In this case study episode, Stuart shares a real-life example of how his approach to financial planning helped a client transition from an underperforming self-managed super fund (SMSF) to a more efficient and transparent investment structure.
The client had an SMSF managed by stockbrokers, heavily concentrated in Australian shares with minimal international exposure. After reviewing the fund's performance, Stuart found it had underperformed an industry fund by over 3% per annum.
Rather than divesting the existing shareholdings, which were trading below fair value, Stuart recommended transferring the assets in-specie into separate super wrap accounts for the client and their spouse. This allowed the client to maintain transparency over their direct investment holdings while eliminating the compliance obligations and costs associated with running an SMSF.
Stuart highlights the advantages of super wrap accounts, including the ability to defer capital gains tax until assets are sold, and the potential for substantial tax savings over time, especially for large balances with minimal turnover.
The episode emphasises the importance of regularly benchmarking investment performance and considering cost-effective alternatives to SMSFs, such as wrap platforms, which can provide full transparency while minimising administrative burdens and compliance costs.
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IMPORTANT: This podcast provides general information about finance, taxes, and credit. This means that the content does not consider your specific objectives, financial situation, or needs. It is crucial for you to assess whether the information is suitable for your circumstances before taking any actions based on it. If you find yourself uncertain about the relevance or your specific needs, it is advisable to seek advice from a licensed and trustworthy professional.
Ep 308: Warning: Does one spouse deal with all financial matters?
Case Study: Financial freedom through property and super: a 15-year success story
Ep 307: How do you know if you’ve been too risk adverse?
Case Study: What to do with employee shares
Ep 306: Should you buy an investment-grade apartment or a house in a secondary location?
Case Study: Beginning building wealth later in life
Ep 305: End of financial year tax planning tips for 2023/24
Case Study: Property investors: know when to diversify
EP 304: What is a strategic asset allocation? Why does it matter?
Case Study: Make life easier for your loved ones
Ep 303: Melbourne property will deliver the strongest growth over the next decade
Case Study: Restructuring a share portfolio across two ownership structures
Ep 302: To what extent should you factor in an inheritance?
Ep 301: Advice for first time property buyers and their parents
Case Study: Overcapitalising isn’t necessarily a big deal
Ep 300: Is it safe to borrow to invest in shares? If so, how?
Case Study: Spending more in the first 15 years of retirement
Ep 299: 20 years of poor property growth… is the property party over?
Case Study: Rebuilding wealth post-divorce
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