WEALTH STRATEGIES FOR MEDICAL SPECIALISTS
WELCOME TO THE INNER CIRCLE Odyssey is a leading private wealth services group that specialises in providing strategic financial solutions to medical professionals. Medical professionals present with unique financial circumstances and as such we believe that they should receive specialised strategic advice . At Odyssey we pride ourselves on delivering independent strategic advice to medical professionals through various stages of their lives From the young medical trainee who is looking to implement their first income protection policy and budget for a first home to the astute professional looking to wind down from medical practice. Odyssey believes that knowledge is the foundation of success in all aspects of life and as such we aim to guide our clients into make informed financial decisions Education Program. Odyssey Financial Management has been an avid supporter of numerous medical fraterities including RACS, RACP, ANZCA and the RACGP and have been actively involved in developing and presenting non product based education programs to their members aimed at providing medical specialists with practical and relevant information in the key areas of business and personal financial management. With Odyssey as your financial services partner, you have the assurance of sound, relevant financial advice at every stage of your working life.
Wealth management solutions for medical specialists At Odyssey, we appreciate that your profession is demanding and the pressure to keep abreast of new developments leaves little time to manage your finances. We have structured our business, offering you a single point of contact for all your financial requirements.
Our In-House Professionals Whether it be to help with strategic financial advice or assisting in accounting, finance, legal and taxation advice, our in house experts and alliance partners can offer you the peace of mind and certainty when making those important decisions. We will assist you in setting your financial goals, recommend effective strategies to help you achive them whilst holding your hand and guiding you through the implementation process. Every person’s situation is different and therefore their priorities and financial requirements change depending upon their particular stage in their professional career. To give you an appreciation of what these may be, we have profiled the needs of three medical professionals; a Registrar, Consultant Physician and a Surgeon.
JOHN MEDICAL REGISTRAR 30 YRS JENNIFER CONSULTANT PHYSICIAN 46 YRS MICHAEL SURGEON 60 YRS This brochure is provided for your information only and should not be relied on as it may not be appropriate to your needs and objectives or personal circumstances. You should seek personal advice from a financial adviser at Odyssey before acting on the information contained herein. All characters depicted in this brochure are fictional and are used purely as a guideline to the services we are able facilitate.
Profile 1 P4
Profile 2 P6
Profile 3 P8
Profile 1
John is a Medical Registrar and is 30 years of age. He is married to Sally and they have a daughter Sam who is six months old. John earns $120,000 per year. He has assets of $65,000 (cash, Australian shares and superannuation). He has debts of $5,000 consisting of a personal loan and a credit card. Apart from the life cover provided by his super, he has inadequate life insurance and no income protection insurance. This can be a serious problem for the family if John dies or is no longer able to work due to illness or injury. He is the main income provider for the family.
John is a young, enthusiastic doctor who loves his work but gives little thought to the future like most people at this stage of their life. Odyssey helped John define a vision for the future along with some long and short term goals. Listed below are some of his areas of concern:
• Greater understanding of how he currently spends his money and how to budget effectively.
• Protecting his earning ability, his biggest asset, with adequate income and trauma insurance.
• How to develop a plan to save money for both expected and unexpected expenses, reducing reliance on credit.
• The ins and outs of purchasing an investment property.
• Structuring of his salary package/ salary sacrifice benefits, including utilising his FBT incentive.
• Establishing a long-term savings/investment plan for his child’s higher education.
Once we identified John’s needs and goals we were then in a position to provide solutions to help achieve them. • We implemented a structured approach to budgeting by completing a budget tracker, identifying spending levels, allocating funds to meet these expenses and introducing a savings plan. • John established a series of online bank accounts as a form of structured savings. John’s expenses are now accounted for and allocated to different accounts on a fortnightly basis in line with his pay cycle. • John’s motor vehicle was purchased utilising a novated lease. This allowed John to salary sacrifice and save on tax.
• John purchased his first property under an efficient loan and ownership structure which resulted in further tax savings. • We incorporated adequate levels of insurance cover for John to protect him and his family in the event of sickness, injury or death. • We established a tax effective savings plan for his child’s education by way of an insurance bond investment. • Facilitated estate planning for his young family.
Profile 2
Jennifer is a Consultant Physician and is 46 years of age. Her annual salary is $350,000 a year. Jennifer is married to Jackson and has two sons, Jason and James who are attending high school. Jennifer has assets of $1,800,000 (consisting of cash, Australian shares, property and superannuation). She also has a current debt of $850,000.
Jennifer wanted to minimise her tax and ensure she had adequate investments to support her in retirement. Odyssey worked with Jennifer on ways of reducing her tax liability while identifying other financial growth opportunities. We assisted in: • Structuring her investments in a tax effective manner, and where appropriate, split investment ownership between Jennifer and her spouse. • Providing a greater understanding of what Jennifer can do in relation to debt reduction and investment. • Identifying where she spends her money on a monthly and annual basis, so as to take greater control of her cash flow.
• Accumulating wealth through the growth of her direct share portfolio and tax effective property investments. • Preparing Jennifer to take advantage of future investment opportunities as they become available. • Leveraging the full potential of her superannuation. • Ensuring Jennifer has adequate estate planning measures in place so that her assets pass down to beneficiaries and maximise wealth retention.
Having identified Jennifer’s position and opportunities, we were able to provide the following solutions: • Completed a formal budget and established a savings plan. Through this, Jennifer was able to allocate funds to meet her needs and objectives. • Jennifer’s expenses now get allocated to a series of online bank accounts that help iron out fluctuations in her cash flow. • Implemented a debt recycling strategy and converted non-deductible debt into deductible debt, thereby reducing increasing her tax efficiency. • Released the equity in existing investment assets and diverted them to tax efficient structures. • Established a self managed superfund that invested directly in Australian shares and property with borrowed funds.
• Increased Jennifer’s investment portfolio by implementing a home equity gearing strategy. By borrowing against the equity in her residence, she was able to tax-effectively invest. A new tailored investment portfolio was created through our in house equities specialists. • Tax effectively structured her Superannuation Contributions • Purchased additional investment properties taking advantage of capital growth and tax deductions through depreciation to minimise her tax liability. • Facilitated estate planning for her family
Profile 3
Michael is a Surgeon who is 60 years of age. He has led a successful career and is a highly respected leader in his field. Michael is planning to retire from a well established surgical practice in the next five years, but plans to use his wealth of knowledge and experience in a lecturing capacity at University till age 70. He is married to Angela, his wife of 34 years. They have three children who have now left home and are no longer dependants. He has assets of $3.4 million (cash, property, shares and superannuation) and has a debt of $900,000.
Michael’s main concern is to restructure for retirement. We worked with Michael to achieve this objective and through the process identified other opportunities such as:
• Implementing a transition to retirement allocated pension.
• Consolidating investments in the most tax effective way.
• Maximising his super benefits pre-retirement.
• Maximising the tax effectiveness and investment performance of his superannuation fund.
• Paying down his investment debt before he retires.
Once we identified Michael’s needs and opportunities we implemented the following solutions: • Realigned his current asset ownership into a more tax effective structure. • Implemented tax effective superannuation contribution strategies, utilising concessional and non concessional contributions within the legislative caps. • Implemented an ‘In specie’ transfer of shares and commercial property into his self-managed superannuation fund. • Active management of his share portfolio. Our strategy involved identifying opportunities to enhance his portfolio.
• Facilitated an optimised ‘transition to retirement strategy’ that determined the most beneficial pension level draw down year on year. • Restructured his current estate planning arrangements. Developed a strategy that was easy to administer, minimising the taxes payable on death and providing details on how to leave his estate to nominated beneficiaries.
Your Yourneeds needs- -our our priority priority
To help you prioritise your financial goals, please circle the number in order of importance. Goals (1 Low - 5 High) Reduce debt
1 2 3 4 5
Maintain a disciplined savings/investment program
1 2 3 4 5
Reduce taxable income
1 2 3 4 5
Start/maintain education fund for children
1 2 3 4 5
Maintain adequate disability insurance
1 2 3 4 5
Buy or upgrade residence
1 2 3 4 5
Buy a vacation property
1 2 3 4 5
Maintain estate for spouse/children
1 2 3 4 5
Achieve financial independence
1 2 3 4 5
Retire at age 65
1 2 3 4 5
Retire early
1 2 3 4 5
Any goals not outlined
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