Reference no: EM132936022

Bob recommends you to his 45 year old son, Basil. Basil Butler is a management consultant who is living and working with his wife Daisy in Manhattan. Basil sends you an email, explaining that his 41 year old wife is expecting triplets in six months' time. They plan to return to Melbourne next month and take up residence in their old warehouse apartment in Fitzroy. They need urgent help because their neighbour is planning to sell her adjoining apartment, which they wish to secure. Daisy loves her old place and dreams of extending their living space by acquiring and renovating the neighbour's apartment. She envisions demolishing part of the shared wall to join the two apartments into one large, liveable space for a family of five.

• Basil's firm is relocating him to the Collins Street office. Daisy, however, is a contractor who has successfully completed a series of projects for Basil's firm. She has been self-employed for 10 years and does not intend to work for the next five years. Basil earns $200,000 p.a. and Daisy earns $130,000. They owe $280,000 on the Fitzroy apartment, but they own a beach house in Portsea outright. The beach house is valued at $650,000. With a penchant for luxury cars, they also have $60,000 to repay on their BMW and $10,000 on the vintage MG. They have put the majority of Daisy's earnings into her superannuation fund, which has now accrued $400,000. Basil is unsure how much is in his superannuation fund. Sadly, they invested the bulk of Basil's earnings in a share portfolio which crashed with the global financial crisis. The portfolio dividends only paid $5,000 last financial year. Together, they have $127,000 in a savings account and $50,000 invested in a long-term deposit. The reserve price on the neighbour's property is $510,000, however, she is prepared to sell it for $495,500 if she does not need to engage a real estate agent and if they will commit to a 30 day settlement. She has given Basil and Daisy the option of a private sale and two weeks in which to make her an offer. As she is divorcing, she is not prepared to extend the time to allow Basil and Daisy to secure finance in Melbourne in person.

• Basil and Daisy are too busy packing up their Manhattan loft to search for finance options. They want you to find a suitable loan with attractive terms and arrange all the necessary paperwork. Timing is their utmost concern.

Problem 1: Write an email to Basil and Daisy to establish and confirm their priorities:

1. Establishing their risk tolerance and determining their investment goals and expectations.
2. Ask for any additional information you require to complete your analysis in accordance with your firm's credit policy.
3. Provide Basil and Daisy with an overview of the three best products you believe are most suited to their needs. Be sure to discuss the strengths, weaknesses, benefits and risks, fees and charges attached to each product.