Step 7 - Enter EXPENSES, SPENDING GOALS, INSURANCE PREMIUMS data from Client Fact Find

Step 7 - Enter EXPENSES, SPENDING GOALS, INSURANCE PREMIUMS data from Client Fact Find


Click on EXPENSES from the left-hand  menu to take you to the Expenses screen.

The EXPENSES screen allows you to record the client's expenditure, spending goals, insurance premiums, and upfront and ongoing fees.


SURPLUS ESTIMATE

On this page, there is also a Surplus Estimate, which shows the client and partner's income and tax, and the loan repayments on all loans, ultimately providing you with an amount noted as the Calculated Surplus.  You may find this calculation useful in your assessments when modelling.

 



As indicated above, the Surplus Estimate shows:

Reg's Net Income is calculated as indicated by the blue arrow in the screenshot above.

Rowena's Net Income is calculated as  indicated by the pink arrow in the screenshot above.

Interest and Debt Repayments are calculated as indicated by the green arrow in the above screenshot.

The CALCULATED SURPLUS is calculated as follows:
                Gross Income
minus       Tax
minus       Loan Repayments
             ________________________

equals    CALCULATED SURPLUS    available for spending on lifestyle, assets,                                                                    investments and savings


Below those calculations (as indicated by the yellow arrow above), the data entry for expenditure commences (see the screenshot below).

The Expenses section allows you to record the client's Lifestyle Expenses, Lifestyle Goals, Insurance Premiums, and Adviser Fees. 

The initial data entry has been pre-populated, as below.



1.       EXPENSE RECORDS
Lifestyle Expense data entry has been pre-populated, as indicated at 1 in the above screenshot.
Click on the relevant row to open the entry and add the annual expenditure amount.
Add the Annual Lifestyle Expense Amount (as indicated by the red arrow in the below screenshot), and click UPDATE to save the entry.



Adding a New Expense

To add a new expense, click the CREATE NEW EXPENSE button.   The EXPENSE DETAILS screen will be displayed. 

Ensure all fields with REQ next to the title are completed. Click Add when completed to save details.

2.       PLANNING GOALS
Initial data entry for Planning Goals has been pre-populated, as indicated at 2 in the above screenshot.

Click on the relevant row to open the entry and add the annual amount for the planning goal, and other relevant details.

Click UPDATE to save the entry.


Adding a New Planning / Spending Goal

To add a new goal click the CREATE NEW GOAL button.

Upon clicking the create button the ADD GOAL screen is displayed. 

Ensure all fields with REQ next to the title are completed. Click ADD when completed to save details.
Helpful Hints on Planning / Spending Goal Data Entry

1.      Name
Enter an free text name of up to 40 characters, such as "High School Fees - Child 1", or "2025 Bahamas Holiday".

2.      Type
Lump Sum  -  a lump sum goal expense to occur at a particular time of the year, such as a home renovation, Christmas holiday, etc.
Monthly   -  a spending goal which will be allowed for on an ongoing basis, such as ongoing school fees.
3.      Date Start
Enter the start date for the spending goal.  
As Prospera can model month specific for the first three years, you can specify the month during that time.  Following this, you can specify the financial year for the start of the goal.   

4.      Date End
Enter the end date for the spending goal.  
As Prospera can model month specific for the first three years, you can specify the month during that time.  Following this, you can specify the financial year for the end of the goal.   

5.      Frequency
Here you can specify if the goal is to happen annually, every two years, or any length of time up to every 10 years.  
This is very handy for things like upgrading motor vehicles, additional holidays, etc.

6.      Owner
Select whether this is a joint expense, or an expense for an individual.

7.      Annual Amount Client Requested
         Enter the amount the client wishes to spend on this goal.

8.      Annual Amount Client Can Afford
Enter the same amount as the amount the client has requested, as in point 7.  
Once you run the report, if the goal is not affordable, you may wish to reduce the amount included in the model for the goal, to see how much is affordable.  The amount used in the modelling is this amount "amount client can afford".  
Having the "Amount Client Requested" and "Amount Client can Afford", highlights that the affordable spending amount for the goal may be less than the client requested to spend.

9.      Funding Account
Generally speaking, the funding account should be the "Surplus Account".

10.    Use this Record in Modelling
Select "Yes" if you wish to include this record in modelling.   Select "No", if you don't wish to use the record in the model.


3.       RISK PREMIUM RECORDS
The risk section allows you to record the client's existing personal insurance (Risk) policies. 

The Risk section is made up of a single panel which shows the client's existing policies. 

New policies can be added using the CREATE NEW RISK button in the lower left of the panel. 
Policies can be opened by clicking on the relevant row and deleted using the Garbage Bin icon  to the right of the row.



Adding a New Risk Policy

To add a new risk policy click the CREATE NEW RISK button.   Upon clicking the create button the RISK DETAILS screen is displayed. 

Ensure all fields with REQ next to the title are completed. 

Click ADD when completed to save details.

Helpful Hints on Risk (Insurance) Data Entry

1.      Name
         Enter an free text name of up to 40 characters, such as "Fred - Life & TPD".

2.      Date Start
         Enter the current date (or proposed start date) for the policy.

3.      Date End
         Enter the date the client will cease paying premiums for the policy (eg. at retirement).

4.      Owner
         Select the policy owner from the dropdown menu.  

5.      Category
Select the category of policy from the dropdown menu.  By selecting the correct category of insurance here, Prospera will incorporate the appropriate tax deduction for income protection policies funded from cashflow.     

6.      Funding Account
Select the account the premium will be funded from.  
If the premium is being paid from super, select the appropriate superannuation fund listed.  
If the premium is being funded from cashflow, select the "Surplus Account".

7.      Premium
Include the annual premium for the policy here.

8.      Cover
Include the level of cover here.  If you do not know this value, you can leave it at zero.  This figure is not required for any calculation.

9.      Use this Record in Modelling
Select "Yes" if you would like the policy premiums included in the projection calculations.    
If you are incorporating premiums for newly recommended policies, you can do this by including the new premiums, and turn the older policies to "No", if you wish. 


Link to Next Article -  Modelling Adviser Fees

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