Watch your investment structure, says Centric Wealth
Investors should regularly review their investment structures to ensure they get the most out of their money, according to Centric Wealth adviser Adam Pearsall.
Four main types of investment structures - personal, company, trust and superannuation - have different benefits, and depending on a client’s particular circumstances, one structure may be more suitable than another, according to Pearsall.
“The right investment structure is an essential part of the financial planning process because it dictates how your assets work for you, now and in the future,” he said.
“Because investment structures control how your investments are legally owned, it is vitally important you review them when your financial or family circumstances change due to a bereavement, inheritance, divorce or changes to your employment status.”
Centric Wealth tends to recommend personal ownership to clients on a low marginal tax rate who are likely to remain so in the future. Company ownership has one of the highest set-up and compliance costs, but it could be a worthwhile approach if the investor is on a high marginal tax rate or acts as a beneficiary of a discretionary family trust, Pearsall said.
While super is mostly used for its tax effectiveness, trusts are usually appropriate for clients who want to maintain control of their investments, add a layer of asset protection and tax-effectively stream income or capital gains, he added.
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