30 04 2014 Sample1 Soa - Risk Only Soa Using Risk Researcher
30 04 2014 Sample1 Soa - Risk Only Soa Using Risk Researcher
30 04 2014 Sample1 Soa - Risk Only Soa Using Risk Researcher
Dear Client,
Statement of Advice
Thank you for the opportunity to advise on your financial affairs. We have pleasure in presenting your
Statement of Advice (SOA), which sets out our specific recommendations for your consideration.
This Statement of Advice is based on details of your relevant personal circumstances and forms the basis of
our recommendations. If any information in this report is incorrect, or if you have anything further to add,
please advise us before proceeding any further.
Several steps are involved in designing a strategy to reflect your personal circumstances. The
recommendations made in this Statement of Advice are the starting point of this process and therefore
should only be undertaken after consulting with us.
It is very important that you take full ownership of your financial decisions. To that end, we can assist you
in making the appropriate decisions, but those decisions remain yours. If necessary, please seek more
information and advice from us until you are comfortable to do so.
We look forward to being of service to you in implementing the recommended strategies and assisting you
in the attainment of your personal and investment objectives.
Should you have any queries in relation to the above or should you wish to fine-tune any aspect of the
recommended strategy, please do not hesitate to contact me.
Yours sincerely,
Opex Advice
Authorised Representative
ABC Financial Services Pty Ltd | ABN 111 222 333| AFSL 222333444
Statement of Advice
Prepared for
Client Sample1
Prepared by
Opex Helpdesk
Authorised Representative of
Phone: 1800111111 Fax:
Email: [email protected]
17 April 2014
ABN
AFSL
Contents
The scope of our advice ................................................................................................... 1
Your personal and financial position ............................................................................... 2
Your objectives ............................................................................................................... 4
Strategy recommendations ............................................................................................. 5
Insurance portfolio recommendations ............................................................................ 9
Additional information .................................................................................................. 14
Disclosures .................................................................................................................... 15
Actions required by you ................................................................................................ 16
Authority to proceed ..................................................................................................... 17
Appendix: Insurance product research .......................................................................... 18
Appendix: Insurance quotations .................................................................................... 19
Advice Limitations
During our discussions, you requested that we limit our advice to the scope of advice and the needs and
objectives as outlined in this Statement of Advice. Because of this request, it is important that you are
aware that we have not provided advice on the following:
Your direct share portfolio as you have this managed by your stockbroker, Morgan Stanley, and you
want to continue with that arrangement.
Your retirement funding needs, as you have specifically requested this not be addressed.
Your debt and cashflow management needs, as you have specifically requested these areas not be
addressed.
Due to the reduced scope of our advice, this SOA may not address all of your issues and needs in respect to
your overall finacial position and retirement readniness.
We recommend you review your cashflow, debt management, and retirmenf funding requirements along
with your insurance position at your next annual review meeting or earlier if your circumstances change.
Personal details
Description
Age
Date of birth
Marital status
Australian Tax Resident
Client
54
01 Jan 1960
Single
Resident
Level 4, 81 Flinders Street
Adelaide SA 5000
Preferred Address
Employment
Excellent
Yes
No
Yes
No
No
Dependants
Name
You have not provided details
Income
Description
Ordinary Wages / Employment income
Total
Owner
Client
Annual Amount
$120,000
$120,000
Expenditure
Description
Mortgage Payments / Mortgage
Payments
Term / Accelerate 123AFJ222000
Other Expenditure / Cost of Living
Total
Owner
Annual Amount
Client
$15,000
Client
Client
$12,000
$55,000
$82,000
Owner
Amount
Client
$60,000
Client
$650,000
Client
$55,000
Client
$25,000
Lifestyle assets
Description
Liquid Assets / Cash on Hand
Cash at bank
Real Estate / Primary Residence
Home
Life Style / Household Contents
Home contents
Life Style / Motor Vehicle
Car
Total
$790,000
Investment assets
Description
You have none or have not provided details.
Liabilities
Description
Primary Residence Mortgage / ING
Direct
Total
Owner
Current Value
Client
$115,000
$115,000
Superannuation funds
Description
AustralianSuper
Divisions (Public
Sector)
Owner
Balance
Death
TPD
Inc Prot
Client
$110,000
Pension funds
Description
You have no pension funds.
Owner
Asteron Life
Accelerate
Client Sample1
Life insured
Client
Client
Client
Type
Death
TPD
Trauma
Cover
$100,000
$100,000
$5,000
Premium
$12,000.00
Yearly
Your objectives
Agreed needs and objectives
In preparing our recommendations we have taken into consideration your personal and financial goals and
objectives. These are outlined below:
To reduce the financial burden on you and your family in the event of permanent incapacity.
To reduce the financial burden on you and your family in the event of a major illness.
Present Value
Simple
Yes
Income
Protection pa
Business
Expenses pa
$90,000
$0
$100,000
$5,000
$90,000
$0
$0
$0
-$95,000
-$90,000
$0
Life
TPD
Trauma
Capital Requirements
Liabilities to clear
Future Expenditure Required
Future Education Expenses
Medical costs/Recovery income
Provision for Tax
Other
$115,000
$0
$0
$0
$35,000
$10,000
$115,000
$275,000
$0
$0
$0
$0
$0
$0
$0
$100,000
$0
$0
$160,000
$390,000
$100,000
Capital Provisions
Disposable Assets
Continuing Income
$60,000
$0
$0
$0
$0
$0
$60,000
$0
$0
Insurance Needs
Total Cover Required
Existing Cover
$100,000
$100,000
$390,000
$100,000
$0
-$290,000
Surplus/Shortfall
Strategy recommendations
We recommend you implement the following strategies to assist you achieve your needs and objectives.
Below, we have outlined the benefits to you, how these strategies place you in a better position and the
key aspects you should be aware of. Additional information about these strategies is available in the
Strategy Flyers we have provided to you.
Life insurance
To protect your family in the event of your death, we recommend life insurance of $100,000 on your life.
We recommend you own the cover in your own name and nominate your estate as the beneficiary.
Reasons
Life insurance pays a lump sum on death, or allows for an early payout for terminal illness that is
expected to lead to death within 12 months.
This level of cover will:
allow your beneficiaries to pay off or reduce the mortgage
protects your long-term wealth accumulation strategy
increase the size of your estate for distribution to your desired beneficiaries.
This level of cover is based on our discussions where we identified and agreed the things you want
to protect. Details have been outlined in the risk needs analysis.
We recommend you own the life insurance in your own name because you have the cashflow
available to meet the premium payments and you want control over the policy, the right to
nominate who receives the proceeds and the right to cancel if the need arises. You also prefer this
form of ownership as the proceeds will be a tax-free lump sum.
Consequences
The premiums for self owned life insurance are not tax deductible.
If you do not nominate a beneficiary, the proceeds will form part of your estate and will be
distributed in accordance with your Will. Directing proceeds to your estate may provide
opportunity to use a testamentary trust to provide a tax-effective future income for dependants.
Alternative strategy
TPD insurance
To protect you and your family in the event that you are unable to work again due to permanent disability,
we recommend Total and Permanent Disability (TPD) insurance of $390,000 on your life ('Own'
occupation). We recommend you own the cover in your own name.
Reasons
TPD cover on your life means being able to pay for health and medical costs, reduce all or part of
your home loan and other outstanding debts, fund long term care needs and protect your longterm wealth accumulation strategy should you be diagnosed with an ailment or suffer an injury
which totally and permanently disables you.
This level of cover will:
provide funding for rehabilitation
provide funding for paid carers and/or modifications to your home or vehicle
assist with repayment of debt
provide a lump sum to invest to generate an income stream
protects your long-term wealth accumulation strategy
This level of cover is based on our discussions where we identified and agreed the things you want
to protect. Details have been outlined in the risk needs analysis.
We recommend you own the insurance in your own name because you have the cashflow available
to meet the premium payments and you prefer this form of ownership as the proceeds will be paid
directly to you as a tax-free lump sum.
Consequences
The premiums for self owned TPD insurance are not tax deductible.
To qualify for a TPD payment you will need to satisfy the definition(s) in the insurance policy you
select.
Alternative strategy
Trauma insurance
To reduce the financial risk that can result from a major illness, we recommend Trauma insurance of
$100,000l on your life. We recommend you own the cover in your own name.
Reasons
Trauma (or Critical Illness) cover is designed to pay you a lump sum in the event that you suffer a
specific illness or injury, such as heart attack or stroke, that may not leave you disabled long term
but are traumatic at the time of occurrence. Treatment and recovery and can be life-changing and
costly.
Trauma cover on your life means for you, being able to afford the best treatment and care; and for
you, should you be diagnosed with a critical illness.
This level of cover will provide funds to:
meet medical expenses or remodel your home
'top-up' your 75% income protection cover
allow you to take time off work
invest to generate an income.
This level of cover is based on our discussions where we identified and agreed the things you want
to protect. Details have been outlined in the risk needs analysis.
Owning trauma insurance in your own name means that the proceeds from a successful claim can
be paid direct to you as a tax-free lump sum.
Consequences
The premiums for self owned trauma insurance are not tax deductible.
For a trauma claim to be successful, the diagnosis must meet the policy definition of 'critical illness'
as outlined in the insurance contract.
Alternative strategy
Owner
Life
Insured
Type
Cover
Action
Premium
Asteron Life
Accelerate
Sample1,
Client
Sample1, Client
Sample1, Client
Sample1, Client
Life
TPD
Trauma
$100,000.00
$100,000.00
$5,000.00
Replace
Replace
Replace
$12,000.00/ye
ar
Sample1,
Client
Sample1, Client
Sample1, Client
Sample1, Client
Sample1, Client
IP
Life
TPD
Trauma
$7,500.00/mont
h
$100,000.00
$390,000.00
$100,000.00
Recommend
Recommend
Recommend
Recommend
$9,693.23/yea
r
Zurich Wealth
Protection
Income Replace
Comprehensive,
Protection Plus
Death & TPD &
Extended
Trauma
Premiums are subject to underwriting requirements and approval from the insurer.
The reasons for our recommendations and the associated consequences are explained below.
Consequences
No death benefit will be paid in the event of death by suicide in the 13 month period from the date
the life new insurance cover commences.
In the event of death by suicide in the first 13 months from the start of your new insurance cover,
the life cover is limited to $10,000.
For a Total and Permanent Disability claim to be paid, the diagnosis must meet the policy definition
of the permanent disability.
For a trauma claim to be paid, the diagnosis must meet the policy definition of the critical illness
which is the subject of the claim.
You will not be able to claim a trauma benefit if you suffer certain conditions within a 3 month
period from the date the policy commences. See the Product Disclosure Statement for details.
As this policy includes a trauma benefit without death cover, it is important to be aware that
survival period of 90 days applies. No benefit is payable is you do not survive this period. See the
PDS for further details.
10
Alternative products
We compared the recommended product against the our approved products list (including but not
limited to providers AIA, CommInsure, and Macquarie) and your existing policy. However for the
reasons noted above we recommended the Zurich Wealth Protection package. Should you like a
copy of our research (including cost and features comparisons) this can be provided free of charge.
Please refer to our full 'Approved Product List' on our website - www.opexconsulting.com.au.
This policy does not offer you the level of cover you require at a competitive price.
This policy does not offer an 'Any' TPD occupation.
This policy has a limited number of critical illness conditions covered.
Consequences
There will be some changes to your cover with the new policy we have recommended. The changes
to your cover are:
Increased levels of cover;
Increased cover types;
Reduced premiums; and,
Larger list of critical illness conditions covered.
There is no immediate financial cost to replace this policy.
The premium of your existing product is $12,000 per annum and the premium of the
recommended product will be $9,999 per annum.
For additional information please refer to the research in the Appendix and to the Product Disclosure
Statements.
11
12
13
14
Underwriting requirements
To assess your application, the insurer requires the following:
Financial reports including profit and loss, balance sheets and tax returns for all entities for the last
two years
Blood tests for HIV/Hepatitis B and C/Fasting MBA20 (Multi Biochemical Analysis 20)
Medical tests resting ECG
Medical Exam
Personal Medical Attendant Report (PMAR). The insurer will request this report directly from your
General Practitioner.
For your convenience, we will arrange for LifeScreen Australia Limited to contact you and arrange a time
and place convenient for you to undergo your tests and medical examination. Once complete all results
will be sent directly to the insurer with no cost to you.
Existing cover
As you are replacing an existing policy with the recommended policy, you should maintain your existing
cover until the new policy is established to ensure you have continuous cover.
Cooling Off Periods
Life insurance products have a cooling-off period during which you can check that it meets your needs.
Within this period, you can cancel the cover. Details about the cooling-off period are set out in the Product
Disclosure Statement.
Future Review
Over time, your circumstances and need for insurance can change. It is important to regularly review your
insurance arrangements with us to ensure you have the right cover in place to protect you and your family.
Your duty of disclosure
Please note the following information regarding your duty of disclosure to the Insurer. The key elements
are:
The Duty rests with you.
If you believe that something is relevant to the insurers decision to accept the application, you
should disclose it.
The Duty could go beyond the questions in the applications.
Disclosure of information that decreases the risk or is of common knowledge, is not required.
The Duty continues until the policy has been issued.
If prior to policy issue, there is a change in the insureds circumstances (health, occupation, pursuits, etc)
and you believe this change would be relevant to the insurers decision to accept the application, details
should be disclosed.
Future claim payments could be affected if the requirements of the Duty are not followed. If the life
insured and the policy holder are different people, you refers to both of them.
15
Additional information
For more information about our strategy recommendations, please read the following Additional
Information Flyers that have been provided to you:
These flyers provide more information about our recommendations and any associated risks. They may
assist you to make your financial decisions. If you require another copy of any of the above documents then
please let us know. Copies will be provided free of charge.
Whilst every effort has been made to include relevant tax considerations, we recommend you seek
advice from an appropriately qualified tax agent about the impact on your tax liabilities before
proceeding.
16
Disclosures
This section outlines the amounts you pay for our advice and the services provided. We have also shown
the amounts we receive. All amounts are inclusive of GST (where applicable).
Advice Fees
Type
Fee
$300.00
Preparation of Advice Fee this fee covers our initial meeting, fact finding, analysis, preparation and
presentation of the advice contained in this document. This fee is payable by cheque made payable to Opex
Consulting.
Commission
Insurance product
Zurich - Wealth Protection Income Replace
Comprehensive, Protection Plus Death &
TPD & Extended Trauma
Total
Annual
premium
$9,693.23
Initial
commission
100%
$9,571.07
Ongoing
commission
11%
$9,571.07
$1,178.56
$1,178.56
Any insurance commission is payable by the insurer to from the insurance premiums and is not an
additional cost to you.
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18
Authority to proceed
Client Sample1
Level 4, 81 Flinders Street
Adelaide SA 5000
I have read and understood this Statement of Advice (SOA) prepared by Opex Helpdesk and dated
17 April 2014, including the disclosure of fees and commission associated with the implementation
and ongoing management of the recommendations.
I confirm that the information provided by me and restated in this SOA accurately summarises my
current personal and financial position and my needs and objectives. I understand that if any of this
information is incomplete or inaccurate then the advice may not be appropriate to my
circumstances.
I understand that the recommendations in this SOA have been prepared for my sole use and are
current for a period of 60 days from the date of the SOA. I acknowledge that after this time I should
not implement the recommendations without further review from my adviser to ensure they
remain appropriate.
I have received your Financial Services Guide and understood the contents.
I have received Product Disclosure Statements for all products recommended within this SOA and
any Additional Information listed in this SOA (where applicable).
I accept the recommendations offered in this document and authorise Opex Helpdesk to
implement all recommendations.
I agree to proceed as varied below. I understand that by choosing to implement a variation to the
advice we risk making a financial decision that may be inappropriate to my needs.
________________________________________________________________________
________________________________________________________________________
Client Sample1
____________________________________
______________
Signature
Date
____________________________________
______________
Signature
Date
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