Investment structures key to maximising assets
Investors looking to maximise the effectiveness of their assets need to ensure they are being held and managed using the right investment structure, according to Adam Pearsall of Centric Wealth.
Additionally, these structures must be aligned not only with the investor's current financial and family circumstances but also encompass how circumstances may change over time.
"Broadly speaking, there are four main types of investment structures including personal, company, trust, and superannuation ownership," Pearsall said.
"Depending on your particular circumstances, one structure may be more suitable than another."
For example, Pearsall said that some structures were better for tax effectiveness while others could help protect assets from creditors or other claims.
"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."
According to Pearsall, when choosing which investment structure suits your particular circumstances, the key objective was to ensure assets were protected and kept in the most appropriate and tax-efficient structure in order to maximise after-tax income.
"The five most common reasons for using different investment structures are tax effectiveness, protection of assets, estate planning, risk mitigation and delegation of control," he said.
"The majority of investors use a combination of investment structures to meet their particular needs.
"It is very rare for an investor to have only one investment structure for all of their assets."
Originally published on SMSF Essentials.
AUTHOR
Staff Writer
Recommended for you
The financial services technology firm has officially launched its digital advice and education solution for superannuation funds and other industry players.
The ETF provider has flagged a number of developments as it formally enters the superannuation space through a major acquisition.
While all MySuper products successfully passed the latest performance test, trustee-directed products encountered difficulties.
Iress has appointed Insignia Financial’s former general manager of master trust and insurance products as its newest CEO of superannuation, who will take over from Paul Giles.
