Add value and charge higher fees with Advanced Strategies using a - PDF document

Add value and charge higher fees with advanced strategies using SMSF Chris Craggs MIPA Argurion Finance Group Who should you trust? Add value and charge higher fees with Advanced Strategies using a SMSF

Our Primary Aim Our primary aim is to develop lifetime plans for clients by clearly understanding their personal situations and financial goals. Our first step is to understand their values and their most important goals so the decisions they make are aligned to things that matter most to them. General Advice Warning The information in this seminar is of a general nature only and has been prepared by Argurion Finance Group Pty Ltd), without taking into account your objectives, financial circumstances or needs. Before acting on any of this information, you should consider whether it is appropriate to your objectives, financial circumstances and needs, and seek appropriate professional advice. You should not rely on this presentation to determine your personal tax obligations, please consult a registered tax agent. The presenter is authorised by Argurion Finance Group Pty Ltd to provide general financial product advice in respect of superannuation and life insurance products. This presentation is correct as at 12/03/2017.

Agenda Understanding super Current and proposed state of super Super Boost: Advanced SMSF Strategies Advanced SMSF Strategies Questions Understanding super: The Good $2 Trillion FUM APRA: 2,429 # Funds SMSF: 562,466 23,309 Number of Financial Advisers • Sources: Financial Services Council/UBS State of the Industry 2016

Understanding super: The Bad Just over $14 billion Value of lost super ? 43% of Australians Have an average of two super accounts Did you know that Australia 5.7 million has a Number of lost super 1.8 trillion super gap accounts • Sources: Longevity Savings Gap Research & Policy Options (September 2012) by Rice Warner for the Financial Services Council. • ATO as 30 June 2016 https://www.ato.gov.au/About-ATO/Research-and-statistics/In-detail/Super- statistics/Super-accounts-data/Super-accounts-data-overview/ Understanding super: The Really Bad • Around 4.6 million Australians receive an income support payment of some kind: 27% of the population • 77% of over 65 years old's receive income support • 13% of Australians are over 65 years of age • This grows to 25% by 2047 Sources: Department of Social Services: Pension Review Background Paper

Current and proposed state of super Proposed from 1 July 2017 Current rules $ 100, 0,00 000 pa or $ 300,000 0,000 pa age 49 or over 2 over a three year period if certain conditions are met $ 13,800 $ 37,000 2. As at 30 June of previous financial year. *Includes reportable fringe benefits and reportable employer super contributions Current and proposed state of super-Catch up Proposed from 1 July Current rules 2018 Bring forward 3 years Catch up payments. No ability to catch up Cap amounts unused from 1 July 2018 can be carried forward for up to 5 consecutive years Concessional Cap only • You now control how and when you make tax deductible contributions to super • If you receive a large tax windfall you are able to reduce your taxable income by making personal deductions to super • Limited to those with account balances below $500,000

Tax on concessional contributions Now 1 July 2017 30% 30% $300,000 15% 30% $250,000 15% 15% * Income for these purposes is determined according to the Tax Law Current and proposed state of super: Pensions 4. Where eligible for the capital gains tax discount

Charging fees for Advice Under $3,000 $3-$6,000 $6-$10,000 $10,000 + Contribution Contribution reserve Self -insurance reserve Transfer of business real property using a related party and /or bank loan TTR Income Stream TTR income stream with In- specie contribution of Transfer of residential auto- revisionary property business real properties using a related party and /or bank loan Lump Sum Payout In-specie contribution of Convert lifetime pension Administering a deceased shares to market linked pension SMSF estate for a member and reserve with more than 1m Investment Strategy In-specie payout of lump Limited recourse Establishing long term Paperwork sum payout of shares borrowing arrangement SMSF -pensions and reserves for members with personal injury claims Pension Reserve In-specie payout of lump Estate planning using an Asset restructure from sum payout of shares SMSF will family trust or company into an SMSF Charging fees for Advice Under $3,000 $3-$6,000 $6-$10,000 $10,000 + Allocation from a reserve Investment strategy Administering a deceased development with SMSF estate for a member investment allocation and with less than $1m placement Contribution reduction Investment transfers Creation of SMSF living and concessional caps between accumulation will to protect review and pension accounts incapacitated and disabled under investment and members for their strategy guides protection Upgrade of trust deed Effective use of the CGT Establishing a SIS Reg retirement exemption 13.22C trust or company for transfer to the fund Change of Trustee Establishing a SIS Reg 13.22C trust or company within the fund

Strategy One: Contribution Reserve With Reserve $50,000 Deduction $25,000 contribution Credited as received $25,000 Reserve next financial year $25,000 Deduction $25,000 contribution $25,000 contribution Without Reserve Reserving-Why you need to start early Accumulator Pension • Once you exceed • Once you exceed $1.6 $1.6million you can no million the balance of longer make Non your monies will be Concessional taxed at 15% Contributions • Your non-dependant • Once you exceed $500k beneficiaries are taxed you can no longer make at 17% catch-up payments

Strategy Two: Transfer of Business Real Property • Increase tax deductible contributions • Capital Gain tax reduced to 10% or 0% • Capital Protection of Asset • Access to small business concessions Strategy Three: Establishing and Using Reserves • From a general reserving perspective section 115(1) of the SIS Act 1993 provides: – (1)A trustee of a superannuation entity may maintain reserves of the entity. (2)Subsection (1) does not apply if the governing rules of the entity prohibit the maintenance of reserves.

How a SMSF works = Profits How a SMSF works-Allocation to Reserve = Profits Reserve

The current situation… 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 - 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 Current Understanding super: How much is enough? Single Couple $43,372 pa $59,619 pa A comfortable retirement lifestyle enables an older, healthy retiree to be involved in a broad range of leisure and recreational activities and to have a good standard of living through the purchase of such things as; household goods, private health insurance, a reasonable car, good clothes, a range of electronic equipment, and domestic and occasionally international holiday travel.

What is actually needed… 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 - 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 Current Required Balance Market Risk 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 - 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 Market risk Required Balance

Consequence of Poor timing 4,000,000 4000000 3,500,000 3500000 3,000,000 3000000 2,500,000 2500000 2,000,000 2000000 1,500,000 1500000 1,000,000 1000000 500,000 500000 - 0 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 Market risk Required Balance Consequence of capital fall at retirement Some of the Options

Benefits of a Reserve ? = ? Profits Reserve Questions “Without good advice everything goes wrong - it takes careful planning for things to go right.“ Proverbs 15:22