Like us, some of our clients are small to medium sized business owners. They enjoy the freedom of running their own business, being their own boss and building relationships with their clients who value the service they provide. With hard work and careful planning, self-employment can bring financial and lifestyle rewards. But without the certainty of a regular income, being a small business owner requires support so you can grow and prosper.
As a financial adviser, we can discuss ways in which you can manage your cash flow, set aside money for tax, grow your retirement savings, protect your income and set up a plan should you, or a business partner, exit the business for any reason.
Meet William and Isabella...
William and Isabella's lives revolve around raising their kids and running their small family-owned business.
William and Isabella have worked hard for what they have. They've always had a good cash flow budget in place and are constantly looking for ways to get ahead. With the amount of wealth they've built over the years, William and Isabella are now anxious about how to best protect it.
Their main concern is protecting their business and income with their main priority to increase their personal savings and reduce their level of debt. Having a thriving business that is well protected into the future is central to their personal financial goals and funding their children’s education.
William and Isabella are concerned that if one of them becomes ill and needs to take time off from the business, the other one will not be able to manage on their own and will need to employ additional staff to assist them. This would be an extra cost to the business and would be disruptive to the smooth running of the business which may have an impact on their staff, they would hate for any of them to leave. The customers are used to the staff and have a good relationship with them, which aids in the business success.
William and Isabella were not sure where they should start and needed some specialist advice.
In seeking professional advice they were able to:
- review their current financial position and business protection plan
- assess the potential risks to their business if they were to suffer accident, illness or premature death
- tailor a business and wealth protection strategy that was suitable for them and their business
- be confident they could continue to pay expenses and the business could thrive without them if needed. They were pleasantly surprised to find out that if they needed to hire additional staff in their absence, there were business protection plans that could facilitate this.
With the knowledge and support they received, William and Isabella were confident they were more in control of their financial future.
Meet Ruby...
Ruby is a very family orientated person. As a single mother with two children, her priority is creating a support network with her extended family and earning a reasonable income as an executive at a publishing company.
On her way to work one morning, Ruby was involved in an accident that landed her in hospital with several broken bones. She needed to take a few months of work.
While such an event would be a tragedy in anyone’s life, for Ruby it had a far more destructive impact because she was worried about how she would pay the bills and look after her children. This additional stress led to a post-traumatic stress disorder that caused mild depression which she needed help to overcome.
Ruby’s condition was going to take a lot of time and resources to heal and her income protection insurance was to play a major part in that journey.
The primary benefit of Ruby’s income protection policy was a monthly income benefit during the time she was unable to work enabling her to continue to pay her bills. A critical part of her recovery was the intense rehabilitation she needed to pay for.
Fortunately, Ruby’s financial adviser had the details of her income protection policy and was able to provide guidance on receiving her full benefits, including supplementary benefits that provided extra funds to pay for a specialist rehabilitation adviser.
Ruby’s rehab adviser formulated a therapy strategy, along with her GP. This included continual communication with her family on how they could best assist with her treatment.
Ruby would never be able to resume her own occupation at such a high level, so her the insurer’s rehab adviser secured re-training within the industry, enabling her to find a job that supported her physical and mental wellbeing and allowed her to work flexible hours around her children’s school hours.
Without the appropriate income protection plan in place and expert guidance from her financial adviser, Ruby’s recovery may have had an entirely different outcome.
Many Australians can identify with Ruby. At some point in our adult lives, we will be faced with our own 'big life' events. This might be an accident, illness, redundancy, or dealing with the death of a loved one. Your wealth protection plan may play a role in how you are able to deal with these life events.
Seeking financial advice can help you to create a tailored wealth protection strategy that is appropriate for you. There are different options for holding wealth protection cover inside and outside of super so it does not need to make a big impact on your personal budget.
Meet Tracey…
Tracey and her daughter Michaela are a mother-daughter power team who work together in a florist Tracey set-up on her own twenty years ago. It is a successful business and has grown immensely over the last decade as they have won a few key commercial contracts. When Michaela finished school she joined her mother in the business. Tracey had been contributing to superannuation since it began in 1992, and when Michaela joined the business she set up a fund for her.
With the business going well, Tracey decided she wanted more control over the decisions on how she invested her superannuation, which was her third largest asset after her business and her apartment.
Tracey got to talking to one of her regular clients who was a local financial adviser. After reflecting on their conversation, Tracey made an appointment with him to discuss setting up a self-managed super fund (SMSF). As her super balance was close to $500,000 and she was willing to put time and effort in to the management of the fund, it made sense to her. Tracey was used to managing a business so the administration of the fund as a trustee came easily to her. As she now had more control, Tracey became a lot more interested in the investment markets and is expanding her knowledge. She regularly reads the newsletter her financial adviser sends her with the latest updates and information. Over time her fund grew at a pace she was happy with.
Tracey and Michaela decided to keep Michaela’s superannuation with an industry fund because she was young, had a low balance, and was not interested in monitoring and controlling her own super fund while she was busy studying, travelling and working in the business.
Last year, the space Tracey leased for the florist went on the market. The business was going well and a lot of goodwill was attached to its location. Tracey made an appointment with her adviser to discuss how she might go about buying it.
The adviser suggested she use some of the money from her SMSF to buy half the property and buy the other half of the property with equity in her apartment. In doing this, when she pays commercial rent, half goes into her super fund and half to herself. As this is a business property, the medium term plan is, after further contributions to the super fund, Tracey and her adviser will discuss the option of using the SMSF to buy out her share of the property.
Tracey is happy having greater control over her financial future but she would not be able to manage the fund, keep up with changing legislation, understand the investment market and be aware of tax implications without the assistance of her adviser. Tracey’s adviser provides a lot of assistance and is very proactive in communicating with her, including reminders about reviewing her SMSF strategy and investments.
If you feel an SMSF may be the right strategy for you, or you want assistance with your existing SMSF, contact us to start the discussion.
We all want to be young for as long as possible, enjoying the best life has to offer, but inevitably, we all get older and our needs and level of care change as we enter different phases of our life. Managing these changes can be stressful and emotional as we want to make good decisions for ourselves and those we care about.
If you or a loved one has reached the stage where some form of aged care is required, there are many things to consider.
As a professional financial adviser specialising in aged care, we can help you understand where to start. We can explain the types of care available, the costs, whether you need to consider selling the family home and how the age pension comes in to play.
Aged care can be complex and the rules and legislation are constantly evolving, but you don’t need to be overwhelmed. Some sound advice can help you understand your options and make a decision that is right for you and your loved ones.
Meet Louise…
Louise is an only child and a mother. She is the primary carer for her parents whose health was declining. Louise visited them a couple of times a week, and had organised additional home care services to support her parents, however, with their declining health, her own family and a career, she was finding it increasingly difficult to provide the care they were needing. It was becoming apparent that it would not be long before they would require more care than she could provide.
Louise needed to make some decisions about their ongoing care, which she found overwhelming. She needed some advice so she could identify the key issues and gain some clarity about their options and all the costs involved.
The first issue Louise wanted clarification on was accommodation options. What were they, how could they afford them and what impact did that have their current assets? She made an appointment with a financial adviser who broke it down in to one simple objective – to achieve the best care for her parents without spending more money than necessary.
The financial adviser explained that the issues around assets, income, pension entitlements and the type of care wanted or needed are all interrelated and complex. There is no ‘one-size-fits-all’ solution.
Upon the recommendation from her adviser, Louise spoke to the family doctor, the Aged Care Assessment Team, her parents’ solicitor and Centrelink to understand their entire situation. She was overwhelmed with information but her financial adviser was able to help her sort through the complexities.
Together, they developed an aged care plan that enabled her to find suitable accommodation for her parents based on the level of care they needed and budget. He helped her structure her parents’ assets including the family home and investments to benefit from available Centrelink entitlements and create an ongoing income solution.
Louise knew she could not have done this on her own and is in regular contact with her financial adviser who continues to help her monitor her parents’ finances and living arrangements. Louise is confident that should the time come when her parents need a higher level of care, her financial adviser can assist her to make the right decisions.
You may need to seek advice for someone you care about. If you need to make decisions around aged care but are unsure where to start, it may start with a simple conversation with one of our aged care specialists.
