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SoA Guide

June 2010

Copyright © Coin Software Pty Ltd Page 2 of 75

Table of Contents

1 Introduction ...................................................................................................................................................................................................................... 3

2 Asset Classes within the SoA .......................................................................................................................................................................................... 4

3 Instructions for using this SoA Guide ............................................................................................................................................................................... 6

4 Prerequisites for using this guide ..................................................................................................................................................................................... 6

5 'On’ Mode Vs ‘Off’ Mode .................................................................................................................................................................................................. 7

6 Non Superannuation Recommendations ......................................................................................................................................................................... 8

6.1 Eligible Termination Payments .................................................................................................................................................................................. 8

6.2 Investment Recommendations ................................................................................................................................................................................ 12

6.3 Debt Management Recommendations .................................................................................................................................................................... 24

5 Superannuation ............................................................................................................................................................................................................. 29

5.1 Superannuation Recommendations ........................................................................................................................................................................ 31

5.2 Compare: Super ...................................................................................................................................................................................................... 52

5.3 SMSF Recommendations ........................................................................................................................................................................................ 56

5.4 Superannuation Income Streams ............................................................................................................................................................................ 62

6 Insurance Recommendations ........................................................................................................................................................................................ 63

7 Centrelink Recommendations ........................................................................................................................................................................................ 65

8 Estate Planning Recommendations ............................................................................................................................................................................... 67

9 Fee Disclosure ............................................................................................................................................................................................................... 70

9.1 Tiered Fees ............................................................................................................................................................................................................. 72

Other costs to you ............................................................................................................................................................................................................. 72

10 Miscellaneous Information .......................................................................................................................................................................................... 73


1 Introduction A new Comprehensive SoA has been introduced for Coin Office v3.4 (build 55). This SoA offers advisers the ability to generate documents covering the following types of strategies: Non Superannuation Recommendations (including ETP payments, gearing, instalment warrants, and Debt management scenarios) Superannuation Recommendations (including rollovers, commutations, income streams, in specie transfers and SMSFs) Insurance Recommendations Centrelink Recommendations Estate Planning Recommendations

A comprehensive list of Word Tags has also been incorporated to ensure advisers are provided maximum flexibility when constructing their advice documents. This new SoA has also been reviewed in terms of formatting to ensure the final document is easy to read and use for your clients.


2 Asset Classes within the SoA Please note, this SoA will only populate correctly when used in conjunction with the 'COIN Asset Classes' or the 'Van Eyk Asset Classes' as selected in the Dealer Group Preferences.

The main difference between the COIN asset classes and the Van Eyk asset classes will be the grouping of the asset classes as follows: COIN asset classes in the comprehensive SoA will include the following 9 asset classes

Defensive Asset Classes Growth Asset Classes

Cash Australian Fixed Interest: Mortgage will be grouped under Aust FI International FI

Australian Equities Int’l Equities Property Securities Direct property Alternative Other


Van Eyk asset classes in the comprehensive SoA will include the following 8 asset classes

Defensive Asset Classes Growth Asset Classes

Cash Fixed Interest: (Mortgage + Aust FI + Int’l FI will be grouped under Fixed Interest)

Australian Equities Int’l Equities Property & Infrastructure - relabelled Direct property Alternative Other

The asset classes you select will affect the way the asset allocation tables are labelled throughout the SoA. Some sample output is shown below.

COIN Asset Classes Van Eyk Asset Classes


3 Instructions for using this SoA Guide There are certain data inputs the user needs to be aware of to ensure the information is captured correctly in the SoA. This guide will help the user in identifying these inputs when formulating specific strategies to ensure the correct SoA output. This guide will take you through all the Comprehensive Tags in the order they appear under 'Comprehensive SoA’. The tag will be shown in the left hand column. Under each tag a Fact Find or Strategy Input (step/s) will be highlighted. The right hand column displays the expected SoA output if you enter the strategies correctly.

Please note, the user needs to pay specific attention to the symbol as this provides the user with details around certain input criterion.

4 Prerequisites for using this guide This guide provides an overview of the Strategy inputs required to generate the comprehensive SoA and assumes the user will have a good understanding of the Coin software. For any further assistance regarding using the Coin software to, please contact your Coin Relationship Manager or the Coin Support desk on 1300 783 603. Alternatively, you can access the Coin Help Guide via the Help menu or Marquee.


5 'On’ Mode Vs ‘Off’ Mode This document refers to ‘On’ mode and ‘Off’ mode, which relates to whether or not the transactions option for superannuation and ABP services has been turned 'on' or left 'off'. This preferences setting is shown below.

When this setting is checked the user will be able to create super and pension service transactions which will then be reflected in the new Generic SoA. As a result, there are changes to the way some super recommendations are entered in Strategy when the ‘On’ mode is enabled. This will be highlighted throughout the guide where necessary. No changes have been made to the way strategies are entered when using ‘Off’ mode.


6 Non Superannuation Recommendations

6.1 Eligible Termination Payments

SoA Output Rolling over a Transitional ETP

The ‘Redundancy’ Tool will need to be completed for all ETP options. Strategy Input

Review of your Eligible Termination Payment

When you receive a genuine redundancy or approved early retirement scheme payment, the portion of the payment above a tax free threshold may be classified as an Employment Termination Payment (ETP). In general, an ETP cannot be rolled into superannuation. However, transitional rules allowing this to apply where the amount of the payment is specified by a qualifying contract in place as at 9 May 2006. Your termination payment fits into this category, meaning that you have the option of receiving the ETP portion of your termination payment either in cash, rolling entire ETP into a superannuation fund or a combination of these options. We recommend that you elect to rollover your ETP into superannuation. A summary of our recommendation and an estimate of the associated tax liabilities is shown in the below table.

Source of Funds Owner Amount Tax Payable Net Amount Transfer To

Redundancy - Tax free

component

John $27,067 $0 $27,067 Col FS

FirstChoice

Personal

Super

Redundancy - ETP

portion

John $22,933 $3,440 $19,493 Col FS

FirstChoice

Personal

Super

Total $50,000 $3,440 $46,560


The user will need to ensure the ‘R/O Total’ option is selected and the ‘Transitional’ check box will need to be checked for the information to populate the SoA. Also ensure all other relevant fields are completed. If using ‘On’ mode and you would like the ETP to appear in the ‘Summary of investment Recommendations’ and ‘Fee Disclosure’ sections the user will need to add a lump sum investment via the ‘Asset Mix’ tab under the Super service.

The Recommended Investments table and Fee Disclosure tables will not be populated if the user is using ‘Off’ mode.

Summary of Investment Recommendations

This section summarises the investments we have recommended for your portfolio. In developing our recommendations we have taken into account your personal circumstances and risk profile, as well as the current economic conditions and portfolio theory.

Recommended Investments - Personal and Superannuation

Investment & Superannuation Assets Owner Current

Amount

Additional

Investment /

Withdrawal

Proposed

Amount

Col FS FirstChoice Personal Super John

CFS FC PersSuper - BT Active

Balanced

$50,000 $46,560 $96,560

CFS FC PersSuper - CFS Balanced $50,000 $0 $50,000

Total $100,000 $46,560 $146,560


Cashing out a Transitional ETP

Strategy Input


When you receive a genuine redundancy or approved early retirement scheme payment, the portion of the payment above a tax free threshold may be classified as an Employment Termination Payment (ETP). In general, an ETP cannot be rolled into superannuation. However, transitional rules allowing this to apply where the amount of the payment is specified by a qualifying contract in place as at 9 May 2006. Your termination payment fits into this category, meaning that you have the option of receiving the ETP portion of your termination payment either in cash, rolling entire ETP into a superannuation fund or a combination of these options. We recommend that you elect to cash out your ETP. A summary of our recommendation and an estimate of the associated tax liabilities is shown in the below table.

Source of Funds Owner Amount Tax Payable Net Amount Transfer To

Redundancy - Tax free

component

John $27,067 $0 $27,067 Cash

Redundancy - ETP

portion

John $22,933 $3,784 $19,149 Cash

Total $50,000 $3,784 $46,216


Rollover and Cash out of Transitional ETP

Strategy Input


When you receive a genuine redundancy or approved early retirement scheme payment, the portion of the payment above a tax free threshold may be classified as an Employment Termination Payment (ETP). In general, an ETP cannot be rolled into superannuation. However, transitional rules allowing this to apply where the amount of the payment is specified by a qualifying contract in place as at 9 May 2006. Your termination payment fits into this category, meaning that you have the option of receiving the ETP portion of your termination payment either in cash, rolling entire ETP into a superannuation fund or a combination of these options. We recommend that you elect to rollover part of your ETP and withdraw the remainder. A summary of our recommendation and an estimate of the associated tax liabilities is shown in the below table.

Source of Funds Owner Amount Tax

Payable

Net Amount Transfer To

Redundancy - Tax

free component

John $27,067 $0 $27,067 Cash

Redundancy - ETP

portion

John $22,933 $3,440 $19,493 Col FS

FirstChoice

Personal

Super

Total $50,000 $3,440 $46,560


6.2 Investment Recommendations

SoA Output

Establish a Cash Reserve

Fact Find Input

Alternatively the liquidity amount can be entered under the ‘Objectives’ tab.

If the Cash Reserve amount is entered in both areas, the amount in the ‘Objectives’ tab will take precedence.

Establishing a cash reserve

We recommend that you establish a cash reserve by investing $10,000 in an appropriate at-call .

We have made this recommendation for the following reasons:

Holding these funds in a secure cash investment will help to ensure that you will have sufficient liquid funds available to meet unexpected expenses or that you can temporarily replace any lost income resulting from unexpected events.

Other things to consider:

Funds invested in cash will provide you with income, but not capital growth. This generally means that, over the long term, the investment returns on your cash reserve may be less than if you invested into growth assets (such as shares and property).


Selling or Reviewing Existing Investments

Strategy Input

Add a Regular or Lump sum Investment or Withdrawal

Reviewing your existing investments

We have reviewed your existing investment portfolio and, based on your current goals and objectives, the following changes are recommended:

Investment Assets Owner Lumpsum Amount Regular Amount

Managed Funds John $100,000 $2,000

Col FS FirstChoice Investment John

Barclays Managed Inv - Diversified

Growth Fund

$13,500 $1,620

BT Wholesale - Active Balanced

Fund

$13,000 $1,560

Deutsche Australian Equities Alpha

Fund

$5,000 $600

MLC Inv Trust MLC Platinum

Global Fund

$5,000 $600

Perpetuals Wholesale Balanced

Growth Fund

$13,500 $1,620

Macquarie - Cash Management

Trust

John and

Jenny

($20,000) ($5,000)

Total $130,000 $13,000


Borrowing to invest using Home Equity

Strategy Input

Add a Home Equity Loan:

Borrowing to invest

Borrowing to purchase investments can be a tax effective way of creating wealth over the longer term. This is referred to as 'gearing'. Larger investment returns can be achieved provided that the total return produced by your geared investment portfolio exceeds the costs of the borrowing. We recommend that you implement a gearing strategy, borrowing a total of $50,000 against the equity in your principal residence to invest as outlined in subsequent recommendations.

Loan Details Home Equity Loan

Borrower John

Lender

Loan Type Home Equity Loan

Repayment Type Interest Only

Initial Drawdown $100,000

Annual Drawdown $0

Interest Rate 6.00%

First Year Interest Payment $3,000

Payment Frequency Monthly

Loan Details


Borrowing to invest using Margin Lending

Strategy Input

Add a Margin Loan:

Borrowing to invest

Borrowing to purchase investments can be a tax effective way of creating wealth over the longer term. This is referred to as 'gearing'. Larger investment returns can be achieved provided that the total return produced by your geared investment portfolio exceeds the costs of the borrowing. We recommend that you implement a gearing strategy, borrowing a total of $50,000 through a margin lending facility to invest as outlined in subsequent recommendations.

Loan Details Margin Lending

Borrower John

Lender

Loan Type Margin Lending Loan



Annual Drawdown $0

Interest Rate 6.00%



Loan Details


Regular Investments using gearing

Strategy Input

Add a Regular Gearing Strategy:

Borrowing to invest

Borrowing to purchase investments can be a tax effective way of creating wealth over the longer term. This is referred to as 'gearing'. Larger investment returns can be achieved provided that the total return produced by your geared investment portfolio exceeds the costs of the borrowing. We recommend that you implement a gearing strategy, borrowing a total of $50,000 through a margin lending facility to invest as outlined in subsequent recommendations. We also recommend that you make regular additional draw downs of approximately $3,000 per annum from your loans to further build your investments.

Loan Details Margin Lending

Borrower John

Lender




Annual Drawdown $3,000

Interest Rate 6.00%



Loan Details


Lump sum Investments (Managed funds or Equities)

Strategy Input

Add managed funds or shares with an initial lumpsum transaction/s;

Investing in managed funds and direct equities

Direct equities (or shares) may be purchased and sold through a broker and effectively give you partial ownership of a company. This entitles you to share in company profits (through dividends) as well as capital growth. Owning and managing direct equities is generally only practical for the Australian share portion of a portfolio. Managed funds are a type of investment in which your capital is pooled with capital from many other investors. The decisions regarding the selection and management of the investment portfolio are then taken care of by a professional fund manager. Managed funds are practical for all portions of a portfolio. We recommend that you invest into a portfolio of managed funds and direct equities through platform name as shown in the table below, and elect to have all distributions reinvested/directed to a .


Managed Funds John $100,000 $0

Total $100,000 $0


Investments through Platforms

Strategy Input

Add a recommended Investment Platform:

Summary of Investment Recommendations

This section summarises the investments we have recommended for your portfolio. In developing our recommendations we have taken into account your personal circumstances and risk profile, as well as the current economic conditions and portfolio theory.

Recommended Platform - Col FS FirstChoice Investment



Amount

Additional

Investment /

Withdrawal

Proposed

Amount



Growth Fund

$0 $13,500 $13,500


Fund

$0 $13,000 $13,000


Fund

$0 $5,000 $5,000

MLC Inv Trust MLC Platinum Global

Fund

$0 $5,000 $5,000


Growth Fund

$0 $13,500 $13,500

Total $0 $50,000 $50,000


Regular investments (Managed funds or Equities)

Strategy Input

Add Managed Funds or Shares with Regular investment transactions:

Investing in managed funds and direct equities

Direct equities (or shares) may be purchased and sold through a broker and effectively give you partial ownership of a company. This entitles you to share in company profits (through dividends) as well as capital growth. Owning and managing direct equities is generally only practical for the Australian share portion of a portfolio. Managed funds are a type of investment in which your capital is pooled with capital from many other investors. The decisions regarding the selection and management of the investment portfolio are then taken care of by a professional fund manager. Managed funds are practical for all portions of a portfolio. We recommend that you invest into a portfolio of managed funds and direct equities through platform name as shown in the table below, and elect to have all distributions reinvested/directed to a . We also recommend that you establish a regular savings plan to supplement your initial investment with contributions of $2,000 per annum.


Managed Funds John $100,000 $2,000

Total $100,000 $2,000


Borrowing to invest using Protected Equity Loan

Strategy Input

Add a Protected Equity Loan by using the Margin Lending/PEL option:

The user will need to add ‘Protected Equity Loan’ or ‘PEL’ in the ‘Description’ field and the ‘PEL’ option under ‘Loan Type’ needs to be selected for this strategy to appear in the SoA.

Investing via a Protected Equity Loan

Borrowing to purchase investments can be a tax effective way of creating wealth over the longer term. This is referred to as 'gearing'. Larger investment returns can be achieved provided that the total return produced by your geared investment portfolio exceeds the costs of the borrowing. Like regular geared investments, with a protected equity loan (PEL) you are liable to pay interest on the loan while being able to benefit from investment price gains along with any dividends that may accrue. However, a PEL arrangement also includes a capital protection feature which provides a form of insurance against downward movements in investment prices. We recommend that you take out a protected equity loan and invest the funds as shown in the following tables.

Investment Assets Owner Lumpsum (Initial) Regular

(Additional)

Managed Funds John $50,000 $0

Total $50,000 $0

Loan Details Protected Equity Loan

Borrower John

Lender

Loan Type Protected Equity Loan



Annual Drawdown $0


Borrowing to invest using Self Funding Instalment Warrants

Strategy Input

Add an Instalment Warrant by choosing the Margin Lending option:

For this strategy to populate the SoA the user will need to ensure the word ‘Self Funding Instalment’ or ‘SFI’ is visible in the ‘Description’ field.

Investing in Self Funding Instalment Warrants

Borrowing to purchase investments can be a tax effective way of creating wealth over the longer term. This is referred to as 'gearing'. Larger investment returns can be achieved provided that the total return produced by your geared investment portfolio exceeds the costs of the borrowing.

Instalment Warrants are a type of geared investment that may be traded in the same way as ordinary shares. They allow you to acquire an asset (usually direct equities) for only a fraction of its market value and borrow the difference. Instalment Warrants are considered 'Self Funding' when the income received from the investment is used to cover the interest costs associated with the packaged loan. Should you not wish to take full ownership of the shares at the end of the term you are not required to repay the outstanding loan balance.

We recommend that you invest via Self Funding Instalment Warrants as shown in the table below.

Loan Details Self Funding Instalment Warrant

Borrower John

Lender

Loan Type Self Funding Instalment Warrant



Annual Drawdown $0

Interest Rate 8%

Loan Details


In-Specie Transfer into Platform

Strategy Input

An In specie Transfer will allow the user to transfer an existing direct asset to a service or existing assets held under a service to another service. To model this you will need to add the assets to be transferred into the 'asset mix' of the service to which they are being transferred. Do not enter an amount at this point.

You will then need to transfer the existing product/s to the new asset within the service using the Add Lumpsum Transfer option:

The service that the asset is being transferred 'to' must be a 'recommended' service.

Making an in specie transfer into a platform

An in specie transfer involves a direct transfer of assets between structures in place of a cash contribution or withdrawal. We recommend that you make an in specie transfer of your investments into a platform as shown in the table below.

Investment Assets Owner Lumpsum

(Initial)

Regular (Additional)

Bhp Billiton Limited John $50,000 ($50,000)


Bhp Billiton Limited $0 $50,000

Total $50,000 $0


Where CGT is not applied you will need to ensure that the ‘CGT Applies’ option has been set to ‘No’ under the existing asset.


6.3 Debt Management Recommendations

SoA Output Loan Consolidation

Strategy Input

The user should use the Action Wizard for this strategy as it requires minimal user input Highlight ‘Consolidate Debt’ select ‘Action’

Consolidating your loans

We have reviewed your existing loans and, based on your current goals and objectives, we recommend that you consolidate your current non-deductible debts into your home loan. This can be done by making a lump sum drawdown from your home loan.

Existing Loans Owner Interest Rate Repayment Balance

Home Loan John and

Jenny

6.00% $24,000 $275,000

Personal Loan John and

Jenny

10.00% $3,600 $15,000

Credit Card John and

Jenny

15.00% $600 $5,000

Total $28,200 $295,000

After implementing our recommendations, we anticipate that your loan repayments will be structured as follows.

Existing Loans Owner Existing Loan(s)

Interest Rate p.a.

Repayment New Balance

Personal Loan John and

Jenny

10.00% $0 $0


This will open the ‘Consolidate Non-deductible Debts’ screen where pre-populated information will appear based on the client's current non-deductible debt:

If the Action Wizard is not utilized the user will need to ensure that the word ‘Consolidate Debt’ is displayed in the ‘Description’ field when adding a ‘Drawdown’ or ‘Repayment’ manually within the Loans tab.

Credit Card John and

Jenny

15.00% $0 $0

Total $0 $0

Refinanced Loans Owner Refinanced Loan(s)

Interest Rate

p.a.

Repayment New Balance

Home Loan John and

Jenny

6.00% $28,200 $295,000

Total $28,200 $295,000


Implementing a Debt Recycling Strategy

Strategy Input

Debt Recycling using Lump Sums can be modelled and then populated within the SoA. The user will need to ensure the word ‘Debt Recycling’ is entered into the ‘Description’ field when making the Lump sum Asset Withdrawal, Lump sum Loan Repayment and Adding the Margin Loan. Step 1 - Withdraw funds from existing assets to repay the Home Loan (non-deductible debt)

Implementing a debt recycling strategy

A debt recycling strategy allows you to convert inefficient (non-deductible) debt into efficient (tax -deductible) debt. It generally involves selling investments, repaying loans, and then re-borrowing funds to invest. As the first step in a debt recycling strategy, we recommend that you reduce the level of your non-deductible debt as shown in the table below.

Existing Loans Owner Amount

Home Loan John and Jenny $20,000

Total $20,000

The next step is to sell down your investments. We recommend that you sell down your investments as shown in the table below:

Investment Assets Owner Amount

Macquarie - Cash Management Trust John and Jenny $20,000

Total $20,000

We then recommend that you re-borrow funds (as shown in the table below) to reinvest (as outlined in subsequent recommendations).

Loan Details Debt Recycling

Borrower John

Lender


Step 2 - Add a Lump sum Repayment to the Home loan

Step 3 - Establish a Gearing Strategy using the Margin Lending option.




Annual Drawdown $0

Interest Rate 6.00%



Loan Details


Establish Reverse Mortgage

Strategy Input

The word ‘Reverse Mortgage’ will need to be added to the ‘Description’ field when adding the Home Loan.

Add a Reverse Mortgage using the Home Loan option and add the corresponding Regular Drawdowns:

6.3.1 Establishing a reverse mortgage

A reverse mortgage allows you to borrow funds using the value of your home as security. You do not make any regular repayments on the loan; it is repaid when you leave the home, sell the home or in the event of your death. We recommend that you take out a reverse mortgage against the value of your home as shown in the table below.

Investment Assets Owner Action Initial

Amount

Ongoing

Amount

Interest

Rate p.a.

Principal Residence John and

Jenny

Loan

Drawdow

n

$100,000 $20,000 6.00%

Total $100,000 $20,000 6.00%


5 Superannuation The following section outlines the superannuation recommendations that can be populated into the SoA. Please note, there are some specific rules in relation to Self Managed Superannuation Fund (SMSF) recommendations. We have outlined these below.

When recommending SMSFs the user has the option to make recommendations on a new SMSF or an existing SMSF by selecting the word tags that fall under ‘Superannuation Recommendations’ or ‘SMSF Recommendations’. If you are providing comprehensive advice to the clients that cover other aspects of their personal position as well as SMSF advice then the user should select the appropriate 'Establish SMSF' option under the Superannuation Recommendations heading as well as the relevant word tags under SMSF recommendations. This will ensure that personal and SMSF details will flow into the comprehensive SoA.


However, if the user intends to provide advice on SMSFs only - you must ensure the ‘SMSF Only’ tag is checked as well as any other related SMSF tags that fall under the SMSF Recommendations’. Please note, if the user selects word tags for other personal recommendations (e.g. debt or investment advice) they will not work in conjunction with the 'SMSF only' check box.

Please note, the SMSF Objectives in Fact Find are intended for advising on existing SMSF clients only. This should be considered in conjunction with the word tags that appear under SMSF Recommendations.


5.1 Superannuation Recommendations

SoA Output Retain your existing superannuation product(s)

This is a text only section. The user needs to ensure they tick the relevant word tag to have this section appear within the SoA.

Retain your existing superannuation product(s)

We have reviewed your existing superannuation fund(s) and, based on your current goals and objectives, we have recommended you retain your existing superannuation funds.

We have made this recommendation for the following reasons: Risk and Return - The asset allocation of your current superannuation portfolio is in

line with your risk profile.

Quality - Your existing investments are performing in line with market expectations and have quality research ratings and performance prospects. While past performance is not necessarily indicative of future performance, your fund has performed well over the medium term relative to funds of a similar risk profile.

Cost - Your current fund has a low fee structure and numerous investment options. Based on our investigations into this product, your current fund meets all of your superannuation needs.

Insurance - Your current fund a range of personal insurance cover with competitive rates.



Establish SMSF (no Rollover of Benefits)

Fact Find Input

The user needs to ensure an SMSF is created in Fact Find with a Recommended status.

Strategy Input

Step 1 - The SMSF will need to be created under the Superannuation Assets tab as a recommended SMSF.

Establishing a self managed super fund (SMSF)

Your superannuation fund plays an important part in building your retirement nest egg, so it is important to consider your options including how are your funds invested and the costs involved. Given the size of your superannuation investment portfolio and your interest in controlling your superannuation investments, we recommend that you establish a SMSF.


Control - A SMSF will give you a greater degree of control over your superannuation investments.

Flexibility - They also afford a greater degree of investment flexibility compared to the use of other superannuation vehicles. For example, you are able to access certain geared investments via a SMSF, and certain personal assets such as listed shares and business real property may be transferred into a SMSF in specie or may be purchased by the fund.

Lower Fees - Provided the SMSF maintains a sufficiently sized investment portfolio there is the potential for lower costs in the long term compared to investing through other superannuation vehicles.


Step 2 - The user will then need to add the assets of the SMSF to the value of the contributions that will be made. Ensuring the assets are added from ‘Start”.

The ‘Recommended Investments – SMSF’ table will Only display Lump sum Investments that have been made in the Additional/Withdrawal p.a. column. No regular investments will be recorded.

Step 3 - The user will need to add Regular or Lump sum contribution/s to the SMSF as an initial injection to the fund.

Summary of Investment Recommendations This section summarises the investments we have recommended for your portfolio. In developing our recommendations we have taken into account your personal circumstances and risk profile, as well as the current economic conditions and portfolio theory.

Recommended Investments - SMSF

Investment Assets Current Amount Additional /

Withdrawal p.a. Proposed Amount

Managed Funds $0 $100,000 $100,000

Total $0 $100,000 $100,000


Establish SMSF (Rollover of Benefits)

Fact Find input

The user needs to ensure an SMSF is created in Fact Find with a Recommended status.

Strategy Input

The user will need to rollover an existing super fund to the SMSF.

Superannuation The generous tax concessions that apply to investments held within superannuation make it the location of choice for long term investments. Individuals who are approaching retirement or who already have access to their superannuation benefits might also consider it for shorter term investments. Of course, the benefits that superannuation offers need to be considered against the limitations it imposes. This section outlines our recommendations as to how you might take advantage of the benefits offered by the superannuation environment without falling into any potential traps.

Rolling over your super benefits into a self managed super fund (SMSF)

Your superannuation fund plays an important part in building your retirement nest egg, so it is important to consider your options including how are your funds invested and the costs involved. Given the size of your superannuation investment portfolio and your interest in controlling your superannuation investments, we recommend that you establish a SMSF and rollover your superannuation benefits into this fund as shown in the table below.

Existing Superannuation Fund Owner Amount

UBS Superannuation - Stable Growth

Fund

John $500,000

Total $500,000


Establish new Super Fund account

Super Input

When adding a super service and using the ‘Product’ options such as ‘Add Recommended Portfolio’, ‘Add Multiple Product’ or ‘Add Product Mix’ the ‘Total Amount’ field needs to be completed and the ‘Input Value’ must be on ‘ Amount’. This will ensure the new values are populated in the SoA. Adding a service using the ‘Add Recommended Portfolio’ option will be illustrated: Step 1 – Add a new super service and add a Recommended Portfolio in the Asset Mix tab

(Shown on the Right)


Step 2 - Add super contribution/s to the fund to inject an amount to the asset mix. When a contribution is made the user will have an option to create asset transactions. In this case purchase amounts have already been entered.

Establishing a new superannuation account

Your superannuation fund plays an important part in building your retirement nest egg, so it is important to consider your options including how are your funds invested and the costs involved. We recommend that you establish a new superannuation account and invest into a diversified portfolio of managed funds as shown in the table below.

Superannuation Assets Owner Lumpsum

Contributions

Regular

Contributions

Macquarie Wrap - Super John


Growth Fund

$54,000 $0


Fund

$52,000 $0


Fund

$20,000 $0

MLC Inv Trust MLC Platinum

Global Fund

$20,000 $0


Growth Fund

$54,000 $0

Total $200,000 $0


Rollover of Super Benefits

Super Input

The user can consolidate to super in many ways, however one commonly used strategy requires special attention - ‘Consolidation from an existing service to a new service’. This will be illustrated below. Step 1 - Add a new service and then consolidate the existing service/s.

Step 2 - The user will need to make a Lump sum Withdrawal from the existing service/s equal to the value of the consolidated amount. To do this Modify the existing service/s – go to the Asset Mix tab and Add Lump sum Withdrawal.

Rolling over your superannuation benefits

Your superannuation fund plays an important part in building your retirement nest egg, so it is important to consider your options including how are your funds invested and the costs involved. We recommend that you rollover your superannuation benefits into as shown in the table below.

Existing Superannuation Fund Owner Amount Consolidate Into

Col FS FirstChoice Personal Super John $100,000 Macquarie Wrap

- Super

Total $100,000


The Withdrawal must be entered in the service otherwise the super information will not be correctly represented in the SoA. This only applies when the user is in ‘On’ mode. A withdrawal is not required for directly held superannuation assets (i.e. superannuation products not held within a service).

Personal Summary

Superannuation Assets

The table below summaries the transactions required to implement your superannuation strategy.

Super Assets Owner Lumpsum

Contributions

Regular

Contributions



Balanced

($50,000) $0

CFS FC PersSuper - CFS Balanced ($50,000) $0

Total ($100,000) $0


Rebalance Existing Superannuation

This section will populate with text and a table. Please note, this table will populate from the information entered into Strategy.

If the Compare: Super module is being used then this table will automatically populate from the information entered within the Compare: Super comparisons screen (Investment Options and Fees).

Rebalance your superannuation product(s)

We have reviewed your existing superannuation fund(s) and, based on your current goals and objectives, the following adjustments to your portfolio are recommended:

Superannuation Assets Current Portfolio Recommended Portfolio

John Amount ($) % Amount ($) %

ASGARD

Superannuation

ASGARD Super Inv

Trust-Capital Stable

$0 0.00% $40,000 23.53%

ASGARD Super Inv

Trust-Growth Fund

$85,000 50.00% $45,000 26.47%

ASGARD Super Inv

Trust-Managed Fund

$85,000 50.00% $85,000 50.00%

Total $170,000 100.00% $170,000 100.00%

We have made this recommendation for the following reasons: Risk and Return - There have been significant market movements since your

portfolio was originally implemented which has created an overweight position within the asset class, and underweight position within the asset class. Given your approach to investing this is not an ideal position to be in as it creates and less diversification within your portfolio. Your reviewed portfolio will form an asset allocation in line with your risk profile.


Lump sum withdrawal from super

Super Input

Make a Lump sum Withdrawal by selecting the Add Cash Wd/Recont button.

Making a lump sum withdrawal from superannuation

We recommend that you make a lump sum withdrawal from your superannuation assets. The table below outlines the amounts that we recommend you withdraw and an estimate of the associated tax liabilities.

Superannuation Assets Owner Super Components Amount Tax

Payable

Tax Free Taxable

BT SuperWrap PSP Jenny $0 $30,000 $30,000 $0

Total $0 $30,000 $30,000 $0


Implementing a Recontribution Strategy

Strategy Input

Add a Recontribution strategy within the Pensions/Withdrawals tab.

The user can only use the ‘Recontribution (Super)’ option when modelling this strategy.

Implementing a recontribution strategy

A superannuation recontribution strategy involves withdrawing funds from superannuation and using the proceeds to make non-concessional contributions back into superannuation. Non-concessional contributions are contributions made to a superannuation fund using after-tax dollars. We recommend that you implement a recontribution strategy as shown in the table below.

Superannuation Assets Owner Withdrawals Contributions

BT SuperWrap PSP Jenny $60,000 $60,000

Total $60,000 $60,000

The withdrawn components and associated tax liabilities are estimated in the table below.

Superannuation Assets Owner Super Components Amount Tax Payable

Tax Free Taxable

BT SuperWrap PSP Jenny $0 $60,000 $60,000 $0

Total $0 $60,000 $60,000 $0


Making concessional (self employed) contributions

Strategy Input

Add Regular or Lump sum Self Employed contributions.

‘Max Conc’l Cont’ option does not populate the SoA at this stage, therefore the ‘Other 'option should be selected under the’ Add Regular’ contribution.

Making concessional (self-employed) contributions to superannuation

Someone who is unsupported (i.e. no superannuation contributions are being made by an employer on their behalf), or substantially self-employed (where income from an employer is less than 10% of total assessable and exempt income, reportable employer superannuation contributions and reportable fringe benefits), may claim a tax deduction for contributions into superannuation. These are a type of concessional contribution. We recommend that you make concessional contributions into superannuation as shown in the table below.

Superannuation Assets Owner Lump Sum

Contributions

Regular

Contributions

Transferred

From

BT SuperWrap PSP Jenny $10,000 $0

Total $10,000 $0


In-Specie Transfer of Investments into Super as Concessional

Contribution

This tag would primarily be used to transfer direct properties or direct equities to an existing SMSF. Refer to the investment property example below:

This tag can only be selected when the ‘Making concessional (self-employed/Other) contributions’ is also checked otherwise the sentence that relates to in specie transfer will not populate the SoA.

Strategy Input Step 1 – Make a Lump sum Withdrawal to the Investment Property

Making concessional (self-employed) contributions to superannuation

Someone who is unsupported (i.e. no superannuation contributions are being made by an employer on their behalf), or substantially self-employed (where income from an employer is less than 10% of total assessable and exempt income, reportable employer superannuation contributions and reportable fringe benefits), may claim a tax deduction for contributions into superannuation. These are a type of concessional contribution. We recommend that you make concessional contributions into superannuation as shown in the table below. We also recommend that you make an in-specie transfer of your investments into superannuation as a concessional contribution. An in specie transfer involves a direct transfer of assets between structures in place of a cash contribution or withdrawal.


Contributions

Regular

Contributions

Transferred

From

COIN SMSF John $350,000 $0

Total $350,000 $0


Step 2 – Make a Lump sum Concessional Contribution to the SMSF to the total value of the withdrawal in Step 1.

Step 3 - Add the Investment Property to the SMSF with a zero value and make a Lump sum Investment to the value of the withdrawal.





Investment Property $0 $350,000 $350,000

Total $0 $350,000 $350,000


Making Concessional (Salary Sacrifice) Contributions

Strategy Input

Add Lump sum or Regular Salary Sacrifice contributions.

‘Up to Conc’l Cap’ option does not populate the SoA at this stage, therefore the ‘Other’ option should be selected under the’ Add Regular’ contribution.

Making concessional (salary sacrifice) contributions to superannuation

Salary sacrificing involves directing part of your pre-tax salary into superannuation rather than receiving it as cash. This is a type of concessional contribution. We recommend that you make salary sacrifice contributions into superannuation as shown in the table below.


Contributions

Regular

Contributions

Macquarie Wrap - Super John $0 $15,000

Total $0 $15,000


Implement a Transition to Retirement Income Stream

Strategy Input Step 1 – Enter the relevant withdrawal transactions against the underlying assets within the super service.

Step 2 - Add a TTR pension under the Pensions/Withdrawals tab to the value of the withdrawal in step 1.

Commencing a transition to retirement pension

A transition to retirement pension is an income stream which allows individuals who have reached their preservation age to access their superannuation benefits, without having to permanently retire from the workforce. We recommend that you use your superannuation benefits to purchase a transition to retirement pension as shown in the table below. Each year you will be able to draw 4 - 10% of the account balance, until you reach age 65 or permanently retire from the workforce.

Pension Details John

Pension Summary

Age when Pension Purchased 60

Pension Description Col FS FirstChoice Pension - Allocated

Gross Amount Invested into Pension $150,000

Tax Free portion of Amount Invested $0

First Year Payment Summary

Recommended Pension Payment before Tax $6,000

Minimum Allowable Pension Payment $6,000

Maximum Attainable Pension Payment $15,000

Tax Free Payment Percentage* 0%


Ensure 'TTR' is selected under the income tab.

For the correct values to appear in the ‘Summary of Investment Recommendations’ table, the user needs to ensure the withdrawal is made from the super account. This only applies to ‘On’ mode.




Amount

Additional

Investment /

Withdrawal

Proposed

Amount



Balanced

$150,000 ($75,000) $75,000

CFS FC PersSuper - CFS Balanced $150,000 ($75,000) $75,000

Col FS FirstChoice Pension -

Allocated

John

CFS FC Pens - Perpetual Balanced

Growth

$0 $75,000 $75,000

CFS FC Pens - Perpetual Conservative

Growth

$0 $75,000 $75,000


Making non-concessional contributions

Strategy Input

Add a Lump sum or Regular non-concessional contribution:

The co-contribution paragraph in the SoA output will appear automatically if the client/spouse is eligible and this has been selected and calculated in strategy. This paragraph notes an assessable income of $61,923. This has been rounded up by 3 cents due to the reduced amount applied of 3.333 cents. The user will need to manually adjust this figure to $61,920.

Making non-concessional contributions to superannuation

Non-concessional contributions are contributions made to a superannuation fund using after-tax dollars. Non-concessional contributions made by individuals with assessable income below $61,923 may be entitled to a government co-contribution. Under this scheme, the government may contribute $0 into an individual's super fund for every $1 of non-concessional contributions made up to a certain limit. The maximum co-contribution is $1,000, and is reduced by 3.333 cents for every dollar of assessable income (plus reportable employer superannuation contributions) over $31,920. The co-contribution completely phases out at an assessable income of $61,923 per annum. We recommend that you make non-concessional contribution(s) into superannuation as shown in the table below.


Contributions

Regular

Contributions

Transferred

From

BT SuperWrap PSP Jenny $10,000 $0

Total $10,000 $0


In-Specie Transfer of Investments into Super as a Non-

Concessional Contribution

This tag would primarily be used to transfer direct properties or direct equities to an existing SMSF. Refer to the investment property example below:

This tag can only be selected when the ‘Making non-concessional contributions’ tag is also checked otherwise the sentence that relates to in specie transfer will not populate the SoA.

Strategy Input

Step 1 – Make a Lump sum Withdrawal to the Investment Property

Making non-concessional contributions to superannuation

Non-concessional contributions are contributions made to a superannuation fund using after-tax dollars. We recommend that you make non-concessional contribution(s) into superannuation as shown in the table below. We also recommend that you in specie transfer your investments into superannuation as a non-concessional contribution. An in specie transfer involves a direct transfer of assets between structures in place of a cash contribution or withdrawal.


Contributions

Regular

Contributions

Transferred

From

COIN SMSF John $350,000 $0

Total $350,000 $0


Step 2 – Make a Lump sum non-concessional contribution to the SMSF to the total value of the withdrawal in Step 1.

Step 3 - Add the Investment Property to the SMSF with a zero value and make a Lump sum Investment to the value of the withdrawal.






Total $0 $350,000 $350,000


Making a Spouse Contribution

Strategy Input

Add a Spouse Contribution using the Non-Concessional option and selecting the 'from Spouse' tick box'.

Making a spouse contribution to superannuation

A spouse contribution is a non-concessional (after-tax) contribution paid by your spouse into your superannuation account. If your income is below $13,800 per annum, your spouse may receive a tax offset of up to 18% on the contributed amount, up to a maximum of $540 per annum. We recommend that your spouse make a spouse contribution into your superannuation account as shown in the following table.

Superannuation Assets Owner Spouse Contribution

BT SuperWrap PSP Jenny $10,000

Total $10,000


5.2 Compare: Super The Word tags under this section will only be applicable if the Compare: Super module has been 'turned on' for the user (this will only be possible if the appropriate licensing has been purchased).

Reasons for product Recommendations

By ticking this word tag a section entitled 'Reasons for Superannuation Product Recommendations' will populate within the Summary of Investment Recommendations section.


Product Replacement

The product replacement table will populate from Compare: Super. The table itself is broken into several 'sub tables'. Each one can be individually selected by using the relevant word tag option. This table automatically populates with the current and proposed position amounts as per the details within Compare: Super under 'Comparisons: Investment Options and Fees'. The Investment balances will be displayed as per the recommendations screen. Some manual adjustment may be required to ensure the table correctly reflects the recommendations made in Compare: Super.

Product Replacement Our advice recommends that you replace an existing financial product with an alternative product. The table below outlines the possible consequences of replacing the existing product, i.e. the costs that you may incur and benefits that you may lose if you accept our recommendations.

Replacing investment product(s)

Investment balance:

Superannuation Assets Recommendation Transaction

movement*

Investment

Balance

Exit/Termination

Fee

John: Current Position

Col FS FirstChoice

Personal Super N/A N/A $100,000 $0

ASGARD

Superannuation N/A N/A $170,000 $0

John: Proposed Position

Col FS FirstChoice

Personal Super Rolled-over ($100,000) $0 $0

ASGARD

Superannuation Retain/ Rebalance $0 $170,000 $0

Macquarie Wrap -

Super Recommended $100,000 $100,000 N/A

* No initial/exit fees have been deducted from any fund for the purposes of this comparison


Other points to note regarding the sub-tables:

Initial Costs table – calculations in this table are based on the positive moves.

Ongoing Costs – calculations are based on the investment balance.

Ongoing Contribution Fees – calculation are based on the regular contribution amounts entered.

Other transaction Costs – The switching fee etc and comes from Compare: Super Features comparison (i.e. there is no calculation, it is just a straight population from features areas. For Direct Share brokerage the adviser will need to edit manually.)

Please note, if you do not have Compare: Super the Product Replacement table will appear blank and will need to be manually completed.

Ongoing costs:

Superannuation

Assets

Admin

Fee

Managemen

t Fee

Member

Fee

Other

Costs Rebates

Total

Costs

John: Current Position

Col FS FirstChoice

Personal Super

$100,000

$0

(0.00%)

$1,809

(1.81%)

$0

(0.00%)

$0

(0.00%)

($262)

(0.26%)

$1,547

(1.55%)

ASGARD

Superannuation

$170,000

$2,210

(1.30%)

$0

(0.00%)

$0

(0.00%)

$0

(0.00%)

($0)

(0.00%)

$2,210

(1.30%)


Consequences/Potential Lost Benefits

This section will populate a table that the user can manually amend to include details of any potential lost benefits a client may face as a result of rolling over their superannuation.

If you are using Compare: Super, the details entered on the Potential Lost Benefits tab under the 'Additional Potential Lost Benefits' section will also populate as bullet points under the appropriate headings.

Consequences of replacing products

The following list outlines some of the possible consequences if you change from your existing investment/insurance products to the recommended investment/insurance products.

Replacing Investments

The following list outlines some of the possible consequences that you may incur as a result of changing from your existing investment products to the recommended investment products.

The benefits you may gain from replacing your existing financial products include:

Greater diversification within investment portfolio and reduced volatility;

The benefits you may lose include:

Your money will not be invested in the financial markets during the funds transfer period;

Other significant consequences that you may incur as a result of acting on our advice include:

This is an example of an additional potential lost benefit in relation to investment.


5.3 SMSF Recommendations

SoA Output Establish Cash Reserve for SMSF

Strategy Input

Add a new Cash a/c in the SMSF. This is done under the asset mix tab for the SMSF.

When adding a ‘Cash Reserve’ the user will need to ensure the following is completed before the correct cash value populates the SoA: Ensure the Investment Type is ‘Cash’ Do Not check the ‘Set as WCA’ option Ensure the ‘Retain’ field is on ‘Yes’

Self Managed Super Fund The recommendations outlined below aim to assist you in achieving the objectives of your SMSF and its members, whilst taking into account their risk and return preferences and a SMSF investment strategy.

Establishing a cash reserve

We recommend that you establish cash reserve by investing $100,000 in an appropriate at-call cash management account.


Holding these funds in a secure cash investment will help to ensure that you will have sufficient liquid funds available to meet unexpected expenses as well as regular commitments such as pension payments or accounting fees.


Funds invested in cash will provide you with income, but not capital growth. This generally means that, over the long term, the investment returns on your cash reserve may be less than if you invested into growth assets (such as shares and property).


Ensure updated Investment Strategy

Strategy Input

No input is required. The table is static and requires adviser input. This option should always be checked when advising on SMSFS to ensure the Investment Strategy information appears in the SoA.

Ensuring an appropriate investment strategy is in place

The trustee of a SMSF is responsible for managing its funds on behalf its members. The trustee has a legislated duty to formulate and implement an investment strategy that will guide all subsequent investment decisions. This investment strategy must take into account the whole circumstances of the fund and its members. We recommend that you ensure that an appropriate and updated investment strategy is established for your SMSF. In line with your personal risk profile, we have assumed that your investment strategy will allow for the following asset allocations.

Asset Class Range Benchmark

Cash

Australian Fixed Interest

International Fixed Interest

Australian Shares

International Shares

Property

Other


Selling or Reviewing Existing Investments

Strategy Input

Add a Transfer, Investment or Withdrawal to existing assets:

Reviewing your existing investments

We have reviewed your existing investment portfolio and, based on the goals and objectives of your SMSF and its members, the following changes are recommended:


Contributions

Regular

Contributions

Cash COIN SMSF $100,000 $0

Existing Managed Funds COIN SMSF ($150,000) $0

Investment Property COIN SMSF $350,000 $0

Managed Funds COIN SMSF $500,000 $0

Col FS FirstChoice Investment COIN SMSF

CFS FC Inv - FirstChoice Growth $37,500 $5,000

CFS FC Inv - FirstChoice High

Growth

$37,500 $5,000

CFS FC Inv - FirstChoice Moderate $37,500 $5,000

CFS FC Inv - FirstChoice Property

Securities

$37,500 $5,000

Total $950,000 $20,000


Borrowing to invest in SMSF (excludes Self Funding

Instalments Regular investments using gearing

Strategy Input

The information on both these word tags is static and appears under the heading ‘Borrowing to invest’ this section requires adviser input even if the modelling has been completed in Strategy. The table that relates to the regular gearing is not coded to populate the SoA and therefore manual input is required.

Borrowing to invest

Borrowing to purchase investments can be a tax effective way of creating wealth over the longer term. This is referred to as 'gearing'. Larger investment returns can be achieved provided that the total return produced by your geared investment portfolio exceeds the costs of the borrowing. A SMSF is able to borrow money to acquire any asset which a SMSF is permitted to acquire directly, subject to certain conditions. We recommend that you implement a gearing strategy through your SMSF, borrowing through a limited recourse arrangement to invest as outlined in subsequent recommendations. We also recommend that you make regular additional drawdowns of per annum from your loan to further build your investments.

Loan Details Loan Description

Borrower

Loan Type Limited Recourse Loan

Repayment Type

Lender

Initial Drawdown

Annual Drawdown


Lump sum Investments (Managed Funds or Equities) Regular investments (Managed Funds or Equities) Investments through Platforms

Strategy Input

Add recommended investment/s via a platform or direct – Regular or Lump sum Investments/Withdrawal:

The information on all three of the above word tags appear in the section ‘Investing in managed funds and direct equities’

Investing in managed funds

Managed funds are a type of investment in which your capital is pooled with capital from many other investors. The decisions regarding the selection and management of the investment portfolio are then taken care of by a professional fund manager. Managed funds are practical for all portions of a portfolio. We recommend that you invest into a portfolio of managed funds through the platform as shown in the table below, and elect to have all distributions reinvested/directed to a cash account. We also recommend that you establish a regular savings plan to supplement your initial investment with contributions of $20,000 per annum.


Contributions

Regular

Contributions

Cash COIN SMSF $100,000 $0

Investment Property COIN SMSF $350,000 $0

Managed Funds COIN SMSF $500,000 $0

Col FS FirstChoice Investment COIN SMSF

CFS FC Inv - FirstChoice Growth $37,500 $5,000


Growth

$37,500 $5,000

CFS FC Inv - FirstChoice Moderate $37,500 $5,000


Securities

$37,500 $5,000

Total $1,100,000 $20,000


Borrowing to invest using Self Instalment Warrants

Strategy Input

Add an Instalment Warrant into the SMSF by adding ‘Other Investment Loan’:

For this strategy to populate the SoA the user will need to ensure the word ‘Self Funding Instalment’ or ‘SFI’ is visible in the ‘Description’ field.

Investing in Self Funding Instalment Warrants Borrowing to purchase investments can be a tax effective way of creating wealth over the longer term. This is referred to as 'gearing'. Larger investment returns can be achieved provided that the total return produced by your geared investment portfolio exceeds the costs of the borrowing. Instalment Warrants are a type of geared investment permitted for use by SMSFs that may be traded in the same way as ordinary shares. They allow you to acquire an asset (usually direct equities) for only a fraction of its market value and borrow the difference. Instalment Warrants are considered 'Self Funding' when the income received from the investment is used to cover the interest costs associated with the packaged loan. Should you not wish to take full ownership of the shares at the end of the term you are not required to repay the outstanding loan balance. We recommend that you invest via Self Funding Instalment Warrants as shown in the table below.

Loan Details Self Funding Instalment Warrant

Borrower COIN SMSF

Lender

Loan Type Self Funding Instalment Warrant



Annual Drawdown $0

Interest Rate 6.00%

Loan Details


5.4 Superannuation Income Streams

SoA Output

Commence an Account Based Pension

Strategy Input Add an Account Based Pension:

.

Commencing an Account Based Pension

An account based pension is a retirement income stream which can be purchased using superannuation funds. We recommend that you use your superannuation benefits to purchase an account based pension as shown in the table below.

Pension Details John

Pension Summary

Age when Pension Purchased 67

Pension Description Macquarie Wrap - Pension

Gross Amount Invested into Pension $1,880,181

Tax Free portion of Amount Invested $643,204

First Year Payment Summary

Recommended Pension Payment before Tax $94,009

Minimum Allowable Pension Payment $94,009

Maximum Attainable Pension Payment $1,880,181

Tax Free Payment Percentage* 34.21%


6 Insurance Recommendations

When recommending insurance the above tag should be checked. In addition to this:

The user can use Inc or the Insurance Tool to ensure the insurance needs analysis populates the ‘Insurance’ section of the SoA.

The recommended insurance policy should be saved to the Insurance tab within Fact Find (this will automatically happen if you select 'recommend' within Inc).

The 'Summary of Recommended Insurance' table will populate based on the Recommended Insurance policies within Fact Find. Existing insurance policies that are to be retained will also be included.

o Where an existing policy is to be retained you can simply leave the status as 'existing'. o Where an existing policy is to be replaced you must ensure you tick the 'policy is to be replaced' tickbox. o Where a recommended policy is to replace an existing policy you must ensure you tick the 'this is a replacement policy' tickbox.


In order for the Insurance Commissions to populate correctly the ‘Initial Commission’ and ‘Ongoing Commission ‘fields should be completed. You should also ensure the ‘Use Annualised Policy Premium’ radio button is selected.


7 Centrelink Recommendations

If any of the above tags are checked and the client is eligible for the Centrelink benefit in the first year of the projections (and this has been selected and calculated in Strategy) the appropriate tables will be populated. The Age Pension section is shown below as an example.

Accessing the Age Pension

The Age Pension is a regular payment from the government for a person who has reached retirement age. The maximum available entitlement depends on whether you are single or in a couple. Once that has been determined, the amount of your entitlement (if any) depends on your level of income and assets. The following tables summarises your estimated entitlements under the Assets and Income Tests. Note that the actual benefit payable is the lower of the entitlements determined by these tests.

Eligibility Assessment - Assets

John - assessable assets $111,841

Total assessable assets $111,841

Excess assessable assets $0

John - Assets Test Payment Entitlement $1,944


A word tag for the Commonwealth Seniors Health Card is also available. Selecting this will ensure the relevant text for this benefit populates the SoA however, the adviser will need to edit this section.

The Commonwealth Seniors Health Card

The Commonwealth Seniors Health Cards provides assistance with the cost of prescription medicines and other services. It is available to those who are of Age Pension age, but do not qualify for the Age Pension. Other services may include: Bulk-billed GP appointments, at the discretion of the GP (the Australian Government provides financial incentives for GPs to bulk-bill concession card holders). A reduction in the cost of out-of-hospital medical expenses above a concessional threshold, through Medicare Safety Net. Your eligibility to receive the Commonwealth Seniors Health Care Card is dependent on your marital status, number of dependants and your level of income. The following table summarises the threshold that applies in your situation and our estimate of your assessable income and eligibility.

Eligibility Assessment Income Test

Maximum Adjusted Taxable Income for Eligibility $50,000 or $80,000

Your Adjusted Taxable Income

Commonwealth Seniors Health Card Eligibility Yes / No

http://www.centrelink.gov.au/internet/internet.nsf/payments/age_pension.htmhttp://www.medicareaustralia.gov.au/yourhealth/our_services/suhc.htm


8 Estate Planning Recommendations

If any or all of the above tags are checked the relevant sections will be populated under section ‘Estate Planning’. This section will populate with text only, you will need to personalise this in line with your client's situation. When you select the 'Establish Binding Death Nominations' word tag the relevant text will populate as well as a table showing all of the superannuation assets that exist in the recommended position for the client and spouse.

.


Placing binding death nominations over superannuation benefits

Superannuation assets do not always form part of your estate and so are not necessarily under the control of a will. Instead, binding nominations can be used to direct superannuation accumulation and pension assets to eligible beneficiaries (or estate) in the event of death. We recommend that you establish a binding death benefit nomination over your superannuation assets as shown in the table below, nominating an appropriate beneficiary.

Superannuation Assets Owner Nomination Type

BT SuperWrap PSP Jenny Binding

Macquarie Wrap - Super John Binding

COIN SMSF - John John Binding

COIN SMSF - Jenny Jenny Binding

Similarly, when you select the 'Establish Reversionary Beneficiary' word tag the relevant text will populate as well as a table showing all of the entries that exist in the 'pensions/withdrawals' tab within the recommended position for the client and spouse.

You will need to edit the table as well as the 'nomination type' column.


Placing reversionary nominations over superannuation benefits

A reversionary nomination can be used to direct your superannuation pension benefits to an eligible beneficiary in the event of your death. We recommend that you establish a reversionary nomination over your superannuation pension assets, nominating an appropriate beneficiary.

Superannuation Asset Owner Nomination Type

Cash Withdrawal Jenny Reversionary

Macquarie Wrap - Pension John Reversionary


9 Fee Disclosure To populate the Adviser Entitlement splits correctly the user will need to ensure these splits are created at the Dealer Group Level first under the following path Preferences – Dealer Group – Products/fees– Commission Groups.

In this screen you are entering the default 'Adviser Entitlement' (Commission split) that you would like to use for all of the products within the products database. As a default all products will sit in the 'unallocated' group. You can create additional groups of products and set different commission splits for each separate group.

Otherwise, the user can override the Dealer group commission splits under the following the below path Preferences – User – Fees & Commissions – Adviser Commission.


The SoA will only pick up the Adviser commission splits that are displayed in the two tables shown above table. Please note, even if these splits are amended in Strategy at the product level, the changes will not be reflected in the SoA.


9.1 Tiered Fees The Generic SoA includes Tiered Fee Structures. The user will need to ensure this is set up at the Dealer Group level first (refer to the Help Guide for more information on Tiered Fees). The menu path is as follows: Preferences – Dealer Group – Key Dealer Group Settings – Services

Once the fees have been set up they will be visible in Strategy and will populate the SoA.

Other costs to you

You may incur other costs through the products we have recommended. You should read the Product Disclosure Statement for each product thoroughly to ensure you understand the fees and costs that may apply.

Tiered Fees

Col FS FirstChoice Personal Super - Upfront Fee - John

$0 to $100,000 5.00% $5,000

$100,001 to $200,000 4.50% $0

$200,001 to Unlimited 4.00% $0

Total $5,000

BT SuperWrap PSP - Ongoing Fee - Jenny

$0 to $500,000 0.80% $560

$500,001 to Unlimited 0.70% $0

Total $560


10 Miscellaneous Information In the ‘Recommended Investments – Personal and Superannuation’ and ‘Recommended Investments – SMSF’ tables under Section 6, the 'Additional/Withdrawal p.a. column' will only reflect Lump sum additions/withdrawals that have been modelled in Strategy.



Amount

Additional

Investment /

Withdrawal

Proposed

Amount

Bhp Billiton Limited John $50,000 $0 $50,000

Macquarie Wrap - Super John


Growth Fund

$0 $2,700 $2,700

BT Wholesale - Active Balanced Fund $0 $2,600 $2,600

Deutsche Australian Equities Alpha Fund $0 $1,000 $1,000

MLC Inv Trust MLC Platinum Global Fund $0 $1,000 $1,000

Perpetuals Wholesale Balanced Growth

Fund

$0 $2,700 $2,700



Withdrawal p.a.

Proposed

Amount

Managed Funds $0 $500,000 $500,000


Cash $0 $100,000 $100,000

Existing Managed Funds $200,000 ($150,000) $50,000

Col FS FirstChoice Investment


Securities

$0 $42,500 $42,500


Growth

$0 $42,500 $42,500

CFS FC Inv - FirstChoice Moderate $0 $42,500 $42,500

CFS FC Inv - FirstChoice Growth $0 $42,500 $42,500

Total $200,000 $970,000 $1,170,000


In Section 7 under ‘Comparison to current situation’ a graph will appear based on your selections within Strategy under the recommended scenario. Within Strategy you should select:

The desired 'view year' as this will determine the number of years included in the graph. (This will also affect the ‘Total expenditure, total income & net investments graph)

The 'Compare Manager' should be utilised to select the scenarios you would like to have appear within the graph.

At least one 'comparison' graph should be viewed within Strategy. This effectively 'generates' the graph in the background to ensure it populates within the SoA correctly.

soa guide - research.coinsoftware.com.au€¦ · the right hand column displays the expected soa...

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