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Archives for August 2018

Benefits of an SMSF

Previously, I highlighted the findings of the Australian Securities and Investment Commission (ASIC) report after reviewing 250 self-managed super funds (SMSF). ASIC does not regulate SMSFs, the Australian Tax Office does and trustees are held directly accountable.

At The Investment Collective, we assess the appropriateness of an SMSF, provide tailored written advice in the form of a Statement of Advice and present the recommendation where you are encouraged to ask questions to better your understanding.

Why should you set up at SMSF?

A client of mine established an SMSF to take back control of their superannuation by removing any influence from large financial institutions and unions. They wanted more investment choices and to be involved when choosing the underlying investments that are appropriate for their risk profile. Both members are now benefiting from the additional income from franking credits.

Another client established their SMSF once we conducted a fee analysis of their previous super fund provider. We highlighted all the fees and additional transaction, operational, borrowing and property costs they were paying. With their new SMSF the client has a very transparent fee structure and is now saving thousands each year. This client had a share portfolio in their name that we were able to directly transfer to their SMSF, increasing their superannuation benefit. We managed their capital gains over a few financial years and transaction costs were cheaper than going through a share broker.

In many instances, our clients’ are surprised how stress-free maintaining their SMSF is. We assist clients to look after and oversee almost all of the administrative tasks. We also connect our clients’ to professional SMSF administrators to complete the annual compliance obligations.

As you can see, there might be benefits to establishing an SMSF depending on your circumstances. The Investment Collective can assist you in an analysis of your current superannuation provider. Please contact us to arrange a review.


Please note this article provides general advice, it has not taken into consideration your personal or financial circumstances. If you would like more tailored advice, please contact us today.

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Teach Your Children to Save Money

Teaching your kids about money and how to manage it can be daunting. Between internet banking, cards, and pay wave – money doesn’t really exist. Approximately 68% of Australian parents show some reluctance to talk to their children about money and believe that digital money is making it harder for kids to understand. Open up the conversation, encourage them to save, teach them about cash, savings and budgeting. Here are 5 tips to get started:

  1. Start with a piggy bank or money box

Encourage your children to save their money until the money box is full! Whether the money comes from helping around the house, birthdays or even finding spare change. Once the money box is full, go to the bank together and open up a savings account. Then encourage them to start all over again!

  1. Savings goals

When your kids really want that new toy or game or whatever it might be, encourage them to save up for it. Use a separate jar/money box to save up for that specific thing. Whenever they find or earn money they can decide how much of it to contribute to their savings goal or their regular money box so that they learn to make a choice as to whether to spend or save.

  1. Keep track of their money

Make a savings goal chart. A good place to start is the price of whatever they’re saving for or a general goal, ask them how much they want to save. Then as they add money to their money boxes and savings jars, they can update the chart. Together, you will know how much they’ve saved and it will encourage them to see progress.

  1. Talk to them about money

Have an open discussion about money and savings. Explain the benefits and disadvantages to cash, the difference between bank cards and credit cards, the variance between a salary and wages. Talk about how much products and services cost, about the average wage and how they can save. This type of open dialogue will help their understanding. Actually encourage your children to use their money to pay for something they want. This will help them learn how to count out the money required for the purchase and remind them to check their change.

  1. Look for good deals together

It might be comparing prices at different stores and online for what you or they are looking to buy. Or maybe comparing brands and sizes for prices at the grocery store. Encouraging your children to look for good deals and specials is something fun for them to do, but also a good lesson on not spending money unnecessarily.

Please note, this article is for general advice purposes only. It has not taken into account your personal circumstances or financial goals. If you would like to learn more about how The Investment Collective can help you, please contact us today.

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Is A Self-Managed Super Fund Right For You?

Australian Securities and Investments Commission (ASIC) recently released a report after reviewing 250 self-managed super funds (SMSF) files. These SMSFs were randomly selected based on Australian Taxation Office (ATO) data.

The report highlighted a poor standard of advice provided on SMSFs. They found 91% of the files reviewed were non-compliant. Non-compliant advice included process failures, poor record keeping and increased risk of financial loss for lack of investment diversification mainly due to a single investment property.

An SMSF allows a member to purchase property within the superannuation environment and I am often asked about how to facilitate this. However, what most clients do not realise is that property is capital intensive, costly to maintain and tends to offer a very low income. An SMSFs sole purpose is to provide retirement benefits for the members or their dependents. Therefore I have to ask my clients, is property appropriate for your retirement when you need to draw an income?

At The Investment Collective, we assess the appropriateness of an SMSF for every client.  We look at many factors and alternatives and then provide a detailed analysis for our clients’ to make an informed decision. If you have thought about establishing an SMSF you should consider the following:

  • The balance of your superannuation
  • Costs involved to set up and running an SMSF
    • According to ASIC a starting balance below $200,000 the setup and operating cost are unlikely to be competitive with other options
  • Willingness and ability to manage the SMSF and meet trustee obligations
  • An investment strategy that suits the needs of members
  • Members Insurance needs
  • Lack of government compensation available for SMSFs

Please note this article only provides general advice, it has not taken your personal or financial circumstances into consideration. If you would like more tailored advice, please contact us today.

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Is Bookkeeping Taking Too Much Time?

Why did you go into business? To become a bookkeeper?

Chances are your answer is no, yet the hours you spend ‘balancing the books’ tell a different story.

In 2018 there is no need for bookkeeping and business compliance tasks to take up a significant amount of time. Further, your accounts payable and receivable can be updated daily with very little effort. Consider what this means for you and your business in real terms. What if your business expenses could be automatically coded by taking a photo? What if reminders to customers for overdue accounts were automated? How much time would you have back if bookkeeping took less than an hour a week? And what would you do with all your new-found free time?

The technology exists for all of the above to easily become your reality. The hours you save can be invested into growing your business or spending more time with your family. At this point most business owners say changing and learning new software is ‘too hard’ and ‘what we do has always worked in the past’. That may be true but at what cost? 10 hours per week vs 1 hour. In terms of cost and efficiency, the difference is hard to ignore. Then there are the advantages of having real-time business financial reports at the touch of a button.

A word of caution – seek advice to ensure the settings are correct from the start so you can enjoy the benefit of accurate up to the minute figures and reporting for your business. Of all the work that comes to our bookkeeping team; fixups are the most common and usually the most expensive.

Please note that the above is provided as general advice and not taken your personal, financial or business circumstances into consideration. If you would like more tailored advice, please contact us today.

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