Case Study – Senior Medical Officer (SMO)
Sam (an emergency SMO), and his wife Mandy had seen a financial planner in the past, but the planner did not seem to know a lot about specific issues for Doctors. Through a colleague who was also a client, a no obligation complimentary review of their financial situation was arranged for Sam and his wife with Doctors Wealth.
What was Discovered?
At the initial meeting, David from Doctors Wealth discovered and discussed the following issues for Sam and Mandy:
1) Sam had not been taking advantage of over $13,000 per year salary packaging and QSuper benefits available to him.
2) The loans on their family home and investment property (which had not been looked at for several years) were at uncompetitive rates, and the loans not structured to provide the best financial outcomes and tax savings for them now and in the future.
3) The previous financial planner had invested Sam’s savings into managed funds which had expensive overheads and their performance net-of-fees relatively poor. In addition, the financial planner was charging a commission on the managed funds, for which Sam was receiving no value.
4) Sam and Mandy had a portfolio of Personal Insurance cover to protect them and their family financially if something unforeseen happened to either of them, including Income Protection for Sam, and Life Insurance, Total & Permanent Disability and Trauma (Critical Illness) Insurance cover for both of them. However, it had also been a number of years since Sam and Mandy had reviewed this.
What was Done?
Following the initial meeting, Sam and Mandy engaged Doctors Wealth to assist them with their
financial matters and begin a trusted advice relationship. The following was then arranged and completed by Doctors Wealth.
1) Doctors Wealth liaised with Remserv and QSuper on Sam’s behalf, and arranged for his salary sacrifice and QSuper to be optimised and maximise the tax savings available.
2) Doctors Wealth Property was able to restructure their loans so they were more tax effective, plus obtain more competitive interest rates. Restructuring for a better tax outcome will save them many tens of thousands over the life of the loan, and the interest saving created represented a saving of around $5,000 per annum alone.
3) Doctors Wealth Planning assisted Sam to obtain the same growth and income exposure, but at a reduced investment management cost, and without any commissions (Doctors Wealth is a fee-for-service company, and does not charge commissions on investments) This saved Sam around $4,950 per year, allowing his portfolio to compound faster over the coming years.
4) Doctors Wealth were able to confirm that better insurance cover was available with another reputable company at a more competitive overall premium, including multi-policy and multi-life discounts, saving them a further $3,050 per year.
What was the Outcome?
Overall, Sam and Mandy were able to save over $26,000 per year, as follows:
– Tax Planning, Salary Packaging and Superannuation optimisation – $13,000 benefit created
– Loan restructuring and with a reduced interest rate – $5,000 benefit created (just in interest saving!)
– Investments – $4,950 in costs saved
– Personal Insurances – $3,050 saved, and with more appropriate cover in place
This annual saving of $26,000 is in addition to the peace of mind Sam and Mandy now have knowing that the future financial advice they received would be focused on them, non-conflicted, and their advisers fully aware how Sam is paid, his benefit packages and what financial strategies will be relevant for him as Doctor.
Sam and Mandy were also relieved that the Doctors Wealth team were able to work together with his existing Professionals, to save him time and stress, plus ensure the best financial outcomes for them.