RMIT Classification: Trusted

BAFI 1014

PERSONAL WEALTH MANAGEMENT

Semester 2, 2023

Practical Assessment 1: Case Study Assignment (Group)

Due date: Friday 25/08 11:59 pm

Weighting: Case Study and PowerPoint Presentation - 30%
Content Coverage Lecture Materials 1 to 4
Learning outcomes • Identify the evolving diverse needs of individuals and
contributions to society in terms of personal wealth
management.
• Contextualise taxation liability and social security entitlements
for a range of clients.
• Consolidate the contribution from Australian society to
individual financial planning incorporating local, national and
global circumstances.

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The assignment consists of two parts.

Part 1: PowerPoint Presentation
Part 2: A taxation case study
The assessments in this course complement each other. Financial advisors are responsible
for aggregating all relevant information and translating it into an actionable plan for their
clients. The challenge for the individual and the financial planner, while looking for solutions
in the financial planning space is to stay abreast of the relevant information that is available
online and elsewhere. The assignments require research and application to further the content
provided in the course. The focus should also be on the client’s circumstances and continuous
self-initiated study of the development in the fields of Economics, Politics, Taxes, Regulations
etc.
The student needs to use the “tax rate and formula sheet” made available throughout the
course, on which the assignment is based.

Assessment task
Part 1: PowerPoint Presentation (PPT)
Summarise into a PowerPoint presentation in the current context, the study: Bateman, H.
(2005). Retirement incomes for an ageing Australia. The Economic and Labour Relations
Review, 15(2), 284-308.

This requires the following considerations:

• The above-mentioned study by Bateman, H. was published in 2005 and thus has
financial and other statistical information of the period that needs to be updated to bring it
into the current context.
• The context of the fourth pillar should be included, This is also discussed in the
study by Martin, B., & Xiang, N. (2015) i.e. The Australian retirement income system:
Structure, effects and future. Work, Aging and Retirement, 1(2), 133-143.
• These studies are available at: https://www.rmit.edu.au/library
Please note:
• The PPT should be no more than 10 slides.
• As a PPT you should not attempt to include full explanations on each slide.
• The PPT is to be used by your colleagues and yourself for presentation to an
audience with limited financial knowledge. Neither of you is required to give the actual talk,
nor are you are required to record this.
You are required to research and present information on the topic beyond the materials in
lectures, books and tutorials.
(10 marks)
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Part 2: A financial and taxation case study is continued on the next page

Part 2: A Financial and taxation case study

Question 2: Case study
You are a financial adviser and the following information is an extract of data you gathered as
part of fact-finding during an initial client consultation for married couple Bryan and Sandra
Barlow:

Husband - Bryan Barlow aged 54 Wife – Sandra Barlow aged 49

3 children –aged 26, 22 and 16

The older two children are independent. Whilst 16-year-old – Dilton attends secondary
college and lives at home.

Bryan works as a Manager, Machine-tool operator in a local manufacturing unit and his salary
for the year is $121,000. Sandra works as a teacher in a local school and her yearly salary is
$51,000.

The following are the financial details of the couple.

Current Assets and Liabilities

Assets (Ownership) Current valuation
Home and Contents (Joint) $850,000.00
Rental Property (Bryan) $600,000.00
Cars (Joint) $535,000.00
ANZ Bank Account (Joint) $15,000.00
ANZ Equity Fund- (Bryan) $20,000.00
Caltex Shares 430- (Bryan) $32,540.00
Superannuation- (Sandra) $125,000.00
Superannuation- (Bryan) $420,000.00
Liability (Ownership) Current valuation
Mortgage (Primary home) (Joint) $450,000.00
Mortgage (Rental Property) (Bryan) $500,000.00
Credit cards (Joint) $6,000.00

Bryan's Superannuation asset allocation

Investment Asset Allocation
Australian Shares 65%
International Shares 25%
Property 10%

Sandra's Superannuation asset allocation

Investment Asset Allocation
Australian Shares 65%
International Shares 35%

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Income and Expenses

Income type (ownership) Amount
Rent (Rental Property) (Bryan) $23,400.00
ANZ Equity Fund- Distribution (Bryan) $900.00
Caltex Dividend (Bryan) $2,100.00
Caltex Imputation Credit (Bryan) $900.00
Expenses Amount
Car insurance (third party $8,000.00
Mortgage (Primary home) $72,000.00
Interest, Mgmt & council fees (Rental Property) (Bryan) $24,700.00
Donations to registered Charity (Sandra) $600.00
Travelling to and from work (Bryan) $5,200.00
Travelling to and from work (Sandra) $2,080.00
Credit card repayment $5,000.00
Food $8,000.00
Clothing/Haircuts/Beauty $4,500.00
House maintenance $3,500.00
Medical/Dental expenses $2,000.00
Entertainment/Dinners $2,500.00
Clubs/Prof. Memberships $1,000.00
Gifts - Birthdays/Christmas $3,500.00

Additional Information:

• The couple has a combined savings account of $15,000 earning minimal bank
interest.
• Bryan has a balance of $420,000 in superannuation. Sandra’s superannuation
balance is $125,000. The couple do not salary sacrifice. Only the superannuation guarantee
contribution is deposited into their account.
• Bryan plans to retire at 60 and Sandra will retire at 55.
• The couple intends to pay off both mortgages in the next 4 years before their
retirement.
• The couple are anxious due to the increase in interest rates on the mortgage loans.
The rental property is an interest-only investment and was positively geared due to the low-
interest rate that prevailed during 2022-23. But the recent increase in interest rates has
increased their expenses on the investment, which are more than the income from the
investment asset.
• The couple has set an objective of saving at least 15% of their combined after-tax
income until their retirement.
• The couple only insured their car with third-party insurance as it is low-cost insurance
compared to comprehensive insurance.
• PAYG (Bryan) $37,300; PAYG (Sandra) $13,111

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Required:
A. Calculate Bryan and Sandra’s after-tax income for the year ended June 30th 2023.
Explain how Bryan and Sandra could reduce their tax liability by splitting their income. Show
the effect this strategy would have had, if they had split income for the tax year ended 30 June
2023.

B. The couple for themselves and their children need an understanding of the significance
of the “Superannuation guarantee rate scheduled to progressively increase to 12% by July
2025”.
Please explain to the couple (in not more than 300 words)
• What is the super guarantee charge rate?
• What is the benefit of an “increase to 12%” to the individual in their retirement saving
and to the Australian economy?
You need to refer to the paper “Australia, I. S. (2021). The Superannuation Guarantee: why we
need 12 per cent.” Please explain this to them
C. Using all the information provided, comment (in not more than 200 words) on the key
issues the Barlows need to consider in planning for their retirement.

(10 + 5 +5 = 20 marks)

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Here are some useful website references that can be used:

Infographic (PowerPoint Presentation/poster) websites:

https://piktochart.com/

https://venngage.com/

Otherwise, you can use Adobe Photoshop or Powerpoint to design the infographic/poster.

Referencing guidelines
Use the RMIT Harvard referencing style for this assessment.
You must acknowledge all the sources of the information you have used in your
assessments.
Refer to the RMIT Easy Cite referencing tool to see examples and tips on how to reference
in the appropriate style. You can also refer to the library referencing page for more tools
such as EndNote, referencing tutorials and referencing guides for printing.
Submission format
The assessment is to be submitted in Canvas as an uploaded (word) file.
Academic Integrity and Plagiarism
Academic integrity is about the honest presentation of your academic work. It means
acknowledging the work of others while developing your insights, knowledge, and ideas.
You should take extreme care that you have:

• Acknowledged words, data, diagrams, models, frameworks and/or ideas of others

you have quoted (i.e. directly copied), summarised, paraphrased, discussed or mentioned in
your assessment through the appropriate referencing methods.
• Provided a reference list of the publication details so a reader can locate the source if
necessary. This includes material taken from Internet sites.
If you do not acknowledge the sources of your material, you may be accused of plagiarism
because you have passed off the work and ideas of another person without appropriate
referencing, as if they were your own.
RMIT University treats plagiarism as a very serious offence constituting misconduct.
Plagiarism covers a variety of inappropriate behaviours, including:

• Failure to properly document a source

• Copyright material from the internet or databases
• Collusion between students
For further information on our policies and procedures, please refer to the University
website.
Assessment declaration
When you submit work electronically, you agree to the assessment declaration.
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Criteria Ratings Points (pts)

HD D C P N DNS
Part 1 Excellent preparation, Very good Good preparation, Basic preparation The presentation
Presentation presentation is well- preparation, the presentation is and presentation was difficult to
(i.e. layout) organised, well-timed presentation is organised timed and are somewhat understand
(5%) clear and has a logical organised and timed structured organised timed and/or poorly
structure. with a logical and structured timed and/or
structure. organised
Presentation aids Presentation aids Presentation aids Presentation aids The presentation
(presentation/poster) support the main support the main are connected to lacks graphics
support the main points points in a logical points the main points and/ or
in a logical and clear way information. The
way arrangement of
information does
not consider the
audience.
Coverage of topic, Coverage of topic, Coverage of topic, Some Coverage of
Clarity of topic and Clarity of topic and Clarity of topic and the topic,
Critical/balanced Critical/balanced Critical/balanced somewhat clear in
content is logical and content is logical content is clear terms of topic and
clear and clear Critical/balanced
content is included
Excellent use of Good use of Graphics and data The presentation
graphics and data. The graphics and data. are presented but needs
arrangement of The arrangement of limited or ill-suited. improvement in
information is coherent information can be The presentation graphics and/ or
with an appeal to the followed but may can be understood information. The
audience. require more effort but is not audience arrangement of
by the audience. friendly. information rarely
considers the
audience.

5>3.99 pts 3.99>3.49 pts 3.49>2.99 pts 2.99>2.49 pts 2.49>0 pts 0 pts 5 pts
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Criteria Ratings Points (pts)

HD D C P N DNS
Part 1 Content Very clear, thoroughly Clear, researched Adequate Poor information, Irrelevant or no
(5%) researched and and referenced. information but not with little research information. No
referenced. issues & Most similarities and as thoroughly and or rare effort to
benefits differences researched and references. Does attend to the
were identified, and an were identified, and referenced. Not all not show a clear purpose of the
excellent understanding a strong similarities and understanding of case study. Not
was demonstrated. understanding was differences similarities and to undergraduate
demonstrated. were identified, and differences. Not to standard.
only partial undergraduate
understanding was standard.
shown.

5>3.99 pts 3.99>3.49 pts 3.49>2.99 pts 2.99>2.49 pts 2.49>0 pts 0 pts 5 pts

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Criteria Ratings Points (pts)

HD D C P N DNS
Part 2 (Case All tax and Few mistakes in tax, Some mistakes in Excessive mistakes No or insignificant
study) Medicare levies, offsets and tax and Medicare in tax and Medicare attempt to provide
(20%) calculations are net tax calculations and/or calculations and/or the solution to the
correct with clear payable/refund, formulas, formulas, client. Citation
formulas, although used calculations or calculations or Mistakes/inadequacy
calculations and correct formulas. results are not results poorly
results presented. calculations and presented clearly. presented. Citation
Provide an results presented. Citation. Mistakes/inadequacy
adequate Provide an adequate
explanation of the explanation of the
splitting of income splitting of income
strategy in strategy in reducing
reducing tax tax expense, which
expense for the needs further
client with contextualisation to
calculation. the case study.
Excellent Citation
selection of key
issues and clear
explanation for
the client. With
citation.
20>15.99 pts 15.99>13.99 pts 13.99>11.99 pts 11.99>9.99 pts 9.99>0 pts 0 pts 20 pts

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