Getting Started with SMSF Terminology and Resources

Managing your own super fund can be a time-consuming and stressful task. What’s the easiest way to monitor your investment strategy? What do all of your complex financial calculations actually mean? With Financial Mappers’ SMSF tools, you can easily consider different financial decisions. Here is a list of terminology for SMSF.

Clearly see the risks

One of the most unnerving things about managing your own super fund is the possibility of a sudden fall in your investment assets, such as a downturn in real estate or another global financial crisis. How would your super fund fare if the unexpected happened? With our Capital Growth Modulator , it’s easy to apply a 40-50% fall in your investment accounts and see what effect that might have on your retirement. Using ‘risk sequencing’ with our modulators or our pre-set economic cycles for different asset classes, like Bubble and Bust in either equities or real estate, you can effortlessly predict and plan for the future — no matter what the outcome might be!

The amazing thing is that you could select a report, which compares your SMSF results over four unique 10-year cycles that have occurred between 1986 and 2011. The results of each cycle is overlaid on a graph of your own projected results.

Reports

Wealth Guidance Report

This is a substantial document that presents the details of your total plan, including superannuation for up to thirty years. The asset allocation will show what percentage of your investments lie within your SMSF and it will give you a return on all your investments including superannuation. The nominated retirement income will be sourced from your superannuation, other investment income, and other investment capital.

Find out how to How to Create Reports in Record Time.

In relation to your SMSF, eight graphs are displayed. The first two graphs show the balance of the fund each year. One graph allocates the value according to contributions (employer, pre and after-tax personal contributions). The second graph displays the results according to the asset class (Interest earning accounts, shares and managed funds, and real estate.

Financial Mappers creates a graph format of an investment profile, within your SMSF, using the terms No Growth (100% cash), Low Growth, Conservative, Balanced, High Growth and Aggressive, together with your Debt Servicing Ratio, where the fund has real estate loans. This Investment Profile is based on the percentage of assets held in interest-earning accounts each year. Returns are displayed in three formats. (Return after expenses, Return after expenses, interest, and taxes, and Real Return after expenses, interest, and taxes). The transactions for each asset class are displayed, together with the Contributions and Drawdown in Present Value.

The Wealth Guidance Report comes with a list of ‘Questions to Ask your Advisor’. Taking your report with you next time you consult with your accountant or advisor may be very helpful and save time for both of you.

Modelling Tools Overview Report

There are three choices of reports which use your modelling tools. The first and default report is one that shows the results of your total plan, overlaid with the four 10-year economic cycles discussed previously. The second is for Modulators which show changes in income, capital growth and interest on loans. The third format shows Historical data for back-testing the plan.

Because you have three separate asset classes within your SMSF, Financial Mappers is able to apply the selected data to each of the asset classes.

Helpful graphs

One of the benefits of using Financial Mappers to manage your SMSF is that we can equip you with a complete financial overview in easy-to-read graphs. Analyzing financial data can be confusing and boring, but with our color-coded, cleanly designed graphs and diagrams you can easily figure out how your SMSF is tracking and predict how they might look in 10-20 years. You can also download these graphs and enter them in your Investment Strategy statement, or take them with you when you visit your SMSF advisor.