At one time or another, we all face situations which can have a substantial impact on our financial affairs. Many of us make snap decisions without the necessary knowledge. Personal CFO helps you make informed decisions about your personal or family finances. Find out how Personal CFO can help you answer pressing financial questions such as:
overview: Personal CFO is a boutique financial advice firm that works with clients to manage their financial affairs throughout the wealth creation lifecycle.
We act as your personal Chief Financial Officer, helping you to identify and quantify your existing financial position. This enables us to formulate and implement comprehensive strategies to improve the long term health of your financial affairs. Given the legislative complexities and time constraints of daily life, you and your family can manage your financial affairs the same way companies do: by hiring a CFO.
why we created Personal CFO: Personal CFO was founded in 2007 by Chartered Accountant Jeremy Darnell. Through his experience in accounting and funds management, Jeremy recognised the significant shortage of technically competent financial advisors who focussed on tax-efficient strategic advice.
our clients: Personal CFO does not target any particular client demographic. Clients can create wealth and value regardless of their age or status. Many of our clients are close to retirement, having established a reasonable net wealth position, and can immediately take advantage of the significant taxation advantages of superannuation. Other clients are further from retirement, with a steady stream of employment income, but the pressures of raising a family leave them little time to devote to their finances.
why choose Personal CFO: Personal CFO is a boutique advisory firm. Our small scale enables us to give comprehensive, personalised service to all clients. We are passionate about being a trusted advisor clients can rely on. We constantly strive to be at the forefront of wealth management and finance industry issues.
the Personal CFO process: Personal CFO is committed to providing a professional, end-to-end financial planning service.
Your engagement with Personal CFO starts with a confidential initial consultation to discuss your needs and circumstances. It is also an opportunity to ask any questions you have about Personal CFO. There is no obligation as a result of this initial meeting however there is a $250 + GST charge.
fees: Personal CFO does not accept commissions from investment products; we rebate all commissions back to clients. We work for an up-front fixed fee, based on the complexity of a client's financial affairs, the ability to make significant changes and the time required to achieve this.
We charge ongoing service fees, generally on a funds-under-advice basis. However, we can also accommodate clients who would prefer to be charged a fixed annual fee or hourly rate.
our services: Personal CFO takes a holistic approach to financial planning. We consider and evaluate all relevant aspects of the financial planning process, unless a client requests a limited focus. This comprehensive review of each client's finances ensures we don't overlook critical aspects of a client's affairs or place them in the too-hard basket.
cash flow and debt management: Before clients can effectively invest their money for long term wealth creation, they must understand their existing and future sources of income, their current living expenses and any anticipated changes. Ideally, clients will already be using a budgeting tool to keep track, however in most cases, clients do not accurately monitor these figures. In simple terms, it is hard to build long-term wealth unless your after-tax income meets or exceeds your living costs.
tax efficiency: The key ingredient that binds all aspects of financial planning together is tax. All financial decisions can impact your current or future tax liability. It is essential to consider tax efficiency as early as possible in any financial decision to avoid costly, unplanned tax bills.
Increasing the tax efficiency of your financial affairs will create tangible wealth benefits which do not rely on appreciation in investment markets.
risk management: The majority of successful companies devote significant resources to identifying, controlling and mitigating risks. So too at a personal level, understanding and controlling your exposure to different forms of risk is often more important than strategies to build wealth.
superannuation: Most people don't pay much attention to superannuation, since it is generally not available until retirement. However, in most cases, superannuation is the second largest asset behind the family home and one of the most tax-effective investment structures available.
investments: Investments are a key ingredient to long-term wealth, but not the only one. While many investment advisors base their entire service offering around investments, Personal CFO believes they must form part of an overall wealth creation strategy.
retirement planning: The ultimate aim of retirement planning is to ensure you have appropriate assets to meet your future retirement spending needs. These assets may include superannuation and a range of other investments and income. In planning for retirement, you may also need to consider succession planning arrangements for your business or the most tax-effective manner to cease your employment or business venture.
estate planning: Most people require a carefully prepared will which maximises the benefits to their beneficiaries by interacting successfully with the assets which fall outside of the estate. However, some of the nation's most successful business identities did not leave behind a will. This was not out of carelessness, but because they structured their financial affairs effectively.
financial modelling: Financial modelling is the glue that brings together all our other services into a meaningful, coherent plan. Most importantly, it allows us to make projections about future financial performance.
our team: Jeremy Darnell, Founding partner
Jeremy is a qualified Chartered Accountant who spent four years in KPMG's audit division and more than a decade working with fund managers AMP, Citibank and Credit Suisse. He has over 17 years experience in roles and industries which are integral to the Financial Planning process.
Personal CFO Pty Ltd
Unit 1, 31 Eurobin Avenue
Manly NSW 2095
Phone: 02. 9977. 3223
Mobile: 0410. 611. 300
Fax: 02. 9976. 3345
- Which assets or asset classes should you invest in?
- Are you paying too much tax?
- Is a self-managed superannuation fund suitable for your family?
- What is the most tax-effective way to make superannuation contributions?
- What is the best structure for your business?
- How do you ensure your family's future is secure if something happens to you or your spouse?
- What is the best way to make the transition into retirement?
- Do you have the funds to pay for your children's or grandchildren's education?
- How much can you afford to spend on a family home, or renovation?
At Personal CFO, we apply a holistic approach to developing a strategy that helps you create long-term wealth. Each client's strategy is tailored to his or her individual needs, desires and circumstances. Investment performance is an important part of any wealth creation plan, but it should not be the sole focus. We feel strategy and structure form the backbone of any financial plan.
The vast majority of people create wealth through many hours of hard work and devotion to their careers. However, by focusing too much on the primary source of income and the important demands of their families, many people lose sight of their financial affairs. As long as monthly income exceeds monthly expenses, people can develop a she'll-be-right attitude. However, in doing so, they often miss significant opportunities for wealth creation.
In the long term, passive sources such as investment income, tax efficiency improvements or strategic planning can generate more wealth than most active sources. Personal CFO works with you to identify these areas and create a long-term financial plan which creates the wealth you need for a comfortable self-funded retirement.
Personal CFO identifies and recommends legitimate strategies and structures that make your finances work harder for you, and help protect your existing wealth from the uncertainties of daily life.
Personal CFO takes no commissions from fund managers for investing your money; we simply negotiate an up-front fixed fee for service. We think of this as a fee for value, which will be more than offset by tangible wealth creation from detailed execution of the strategies we recommend.
Many financial advisors receive a significant proportion of their revenue from investment products. These products provide a regular stream of commissions as the client remains an investor. However, this can make advisors complacent, since they continue to receive income no matter what state customers' finances are in. Many financial advisors are also not transparent about the commissions they receive.
Investment advice is an important part of any wealth creation plan, but Personal CFO sees this as one of the later stages in the financial planning process. Before we get there, we get to know each client comprehensively and help them put together the most efficient strategy and structures. Our customers achieve optimal long-term wealth creation from having the right structure in place at the outset, maximising tax benefits and establishing effective means of budgeting, debt and cash flow management.
With this foundation in place, customers can start making regular contributions to tax-effective investment vehicles, choosing the right mix of investments and then watching the magic of compounding returns over the longer term. As the investments and customers' circumstances change over time, we regularly review and refine the mix.
Most people can benefit in some way from appropriate financial advice. We encourage everyone to contact us for a free, personal and confidential discussion. After this initial meeting, if you feel we cannot improve your financial position, there is no obligation to proceed.
Personal CFO does not take commissions from investment products. By following a fee-for-service model, we provide financial advice in your best interests.
Personal CFO takes a holistic approach to financial advice and provides a comprehensive review of all your financial needs. If you prefer, we can advise you on any specific areas you want to talk to us about. We specialise in superannuation, retirement planning, self-managed superannuation funds, tax-efficient structuring of personal and investment affairs and investment advice.
We draw on a close team of external specialists for areas such as life insurance, self-managed superannuation fund administration, the legal document aspects of estate planning and debt refinancing.
We invest considerable time in maintaining a high level of technical ability. Personal CFO is licensed to provide financial advice through InterPrac Financial Planning, which is affiliated with the National Taxpayers and Accountants Association (NTAA). Our staff have significant industry experience, are members of relevant industry bodies and attend an extensive list of annual conferences and seminars. We keep abreast of tax and legislative changes so clients don't have to.
Personal CFO's staff have been involved in investment selection over many years and have actively managed direct Australian share portfolios since 2005. Our background, qualifications and experience provide an excellent platform to offer astute and appropriate investment recommendations in direct equities and managed funds.
By looking after our clients' financial planning needs, we help them focus on what they do best - enjoying life, family and the fruits of their labour.
Before your initial meeting, we will send you a client survey, which should take approximately 30 minutes to complete. We will use this information to maximise the effectiveness of the meeting by concentrating on key benefits and value-creation opportunities most relevant to your circumstances.
To gain the most value from this consultation, it is important to accurately and comprehensively detail your financial affairs. It is important for us to know about anything that may impact on your or your family's financial situation. This ensures we can come to an agreement that suits you and Personal CFO.
If you are happy to proceed after the initial meeting, we will give you an in-depth list of questions and may request you to provide back-up documentation such as superannuation statements, tax returns, trust deeds and wills.
Based on this information, we will create a financial plan and present it to you. If you are happy, we will implement it.
However, this is just the beginning of the financial planning process. Your life constantly changes and so do your financial situation and the laws governing taxes, superannuation and investments. As a result, we develop an ongoing relationship with you to fine-tune and adjust your plan as necessary. Each financial plan we create for customers includes a formal review process, ideally every six months. This provides a chance to review performance and the impact of financial or legislative changes, and to make any changes required.
We firmly believe the value created will more than offset the costs of preparing the plan and providing ongoing advice. That's why we call it a 'fee for value' approach.
Our financial advice process reviews a number of key areas. Each is important in its own right and integral to the operation and effectiveness of the others. A complete financial plan needs to focus on the following areas:
However, all is not lost if you currently face this dilemma. Even if you do not have the capacity to directly increase your income in the short term, there are many avenues for decreasing your expenses through taxation or more efficient spending. Many of the taxation efficiency changes we recommend can have an immediate impact on after-tax savings, while others build over time. By tracking monthly living costs and monitoring spending against a realistic budget, customers can improve their net savings position. Personal CFO can demonstrate ways of using an effective cash flow monitoring tool.
Having too much debt, or an ineffective debt structure, can also make it hard to save or make ends meet. In an environment of rising interest rates and falling asset values, it is vital to maintain an appropriate level of debt and an optimal balance of tax-effective debt. Personal CFO can recommend and help implement strategies to improve your debt position. This may involve small adjustments to your existing debt structure or management methods, or refinancing or consolidating your debts. Personal CFO has relationships in place with trusted mortgage brokers to ensure you receive the most economical and suitable finance solution.
Personal CFO's staff have worked in personal, company and superannuation tax matters and consider all legal tax angles when preparing your financial plan. However, Personal CFO cannot provide direct taxation advice. This is why it is important to retain the services of a qualified accountant who can provide specific tax advice. Personal CFO can recommend skilled professionals if required.
We believe individuals need to focus on three key areas of risk:
- Asset protection strategies
- Appropriate insurance
- Investment strategies that suit their risk profiles.
As part of the financial planning process, Personal CFO will review these aspects of risk and recommend appropriate strategies. Clients can decide whether or not to implement measures that either remove or mitigate those risks.
Asset protection strategies
We advise on business and investment structures to protect against future potential creditor or unwanted family claims. For example, we can help you decide what structure is best to run your business and who should own your assets.
Personal CFO focuses on insurance that:
- Mitigates the impact of events that reduce your ability to generate an income
- Provides for your family's future in the event of your death
- Gives you adequate income to see you through a debilitating sickness or injury.
Very few Australians have appropriate levels of income protection, life, disability or critical illness insurance. In addition, many policies do not provide appropriate coverage, cost or tax effectiveness for clients' needs. Personal CFO works with specialist partners to recommended suitable insurance coverage.
Investment risk profile
Most significant wealth creation has come from taking some sort of risk, and every investment decision carries an element of uncertainty. In simple terms, risks can be grouped into two main categories: permanently losing money or not achieving your investment objectives. Risk tolerance is a measure of how much risk an investor is willing to handle. It consists of:
- Financial tolerance - usually a hard dollar figure, as in how much can you afford to lose
- Emotional tolerance - the amount of risk you can handle before you start losing sleep over your investments.
Personal CFO works with each customer to accurately assess his or her risk profile and ensure we make investment recommendations that are appropriate for that profile.
Recent major changes to superannuation tax laws make super a vital part of any wealth creation strategy. These changes have made it harder to get money into super, but much easier - and significantly more tax effective - to get it out. With the right strategy in place, superannuation can provide tax-free income and even generate a refund for franking credits.
Personal CFO has many years experience in superannuation and in-depth knowledge of the legislative changes which may impact your financial affairs. We can advise you on the full range of superannuation options including self-managed superannuation funds.
Personal CFO works with clients to formulate a strategy which considers their future financial needs, current net assets, risk profile and taxation implications, to develop an appropriate investment portfolio. In most cases, Personal CFO recommends clients invest in a combination of direct Australian shares, domestic and international equities managed funds and cash products.
Where clients have an appropriate risk profile and an investment time horizon of at least seven years, Personal CFO believes they will generally be better off investing in a mix of Australian and international equities, with a greater weighting to Australian shares given their favourable taxation advantages.
When recommending direct share investments, we look for high-quality, large-capitalisation, long-term growth companies that have a proven track record, experienced management and a focus on continually increasing their payment of fully franked dividends. We usually advise clients to buy and hold these investments for the long term, thereby reducing and deferring capital gains tax and transaction costs.
Personal CFO has access to institutional broker equities research, publications and market commentary, together with direct access to Lonsec equities and managed funds research. These help us purchase shares at the right time and at a reasonable price.
We recognise that a high growth bias is not suitable for everyone, so many of our clients combine a share portfolio with direct property. Personal CFO can help clients finance and structure their property investments with referrals to appropriate mortgage brokers, solicitors and real estate agents.
The benefits of experience
Personal CFO's staff have been involved in investment selection over many years and have actively managed direct Australian share portfolios since 2005.
Our background, qualifications and experience provide an excellent platform to offer astute and appropriate investment recommendations in direct equities and managed funds.
Investments to avoid
Personal CFO does not recommend products such as agribusiness schemes and investments that pay advisors an initial commission. We believe if a product can't sell on its own merits, it is not worth investing in. Tax is a very important consideration in all investment decisions, but one which we believe should never be the sole reason for investing. We also avoid investment products with complicated structures or business models. As Warren Buffett said, "Find a business so simple an idiot could run it, because in all likelihood one day an idiot will be running it."
If we find an appropriate investment product which pays an upfront commission to the advisor, we rebate the entire commission back to the client.
Personal CFO's approach to retirement planning also encompasses the non-financial aspects - ensuring you live a full, healthy and lengthy retirement. This may also include structuring your affairs to suit part-time work or taking advantage of the transition to retirement pensions.
For example, it may be appropriate for superannuation, jointly owned assets and those assets held within family trusts to bypass the estate completely. For certain other assets, it may be beneficial from a tax planning or future family wealth perspective to be directed into the estate. An orderly and controlled passing of assets through different structures can provide significant tax benefits to beneficiaries or protect the assets from being misspent or attacked by beneficiary creditors.
Estate planning measures can also ensure your family retains control of your assets if you become incapacitated. An enduring power-of-attorney appointment will ensure that this power is left to someone you trust, in most cases your spouse or a family member.
There are also many tax-effective strategies for passing accumulated wealth to your beneficiaries at all stages of your life. From a tax perspective, it is crucial to establish investment and business structures correctly, rather than having to unwind them later, when there may be stamp duty, land tax, capital gains tax or value shifting implications.
Personal CFO has a comprehensive knowledge of all these areas and works with specialist estate planning solicitors to develop a structure that suits you.
Personal CFO uses Xplan financial planning software to create a number of different scenarios. We use these to forecast the financial implications of your investment decisions and the anticipated change in net wealth and cash flow. It provides a very detailed and easily adjustable financial forecast to complete your financial plan, and incorporates all current tax and superannuation legislative amendments. The modelling software also enables the projections to be updated as required.
Jeremy has a Bachelor of Commerce (UNSW) majoring in Accountancy, a Diploma in Financial Services from FINSIA and a Diploma of Financial Planning (PS 146 compliant) from Kaplan. He qualified as a Chartered Accountant in 1995.
Personal CFO is licensed to give financial advice through InterPrac Financial Planning Pty Ltd. InterPrac is a Financial Services business dedicated to providing clients, through their advisors, with financial services and strategies suited to their personal circumstances and needs. InterPrac holds a financial services licence from the Australian Securities and Investments Commission, and is responsible for the advice Personal CFO provides.
InterPrac is also affiliated with the National Tax and Accountants' Association Ltd (NTAA). NTAA is a member-based organisation that provides practical tax advice. It is a non-profit association which was formed in 1992 as a support group for tax agents and business taxpayers. Its goal is to provide correct, practical tax advice in the face of complicated and constantly changing tax legislation.