Welcome back!
Scene One – Providing Entity
Hi Doris! Peter here from Quill Group Financial Planners, presenting to you your personalised video Statement of Advice on the XX of February 2025. My authorising licensee and contact details are on the screen now, should you wish to reach out to me at any time. Okay, lets get right into it.
Same as all Scene 1
Scene Two – The Client
retired, married, adult children, like to travel
they have $350,000 spare cash following a property sale and want to look at how to best invest this money.
Doris, you are married and living the retired life, enjoying activities such as travel and holidays.
You have come to me seeking advice to invest $350,000 surplus cash from the proceeds of a property sale.
Show Doris as a 74yo Caucasian female, standing smiling with a husband next to her. Then show another image of flying plane and island.
Then show Money Bag with label $350k and show Investment Portfolio image next to it.
Scene Three – Scope And Goals
You would like to ensure that you have sufficient cash flow to maintain your lifestyle in retirement.
Doris, we agreed that this advice will cover investment advice within your superannuation platform, as well as pension advice.
Your goal is to ensure that you have sufficient cash flow to continue maintaining your lifestyle in retirement.
Scope:
1. Superannuation (investment)
2. Pension
Goal:
Sufficient cash flow in retirement
Scene Four – The Advice
Doris, make a Personal (Non Concessional) Contribution of $350,000 from your available cash at bank into your existing Macquarie account based pension.
Your superannuation fund balance will increase from $194,744 to $444,744 once the non-concessional contribution has been made. This contribution will form part of the tax-free component of your superannuation benefits, allowing them to be paid tax free to beneficiaries upon your death.
The non-concessional contribution cap for the current financial year is $120,000. Note that financial penalties apply if this cap is breached. If you exceed your non-concessional cap, the excess amount may be taxed at 47% if not withdrawn. You may also incur a general interest charge on the additional tax liability if not paid by the due date. You must be under age 75 to make this contribution.
Doris, refresh your existing Macquarie account based pension and draw the minimum payment of $1,851 per month ($22,220 per annum).
An account based pension is an easy way to manage your retirement savings. The level of income drawn from your account based pension will help meet your lifestyle needs, and can be varied each year in the event your lifestyle needs change. You also have access to lump sum withdrawals when you need the extra cash. As you are over age 60, the pension payments will be received by you tax free. No tax is paid on the investment returns earned by the underlying investments, and no capital gains when selling underlying investments.
There is a minimum income requirement that must be drawn from your account based pension depending on your age. As you are aged 74, your minimum required annual payment is 5% or $22,220. Account-based pensions are not guaranteed to last for your lifetime. They will cease once the account balance is exhausted.
Doris, retain your existing Macquarie Pension Manager account, and invest the additional funds into the EQ Diversified Separately Managed Account (SMA).
We recommend investing additional funds into your existing EQ Diversified SMA, in line with your Balanced risk profile. Maintain a minimum of 1.25% of your portfolio in the Macquarie Cash Management Account (CMA) to cover fees etc, and arrange to have all investment income paid into the portfolio cash account. Where your Pension account requires a cash top up, drawdowns should come from the EQ Diversified SMA.
The performance of your investments is not guaranteed and it is important to understand that your expectations for investment return may not be met. You will need to maintain a minimum balance of $25,000 in the recommended Separately Managed Account portfolio.
My first advice is to make a non-concessional contribution of $350,000 from your cash surplus into your existing Macquarie account-based pension. As a result of this advice, your fund balance will increase to $544,744 and will increase the tax-free component of your super benefits. Please note however, that this contribution must be made before you turn 75, and if you exceed the $120,00 non-concessional cap for this financial year, the excess amount may be taxed at 47% if not withdrawn, including additional general interest if any resulting liability is not paid by the due date.
My second advice is to refresh your account-based pension and draw the minimum monthly payment of $2,270, amounting to $27,237 per annum. This is an easy way to manage your retirement savings, as the level of income drawn will meet your lifestyle needs, can be varied each year, can be withdrawn as lump sums, and there is no tax payable on either the withdrawals or the investment returns. Please note however, that the pension is not guaranteed to last for your lifetime, and will cease once the account balance is exhausted.
My final advice is to retain your existing Macquarie Pension account and invest the additional funds into the E Q Diversified S M A, in line with your balanced risk profile. I recommend you maintain a minimum 1.25% of your portfolio in cash to cover fees and arrange to have all investment income paid into cash also. If your pension requires a cash top up, drawdowns should be made from the E Q Diversified S M A. Please note that the performance of your investment is not guaranteed, and you will need to maintain a minimum balance of $25,000 in the recommended S M A.
1. Show Money Bag labelled $350k and blue arrow pointing to Nest Egg with label Pension underneath and Macquarie brand logo on top. Then show green vertical arrow next to Nest Egg, same height, with arrow head on top and label the top of this arrow $544,744. Then show red "!" sign (https://stock.adobe.com/au/search?k=%22caution+symbol%22&asset_id=964178039) and label "Before 75" next to it, and then under it another red "!" sign with label "Under $120k cap (47% tax)" next to it.
2. Show Nest Egg with Macquarie logo on top, and show a recycling symbol over the building (https://www.cleanpng.com/png-green-symbol-clip-art-recycling-logo-7380051/). Then show blue arrow pointing right from the Nest Egg and label to $2,270per month. Then show four green ticks, and label each one with "meets income needs", "variable income withdrawal", "lump sum withdrawal" and "no tax". Then show Line Graph with red arrow pointing down and intersecting with x-axis, label this point $0 and label y-axis "Balance".
3. Show Macquarie Logo and put green tick over it. Then show label $350k and blue arrow pointing from it to Elston Logo (https://www.elston.com.au/asset-management/multi-asset-smas/) and show Pie Graph showing 60% growth and 40% defensive labelled. Then show three green ticks, label each one "1.25% minimum cash balance", "Investment returns to cash account", and "Sell EQ SMA for lump sums". Then show Investment risk graph, only with the graph and red zig zag line (not the green circles etc) and next to this, label "$25,000 minimum".
Scene Five – Fees And Costs
Product fees
Let's discuss fees.
First of all, great news, there is no upfront fee for the research or preparation of our advice.
There is an ongoing fee, which amounts to $3,795 per annum, deducted from your pension account in equal monthly instalments and annually indexed to CPI. Please note that this has increased from your current fee of $2,194 per annum, due to the increased assets under our management. This ongoing service fee places you on our Essentials Package, which means you will receive an annual meeting with your relationship manager to review your portfolio and strategy, an annual comprehensive portfolio report, an annual review of your risk profile and asset allocation, an annual review of your estate planning needs, and regular contact with me as and when required.
Lastly, please note the following two tables. The first demonstrates that your annual product costs have increased due to further funds under management. The second is your asset allocation, which demonstrates that our investment recommendations are aligned to your 60 40 balanced risk profile.
Put "$ Upfront" label and put a red cross over it.
Show another with "Ongoing fee - $3,795pa" label. Then show three things listed underneath it:
- Annual review meeting
- Annual portfolio report
- Annual risk and allocation review
- Annual estate planning review
- Access to me as your adviser
Show first table, circle the $2,750 at the bottom then draw a horizontal green arrow to the $7,232 and circle that in green. Then show second table and circle the 59.31% on the bottom first in green and then the 40.69% in green.
Scene Six – Disclosures
Doris, we have now covered the advice in full and with that, there are a few important points I need to make.
This Statement of Advice is for your consideration and your use only.
We have based this advice on information gathered from our discussions, and your completed Client Confidential Data Collection Booklet. We have assumed that this information is correct. Should any information have changed or be incorrect, you should contact us so we can review these strategies.
For information regarding benefits, interest and associations, please refer to the Financial Services Guide. We have already provided a copy, however you can view the latest version on our website. Alternatively we can email or post a copy to you on request.
After you acquire certain financial products, a 14 or 28 day cooling off period will apply in certain circumstances. This means you can cancel or transfer to another financial product within this period if you decide this financial product no longer meets your needs. Please refer to the relevant P D S for details regarding your cooling off rights.
Finally, my advice remains current for a period of 30 days from the date of this video. If you decide to implement our recommendations after this time, or if your circumstances change during this time, please contact me so we can confirm that the advice continues to be suitable for you.
Doris, this advice purely considers your interests only, and is therefore in your best interests. Please sign the A T P if you wish to proceed with my advice. Otherwise, if you have any questions, please let me know. Thank you!
1. This SoA is for you only.
2. Let us know of any incomplete or inaccurate information immediately.
3. While we do not share any association with any of the products we have recommended in this advice, please refer to our FSG for further disclosures on any broad associations we may have.
4. 14-28 day cooling off period - please check relevant PDS
5. This advice is valid for 30 days from today's date.