Superannuation Of Frank & Heather Barnes Essay

Question:

Discuss about the Superannuation of Frank and Heather Barnes.

Answer:

Develop Appropriate Strategies and Solutions

The review of the current structure and the investment strategy of Edithvale Retirement Fundhas been discovered to have a total asset of $625K. In this respect, the member account of Frank is $380,000, for Heather is $220,000 and for ben is $25,000. It is seen that the asset that is available in the Edithvale Retirement Fund has been segmented into $39,000 for Cheque Account, $50,000 for Term Deposit 1, $25,000 for Term Deposit 2, $211,000 for Share Portfolio and $300,000 for managed funds. It is even seen that the investment strategy has to be increased in order to increase the income that would help ben in undertaking a loan for the purchase of the commercial property. The compliance issue that is existent with the fund is that it has to maintain a minimum amount of fund so that it can be helpful in purchasing the commercial property where Frank operates his business. Frank pays a rent of $75k for the commercial property and in order to purchase the property the fund needs to increase their level of return by undertaking new investments and by increasing the fund value of the share portfolio and the managed funds.


When an individual looks to transfer the their business property into their retirement fund, it is essential to consider a number of issues like the allowable assets, stamp duty, tax consequences and the GST issues. The transfer of the business property to the retirement fund will be possible with the help paying the capital gains and considering the tax and VAT issues. It is even essential to understand the contribution rules and the risks associated with it. The transformation can be completed by paying the administrative charges as well as the taxes that are applicable to be paid. The transfer of the business property to the retirement fund would help maintain the income level of Frank even after retirement. Ben does not have the capability to pay $ 1 million for the mortgage and therefore transferring the business property to the retirement fund and not seeling the business would mean that the fund would have a higher value leading to the banks granting loan for the purchase of the property. The recommendation that can be given is paying off the capital gains and the other existing taxes so that there are no obligations from the government thereby increasing the fund balance of Edithvale.


A strategic planning needs to be undertaken for the clients and it is seen that the fund will be created in such a way so that the expectations of Frank, Heather and Ben can be met. The tax planning and structuring that requires to be paid by the client includes the capital gains tax and GST. Ben does not need to the taxes as his fund amount is $25,000. The couple are in the planning of retiring and therefore it is recommended that the business property is transferred to the Edithvale Retirement Fund thereby improving their income. Ben requires to invest in a superannuation fund in order to increase his income and create a fund for future retirement. The management of the risk should be done by taking advice from the solicitor and accountants so that they can provide recommendations and advise that would reduce the level of risk. The protection of the asset is possible by taking help of the accountant and analysing the market from time to time and investing in the appropriate fund thereby improving the rate of return. The investment advice should be taken from a proper consultant while the management cash flow should be done by the accountant. The level of income and expenses should be maintained in an appropriate manner thereby maintaining profit for the client that can be used for investment purpose. Personal budgeting should be done by allocating the amount that would be spent on various areas and thereby improving the return for the client.

Strategies and Negotiate Solutions

The strategies that would be given to the client would be presented in the form of a formal document where all the recommendations would be written down in an effective manner and this would provide a proper idea to the clients. A meeting will be fixed with the client where all the requirements and the strategies would be addressed in an effective manner so that the clients can gain knowledge and in case of any queries can address them to the consultants.


The steps of explaining the existing assets into superannuation would be done with the help of proper presentation and explaining each and every step and the concessions the clients are supposed to receive. With respect to the special contributions the Frank and Heather are liable for such contributions as they have crossed the age of 60 years. Real estate transfer is possible to the retirement fund as the client have their own house. Concession on capital tax implication is available for Frank and Heather but not for Ben. The two concerns that the clients may raise would be the level of risk associated and what can happen in case of changes in the market and valuation of stock. It is observed that such issues can be resolved by answering that the level of risk is low with the help of suitable evidence and with respect to changes in the market; the client can at any time withdraw the money and can invest in any other kind of portfolio. The clients are proposed a portfolio review and financial plan review so that the investment fund can be managed appropriately. The client would be provided financial review plan and portfolio review so that proper assessment of the managed fund can be undertaken. The associated fee includes the consultation fee and the management fee of the portfolio.

Bibliography

Arnold, Bruce, et al. "Partner-Scale Economies, Service Bundling, and Auditor Independence in the Australian Self-Managed Superannuation (Pension) Fund Industry." Auditing: A Journal of Practice & Theory 36.2 (2016): 161-180.

Bird, Ron, et al. "Experiences of Current and Former Members of Self-Managed Superannuation Funds." (2016).

Cummings, James R. "Effect of fund size on the performance of Australian superannuation funds." Accounting & Finance 56.3 (2016): 695-725.

Earl, Joanne K., et al. "Financial literacy, financial judgement, and retirement self-efficacy of older trustees of self-managed superannuation funds." Australian Journal of Management 40.3 (2015): 435-458.

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