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SMSF Advice


Managing a Self Managed Superannuation Fund

With much freedom comes much responsibility

Like other superannuation funds, self-managed super funds (SMSFs) are a way of saving for your retirement in a tax effective manner. The key difference between an SMSF and other types of super funds is generally, that members of an SMSF are the Trustees of the fund and run it for their own benefit, and have responsibility for ensuring that it complies with the SIS Act. and its Regulations.

With a SMSF you decide how to invest and thus have a wider choice of investments than standard off the rack funds. A SMSF can invest in a broader selection of investments including property and, if you are self employed, small business assets.  

Click here to read our article The Four Key Mistakes that SMSF Trustees make when investing in property.

  • A SMSF can have a maximum of four fund members and can include family members, giving the fund more super to invest. Assets held inside an SMSF are usually shielded from bankruptcy but are the property of the fund and not available for members personal use
  • SMSF's aren't for everyone and you should think carefully before deciding to set one up. It's a major financial decision and you need to have the time and skills to do it. Either way you should certainly get professional advice.
Remember all financial & investment decisions carry risk, so it's important to think carefully about your investment options to balance the level of risk against the level of financial return. You also need to be sure your super investments are legalDrew Browne

Investing in Property through a SMSF

For SMSF’s that choose in invest in property as part of their considered investment strategy, banks and other mortgage providers will require a Certificate of Financial Advice along with funder specific additional requirements and documentation.

This can be a difficult document to obtain as it requires a licenced and experienced professional with an unusual broad skill set and understanding of your funds investment plan, trustee deed and member’s needs.

At Sapience, we are Authorised Credit Representatives and understand non-recourse mortgage lending, are licenced Financial Advisers & Planners (Authorised Representatives of an AFSL) and hold a higher level of expertise with regards to SMSF investments. This breath of expertise means we can comfortably work with SMSF Trustees to help them comply with different sections of the SIS Act and we can provide Certificates of Financial Advice.

If you are a SMSF Trustee and need assistance meeting your member insurance responsibilities, whether you need a Certificate of Financial Advice, or want to update your documented investment plan, we can help you.

Get in touch with Sapience today. Simply leave your details and request a call back.


Wealth Management


Managing Wealth

…it means different things to different people and it can be measured in many ways, including money, but its certainly not just about tax

Whether you're a young executive wanting to protect the returns from your hard work, whether you're a self employed person, maybe you have an SMSF and want to align your personal belief with ethical investment choices - perhaps you manage family wealth for the future generations or maybe you have just come in to some 'extra funds' or whether you just want to make sure that wealth can be transferred to your loved ones - outside a Will that can be challenged - in a tax effective manner - a second opinion about wealth management options is an important part of your plan.

At Sapience we understand that while almost everyone is working towards financial independence. We also understand that different people have different ways to measure wealth and different goals and ideas for what they’re going to do when they reach that milestone.

Together we will work to find a solution that works with your attitude, level of experience and your goals.


Questions to ask when planning your Will

Estate Planning - Checklist

Key Issues to consider when your planning on making a Will.

Quick questions to ask yourself, ask your spouse (and then your solicitor)

It is important your estate planning strategy ensures that those you care about are appropriately provided for. Today's families and relationship structures are complex, so are the issues involved when you're making sure everyone you love is looked after.

Families with Children

  • Have you nominated a guardian for your children?
  • Should your Will make provision for investment income to be paid through a trust to avoid the minors losing much of the income from the estate in tax?
  • Do you have sufficient assets in the estate to provide an income stream to the minors? If not, have you sufficient life insurance to create an estate for them as an alternative?
  • Does your Will make provision for your assets to be held in a trust to protect the minors' interests?

Families with Children who may be facing bankruptcy, divorce, or who own their own businesses

  • Does your Will cater for a testamentary trust for each child to protect your assets from creditors or
  • bankruptcy?
  • Does your Will protect your assets if a child faces divorce - so your assets do not pass to your children's ex-spouses?

Families with a Large amount of Superannuation or a SMSF

  • Should you make a binding nomination with your superannuation fund to provide certainty as to who will receive your superannuation benefits? Or do you want your super paid to your estate?
  • Will your superannuation benefits be paid in the most tax effective manner? If the payment of your superannuation is made to non-dependants, it must be taken as a lump sum and tax of up to 16.5% could be payable. If your superannuation is paid as a lump sum to dependants there is no tax.

Families with Siblings who may be 'spendthrifts'

  • Does your Will provide a structure that will prevent spendthrift children from squandering your assets?
  • Do you want your Will to have provisions that will maintain your assets for the benefit of your grandchildren?
  • If this is a concern, there are specialised products that can be put in place that are outside your Will and the reach of those who may challenge it.

Families that Own a Family Business

  • Will your family business pass to those that you want to control it?
  • Will the control of the business pass in the most tax effective manner?

Families with members who are Disabled or Infirm or who have special needs

  • Does your Will have a trust structure to provide for the long term care of family members who are disabled or infirm?

Multiple Marriages and Children from Other Marriages

  • Does your Will ensure that children from all your marriages will be looked after?
  • Do you need your Will to ensure that your assets pass to your children and not those of your current spouse?
  • Does your Will protect your current spouse from the claims of previous spouses?
  • Does your Will need to provide for an ex-spouse?

Get in touch with Sapience today and request a call back.


Death duties inside your super fund?

Are death duties are hiding in your super fund!

It pays to know the rules about your Super.

New superannuation laws now make your beneficiaries liable for unexpected tax bills if you overlook this aspect of your financial plan.  Most people know that withdrawals for your super are now tax free for retires over 60. But the next question is, What happens to your money when you die?

Scroll down to read the full article below or click on the download link.

Get in touch with Sapience today. Simply leave your details here and Request a Call Back at a time convenient to you.

Can't see this document? Click Me

Drew Browne's portrait
Drew Browne
Founder, Author & Senior Adviser @ Sapience Financial & Investment now celebrating 15+ years of helping Gen X & Y and Small Business Owners. Ask Drew about giving back to the community, special needs children & young adults, Fair Trade Coffee, & helping the worlds extreme poor out of poverty through microfinance – we dare you!

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Myth busting life insurance

Debunking the myths about professional insurances

Strange things some people believe.

Most people wouldn't decide to insure half the value of their car, so why do most Australians only have half the life insurance cover they need? There are a number of reasons - people think they already have enough, they believe they don't need insurance or they think that its too expensive. These reasons and more are myths.

Let's debunk those myths and face the facts, because it's important for you and your family that you base your future on facts not myths.

Myth 1 - I have enough insurance inside my super

Unlikely. Remember the minimum level of cover provided via your super fund is set with all members in mind so its unlikely to be exactly the level of cover you and your family need. More likely than not, it wont cover all or even most of your debts. Make sure you contact your super fund to find out your level of cover.

Myth 2 - I don't need insurance, the Government will look after me if I get sick or injured

This would be nice but it's not really the case. Centrelink will pay a maximum disability pension of $569.80 per fortnight for singles and $475.90 (each) for couples 1. Would this cover your current lifestyle? This equates to less than $34 a day for a couple.

Myth 3 - Workers' compensation will cover me

Not usually. Workers' compensation only covers accidents or injuries that occur during working hours or for an illness that's the direct result of your employment. The majority of accidents and illnesses occur outside of the workplace. So if you want to protect your lifestyle and your family it's unwise to rely on workers' compensation alone.

Myth 4 - Life Insurance is not affordable

For most Australians insurance is very affordable. For example, a 35 year old male, non-smoker applying for $500,000 of Life Insurance cover the monthly premium would be approximately $30. A 35 year old female, non-smoker applying for $500,000 of Life Insurance cover the monthly premium would be approximately $25.

That's peace of mind for less than the cost of a coffee a day. If you have some existing cover, increasing this to adequate levels may cost you even less than that coffee. You may find a budget planner a useful tool to help you see how you could free up the spare cash to ensure you have the right level of cover. Depending upon your circumstances, you may be able to have your Income Protection insurance premiums paid from your employers superannuation fund.

Contact Sapience today to learn more about this specialised service.

Myth 5 - Life Insurance companies do not pay claims

Simply not true. Insurers do pay claims. In fact Life Insurance companies pay out almost $10 million every working day in claims to customers2. This figure would be even higher if the Australians had adequate levels of cover.

Sapience clients have received in excess of $1,000,000 in claim payments.

Myth 6 - Many people have to pay higher premiums or cannot get life insurance at all

Insurers are in the business of giving people access to insurance at an affordable price. If they failed to do this, they wouldn't have a business. Data from IFSA indicates that around 93% of applicants pay standard premiums for their life insurance3. People who have a higher risk of developing chronic illness or who work in high risk occupations are usually required to pay an extra premium to cover this risk - but this only applies to a few people (the remaining 7% of applicants). And only a very small number are not able to be covered at all.

Myth 7 - Most people have enough insurance

Unfortunately, this is not the case. In fact, research shows that 60% of families with dependent children do not have enough insurance to cover the household expenses for a year if the family bread winner were to die4. We also know that on average those that have death cover through their super policy have less than half the level of cover they need5.

Ironically, most Australians insure their homes and cars but less than a third insure their most valuable asset - their income. This causes unnecessary hardship for numerous Australians.

Get in touch with Sapience today. Simply leave your details and request a call back.

1 Centrelink website. Rates are a guide only and are effective from 20th March 2009.
2 IFSA analysis based on APRA data and Risk Store data 2007
3 IFSA, industry underwriting analysis 2007
4 IFSA/TNS Protection Gap research 2005
5 IFF/AIST Research, 2008

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