Financial Mappers Shows SMSF Trustees How To Write Their Investment Plan

Guest Blog By Glenis Phillips of Financial Mappers

Writing an Investment Plan is an important duty for SMSF Trustees.

I started my SMSF in 1982. Over the last 35 years I have experienced all the ups and downs of regulation changes.

When I created my SMSF fund I realised that this fund was going to hold about 50% of my investments by the time I retired. This was the motivation to begin my investment education . I am now a Senior Fellow of FINSIA. I am also the designer of Financial Mappers.

My focus was to provide investors with financial planning software which was easy to use. But it needed to give the depth of information to make good financial decisions. This software is specially designed to accommodate a detailed SMSF account within the software.


Your SMSF Investment Plan

You can make your Investment Plan as simple or as complex as you wish. The important thing is to prove that you do have a strategy for your superannuation fund.

Financial Mappers will help to write this Investment Plan. The great thing about the SMSF account in Financial Mappers is that it divides your assets into the three major asset allocations. Thus the program provides you with lots of graphs and data which you can download into your Investment Plan.

You could also print the SMSF Report generated by the software and then attach a brief statement of your Investment Plan.

When writing your Investment Plan, there are issues you may want to consider. The following discusses the type of information to include in your Investment Plan.


Image: SMSF Planner Page

Will your SMSF support you in Retirement?

With Financial Mappers you can project your SMSF plan up to 30 years after you retire. This gives you an indication on whether you can maintain a similar lifestyle in retirement.

The aim of your superannuation fund is to support you in retirement. This should be the focus of your Investment Plan.

Of course the hope is that your predictions turn out to be correct. With modelling tools you can consider a range of ‘What if?’ scenarios. You can make an informed analysis of your future financial prospects in retirement.

You can use the graphs to show how you expect your fund will support you in retirement. You can use the comprehensive modelling tools to demonstrate a “worst case” scenario.

Image: SMSF Asset Allocation

Voluntary Contributions

Recent changes to contribution limits may impair the amount one can contribute. You can include these additional contributions and see if they push you over the current $1.6m cap on funds.

The recent changes to caps on superannuation, may mean you need a new investment strategy.

You can view these projections in easy to read graphs.

Your Investment Plan should show that you will not over-contribute to the fund.


Image: SMSF Account Balance

Return on Investments

The key to successful investing for retirement is to start as early as possible. You have time to enjoy the effect of compound interest.

Albert Einstein once said, “Compound interest is the eighth wonder of the world. He who understands it earns it, he who doesn’t pays it”.

Start your savings now! This can be the difference between a modest retirement or maintaining similar standards of living. You can make your retirement a celebration.

With Financial Mappers, the income from your cash type accounts, shares, managed funds and real estate are all calculated to give you one single return. Without this type of software, it is almost impossible to calculate.

Generally it is best to consider the Real Return on Investments. This is the return discounted for inflation. One also should consider the returns after expenses.

The graphs in Financial Mappers display three returns on investments. This allows you to compare your returns with other benchmark funds.

The Investment Plan should show your predicted return on investments. Risk and reward may be related to the investment return. It is generally accepted that the higher the return, the greater the risk. For this reason, one may want to change the returns over different time periods of your plan.

You can use the graphs to demonstrate this in your Investment Plan.

Image: SMSF Return on Investments

Assessing Risks

The graphs in Financial Mappers give you a clear picture of your investment profile. Investment Profile, displays the percentage of cash type assets held in the fund.

For example, if you have less than 20% of your assets in interest earning assets, your investment profile is called “Aggressive”. Modern theories of risk profile, suggest that the older one is, the less risk one can afford to take.

The graphs in Financial Mappers give you an instant picture of these risks over the life of your plan.

Including this graph in your Investment Plan demonstrates that you have given consideration to your asset allocation. That is, the allocation between cash type assets and growth assets. Growth Assets are generally considered to be equities and real estate.


Image: SMSF – Investment Profile

Investment Properties

Investing in real estate has become very popular for SMSF.

You may be depending on the income generated through rentals for much of your retirement. So you want to make sure the figures are sound.

Each of your properties will generate their own graph. This will assist you in working out when is the best time to buy or sell. A common failure of SMSF trustees is to consider when property will need to be sold.

As the percentage of compulsory drawdown increases, there will come a time, when the rental income cannot meet the minimum drawdown.

Your Investment Plan should demonstrate when you plan to sell your real estate investments.


Image: SMSF Investment Property (one)

Keeping up to date with changes in Superannuation

Being a trustee for your superannuation fund comes with a lot of responsibility. At the end of the day, you are responsible for the management of the fund.

The rules and regulations of superannuation are extremely complex. Changes to legislation occur far too frequently. You are most fortunate to have access to the information provided by the SMSF Community.

I urge you to support Ginger and Kev Connolly who work tirelessly to ensure you get the information you need to manage your superannuation.

Please show your support for this website. You can do this by liking their social media pages, sharing the information with friends and commenting on their blog pages.

Most importantly, please write a review click on this link which shows how much you value SMSF Community.


Glenis Phillips SF Fin



SMSF Community disclaimer: This article was submitted and published by permission from Glenis Phillips of Financial Mappers
This article is for general information only.






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