Understanding Your Investment Vehicle Options

In the complex landscape of financial planning, the right investment vehicle is key to navigating towards your financial goals. At Arrow Private Wealth, we're committed to helping our clients understand their options. Below is an insightful comparison of various investment vehicles, complete with a scoring system across critical factors.

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Investing in Personal Names

Factor	Score (1-5)	Comments
Cost to run	1	Minimal administrative overhead.
Asset protection	1	Personal assets may be at risk.
Flexibility	5	Complete control with no access restrictions.
Complexity	1	Straightforward without the need for complex structures.
Access to funds	5	Immediate access to investments.

Investing in your own name might be the simplest method, but it's important to consider the implications, such as higher tax liabilities and lower asset protection.

Superannuation - Accumulation Phase

Factor	Score (1-5)	Comments
Cost to run	3	Management fees and insurance costs.
Asset protection	3	Some protection from personal creditors.
Flexibility	3	Contributions and access limited by super rules.
Complexity	5	Requires compliance with superannuation regulations.
Access to funds	2	Restricted by preservation age and other conditions.

A super fund in the accumulation phase offers tax benefits, though it restricts access to your funds until retirement.

Superannuation - Pension Phase

Factor	Score (1-5)	Comments
Cost to run	3	Ongoing fees for management and investment choices.
Asset protection	3	Similar to accumulation phase, with some creditor protection.
Flexibility	3	Limited further contributions; tax-free earnings.
Complexity	5	Involves stringent rules in transitioning from accumulation.
Access to funds	2	More accessible, but only upon meeting retirement criteria.

The pension phase of superannuation can be tax-efficient, offering significant advantages for retirees.

Family Trusts

Factor	Score (1-5)	Comments
Cost to run	5	High due to setup costs, trustee obligations, and compliance.
Asset protection	5	Trust assets are usually protected from beneficiaries' creditors.
Flexibility	5	Discretionary distributions allow for tax planning opportunities.
Complexity	5	Active management and understanding of trust law required.
Access to funds	5	Trustees control distributions, which can be timely.

Family trusts allow for income distribution among beneficiaries, which can be a tax-effective strategy.

Corporate Beneficiary

Factor	Score (1-5)	Comments
Cost to run	4	Setup and maintenance costs, along with corporate tax obligations.
Asset protection	5	Corporate structure provides a shield for personal assets.
Flexibility	4	Income splitting available; lacks CGT discount benefits.
Complexity	4	Increased due to governance, compliance, and administration.
Access to funds	3	Access is through dividends, subject to corporate decisions and tax.

Investing via a corporate structure can offer tax planning benefits and protection, but comes with its own set of rules.

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The scores reflect a blend of cost-effectiveness, legal protection, operational agility, administrative complexity, and liquidity associated with each investment vehicle. These insights should serve as a guide to understanding how each option fits into your broader financial strategy.

Our advisers are well-versed in the nuances of each investment vehicle and are ready to assist you in making the choice that best serves your financial journey.

General Advice Warning:
Any general advice on this page does not take account of your personal objectives, financial situation and needs, and because of that, you should, before acting on the advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. Information contained on this page was correct at the time of posting.