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Financial Advisers: Your Partners in Wealth (Part Three – Optimising Tax, Super, and Beyond)

In the first two parts of this series, we touched on the fact that the scope of a financial adviser’s role has evolved beyond simply managing investments, now taking on a more holistic, comprehensive approach to serve the complex needs of clients. This evolution includes offering guidance on emotional financial decisions, like planning for Aged Care, and providing strategies for tax optimisation, particularly in enhancing superannuation balances through tax-effective contributions and thorough tax planning. These important services are critical, both for safeguarding your assets during market downturns, and maximising returns in more prosperous economic conditions. In part three, we’ll look at the benefits of an advice relationship with a financial adviser, with respect to their role in effective tax planning, boosting your super balance, and a few additional tax-related services.

Tax Planning Support

Tax knowledge is an integral part of an adviser’s role, in addition to understanding financial markets and estate planning. Tax expertise becomes increasingly critical each year, especially in superannuation, where caps are continually introduced to limit the amount individuals can hold in tax-effective retirement funds. Our advisers’ access to a specialist Tax team at McKinley Plowman means that even in the most complex situations, we can provide optimised tax planning solutions to fit your needs.

Tax know-how extends beyond superannuation to encompass investing and social security, and tax-optimised advice includes:

• Asset Allocation: Optimising assets across superannuation, investment bonds, and other tax structures.
• Asset Implementation: Delivering tax-effective investment strategies and maximising tax benefits.

Supercharging Retirement

One of the most potent tax-effective investment strategies advisers can employ for most working-age Australians is salary sacrifice. For example, Maria, with an $85,000 salary, can benefit from sacrificing $5,000 into super, incurring $750 in contributions tax instead of $1,725 in income tax. This translates to an additional $975 invested in her super fund, kickstarting the power of compounding.

For older Australians, transition to retirement strategies can provide substantial benefits. These strategies enable individuals to contribute more to super without reducing their take-home pay. However, implementing such strategies can be complex without the guidance of advisers who understand the requirements – hence an advice relationship is critical.

For those with higher super balances, alternative vehicles such as investment bonds and company structures become viable options. Your adviser can guide you through these alternatives, explaining their inherent pros and cons and ensuring optimal implementation.

Other Tax Matters

Advisers offer guidance on various tax-related matters, including:

• Investment solutions with low turnover strategies, tax minimisation overlays, or centralised portfolio management.
• Insurance strategies enabling clients to hold policies in super, thereby offering tax benefits that can be reinvested.
• Navigating entitlement to social security payments like the Child Care Subsidy, Family Tax Benefit, and Parental Leave Pay.
• Determining eligibility for seniors’ benefits such as the Age Pension, Commonwealth Seniors Health Card, and Home Equity Access Scheme.
• Identifying small business grants and incentive payments.

Getting these tax-related decisions right can be challenging for individuals, as tax rules can easily catch them off guard, potentially resulting in penalties.

McKinley Plowman: Your Partners for Life

Understanding these aspects underscores the profound impact a financial adviser can have on nurturing and protecting your tax, super, wealth, and beyond – regardless of market conditions. Effective financial advice encompasses such a broad scope – an understanding of investments and markets, taxation, social security, human behaviour, and so much more. All of these play a crucial role in shaping decisions you make about your money and lifestyle, no matter whether the markets are going up, down, or otherwise.

If you’re ready to gain clarity about your finances and achieve your lifestyle goals, McKinley Plowman’s financial advisers will help you do just that. Please do not hesitate to reach out to us today on 08 9325 2411 (Perth), 08 9301 2200 (Joondalup), or via our website.

written by:

Justin McMillan

Financial Adviser Justin McMillan has been with McKinley Plowman for several years, following our acquisition of his practice Smartwealth. He firmly believes that while financials, investments, and strategies are important in an individual's financial plan, they are simply the vehicles to allow clients to get where they want to be. Justin takes a holistic and rounded approach and focuses on the individual, taking the time to listen and understand what drives and motivates his clients.