Helen and Hosea Client Profile - Assignment Example

Client profile CASE: HELEN AND HOSEA LANE Financial Position as at 31 January 2015 Personal Financial Data Mr. works as full time trainer at the local sports club in their neighborhood while Helen works as a teacher in a private school in the suburb they reside. Helen is 34 and Hosea is 37 and have been married for ten years. They have two daughters aged 7 and 3. They both live in Toronto. Employment Hosea Hosea parents were missionaries in Africa, which was where he was born. Hosea spent the better part of his childhood and teenage years. He studied in different international schools where he developed a love for sports. He graduated from Africa University in 2001 and went on to work for three years with a Sports organization called “Cheza” which means “Play” in the African Swahili dialect where he was paid $ 30,000. He later went to Regent University for his Masters degree, which was fully sponsored by the religious organization that employed his parents. He managed to save $ 10,000 by keeping all his expenses to a bare minimum while at college. He started working as an assistant college coach the month after his graduation earning $70,000 for three years then got promoted and started earning $80,000. He plans to continue working with this club for as long as he can. Hosea has written some books on sporting in Africa, which has brought him quite good revenue returns. He got 475,000 as net income, which he got after the book sales. He plans to write more books before he retires. 2 Helen Helen originally trained to be a social worker. She worked for the inner city program in Ontario for five years after graduating earning $35,000. The pay was not so good but she liked what she was doing and felt fulfilled. It was while working there that she got involved with her current school that was doing a better job in the inner cities. They offered her a job, which paid better; $55,000 and provided free housing within the school’s grounds. It was during a sports tournament when she met Hosea, and later got married. She decided to further her education by pursuing an online Masters degree in education at Regent University, which confirmed her credentials as a teacher. Helen now earns $73,000 and plans to continue working with the school until retirement. She also just opened up an old peoples home in a house she inherited form her maternal grandmother, which has been bringing in $150,000 per year. She had taken out a loan of 300,000 to renovate the property and to hire new staff but she believes she will be able to repay the loan in about three to five years. The house is worth $ 2.5 million, as it is located in the more expensive side of town. Her grandmother had come from old money. Helen though believed in living a modest life. Personal Assets and Liabilities Hosea’s parents had given them $ 500,000 as a wedding gift since he and his wife had decided to have a very simple civil wedding. Helen’s family had given her an apartment worth $1.2 million, which they rented out monthly for $3,500 since they lived at the school’s housing area. Helen’s dad gives them $10,000 a year as a Christmas gift, which he banks directly to their TFSA account. Helen’s dad is a financial planner by profession and is always encouraging his family to save. The couple both has RRSP and TFSA accounts. Helen and Hosea both use their dad’s new car but have one of their own which is in good condition. Education Savings The couple has invested in RESP where they save$ 350 a child per month, which is also matched by Helen’s father at $700. This means that they invest 1050 in total per child. They plan to let their children have the freedom of choosing a university they love in the future. 3 Personal Health Helen and Hosea have always been in very good health. The birth of their second baby was though caesarian section but even after that, all has been well. The couple does not drink or smoke, and they take extra care of their health. They follow a kosher diet, which is very healthy. They are both on a comprehensive health insurance serviced by the institutions they work for. Financial Backup Plans Helen’s dad who is always thinking about money has taken out an insurance plan for his daughter with the beneficiaries being his grandchildren of $1 million. Hosea has his own life cover of $400,000. Hosea club has a disability cover that is 100% of his salaries for 3 months if off work and 6 months if at work such as at a game, and thereafter a 75% for a further 6 months. Both Helen and Hosea have written out wills in favor of each other and their children. Pension Covers The couple has two pension covers with 5% of their salary that is double matched by the employer. These have invested in bonds and equities on a 50-50 basis. Their children are both listed as the beneficiaries on an equal basis. Inheritances Helen inherited a prime property in an up market area that is currently worth $ 2.5 million. Hosea received a check of $57,000 from his grand uncle this February, which was quite a surprise for the old man always complained of being flat broke! Plans for the Future Helen thinks that they should buy a new car in five years time and sell their current car which they hardly make use of just so they do not look too old fashioned. They plan to take a six -month holiday to Kenya to visit friends they went to school with. Expenses & Cash Flow Helen and Hosea are planning for the six-month extended holiday to Kenya in five years time as they want the kids to be old enough to enjoy the country and its people. They plan to replace their younger daughter baby cot with a bed. Their older daughter has also outgrown her bike so they are getting her one with gears. Helen also wants a new air fryer that costs $300 for making fat free chips. Monthly Expenses Babysitting $200.00 Groceries and pharmacy $2,400.00 Fast food / restaurants $150.00 Property taxes $575.00 Utilities $375.00 Car insurance $200.00 Gas for cars $180.00 Clothing $300.00 Daycare $400.00 Entertainment $250.00 Phone, internet, cable $200.00 Home insurance $80.00 Life insurance - Mason $50.00 Group Supplementary Life insurance $8.50 Group long-term disability $100.10 Monthly Savings: RESP contribution (per child) $350.00 RRSP for Helen $400.00 RRSP for Hosea $550.00 Pension Plan $450.67 5 Other Assets and Debts CARS 2001 Chevrolet Silverado No loan, paid in full 2010 Ford Escape( Full Owner/No Loan) BANK ACCOUNTS $ (190,369.14) LIFE INSURANCE $1,980,000.12 Cash at hand $ 1,960 Home furniture $ 240,000 DEBTS $300,300 Master Card ( Care home) Credit Limit $400,000 @ 14 % interest rate Investment Details INVESTMENTS AT TD DIRECT INVESTING $15,500.01 Invested 100% in TD Money Market Fund TFSAs $ 15,567.36 CN Railway stock 20% TD Bank stock 45% Apple Inc. 33%* Microsoft stock 35% 5,750.67 RRSPs $18,801.82 TD Bank stock Cash 20% PENSIONS None $87,971.24 Managed by pension fund manager DISCLAIMER THE FINANCIAL PLAN I CREATE FOR YOU IS FOR ACADEMIC PURPOSES ONLY. I AM A STUDENT AT FANSHAWE COLLEGE AND NOT A CERTIFIED FINANCIAL PLANNER. ANY RECOMMENDATIONS IN THIS PLAN SHOULD NOT BE IMPLEMENTED WITHOUT BEING REVIEWED BY A CFP PROFESSIONAL OR A PROFESSIONAL, QUALIFIED FINANCIAL PLANNER. Please be assured that all the information that you provide will be kept strictly confidential. The finished plan will be used as a project for academic purposes and will be shared only with my professor. If you wish, your name and identifying details will be changed prior to submission. Our engagement will continue until April 30, 2015. As this plan is for my academic purposes only there is no fee required. Please note, the following engagement letter has been constructed for academic purposes only. Client Signature(s):__________________Helen Grant_____________________Hosea Grant_____________________ Date:_________________________31/12/14____________________ ________________________ LETTER OF ENGAGEMENT March 5 Helen and Hosea Lane Toronto 5, Ontario Canada Dear Mr. & Mrs. Lane, I appreciate that you took the time to set up this meeting with the aim of discussing your financial affairs. I look forward to be any of assistance to you, as we work together. Parties to this engagement: This letter of engagement lists the services I will provide in the capacity of a CERTIFIED FINANCIAL PLANNER (CFP), to the clients specified above. Alterations should be made in writing and all parties should be at a consensus about the effected changes. Practitioner Qualifications: I am a CFP professional registered with the Financial Planning Standards Council. I am also licenced by the state to trade investment products and securities, and any insurance products such as life and disability policies. Contracted services: The engagement will include the following services: Use data given by you to gather detailed data Engage you in discussions in order to determine financial objectives Perform an evaluation of your current situation in light of your financial objectives Suggest alternative best strategies in light of financial analysis Document and provide a written financial plan for you Other______________________________________________________________ Statement of Financial Position Prepare your Balance Sheet statement Prepare your Cash Flow statement Financial Forecasting Prepare you a financial forecast report based on your pre-retirement and retirement objectives and goals Investment Planning Prepare your investment portfolio Project expected volatility and return Suggest diversification Consider, project and account for taxation Educate you on relevant investment matters Prepare forecasts for every financial situation considered Risk Management Consider the risks to investment such as death or disability Consider the possibility for the need of custodial care in such as in the case of insanity or mental incapacity Prepare a financial forecast that would handle the aforementioned scenarios Income Tax Perform a total review of your income tax situation Forecast and plan for income taxation on investments Factor insurance benefits Estate Planning Make a comprehensive review of your financial goals as regards your estate Present strategies on minimizing expenditure on the estate and its settlement Prepare a financial forecast for the above Other Benefits FFM will conduct a review meeting to access your current situation in light of your financial plan Disclosures: To ensure services offered are effectively done, it is the client’s responsibility to furnish the Financial Planner with the following documents: Copies of wills Details of pension plans Copies of insurance policies Details of employment benefits Information and Client Privacy: The information provided must be current, accurate and up-to date I shall not be required to verify any of the information provided by the client I shall fully rely on information provided by the client and their representatives(accountant, attorney) I will rely on the clients choice of the clients investment All the clients documents will be duly returned and copies of all documents retained for reference and compliance purposes All information as regards the client will be held in utomost confidentiality except if exempted by law Payment terms: The fees for the services will be an initial deposit of 50% of the fixed fee and an hourly charge of $ 300. Guarantee: You, the client retain the right to terminate this service at any time subject to a written notice. Please adhere to the following: Dissatisfaction of services: please write a written notice that includes the reasons for your complaints For any other reason__________________________________________________ I reserve the right to terminate the engagement at any given time by giving a five day written notice. If you find that this Letter is the correct statement of the entire verbal agreement agreed upon between us, then please sign below. Please return one original copy and retain one for yourself and ensure that both your copy and ours has been stamped with our office seal. Please make your check for $__________ payable to the Financial Planning agency. Thank you. Financial Planning Agency By:___________________________________ ________________________________ Financial Advisor AGREED AS ACCURATE ANS ACCEPTED In signing in the below space , you accept that you have received, read and understood the engagement policy I furnished you with. Your signing of this Letter of Engagement also means that you understand its content, and accept and agree to all its terms and conditions. First name of Client_________________________-(please print) and Social Security Number ___________________and certified Signature ______________________________plus date_______________________________-_ Second name of the Client’s ___________________________-(please print) and Social Security Number _________________________and certified Signature _____________________-plus date____________________ Signed at___________________________ Read More