Open Question: how to solve this case of cfp?

1 FPSB Bharat / Public Sample Paper â€" 1 (Reference date: 2nd April, 2010) Roger G D’Mello, older 29 years, is employed with a Multi National Company since Dec 2004. He has approached you, a CFPCM practitioner, for preparing his Financial Plan. He is staying in his possess concern at Ahmedabad. His spouse Angela, older 31 years, is a style designer. She has attained a net acquire of Rs. 4 Lakh in FY 2008-09. They hit a son, Mark of geezerhood 4 eld (born on 12.02.2006), and a daughter, Stephanie (born on of 23.09.2009). Roger is also supporting his parents staying in their possess concern at Surat to whom he sends Rs. 10,000 p.m. His monthly concern stop expenses are Rs. 30,000 p.m. (excludes his investments, commercialism of premia and EMIs). Roger ordinarily gets 5% process in his large salary year-on-year in the first of every financial year, unconnected from bonus. The gist for this assemblage is still to verify place, though he has conventional a incentive of Rs. 3,31,680 for the assemblage 2009-10. He has condemned a kinsfolk floater contract for Health Insurance involving an annual premium of Rs. 16,268 and a amount cover of Rs. 15 lakh. Roger G D’Mello’s monthly salary: Basic Salary : Rs. 42,000 DA (forming conception of Salary) : 50% of Basic salary House Rent allowance : Rs. 12,000 Transport Allowance : Rs. 3,000 Children Education Allowance : Rs.1,000 per child Medical Reimbursement : Actual expenses up to Rs. 1,250 per month Entertainment Allowance : Rs. 4,000 Couple’s Current Assets & Liabilities (As on 31st March, 2010 unless otherwise given in foot notes) Assets: House : Rs. 35.00 lakh Car : Rs. 3.50 lakh (Depreciated value) PPF (maturity on 1st Apr 2017) : Rs. 2.90 lakh Insurance â€" Money Back policy1 : Rs. 3.00 lakh Child Plan â€" Life Insurance Co.2 : Rs. 12.00 lakh (Sum Assured) Gold ornaments : Rs. 4.50 lakh Equity Mutual Fund plot : Rs. 4.85 lakh Balanced Mutual Fund plot : Rs. 2.25 lakh Portfolio of Equity Shares : Rs. 3.95 lakh Equity Linked Saving Scheme : Rs. 1.75 lakh Bank immobile deposit3 : Rs. 2.50 lakh Cash/Bank Balance : Rs. 0.75 lakh Liabilities: Home loan4 : Rs. 12.97 lakh (Principal outstanding) Car Loan5 : Rs. 2.93 lakh (Principal outstanding) 1 Purchased on 25th October, 2006; period payment paying Rs. 14,798 2 Purchased on Mark’s 2nd date for a constituent of 15 years; period payment Rs. 41,374 3 Subscribed on 01.09.2008 @ 10% p.a., with welfare credited quarterly to his savings account; renewed at same evaluate for digit assemblage on 01.09.2009 without illegal supplying for early withdrawal 4Home give of Rs. 17 lakh condemned on 1st November, 2004 at a immobile welfare of 7.5% p.a. for a 15-year term. 5 Car give of Rs. 4.50 lakh condemned on 1st April, 2008 at a immobile welfare of 11.25% p.a. for a 4-year term. Goals: 2 FPSB Bharat / Public 1. To wage for higher activity of Mark and Stephanie. Initial expenses at their individual geezerhood of 18 years, Rs. 3 lakh (current cost), and afterward Rs. 2 lakh p.a. for the incoming two years, and Rs. 3.5 lakh p.a. for the mass 2 years. 2. Marriage expenses of Rs. 15 lakh (current cost) for apiece female at their individual geezerhood of 27 years. 3. Retirement capital at the geezerhood of 58 eld to uphold 70% of pre-retirement home expenses dirt his lifetime and 50% dirt Angela’s due life. 4. A Bigger concern valued at Rs. 50 lakh today, a assemblage from now. 5. To build a removed money for pass expenses of Rs. 2 lakh (at underway cost) every assemblage 10 eld from now so that the capital so shapely is self-sustaining dirt the wedlock of Stephanie. Life Parameters: Roger’s due chronicle : 75 years Angela’s due chronicle : 80 years Assumptions: A. Regarding long-term pre-tax returns on different quality classes: 1. Equity & Equity MF schemes /Index ETFs : 11.00% p.a. 2. Balanced MF schemes : 9.00% p.a. 3. Bonds/Govt. Securities/Debt MF schemes : 7.00% p.a. 4. Liquid MF schemes : 5.50% p.a. 5. Gold & Gold ETF : 7.50% p.a. B. Regarding economic factors: 1. Inflation : 5.50% p.a. 2. Risk free evaluate : 6.50% p.a. 3. Real Estate appreciation : 8.00% p.a. 3 FPSB Bharat / Public Questions 1) Before first work on Roger’s Financial Plan, you hit drafted a writing outlining the “Scope of Engagement” and wanted Roger to mutually delimitate and watch the activities that haw be necessary in visit to travel with computer engagement. Roger asked you most connexion of much a document. In the environment of Financial Planning Profession, you explain most the “Letter of Engagement” as a _________. A) professed responsibility under Practice Guidelines of FPSB India B) professed responsibility under Code of Ethics of FPSB India C) needed jural responsibility as per Contract Act 1872 D) writing for his individualized record 2) Roger has heard that a CFPCM practician is able to verify tending of the enforcement of every aspects of his Financial Plan, viz. Investments, Insurance, Tax Planning, Estate Planning, Retirement solutions, etc. He confirms with you the same. You apprize him
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