Services Used – Wealth Protection, Retirement Planning, & SMSF.
A Yield Client Case Study 
With our advice, can meet retirement income goal of $300,000 net p.a.
Almost doubled super value in 7 years
Focused strategy to minimise tax on sales of properties
Significant diversification benefits and improved liquidity
With our advice, can meet retirement income goal of $300,000 net p.a.
Almost doubled super value in 7 years
Focused strategy to minimise tax on sales of properties
Significant diversification benefits and improved liquidity
Achieving Financial Security for High Net Worth Australians
Financial planning for high net worth individuals in Australia offers tailored solutions, tax efficiency, estate planning, investment advice, risk mitigation, and philanthropic support to affluent families.
Our clients Charles and Brenda are a high net worth couple, who sought guidance on retirement income; property portfolio management; and wealth protection. They aimed to retire with a monthly income of $25,000 p.m. indexed for inflation but were uncertain of how feasible this would be for them. With their priorities in mind, our advisors provided comprehensive solutions for their transition to retirement, mapped several years into the future, to address their goals.
This case study is produced with our client’s permission and demonstrates the benefits of working with a suitably qualified financial planner. It shows how to optimise the financial situation of high net worth individuals in Australia, ensuring comprehensive wealth management and long-term financial objectives are met.
Identifying the needs of HNW clients
Charles and Brenda had developed considerable wealth throughout their working years. Being a surgeon Charles had earnt a sizeable salary throughout his working life, which underpinned the family’s lifestyle needs and gave them free cashflow to invest.
With a preference for property, they acquired a portfolio of 16 properties, which they had grown considerable equity in. This presented a range of opportunities and challenges for retirement, including large debt, complex tax structures and high taxable income to them personally. This type of complexity if not unusual, when planning for the needs of high-net-worth Australians, however, requires deep thought to optimise outcomes.
Of importance we sought to understand their retirement income objective, as this underpins how their assets will be best allocated. Through discussion they presented a range from $20,000 p.m. net minimum through to an ideal target of $25,000 p.m. Our task was to evaluate how achievable this could be and through detailed analysis, we provided them with a clear understanding of their progress towards this target.
We devised a strategic sell-down plan for some of their properties over several years, so they could reallocate some of this money to their retirement income needs and to reduce debt. This approach ensured a streamlined and optimised portfolio aligned with their long-term goals.
Additionally, we offered tailored investment advice across multiple structures, such as Self-Managed Superannuation Fund (SMSF), Trusts, and Companies. By considering their risk tolerance, investment objectives, and tax implications, we crafted personalised investment strategies to maximise growth and efficiently manage their assets.
A thorough review of Charles and Brenda’s insurance needs revealed an opportunity to optimise coverage and reduce costs. With insurance expenses nearing $60,000 annually, we worked to tailor their policies to their current circumstances, providing adequate protection while optimising premiums.
With our comprehensive financial plan, Charles and Brenda gained clarity and confidence in their retirement goals. Our ongoing support and guidance have positioned them on a path of financial security, including investment strategies, and an efficient insurance structure.
HNW Investment Advice
We identified several tax-effective opportunities to maximise their investment potential by utilising their SMSF, family trusts, and a bucket company. A sell-down strategy was devised for their property portfolio, considering factors such as capital gains tax implications, rental income, maintenance requirements, deductibility, and simplification of their trusts to reduce accounting costs.
To reduce debt and boost their superannuation balance, we implemented a focused strategy. While traditionally considered 70% balanced investors, we recommended a 10% tilt towards defensive assets for their non-property assets, resulting in an investment allocation of 60% growth investments and 40% defensive assets. As part of this, we advised different allocations for the various entities they invest through, to help optimise the overall tax outcome. This approach provides them with a far greater diversification than they had, more liquidity to meet their income and lump sum needs, and less single asset risk.
Given they are high net worth individuals, and considerate of their investment experience, Brenda and Charles elected to work with us as wholesale investors. This means we can invest in exclusive opportunities, that are not readily available to other investors, and we can deliver our advice more quickly and succinct, which suits their position, understanding and busy lives.
The investment approach we helped them craft was highly bespoke and diversified, catering to their preference to retain an apartment block of 8 units for retirement income. Their portfolio also comprises a mix of exclusive investments owned directly with product providers, investments traded on the share market including cost-effective ETFs, and investments held on investment platforms that offered access to quality investment managers at low costs.
Responding to their interest in further diversification, we explored the option of contributing funds to our Managed Discretionary Account (MDA) service, enhancing the overall investment allocation.
Through our meticulous investment advice, Charles and Brenda have been able to navigate various investment structures, achieve tax efficiencies, diversify their portfolio, and optimise their retirement income plan. This bespoke approach ensures their investments align with their long-term goals and risk tolerance, providing them with peace of mind and confidence in their financial future.
Insurance Advice
While it appeared that the couple no longer required coverage from a monetary perspective, we recommended retaining some insurance. Given that they were still generating income and to manage potential risks associated with changing market values of assets and increasing interest rates, it was prudent to maintain a level of coverage.
Upon discussing the idea of cancelling all insurance policies, we concluded that retaining policies with level premiums made the most sense. Level premium policies that have been held for some time offer long term accrued savings, compared to equivalent cover available in market today and were affordable for the linked benefit. Consequently, our recommendations included cancelling Charles’ MLC life and TPD policy, cancelling Charles’ AIA life and Trauma policy, and reducing Brenda’s OnePath Life & Trauma cover to $250,000.
Implementing these changes would result in a significant reduction in premiums, from $60,216 to an estimated $31,080. This cost-saving of $29,136 allowed Charles and Brenda to maintain a substantial level of coverage should they require it in the future.
Our insurance advice was designed to strike a balance between managing costs and mitigating potential risks and finding alignment with what they valued in this area. By retaining level premium policies and making appropriate adjustments, Charles and Brenda were able to optimise their insurance coverage while achieving significant cost savings. This approach ensured that their insurance needs aligned with their current situation, providing them with continued peace of mind and financial security.
Retirement Planning
Initially targeting a monthly income of $25,000, we conducted a thorough review to assess their ability to retire comfortably at income levels of $15,000, $20,000, and $25,000 per month.
To achieve their retirement goals, our strategy involved transitioning a portion of their wealth from property holdings and diversifying it into other asset classes that could provide a steady income stream over time. We also focused on reducing debt and transitioning wealth into their superannuation accounts which is an effective strategy for high net worth individuals in Australia.
Through in-depth discussions and multiple meetings, we collaborated with Charles and Brenda to determine an appropriate sell-down order for their properties based on their individual perspectives. This process ensured that their asset portfolio aligned with their retirement income needs.
To manage tax implications, we structured the sell-down strategy in a way that prevented their income from exceeding their required levels. Any excess income generated through capital gains was directed to their bucket company, optimising tax efficiency and cash flow management. Based on our projections, we determined that Charles and Brenda would need to utilise their bucket company to fund their cash flow from the 2024 to the 2026 financial year.
We collaborate with his Accountant and seek to find solutions we think work for their financial plan, and then rely on their Accountants ultimate tax advice. Active communication with Accountants and other trusted advisors is a core benefit of a comprehensive financial planning relationship for high-net-worth clients in Australia.
By implementing our strategic steps, we identified that Charles and Brenda were well-positioned to meet their income needs at their desired levels. The plan also allowed Charles to transition into retirement in line with his preferences. Furthermore, they had the added comfort of having total assets in excess of their needs, providing them with financial security and peace of mind.
Superannuation Advice
After determining the sell-down order for their properties, we focused on identifying the maximum amount they could contribute to their superannuation accounts, considering the tax efficiency of this investment vehicle.
Our recommendation was for both Charles and Brenda to maximise their concessional and non-concessional contributions to superannuation. For concessional contributions, we advised them to contribute $25,000 each year (now $27,500), taking advantage of the tax benefits available, as long as they were under the age of 65. These contributions were estimated to save the couple $6,000 per year in tax, which could be redirected towards boosting their retirement savings.
Upon Charles’s retirement, we suggested establishing account-based pensions to support their ongoing income needs. This approach allowed them to draw from the excess accumulation balance they would have, ensuring flexibility and meeting their desired income levels above the minimum required.
By following our superannuation advice, Charles and Brenda were able to maximise the tax advantages and potential growth within their retirement investments and nearly double their super balance within a 7-year period. This strategic approach not only optimised their retirement savings but also provided them with the necessary income streams to support their desired lifestyle in retirement. Our comprehensive superannuation plan enabled them to make the most of their financial resources and confidently transition into this next phase of their lives, highlighting the importance of financial advice for high net worth individuals in Australia.
Benefits of our Advice
Because of the trust Brenda and Charles have placed in us, we have developed a partnership which will allow us to guide them towards long-term wealth and prosperity. This will underpin their financial success and well-being.
By following our strategic advice, they achieved their desired monthly income of $25,000 and can feel secure they will have a partner to help them manage change from here. We successfully guided them in nearly doubling their superannuation value within seven years through careful planning and effective investment strategies. Our implementation of a focused strategy minimised tax implications during property sales, preserving their wealth and optimising financial outcomes. Emphasising diversification and improved liquidity, we transitioned a portion of their wealth into diversified asset classes, providing stability, reduced risk, and long-term growth potential. Our holistic approach resulted in tangible and transformative results, allowing Charles and Brenda to meet their income goals, witness superannuation growth, benefit from strategic tax planning, diversification, and improved liquidity. They are now well-prepared for a financially secure and fulfilling retirement, highlighting the vital concept of financial planning for high net worth individuals in Australia.
If you find our approach appealing or if you would like to discuss your personal financial situation, we invite you to reach out to us. Our team is dedicated to assisting you in optimising your financial position with prudence and offering tailored high net worth wealth management strategies that align with your unique needs and goals. Contact us today to embark on your path towards financial success.
