. His
father is of age 65 years and has undergone heart surgery a couple of years ago. His mother
is of age 61, is a homemaker and is in good health. They have a three-bedroom flat which is
registered in his father’s name. The flat was acquired in the year 2006. It has no debt. The
current valuation is ₹1.75 crore. Jasneet’s father still works as consultant in a general
insurance company from which he retired at age 60. His commissions earned amounted to
₹3.28 lakh in the previous financial year. Besides, he gets a monthly pension of ₹22,460 at
current fixation.

Jasneet wishes to marry a 32-year-old finance professional Rasmeet Chadha from a suburb
in Mumbai early next year. Jasneet has an all-inclusive annual package of ₹30 lakh. His
annual basic salary is ₹7.5 lakh and much of his emoluments are toward variable pay and
bonuses. He gets a house rent allowance which is 60% of his basic salary. Jasneet paid
₹7.45 lakh in income tax in the Assessment Year 2022-23. Rasmeet earns ₹18 lakh
annually. Her basic annual salary is ₹6 lakh. She paid ₹4.46 lakh in income tax in the
Assessment Year 2022-23. Both Jasneet’s and Rasmeet’s employers contribute toward
superannuation benefits which include provident fund and gratuity. Jasneet’s provident fund
balance as at December 2021 was ₹18.68 lakh. Rasmeet is working for the last 8 years. Her
provident fund account as at March 2022 showed a balance of ₹14.92 lakh.

The family’s monthly household expenses are ₹90,000. Jasneet incurs average monthly self-
expenses of ₹20,000 every month which includes annual life insurance premium of
₹1,07,550 affording him term insurance cover of ₹2.5 crore and an additional sum assured of
₹20 lakh on a with-profit policy. You discover that Jasneet has five term policies of ₹50 lakh
each with three different insurers. With two insurers, he has nominated his father as
beneficiary while with the third one, his mother is the beneficiary. His with-profit policy,
purchased 5 years ago, shall mature in October 2037. Jasneet pays a total premium of
₹82,350 toward separate health cover of ₹10 lakh each for his parents. The Long Term Care
of parents is a concern toward which Jasneet wishes to create an emergency fund. Jasneet
is covered comprehensively for health and accident insurance by his employer and does not
have a separate health insurance policy. The same is true in the case of Rasmeet as well.
Rasmeet pays ₹41,780 annual premium for a total ₹2 crore term life cover on two life
policies of ₹1 crore each with the same insurer. Her father and mother are beneficiaries in
one policy each.
Jasneet has a total current investment value of ₹21.83 lakh in financial instruments, a
majority, ₹15 lakh approximately, is into direct equity and equity oriented mutual fund
schemes. The balance is spread across bonds and debentures of companies. Rasmeet has
been savvy in investing money in stocks and has a current equity portfolio value of ₹73 lakh.
She also trades in the market. She piled up huge short-term capital gains in the previous

Confidential / Proprietary material for FPSB’s Integrated Financial Planning course

Case Study-7 FPSB® Integrated Financial Planning Course

year. She has confided that she would keep her portfolio separate and use it as per her ‘free
will’ unless at some stage in the future she feels it incumbent to contribute some part toward
family goals. Jasneet runs a savings bank balance of ₹7 lakh. His credit card outstanding
dues are ₹2.57 lakh due within 30 days. They do not have any other loans.
Jasneet’s idea to engage you at this stage to make a financial plan is to accommodate
Rasmeet’s willingness to co-opt her financial resources in the upcoming marriage with
Jasneet, a sort of equal sharing of the expenses. They both have large extended family in
and around Mumbai itself. In a destination wedding arrangement, they expect the total
expenses for a 5-day long functions to be in the vicinity of ₹ 1 crore.
Having their relatives in and around Mumbai means Jasneet’s family gets to have frequent
get-togethers, holidaying and joint vacations. They want to set aside a fund toward this
expenditure, roughly ₹2 lakh annual at current costs. Also, they would like to dispose of their
old sedan and acquire in its place a 6-seater SUV which would be handy in family’s get-
togethers and vacations.
You, in a meeting with Jasneet and his parents, have stressed on the need to have an estate
plan in place immediately. Jasneet has confided that he must retire with a net worth of US$2
million. He wishes to have a viable time-period for such accumulation. Also, the net worth
should have tax-efficiency in both building and consuming stages and should have a fair mix
of asset classes. You feel this a challenge not in terms of quantum but in pegging the net
worth to US$, which keeps appreciating, hence the net worth goal. He aspires to have a
holiday home and asks to design a savings strategy and/or debt funding. He enquires
whether his proposed wealth building plan as above co-opts their comfortable retirement as
well and whether they should be able to retire early or might have to extend working years.
As further financial and life goals would be evolving with Jasneet and Rasmeet settling in
their married life, a sufficient core fund to separately meet the relevant expenses of up to two
children should be provisioned. You sketch a template to have such provision at various
stages and have enough risk protection with either or both of Jasneet’s and Rasmeet’s life
exigency, disability, etc. You also emphasize that Rasmeet should also attend their
discussion for determining risk assessment as a family unit and further deciding on several
aspects like a strategic asset allocation, tactical shifts to create wealth, identification of joint
goals, management of finances, assets, etc.
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Confidential / Proprietary material for FPSB’s Integrated Financial Planning course