Financial
 Planning

Capabilities

We combine our wealth of knowledge in financial markets and superannuation legislation with our close relationship with our accounting team to tailor strategies and build a plan and portfolio that meets your needs.

Some of the areas we can assist you with include but are not limited to:

Aged care

Decisions over aged care for loved ones can be an emotional experience - and that's before the additional stress associated with costs of funding the aged care and the complexity of the social security system. So it pays to get well rounded advice and the key is to plan ahead as your loved one's circumstances can change quickly. 

Regardless of the accommodation you or your loved ones decide upon, the high costs and complex financing options for retirement and aged care facilities means many issues need careful planning including:

  • Aged care costs - what are the entry fees (including accommodation deposits and accommodation payments) and ongoing costs (including basic daily care fees, means tested fees and extra service charges) of residential care?
  • Family home - will someone still be living there? Should it be sold? Should it be rented out? Is a reverse mortgage appropriate?
  • Social security - how can we maximise your age pension entitlement by structuring your assets in the right way?
  • Taxation - what special tax offsets may be available when living in residential aged care?
  • Estate planning - have you or your loved ones sorted out the Power of Attorney or Enduring Guardianship?

Seeking financial advice from an aged care specialist during this time can ensure that the decisions that you and your family make will be the right decisions, whilst taking into consideration the impact upon your financial situation, age pension entitlement and aged care costs. Making the wrong decision could result in a loss of age pension, increased aged care costs and a reduced estate to be passed on to the next generation.

Estate planning

In its more simple form, estate planning is all about peace of mind. It’s about making sure that your assets are distributed to your beneficiaries according to your wishes and in the most financially efficient and tax-effective way possible.

Why think about estate planning?

With family structures becoming more fluid, planning your estate has become more important in recent times and often involves much more than just a simple Will.

Family trusts, payouts of superannuation balances and the tax implications for beneficiaries can all be managed with a careful estate plan. Seeking advice from your financial adviser is a crucial step in developing an effective estate plan.

Developing an effective estate plan will ensure that:

  • the tax payable is minimised on the income and capital gains earned on assets;
  • the right ownership and control of your assets passes to your intended beneficiaries; and
  • your assets may be protected if the beneficiary is involved in any legal difficulties (for example, divorce or bankruptcy).

A sound estate plan can assist in avoiding possible difficulties and disagreements for your beneficiaries.

Keep it current

Your estate plan should be reviewed on a regular basis, and particularly when a significant event occurs such as:

  • commencing work
  • changing employment
  • getting married
  • getting divorced
  • the birth of children
  • starting your retirement
  • the death of a relative you have included in your estate plan.

Estate planning is a vital part of your overall financial plan and it should not be left until it’s too late. The events (listed above) can be life altering for you and your loved ones and should prompt you to think about your estate planning needs and objectives.

A checklist has been provided below to assist you with your estate planning objectives and requirements:

An estate planning checklist

Yes

No 

Do you have a valid Will?    
Have you reviewed/updated your Will since the last significant event in your life?    
Does your Will protect your assets to ensure they are not inappropriately diminished?    
Do you know how much money your family would need if you died today?    
Are you and your family financially protected if you were to suffer a serious illness/injury?    
Are you and your family financially protected if you were to become totally and permanently disabled?    
Have you appointed someone to look after your affairs if you die or become incapacitated?    
If you are a business owner, have you considered exit strategies from your business?    
If you are a business owner, have you planned for the future of your business after you die?    

If you answered ‘no’ to any of these questions, it is possible you have a gap in your estate planning needs.

Personal insurance

What’s your greatest asset? Life insurance forms a critical part of the financial planning process, providing financial security for you and your family. A sound financial plan will encompass both wealth creation and wealth protection.

Life is full of unforeseen circumstances which can affect your plans. Life insurance may help you to meet your financial goals and obligations if you lose your ability to earn an income.

Why is life insurance so important?

Life insurance shifts the financial burden from you to the insurance provider who can afford to protect you because of the pooled premiums paid by their customers. Put simply, life insurance is there to provide you with protection against the financial impact of an event such as death, disablement, serious illness or injury.

What type of insurance is available?

There are a range of insurance options available that can be tailored to suit your needs and personal situation. The most common types of life insurance include:

Income protection

Everyone who relies on a regular income needs to consider income protection. Your ability to earn an income is possibly your most valuable asset and should be protected. Income protection can provide you with a safety net if you are unable to work in the event of a temporary disablement due to sickness or accident. It is designed to help maintain your lifestyle by ensuring your cash flow needs and expenses can continue to be met during a period of absence from work. 

The premiums that you will pay for this type of policy are generally tax deductible. If you hold your insurance within super, the super fund is able to claim a tax deduction on income protection insurance premiums which can reduce the cost of the cover.

Life insurance cover

Life insurance cover leaves your beneficiaries with a lump sum to help cater for their financial wellbeing. This will give you the peace of mind of knowing that those who depend on you will not be financially disadvantaged with the burden of maintaining living standards or making loan repayments. As a general rule, you should aim to have enough cover to pay all large debts and provide your family or other dependants with a lump sum that can be invested to earn an income to replace your lost earnings.

Total and permanent disablement cover

Total and permanent disablement (TPD) cover pays a lump sum should you become totally and permanently disabled through illness or injury. Becoming totally or permanently disabled can be a financial burden. It can prevent you from earning an income at a time when you have additional expenses to cover such as medical and/or rehabilitation costs. Your family also suffers from your disablement both financially and emotionally. TPD benefits help ease the financial concerns experienced at this difficult time.

Trauma (crisis) cover

Trauma or crisis cover provides a lump sum payment to help people recover from a traumatic event such as a heart attack, cancer or stroke. This lump sum can be used to ease financial stress during a period of recuperation, where items such as home modifications and specialist medical attention may be incurred.

Things to consider

Should you get your life insurance within your superannuation fund?

Many superannuation funds will provide you with the option of purchasing insurance through the fund. You can potentially benefit from tax deductions and cheaper costs when you hold insurance within a superannuation fund. There is, however, often a wider choice of insurance cover available outside of your superannuation fund.

Understanding insurance definitions

It’s important to understand your cover as it may help you avoid any complications if you or your estate need to make a claim. You should read and understand the product disclosure statement along with the entire policy document. If there’s something you are unsure about, ask your financial adviser to clarify it for you.

How much cover do you need and what type?

You should ensure your cover is adequate and that you are not over, or under, insured. The kind of life insurance that you need depends on a number of factors such as your:

  • lifestyle needs
  • dependants
  • personal financial circumstances.

Your financial adviser can help you select the most appropriate life insurance option and provider, and can review your insurance cover regularly to make sure it remains appropriate to your ongoing needs.

Saving and investing

Many Australians delay taking control of their finances because they don’t have time, they find it too daunting or they may just not know where to start. The reality is that the sooner you take charge, the sooner you can start working towards achieving better results, especially in the long term.

While this information highlights some factors to consider, and how these may impact your finances, it does not replace the need for ongoing financial planning advice that is tailored to your specific needs. Being a successful investor isn’t difficult, but it is important to get the fundamentals right. So where do you start?

Why think about saving and investing?

In the short term, a savings ‘safety net’ frees you up from the stress of living from payday-to-payday. Similarly, in tough financial times or when unplanned expenses arise, you can comfortably access your own savings instead of being forced to use more expensive options such as credit cards, loans and cash advances. In the medium term, a regular savings plan establishes a financial track record (which is essential when applying for finance), and can also help you to reach goals such as a holiday or a new car. In the longer term, effective saving and investing can help to improve your quality of life – possibly supplementing your superannuation when you retire and allowing you to accumulate greater wealth.

While saving is about putting some money aside, investing is about making this money work harder.

Where to invest?

For many people, a high-interest earning account or a cash management account, separate to your everyday banking, is a simple and effective way to start saving and to make your first foray into the world of investing.

When you are ready to start looking at alternative investment options, there are four main asset classes to choose from:

  • cash
  • fixed interest
  • property
  • Australian and international equities (also known as shares).

You can choose to invest directly in these assets – such as purchasing an investment property – or indirectly via a managed fund, which provides you access to multiple options, diversification and consolidated administration.

Either way, your financial adviser will be able to guide you towards the choice that is right for you.

Superannuation

It’s essential that you take an interest in how your superannuation savings are invested as it is likely to be one of the biggest assets you will own. The decisions you make now about your super fund will affect the amount you have in retirement – in other words, your retirement lifestyle depends on it!

Super is one of the most tax-effective ways to save for your retirement. However, there are many different options of super funds available in today’s increasingly complex market and not all super funds are the same.

Generally, Australians can choose where their current employer directs their 9.5 per cent compulsory superannuation guarantee (SG) contributions. Some super funds make it easier to take advantage of tax-effective strategies to add to your retirement savings and some super funds provide insurance cover while others offer greater investment choices.

An important first step is to decide what benefits and features are important to you in a super fund. You can then better match your personal needs to the super funds available, helping you to meet your retirement goals.

Superannuation is an investment strategy for your retirement that you can build up during your working life. Financial advice is important in helping you make the right decisions in a complex superannuation environment.

Key features and benefits of super funds

Guaranteed contributions

If you are working, your employer is generally required to contribute at least 9.5% cent of your salary to your super fund on your behalf (this is known as the superannuation guarantee or SG). Most employees who are who are above age 18 and are earning more than $450 per month are eligible for SG contributions. This applies whether you are full-time, part-time or employed on a casual basis.

Investment options

Your super fund pools your super money with other members’ funds and invests the money in assets, such as property, shares, fixed interest and cash investments. By carefully choosing the best assets, your fund makes sure that the money you contribute is looked after and grows. The aim is to build up as much money as possible for your retirement, to ensure a comfortable lifestyle.

Timeframe

Superannuation is generally a long-term investment. This means that your money has a long time to benefit from the growth of your investments.

Other things to consider:

Fees

To pay for the cost of looking after your super, fees are deducted from your account. Also, as super is an investment, the Government charges tax, albeit at a concessional rate.

Insurance premiums

Sometimes your super fund offers insurance to cover you for death, total and permanent disablement and income protection. If you elect to have insurance cover within your super fund, then the premiums for that insurance are deducted from your account.

Preservation age

The Government has placed restrictions on when you can access your super benefits, to ensure that super is used in retirement and not beforehand. Your preservation age is the Government specified age at which you can gain access to your superannuation benefits, provided you have permanently retired from the workforce. Your preservation age is determined by the year you were born.

Transitioning to retirement

The nature of retirement is changing and so are the rules. If you want to reduce your working hours or even pay less tax without sacrificing your income, a transition to retirement pension could be the answer.

Longer life expectancies mean many Australians are spending more time in retirement than ever before[1] – increasing the burden on our social security system and emphasising the importance of accumulating superannuation.

As a consequence, the Government is encouraging us to remain in the workforce beyond the traditional retirement age.

Did you know that you can access your superannuation while you are still working?

Using a transition to retirement pension you can generally access between 4-10 per cent of your super balance, as long as you’ve reached your preservation age (between 55 and 60 depending on the year you were born).

A better lifestyle on the same income

A transition to retirement strategy allows you to supplement your income by drawing a regular pension payment from your super fund. There are a few ways you can benefit:

  • continue to work full-time but reduce your tax by taking a pension and salary sacrificing some of your income into super;
  • moving from full-time work to part‑time work and replacing lost salary with income from the transition to retirement pension; and
  • as a business owner/operator, you could use a pension to supplement your income needs in quiet times.

A transition to retirement pension may also help reduce your overall tax bill while boosting your total super balance before you retire.

[1] Australian institute of Heath and Welfare – mortality data

EMFS is a  corporate representative of Edwards Marshall Advisory Pty Ltd (EMA), ABN 18 600 878 555, AFSL 479792. Edwards Marshall Advisory Pty Ltd holds the licence to provide financial planning services and product advice. EMFS has four individual authorised representatives of Edwards Marshall Advisory Pty Ltd. They are James Scott-Young, Alana Lesan, Grant Edwards and Steven Wild.