Scope of advice assumptions
Whether a recommendation is considered within a financial model will depend on whether it is set to be in scope by the adviser. The following is a map of what needs to be set in scope for a recommendation to be considered within an “Optimised” financial model. If running a “Deterministic” model then the adviser will need to predetermine the recommendation settings.
| Strategy group | Recommendation description | Adviser set scope |
|---|---|---|
| Cashflow Management | Cash reserve | Review cash reserve |
| Cashflow Management | Set aside cash to meet a planned goal | Always in scope |
| Cashflow Management | Maintain an expenditure plan (budget) | Review budget |
| Cashflow Management | Salary packaging (non-super items) | Tax minimisation strategies |
| Cashflow Management | Elect to use the indexation method for calculating capital gains tax | Always in scope |
| Cashflow Management | Elect to have salary paid into offset account | Review debt structure |
| Cashflow Management | Reduce discretionary spending | Review budget |
| Debt Management | Debt Consolidation (maintain loan repayments) | Debt repayments |
| Debt Management | Adjust your debt repayments (non-deductible debt) | Debt repayments |
| Debt Management | Adjust repayment frequency | Debt repayments |
| Debt Management | Refinance an existing home loan | Debt refinancing |
| Debt Management | Lump sum debt repayment (reduce home loan) | Review debt levels |
| Debt Management | Debt Consolidation (reduce total loan repayments) | Debt repayments |
| Debt Management | Establish a line of credit | Debt refinancing |
| Debt Management | Establish a credit card with monthly interest free terms | Debt repayments |
| Debt Management | Clear your home mortgage | Review debt levels |
| Debt Management | Convert debt to interest only loan repayments | Debt refinancing |
| Debt Management | Establish an offset account | Debt refinancing |
| Debt Management | New debt (home loan and investment properties) | Review debt levels |
| Debt Management | Increase leverage | Review debt levels |
| Debt Management | Lump sum debt repayment (other debt) | Debt repayments |
| Debt Management | Pledge asset as security for a loan | Review debt levels |
| Investment Portfolio | Non-superannuation Platform | Review investment strategies |
| Investment Portfolio | Dollar Cost Averaging | Review investment strategies |
| Investment Portfolio | Retain existing investment platform | Review investment strategies |
| Investment Portfolio | Exchange Traded Funds (ETFs) | Review investment strategies |
| Investment Portfolio | Portfolio recommendations | Portfolio recommendations |
| Investment Portfolio | Asset Allocation | Portfolio recommendations |
| Investment Portfolio | Dividend re-investment | Review investment strategies |
| Investment Portfolio | Superannuation Platform | Review investment strategies |
| Investment Portfolio | Hedge against market risk | Review portfolio risk |
| Investment Portfolio | Hedge against overweight asset position | Review portfolio risk |
| Investment Portfolio | Drawdown approach (best performing asset class first) | Retirement income stream strategies |
| Investment Portfolio | Drawdown approach (worst performing asset class first) | Retirement income stream strategies |
| Investment Portfolio | Drawdown approach (proportional) | Retirement income stream strategies |
| Investment Portfolio | Drawdown approach (classic bucket – defensive first) | Retirement income stream strategies |
| Investment Portfolio | Protected equity investment | Alternative investment strategies |
| Investment Portfolio | Purchase investment property | Investment property |
| Investment Portfolio | Purchase commercial property | Investment property |
| Investment Portfolio | Invest in a SMA | Review investment strategies |
| Investment Portfolio | Invest in a IMA | Review investment strategies |
| Investment Portfolio | Sell assets | Review portfolio |
| Lifestyle | Recommended working days per week required to meet lifestyle | Review working hours |
| Lifestyle | Return to work date | Review working hours |
| Lifestyle | Downsize principal residence | Review principal residence strategies |
| Lifestyle | Hire a nanny | Review child care arrangements |
| Lifestyle | Increase retirement age | Always in scope |
| Lifestyle | Move back into principal residence | Review principal residence strategies |
| Lifestyle | Place child in child care | Review child care arrangements |
| Lifestyle | Purchase a principal residence | Review principal residence strategies |
| Lifestyle | Reduce working hours | In scope if set as an objective |
| Lifestyle | Purchase holiday home | In scope if set as an objective |
| Lifestyle | Rent out holiday home | In scope if set as an objective |
| Lifestyle | Rent out principal residence | Review principal residence strategies |
| Lifestyle | Rent a property | Review principal residence strategies |
| Lifestyle | Rent and buy later | Review principal residence strategies |
| Lifestyle | Sell principal residence & rent | Review principal residence strategies |
| Lifestyle | Upgrade principal residence | In scope if set as an objective |
| Lifestyle | Remain in principal residence and take a home equity release | Review home equity / reverse mortgage options |
| Lifestyle | Remain in principal residence and take out a reverse mortgage | Review home equity / reverse mortgage options |
| Lifestyle | Take paid parental leave | In scope if set as an objective |
| Wealth creation (Super) | Small business CGT concessions (not 15-year exemption) | Contribution strategies |
| Wealth creation (Super) | Withdraw from super | Always in scope |
| Wealth creation (Super) | Reduce mortgage repayments and direct cashflow to super | Contribution strategies |
| Wealth creation (Super) | Personal deductible contribution | Contribution strategies |
| Wealth creation (Super) | Cash out and re-contribute to super | Contribution strategies |
| Wealth creation (Super) | Retain Unrestricted Non Preserved Benefit | Always in scope |
| Wealth creation (Super) | Transfer super from overseas (UK fund) | Rollover advice |
| Wealth creation (Super) | Superannuation co-contribution | Contribution strategies |
| Wealth creation (Super) | Personal deductible contribution to reduce CGT | Contribution strategies |
| Wealth creation (Super) | Non-concessional contribution | Contribution strategies |
| Wealth creation (Super) | Salary sacrifice (superannuation) | Contribution strategies |
| Wealth creation (Super) | Super contribution splitting | Contribution strategies |
| Wealth creation (Super) | Superannuation consolidation | Rollover advice |
| Wealth creation (Super) | Spouse contribution | Contribution strategies |
| Wealth creation (Non-Super) | Small business CGT concessions (eligible for 15-year exemption) | Contribution strategies |
| Wealth creation (Non-Super) | Insurance bond | Review investment strategies |
| Wealth creation (Non-Super) | Contribute to an existing Insurance bond | Review investment strategies |
| Wealth creation (Non-Super) | Gearing within an Insurance bond | Gearing |
| Wealth creation (Non-Super) | Invest a lump sum | Review investment strategies |
| Wealth creation (Non-Super) | Margin lending (instalment) | Gearing |
| Wealth creation (Non-Super) | Gearing (instalment) | Gearing |
| Wealth creation (Non-Super) | Education bond | Review investment strategies |
| Wealth creation (Non-Super) | Gearing (lump sum) | Gearing |
| Wealth creation (Non-Super) | Withdraw Investment | Review investment strategies |
| Wealth creation (Non-Super) | Regular Savings Plan | Review investment strategies |
| Wealth creation (Non-Super) | Income Splitting | Review investment strategies |
| Wealth creation (Non-Super) | Margin lending (lump sum) | Gearing |
| Retirement income streams | Guaranteed lifetime income stream (super) | Retirement income stream strategies |
| Retirement income streams | Withdraw lump sum from pension | Retirement income stream strategies |
| Retirement income streams | Transition to retirement to increase cashflow | Retirement income stream strategies |
| Retirement income streams | Increase your pension payments | Retirement income stream strategies |
| Retirement income streams | Commute your pension | Retirement income stream strategies |
| Retirement income streams | Commence an account based pension | Retirement income stream strategies |
| Retirement income streams | Redeem annuity | Retirement income stream strategies |
| Retirement income streams | Guaranteed term annuity (non-super) | Retirement income stream strategies |
| Retirement income streams | Transition to retirement and salary sacrifice | Retirement income stream strategies |
| Retirement income streams | Withdraw a lump sum from pension and re-contribute to spouse | Retirement income stream strategies |
| Retirement income streams | Commute existing pension, consolidate super, commence new pension | Retirement income stream strategies |
| Retirement income streams | Guaranteed lifetime annuity (non-super) | Retirement income stream strategies |
| Retirement income streams | Decrease your pension payments | Retirement income stream strategies |
| Retirement income streams | Guaranteed term income stream (super) | Retirement income stream strategies |
| Retirement income streams | Retain an existing pension strategy | Retirement income stream strategies |
| Retirement income streams | Nominate 54/11 | Review defined benefit options |
| Retirement income streams | Take defined benefit as a pension | Review defined benefit options |
| Retirement income streams | Take defined benefit as a lump sum | Review defined benefit options |
| Retirement income streams | Take defined benefit as a combination of lump sum and income stream | Review defined benefit options |
| Self Managed Superannuation Funds (SMSF) | Segregation of assets | SMSF strategies |
| Self Managed Superannuation Funds (SMSF) | Limited Recourse Loan | SMSF strategies |
| Self Managed Superannuation Funds (SMSF) | Wind up SMSF | SMSF strategies |
| Self Managed Superannuation Funds (SMSF) | Corporate trustee structure | SMSF strategies |
| Self Managed Superannuation Funds (SMSF) | Transfer business real property into SMSF | SMSF strategies |
| Self Managed Superannuation Funds (SMSF) | Purchase business real property from related party | SMSF strategies |
| Self Managed Superannuation Funds (SMSF) | Establish a SMSF cash account | SMSF strategies |
| Self Managed Superannuation Funds (SMSF) | Contribution reserves | SMSF strategies |
| Self Managed Superannuation Funds (SMSF) | Design an SMSF Investment strategy | SMSF strategies |
| Self Managed Superannuation Funds (SMSF) | Individual trustee structure | SMSF strategies |
| Self Managed Superannuation Funds (SMSF) | In-specie contribution to super | SMSF strategies |
| Self Managed Superannuation Funds (SMSF) | Review your SMSF investment strategy | SMSF strategies |
| Self Managed Superannuation Funds (SMSF) | Pooled or separate investment strategies | SMSF strategies |
| Self Managed Superannuation Funds (SMSF) | Purchase warrant | SMSF strategies |
| Self Managed Superannuation Funds (SMSF) | Establish an SMSF | SMSF strategies |
| Self Managed Superannuation Funds (SMSF) | Appoint an SMSF administration service | SMSF strategies |
| Risk Management | Cancel existing Life Insurance policy | Review insurance policies |
| Risk Management | Cancel Income Protection insurance | Review insurance policies |
| Risk Management | Cancel Total & Permanent Disablement insurance | Review insurance policies |
| Risk Management | Cancel Trauma insurance | Review insurance policies |
| Risk Management | Cancel existing business expenses policy | Review insurance policies |
| Risk Management | Required Life Insurance | Review insurance needs |
| Risk Management | Required Income Protection | Review insurance needs |
| Risk Management | Required Total & Permanent Disablement | Review insurance needs |
| Risk Management | Required Trauma | Review insurance needs |
| Risk Management | Required business expenses | Review insurance needs |
| Risk Management | Business Succession Agreement | Review insurance needs |
| Risk Management | New life policy | Review insurance policies |
| Risk Management | New TPD policy | Review insurance policies |
| Risk Management | New income protection policy | Review insurance policies |
| Risk Management | New trauma policy | Review insurance policies |
| Risk Management | New business expenses policy | Review insurance policies |
| Risk Management | Business Continuance Insurance Funding (key person) | Review insurance policies |
| Risk Management | Business Succession Insurance Funding (Life, TPD & Trauma) | Review insurance policies |
| Risk Management | Life and Flexi-linked TPD insurance (combined) | Review insurance policies |
| Risk Management | Life and TPD insurance (linked policy) | Review insurance policies |
| Risk Management | Life and Flexi-linked TPD and Trauma insurance (combined) | Review insurance policies |
| Risk Management | Life and Super-linked TPD insurance (combined) | Review insurance policies |
| Estate planning | Power of Attorney/Advance Care Directive | Consider estate planning requirements |
| Estate planning | Commute a reversionary pension | Consider estate planning requirements |
| Estate planning | Direct assets via Will for Centrelink purposes | Consider estate planning requirements |
| Estate planning | Reversionary beneficiary | Consider estate planning requirements |
| Estate planning | Testamentary trust | Consider estate planning requirements |
| Estate planning | Binding death nominations | Consider estate planning requirements |
| Estate planning / Tax planning | Establish a Discretionary Family Trust | How to protect asset from creditors / Review tax structures |
| Estate planning / Tax planning | Establish private company | How to protect asset from creditors / Review tax structures |
| Tax planning | Pay dividend from private company | Always in scope |
| Tax planning | Distribute trust income | Always in scope |
| Estate planning | Update will | Consider estate planning requirements |
| Estate planning | Guardianship | Consider estate planning requirements |
| Social security | Gifting to reduce assets and income (within limits) | Review social security strategies |
| Social security | Gifting to reduce assets and income (outside limits) | Review social security strategies |
| Social security | Age Pension | Review social security strategies |
| Social security | Funeral bond to reduce assets and income | Review social security strategies |
| Social security | DVA Service Pension | Review social security strategies |
| Social security | Superannuation to reduce assets and income | Review social security strategies |
| Social security | Family Tax Benefit (FTB) | Review social security strategies |
| Social security | Commonwealth Seniors Health Card | Review social security strategies |
| Social security | Improve the family home to reduce assets and income | Review social security strategies |
| Social security | Disability Support Pension | Review social security strategies |
| Social security | Newstart Allowance | Review social security strategies |
| Social security | Apply for government parental pay | Review social security strategies |
| Aged care | Move into Aged Care | Review aged care options |
| Aged care | Daily accommodation payment for aged care | Review aged care options |
| Aged care | Insurance bond to reduce aged care fees | Review aged care options |
| Aged care | Fund your aged care costs | Review aged care options |
Post your comment on this topic.