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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This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.
