XPLAN Training Participant Guide XTOOLS and Engage

Table of Contents

Welcome and Introduction......................................................................................3

Using this Guide .................................................................................................. 4

Session Focus.......................................................................................................5

Prerequisites........................................................................................................ 5

Expectation ......................................................................................................... 5

Session outcomes .................................................................................................6

1. XPLAN and the Advice Process.........................................................................7

2. Navigating XPLAN (Refresher) .........................................................................8

3. XTOOLS...................................................................................................... 12

4. Creating the Client in XPLAN...........................................................................19 

5. XTOOLS - Lifestyle Goals ............................................................................... 20

6. XTOOLS - Retirement Funding..........................................................................33

7. XTOOLS - TTRAP............................................................................................44

8. Engage - Consolidate Super ............................................................................50

9. Engage - Planning for Retirement ................................................................... 58

Conclusion.............................................................................................................67

Support and Contacts..............................................................................................68

Welcome and Introduction

Agenda

Using this Guide

This guide has been written and structured to be as easy to follow as possible. To help you to navigate through this guide, a number of symbols are used to help identify key points or sections.

	Important - you really need to read these sections
	Extra information - you only need to read these sections when you are confident with the systems basics or if you want more background information and detail
	This symbol highlights useful hints or tips on the system
	Activities to be completed with the trainer

 Session Focus

Welcome to the ½ Day XTOOLS and Engage workshop. This course will focus on using XPLANs scenario based, quick projection calculators, XTOOLS and Engage, for a young couple in accumulation phase, and covers:

• XTOOLS and Engage navigation and data entry

• Using the calculators to model client scenarios

• Using XTOOLS to:

  • Analyse a client's lifestyle goals;

  • Project their Retirement Funding;

  • Analyse a Transition to Retirement strategy;

  • Take into account a client's cash flow, assets and liabilities

• Using engage to:

  • Analyse the effect of consolidating super;

  • Project Planning for Retirement;

  • Take into account a client's cash flow, assets and liabilities;

In this course you will become familiar with the design and function of these, and become competent in the use of them. There are alternative workshops for learning about XTOOLS+, which is XPLANs full cash flow strategy modeling tool.

Prerequisites

XPLAN Training session (one of the following):

• New User - Admin

• New User - Adviser

• New User - Risk Advice

And have good knowledge of Financial Planning concepts

Expectation 

What you can expect from today's session?

• Demonstrations

• Case study

• Hands on activities

 Session Outcomes

After completing this workshop, you will be able to:

• Understand the function and use the 3 XTOOLS calculators, and 2 Engage calculators.

 This workshop aims to provide you with the knowledge to use the calculators. It is NOT a strategy based workshop.

1. XPLAN and the Advice Process
   

   • Introduction

     Overview
     
     Many advisers use the Advice to Client process to manage the advice process in their business. To enable participants to be able to relate to the different modules in XPLAN, this course is structured along the line of the Advice to Client process.

     XPLAN and Financial Planning

     The components and tools in XPLAN have been created to support and complement the process ofproviding quality and efficient recommendations to clients.
     
     
     
     
     
     
     
     
     
     

2. Navigating XPLAN (Refresher)

   1. 1. XPLAN Overview
         XPLAN is a web based financial planning software package that brings together the different stages in the advice process through the use of a number of modules and tools.

         XPLAN enables delivery of advice to clients through integrated client management, modelling and portfolio management tools and applications.

         The facilitator will demonstrate and take you through each of the modules and tools, and explain their function to you

      2. XPLAN Components
         

         Client Focus	A comprehensive Fact Find and Client Relationship Module. This is where client data is entered. Underlying these functions is the task management capability, which is designed to support the workflow process within a business
         XPLAN CRM Office	A suite of tools which not only provides users with standard document templates but also the functionality to build customised templates.  These tools provide the ability to manage the templates as well as to merge data from the system into the templates
         XTools	A suite of tools which can be used for projection and analysis. Some of the calculators can be used in a client facing situation.
         XTOOLS+	XTOOLS+ is a powerful modelling tool that can be used to model and compare cashflows and projections
         IRESS Portfolio System (IPS	IPS is used to manage and provide reporting on client portfolios
         Risk Researcher	A fully interactive risk research tool that provides both qualitative and quantitative analysis for personal risk insurance products
         SuperSolver	A superannuation comparison tool that provides product specific comparisons of costs and intangible plan features. It provides data on hundreds of retail, industry, government and corporate superannuation funds, and allows for the creation of new plans or deriving new plans from existing plans
         Debt Qualifier	It is a mortgage-qualification and analytics system. It provides a single point solution for Debt and Risk Management for existing and new clients

      3. Logging into XPLAN

         • To login, access your designated website by typing in your website address

         • The login page for your website is displayed

         • Enter your User ID and Password and click
           

      4. Navigating the XPLAN Interface
         
         1. 1. 1. The XPLAN interface is composed of three areas, the Title bar, the Navigation menu, and the Main Page.
                  
                  

         Title Bar

         • Available in all areas of XPLAN

         • Quick links to XPLAN, Add (Client, Note, Task), Help, Logout and List of Clients. The ‘Home’ button  has  a default name ‘XPLAN’  but  can  be 

         • Quick search for Clients, Users, Groups, Documents, Tasks (by ID), Suppliers, Professional Advisors and Referrers

         • Recent is the list of clients recently worked on.

         • Advanced function allows users to search the client base that meet certain criteria.

         The Instant Search  icon allows you to search for any key heading within your XPLAN system. Once you have searched, hyperlinks will be shown to take you directly to that location.

         Navigation Menu
         

         • Located on the left of many XPLAN screens

         • Allows for access to XPLAN modules and subsections

         Client Focus Screen

         The Client Focus screen is displayed when a specific client has been selected and comprises the following sections:

         • Title bar provides shortcuts to various commonly used functions within XPLAN.

         • Home or XPLAN menu - access to the various XPLAN components are located

         Any time you see click on the arrow to access additional options and sub menus. 

      5. Getting Help
         

         Overview

         XPLAN has an Online Help function which provides the most up to date information on the different components and tools in the system. Interactive Tutorials are also available for viewing Training Workshops.

         The Help files also provide updates on all new software versions.

         Accessing Help

         1. Click on the Help function located on top of the Title bar

            

         2. The ‘Help’  screen  is  displayed

         3. Navigate using the menu bar located on the left.

            

         4. You  may  also  want  to  use  the  “Search”  function  available.

         Accessing Interactive Tutorials from within the Help Files

         1. Select Video Tutorials followed from the menu bar located on the left:

         2. Click on the workshop you would like to view.

         3. A video will start automatically with a chapter menu available from the left side menu bar

            

         4. Click on the workshop you would like to view.

         5. Follow the online prompts to view individual videos.

         Dashboard  is  the  default  ‘home’  screen to  load.  To  navigate  back  to  the  ‘home’  screen,  just  click  on  the  site  logo.  You  can  also  open  additional  windows  by  holding  down  the  ‘Shift’  key  and  click  on  the  logo.  ‘Ctrl’  and  click  will  open  new  tabs.  News  is  also  available  through  a  dashboard  tab

3. XTOOLS

   1. Introduction
      

      XTOOLS comprises a selection of stand-alone calculators; these calculators are considered invaluable

      instruments  when  explaining  financial  scenarios  to  clients  and/or  graphically  illustrating  a  client’s  financial  position. 

      XTOOLS is logical in its approach, ensuring its ease of use no matter how complicated a scenario or calculation may be.

   2. Difference  between  XTOOLS 
      

      XTOOLS+

      XTOOLS provides advisers with sophisticated cashflow tools specifically catered to everyday financial planning strategies:

      • Debt

      • Insurance

      • Investment

      • Lifestyle

      • Retirement

      • Social Security

      • Taxation

      XTOOLS generally only have a few input screens, and provide a cash flow and graphical output.  

      XTOOLS+ (or CALM - Cash flow, Asset & Liability Model), is our flagship strategy-based generic modelling tool. CALM provides holistic analysis of your client's objectives, cash flow and investments to analyse and model financial planning strategies across multiple entities.

      XTOOLS+ FEATURES

      • Model up to 30 separate asset holdings (non-property), 20 liabilities (P&I/interest only), and 10 direct properties (residential/investment)

      • Assets - benchmark allocations, managed or direct investments

      • Liabilities - principal & interest or interest-only, of any deductibility  Direct Properties - principal residence or investment

      • Asset/cash flow  descriptions  to  uniquely  reflect  your  client’s  projection

      • Ability to match liabilities and assets for detailed gearing analysis

      • Flexible cash flow timings and types, both regular and one-off

      • Multiple contribution, withdrawal, and reinvestment periods for all assets

      • Auto surplus/deficit cash flow allocation to/from assets or debt

      • Automatic asset encashment to minimise CGT

      • Income/growth/franking based on dealer assumptions/asset allocations

      • Quarterly or annual analysis

      • Unlimited number of scenario based projections for each client.

      • Ability to integrate scenarios with financial plans in Microsoft Word

      XPLAN has employed simulation techniques in XTOOLS (not XTOOLS+) to help assess how uncertain variables such as inflation, salary inflation, investment return and life expectancy affect investment projections. XPLAN will offer numerous options with slightly differing values for each uncertain variable giving a statistical sampling of your projection output. NOTE:- Results above the 95th percentile and below the 5th percentile are not shown. 50% of the values will fall below the median, however only 45% over and under the median is shown

   3. XTOOLS  Calculators
      

      Debt > Debt Consolidation

      Debt Consolidation allows an adviser to model the consolidation of up to 10 existing tranches of debt to a single Principal and Interest Loan. Existing loans may be credit cards, store cards, or personal loans for any purpose. The tool allows for loans payable at any interest rate assuming monthly repayments. The tool presents results and allows advisers to easily quantify savings possible in interest, fees and time by consolidating debt at lower interest rates.

      Debt > Loan Illustrator

      This tool allows advisers to amortise any outstanding loan balance. The tool directly compares actual loan repayments made against the lender's standard loan schedule to highlight savings in interest and time. An existing loan can be modeled and the effect of the following demonstrated:

      • additional regular repayments

      • commencement and regular fees

      • forward interest rates to quantify the effect of rising or falling interest rates • lump sum repayments or additional draw downs

      In addition, Loan Illustrator can automatically amortise the outstanding loan to a specified early repayment date. The tool will automatically determine the additional repayments required to extinguish the loan by the specified date. 
      

      Insurance > Needs Analysis

      Insurance Needs Analysis is a projection based analytical tool for assessing insurance needs. It takes into account projection term and survivor liquidity in each future term when calculating the level of insurance required

      Investment > Direct Property
      

      Direct Property allows an adviser to isolate the effects of direct property investment in relation to capital, tax savings and cashflow.  Up to four properties may be catered for, with the associated gearing also considered. The loan details are customisable for added flexibility in relation to term, repayments, type and deductibility.

      Ownership may be apportioned between client and partner for each property, and each property may be current, purchased now or in a future year. Principal residences may also be accounted for by identifying them as non-taxable property.

      Investment > Education Funding

      This tool can be used to determine adequate savings to fund education expenses.  It allows for primary, secondary and tertiary education expenses for up to 5 children.

      Education expenses are funded directly via an investment fund. Education Funding caters for one-off education expenses and funding from sources other than an investment fund, such as salary.

      Appropriate levels of funding can be quickly determined by optimising the initial investment amount or the amount of regular savings

      Investment > First Home Saver

      The First Home Saver XTool allows advisers to model and compare client's saving for a home deposit in a First Home Saver Account in comparison to saving in a regular asset. Government contributions applicable for the First Home Saver account are calculated taking into account indexed thresholds and account balance caps.

      Additionally, the First Home Saver XTool calculates the change required in contributions from the client in order to achieve their savings goal in the specified time frame

      Investment > Instalment Gearing

      This tool can be used to illustrate the benefits of a long term instalment gearing strategy, including the ability to maintain the gearing at a constant level.  Utilising various risk profiles or specific asset classes, the tool allows analysis of the effects on capital, cashflow and taxation.  Ownership is fully customisable with the ability to hold investments individually, jointly or split disproportionately between members of a couple. Various fees and interest rates may also be accounted for.

      Investment > Profiles

      This tool is intended to help quantify the characteristics of the investment profiles and related assumptions adopted by the licensee group. It provides a study of the assumed risk and return properties of the standard investment profiles.

       In doing so, the tool models a regular savings plan assumed to be invested in a portfolio with asset allocation equal to that of the investment profile. The illustration can be made relevant to an individual by allowing for actual balances and ongoing savings as part of a regular savings plan.

      Investment > Savings 

      The Savings XTool is for calculating how much a client should change their contributions in order to meet a savings goal.

      Lifestyle > Lifestyle Goals

      XPLAN’s  Lifestyle  Goals  is  designed  specifically  for  the  financial  planner  who  wants  to  use  an  illustration  tool  to aid goal setting, strategy and review discussions with their clients. Lifestyle Goals offers bold display screens which feature one-click changes to strategy and input without needing to navigate away from the main results screens.

      Retirement > Allocated Pension
      

      This tool can be used to illustrate both a new and an existing allocated pension.  Utilising various risk profiles or asset classes, the tool allows analysis of the effects on capital and tax position over the long term.   With the ability to allow for Account Based Pensions, Annuities and Allocated Pensions; this tool aims to covers all aspects of retirement income streams.

      Retirement > Life Expectancy

      The Life Expectancy XTool has been designed to simply investigate life expectancy in more detail.

      Based  on  the  client’s  age  and  gender,  the  XTool  will determine the client's expected future lifetime. The probability of survival (based on life tables) to future ages is also available.

      The purpose of the tool is to put financial objectives in the perspective of life expectancies, particularly relevant when discussing needs and objectives. The Life Expectancy XTool uses the most recent Australian Life Tables.

      Retirement > Lump Sum vs. Pension 
      

      The Lump Sum vs. Pension XTool allows you to show clients a comparison of the effects of retaining superannuation benefits in an account based pension with pension income drawdowns, versus an accumulation account with regular drawdown lump sum payments of the same amount.

      Retirement > Retirement Funding

      For a client or client couple, this tool enables the adviser to analyse and present the suitability of existing retirement funding. The projection of retirement wealth can be summarised graphically, and quantified by simulating the likelihood of achieving financial objectives. 

      As well as catering for retirement goals such as expenditure and estate capital, this tool incorporates education costs. Often, funding child education and retirement are seen as opposing goals. Retirement Funding allows advisers to easily demonstrate how education and retirement goals can both be met.

      Retirement Funding quantifies the effect on specified financial objectives of:

      • increasing retirement savings

      • different investment profiles on expected returns and volatility

      • saving sooner rather than later

      • lump sum savings/withdrawals

      • paying an allocated pension

      • optimising entitlements

      • adopting a contribution to spouse strategy

      • eligibility to receive income support, including age, blind, disability and service pension and partner allowance

      Retirement Funding accumulates assets for the purpose of providing retirement income. The focus of results is not necessarily on dollar values, but whether financial objectives can be met over the projection period.  The projection period may be limited to the longest life expectancy or a selected timeframe (expressed relative to life expectancy).

      Depending on the level of accuracy required and the data available, Retirement Funding provides either a simple or detailed analysis.  Detailed analysis allows the advisor to state how the funds will be used in retirement, together with a full analysis of the taxation consequences. Simple analysis assumes that all retirement benefits are taken in cash, and no taxation consequences of the withdrawal are considered.

      Retirement > Super Projection

      The Super Projection XTool allows you to compare the performance of a client's existing superannuation plans against up to four replacement plans.

      Retirement > TTRAP

      The Transition to Retirement XTOOLS gives you the ability to model and assess the benefits available to clients from accessing superannuation as an income source but continue working in some capacity and topping up their retirement savings.

      With the ability to give an in-depth view of tax, income stream(s), long-term retirement savings and the ability to meet expenditure objects, the TTRAP tool gives concise yet accurate details of all aspects of this popular retirement and superannuation strategy.

      Social Security > Income Support

      The  Income  Support  XTool  allows  you  to  do  a  point  in  time  calculation  on  a  client’s  entitlement for Centrelink Benefits based on their Assets and Income

      Taxation > Income Tax Calculator

      This is intended to serve as a quick tax estimation tool for the current tax year. It quickly allows an adviser to establish income after tax in determining surplus income available for investment.

      The tool is sensitive to resident tax status and income types such as franked and unfranked investment income.  HECS debt repayment and Medicare Levy Surcharge liability are also automatically calculated.

      For a married couple this tool will present individual assessment as well as couple assessment.

      Taxation > Salary Packaging

      This tool allows you to compare tax and income from packaged and non-packaged scenarios, and the projected difference in superannuation balanced.

      Taxation > Tax on Super Lump Sum

      This tool quickly allows an adviser to establish the tax payable on a superannuation lump sum, consistent with its respective components.  The implications of Medicare, HECS and other income are considered.

      For a married couple this tool will present individual assessment as well as couple assessment.

   4. Engage
      

      Engage is a new capability available for XTOOLS license holders. It is designed to access the XTOOLS calculators  but  presents  the  information  in  a  graphical  interface  to  be  more  appealing  and  ‘engaging’  between adviser and client. It utilises touch functionality with sliding bar input ability.

      Essentially Engage is a graphical interface for performing single-issue client advice, using XPLAN modules for calculations and assumptions. Advisers can use Engage while accessing a client or you can enable Engage in Client Online Access to allow clients to enter their own details.

      Some Engage tools can also be embedded onto websites.

      Some Engage tools use XTOOLS for calculations. The scenarios saved in Engage can be opened in the corresponding XTOOL for further analysis.

      Engage tools currently available are:

      • Consolidate Super

      • Insurance needs

      • Investment Choice

      • Planning for Retirement

      • Risk Profile

      • Salary Sacrifice

      • Transition to Retirement

        

        Hints and Tips

        • When using the calculators, be sure to only input details relating to that specific calculator; for example, if you are using the Retirement Funding calculator, make sure you are only put in information  from  the  client’s  retirement  date.  Trying  to  commence  a  Transition  to  Retirement  Income  Stream will not work and will throw out your calculations; there is a specific calculator for Transition to Retirement Income Streams

        • Make sure your Scenario names are appropriate and relevant; over time the list of scenarios you create  will  be  quite  extensive,  if  all  are  named  ‘Current  Situation’  it  may  be  difficult  to  decipher  which  is the relevant/appropriate scenario.

4. Creating the client in XPLAN

   1. Introduction

      In order to use the projection tools we will use the following client details:

      Client Details

      Name	John	Mary
      Gender	Male	Female
      Date of Birth	01/07/1965	01/01/1970
      Marital Status	Married	Married
      Employment Status	Full time	Full time
      Salary	$70,000 pa	$35,000 pa
      Retirement Date	01/07/2030	01/07/2030
      Cost of Living	Now - $50,000 pa; Retirement - $60,000 pa
      Investment Profile	Growth	Growth
      Private Hospital Cover	Yes	Yes

      Assets

      Description	Owner	Amount	Other Details
      Home	Joint	$550,000	Growth 3%
      Contents	Joint	$40,000	Nil
      Car	Joint	$30,000	Nil
      Bank Account	Joint	$5,000	Income 1%
      MLC MKey Super Fundamentals – Balanced Horizon 4	John	$150,000	SGC
      REST Super – Core Strategy	John	$5,000
      HOST Plus – Balanced	Mary	$75,000	SGC

      
      Liabilities
      

      Description	Owner	Amount	Other Details
      Home Loan	Joint	$250,000	Interest 6%, 15 years

      
      Create Client

      Work with the facilitator to enter the necessary client’s  details.  Use your own surname when you enter the client’s  name.

5. XTOOLS - Lifestyle Goals

   1.  Introduction 
      

      XPLAN’s  Lifestyle  Goals  is  designed  specifically  for  the  financial  planner  who  wants  to  use  an  illustration  tool  to aid goal setting, strategy and review discussions with their clients. Lifestyle Goals offers bold display screens which feature one-click changes to strategy and input without needing to navigate away from the main results screens.

      1. Upgrade their car every 5 years with a value of $10,000 up to say age 85.

      2. In retirement, go on an overseas holiday every 2 years for the first 10 years with a value of $30,000 in  today’s money.

      3. At retirement, renovate their home to add a work shed, pool and gym, costing $150,000 in today’s

      4. Purchase a Yacht at a cost of $500,000 (PV terms)

   2. .Case  Study

      John and Mary have specific lifestyle goals they would like to achieve, and are seeking advice on the feasibility, affordability, and funding requirements:

       

   3. Using  the  Lifestyle  Goals  Calculator
      
      
      1. Once the client has been created, and data updated in Client Focus, click on the XTOOLS menu item within the left hand navigation bar, and then Lifestyle>Lifestyle Goals to open the Lifestyle Goals calculator.
         
         

      2. Enter a scenario name (e.g. Scenario 1), then click on .

         

         Note: it is important you utilise appropriate naming conventions to distinguish between different scenarios. Dates may help.

      3. Enter the  client’s  Personal Data as shown below (as per the case study).

         

         Note: The basic client information should pull through automatically from Client Focus. Also you have the ability to import more data using the Import Wizard

      4. Click the button (top right hand corner of the page) to submit the data and proceed to the next screen.

      5. Enter the Cashflow information as shown below (as per the case study).

      6. Click the button (top right hand corner of the page) to submit the data and proceed to the next screen

      7. Add  the  client’s  Lifestyle  Goals  expenditure  as  shown  below  (as  per  the  case  study).

      8. Click the button button (top right hand corner of the page) to submit the data and proceed

      9. Enter Assets (as per the case study). Working cash accounts should be added as Lifestyle Assets.

      10. Click the button  and enter Liabilities as per the case study

      11. Click the button  and enter Superannuation (as per the case study)

          

          Note:  Pension  income  =  ‘Expend  Portion’  will  draw  from  both  client  and  partner’s  super  proportionally  to  meet their retirement expenditure previously entered.

      12. Click the button  to enter any Insurance, which will be Nil as per this case study.

      13. Click the button  and adjust Economic data (as per the case study).
          
          

          Investment Profile Type 

          • Simple uses the investment profile throughout

          • Life Stages allows different investment profiles to be applied

      14. Click the button  and adjust Options as necessary. Here we will need to make some assumptions as per below.

          

          You can now check the output cash flows (display) and charts from the left menu

          

      15. To view the output cash flow summary, click on Display > Summary

   4. Checking the results
      

      Firstly,  you  can  set  the  timeframe  and  periods  that  you  wish  to  see  by  clicking  on  ‘Period’  at  the  top  left  of output screen  and  adjusting.  Let’s  say  period  1  to  30  then every 5th period.

       

      Using  the  Display  output  you  can  analyse  the  client’s  situation.

      1. Check the output to ensure the results are reasonable based on the input. e.g. Net Cashflow in the Summary screen.

         

      2. You may want to check specific facilities. e.g. Go to Display > Super > Client.
         Hints and Tips

         • Clicking on  underscored  names  like  ‘Opening Value’  will  take  you  to  that  input  The expand button  gives a detailed breakdown of the values.

         • The cog icon at the top right  allows you to export displays as a CSV.

           Similarly  Charts  can  be  used  to  illustrate  the  client’s  situation

           1. Go to Chart > Net Assets (Interactive). This is the chart that you can interact with, and model different scenarios for the client.

              

              Charts can also be downloadecd by clicking on the button the top right of the screen Will allow you to select the file type to download the chart as:

           2. To use the interactive function of the chart, click on the car icon within the chart. This will give a pop up box where you can check or change the data input.

              

           3. In the  bottom  half  of  the  screen  under  ‘Data’  you  can  adjust  values  and  the  screen  will  refresh  to  show the impact. First select the tab for the Recommendation you want to view or adjust. This is the same as listed in the Input screen.

              

           4. Slect Lifestyle first to view the changeable fields.

              Select each of the remaining Recommendation choices to      view the changeable fields.

           5. Once the other Recommendations have been viewed, go back to Allocated Pension. We cansee  the  client’s  funds  will  only  last  to  age  79.  Start  by  increasing  the  retirement  age  by  2  years  for John and Mary, and view the impact of this.
              

              We can see that this will solve their problem.

           6. Ensure you change the retirement ages back to 2030. Now change the Trade Off Lifestyle Objectives to  ‘3  and  below’  and  view  the  impact  of  this  change.
              
              
              Work with your trainer to determine how much the clients can afford for their Yacht?
              

              Sensitivity charts are available in the XTOOLS and allows you to view comparisons of specific data like Risk Profiles and Retirement ages

           7. Now work through the Chart > Sensitivity charts until you get to Surplus Option.

              

              Here we can  see  the  impact  on  the  client’s  capital  based  on  where  they  allocate  their  cashflow  surplus

                Which is best? Which is the worst?

   5. Review  Mode (Demo)

      Once a new scenario is greater than 9 months old, you will have the ability to open it in Review Mode. This is denoted by anext to the scenario in the Scenario Index. The existing scenario, must have been created  in  XPLAN  2.5  or  higher,  or  if  it  hasn’t,  it  must  have  been  reopened  in  2.5  or  higher  and  then  9  months old from the reopen for Review Mode to become available

      1. When you open a scenario in Review Mode, the scenario date is incremented by one year and the inputs will have been indexed where relevant. You can then use the Import Wizard, or work through the Input screens to update the current year details.
         
         
         

      2. On the key charts, you will now have two Net Assets projection lines. The original projection is in red, and the new updated projection in blue. For the current projection, years up to the current year will show the actual net assets position for each year based on inputs made each year, and future years will show the outcome of the new projection.

         

         Using these key charts, you can model the impact of making new strategy changes or trading off goals to demonstrate these immediately to your clients.

      3. On the Display pages, prior years will be displayed with limited details, showing only key data and inputs saved for that year, while the current and future years will display a full calculated projection.

      4. When opening in Review Mode a copy of the scenario is also taken to serve as a backup of the original scenario, and can be accessed from the Scenario Index. Prior to 9 months, you can open a scenario and  update  the  current  year’s    If  a  scenario  is  greater  than  21  months  old,  you  will need to open it in review mode, update for the previous (missed) year and then open it in review mode again to update for the current year.

         

6. XTOOLS – Retirement Funding

   1. Using  the  Retirement  Funding  Calculator
      

      • From the client menu click on the XTOOLS menu item within the left hand navigation bar, and then Retirement > Retirement Funding to open the calculator.
         
        1. Enter a scenario name (e.g. Scenario 1), then click on .
           

           Note: it is important you utilise appropriate naming conventions to distinguish between different scenarios. Including dates may help.

        2. Enter the  client’s  Personal Details as shown below (as per the case study).

           

           Note: The client information should pull through automatically from Client Focus. Leave Analysis Type as"Detailed".

           • Simple analysis assumes that all retirement benefits are taken in cash, and no taxation consequences of the withdrawal are considered.

           • Detailed analysis allows you to state how the funds will be used in retirement, together with a full analysis of the taxation consequences.

        3. Click the button (top right hand corner of the page) to submit the data and proceed to the next screen.
        4. The Income should automatically come through from client focus but check (as per the case study).
           
        5. Click the button  button (top right hand corner of the page) to submit the data and proceed to the next screen.
        6. Now in the Expenses screen input details (as per the case study).
           

           Here it allows for adding up to 10 one-off or recurring Lifestyle Expenditure such as a Car Purchase or Travel. For a one-off expense, the From Age and To Age should be set a year apart, for example, from '64' and to '65' for it to occur in year one which the client is 64.

           
        7. Click the button (top right hand corner of the page) tp submit the data and proceed to the next screen.

        8. Enter the superannuation details.
           

        9. Click the button to input the Other Assets.
           
           

           
           
           

           Note: In Non-financial Assets do not input home.

        10. Click the button to input Financial Objectives.
            
            

            
            
            

        11. Click the button and input details for retirement Strategy (as per the case study).

            Here you can nominate the Pension Income but we will leave it as Expend Portion. This will draw  funds  from  client  and  partner’s  super  proportionally  to  cover  their  retirement  expenses  being $60,000 or the min limit whichever is the greater.
            
            
            
            

        12. Click the  button to input any Insurance data. Leave as $0.

            Here it allows for ‘what if’ scenarios for client and partner. We could always come back later to see the impact of an Insurance Event such as if the Client dies now, and model the insurance requirements.

        13. Now click on  to go to the Recommendation screen.

            Here is where we can view each strategy and its relevant input.
            
             Move through each of the choices below to view the input fields.
            
            
            
            

        14. Once you have viewed these choices, select ‘Other Expenditure’.Here you will see a list of the client’s lifestyle Expenses as input previously. Now you must determine which of these you will include in your recommendations, e.g. you may recommend the client doesn’t buy the ‘Yacht’. The impact of not including can then be seen in the output comparison screens. For our purposes we will leave all as Include.
            
            
            
            

        15. Click the  button to check Income Support data. No changes required.

        16. Click the  button to go to Cashflow Options where we choose how any surplus cashflow is treated. Adjust as below: we will assume the client spends any surplus cash before and after retirement.
            
            

        17. Click the  button to go to Economic. Adjust accordingly.
            
            

   2. Understanding the results
      
      Now we can view the output Display and Chart menu items in the left navigation bar.
      Using the Display output you can analyse the client’s situation.
      • Firstly go to Display > Current > Retirement Wealth and check the results
        
      • You can set the timeframe and periods that you wish to see by clicking on ‘Period’ at the top left of output screen  and adjusting. Set this to Period 1 to 30 then every 5th period.
        
        Hints and Tips
        
        1. Clicking on underscored names will take you to that input area.
        2. The expand button  gives a detailed breakdown of the values
        3. The cog icon at the top right allows you to export displays as a CSV.
      • We can see in this display how long their retirement funds will last. We can also check this graphically. Go to Chart > Retmt Wealth. Select ‘Other Expenditure’ under the Data Panel. Can the client afford their retirement expenditure?
        
        Now select the other recommendation options using the drop down menu under the Data panel.
   3. We can also use Chart > Simulated to view probabilities. Go to Probability of Meeting
      Objectives.
      
      

   4. There are various ways of adjusting the client’s expenditure objectives: in Input or Charts. However Charts gives us an instant updated view of any changes that we may decide on.
      Go back to Chart > Retmt Wealth. Let’s adjust the obvious first and select Include = No for the Yacht. (You may need to click on the page name ‘Retmt Wealth’ to refresh.)

      

      This will of course mean that they can meet their objectives and can also be viewed in Chart > Compare > Net Wealth.
      

      

      Work with your trainer to complete the following:

      • Go back to Input > Expenses and adjust the Holiday Home amount to determine what the client can afford. You can check the result in Display or Chart.

      • Once you have determined the affordable amount go to Display > Compare and view the outputs.

      • Then go to Chart > Compare and view the graphs.

      • Then go to Chart > Volatility and view the graphs.

      • Now spend 5 mins to adjust and view what you want. Please ask if you are not sure

7. XTOOLS – TTRAP

   • Introduction
     The Transition to Retirement XTOOL gives you the ability to model and assess the benefits available to clients from accessing superannuation as an income source but continuing to work in some capacity and topping up their retirement savings.
     With the ability to give an in-depth view of tax, income stream(s), long-term retirement savings and the ability to meet expenditure objectives, the TTRAP tool gives concise yet accurate details of all aspects of this popular retirement and superannuation strategy.

   • Case Study
     

     John wants to semi-retire at age 60, and is seeking advice:
     

     1. On how much income a pension will give him between age 60 and 65.

     2. On how much he would need to then contribute to super.

   • Using the TTRAP Calculator

     1. In the client, click on the XTOOLS menu item within the left hand navigation bar, and then Retirement>TTRAP to open the calculator.

        

     2. . Enter a scenario name (e.g. Scenario 1), then click on 

        

        Note: it is important you utilise appropriate naming conventions to distinguish between different scenarios. Dates may help.

     3. Enter the client’s Personal Data as shown below. Leave Salary Packaging as Exclude.

        

        Note: The basic client information should pull through automatically from Client Focus 

     4. click the  button (top right hand corner of the page) to submit the data and proceed to the next screen.

     5. Enter Income if required (as per the case study).
        
     6. Click the  button (top right hand corner of the page) to submit the data and proceed to the next screen
        This will bring us to the Contributions screen
        
        If we had selected to include Salary Packaging on the Personal screen, then we would have additional fields to input the appropriate data.
        
     7. Click the  button (top right hand corner of the page) to submit the data and proceed to the next screen. Enter the details as below:
        
     8. . Click the  button (top right hand corner of the page) to submit the data and proceed to the next screen.
     9. Enter Transition to Retirement details as below. We only need to complete John’s details.

        

     10. Click the  button (top right hand corner of the page) to submit the data and proceed to the next screen.

     11. In the Economic screen, just change super and pension profiles to Growth.

   • Understanding the results
     Now we can view the output Display and Chart menu items in the left navigation bar.

     Using the Display output you can analyse the client’s situation
     

     1. Firstly go to Display > Summary and check the results.

        

        We see that retirement wealth has increased by about $103,000, and tax reduced by nearly $30,000.

     2. Now go to Display > Current vs TTRAP > Multiple Years > Client for more detail and see the pension income and contributions optimised amounts.

     3. The Display > Required Action screen shows how much the client actually needs to contribute.

        

     4. We can also view the graphical output of the results. Go to Chart > Total Super > Client.
        
        Go through the remaining displays and charts to view the output results.
        

8. Engage – Consolidate Super

   • Introduction
     Engage allows for a planner to provide a single-issue member advice in a timely and efficient manner. This will ultimately enable your business to provide appropriate, accessible and affordable advice to more members. These Engage tools are designed to be interactive with clients. Our client has 2 super funds we need to model consolidation.
     This Engage tool accesses SuperSolver functionality
     

   • Using the Engage – Consolidate Super Calculator

     1. Select your client

     2. In the client menu go to Engage and you will see the available tools:

        

     3. . In our case select Consolidate Super. Enter a scenario name and click on

        

   • Navigating Engage

     1. The first screen shows the client basic details with a new interface look. Check and adjust the data if necessary.

        

     2. Enter required information by clicking in the box or selecting options. You will notice at the bottom of the screen where Client Objectives or Adviser Strategy notes can be added during the interaction with the client. Move through the Tool by clicking on 

     3. The next screen is Income. Enter the salary and hit ‘Tab’ button on the computer will automatically populate SGC value. Alternatively you can use the slide bar underneath.

     4. Click on  to enter the superannuation funds details. Click on the Add Super button.

     5. . Click on  to enter the superannuation funds details. Click on the Add Super button.

        

     6. This will bring up a pop-up box where you can search for the super fund name. Typing in MLC will bring up the choices. This is now accessing SuperSolver

        

     7. Select the super fund – MLC Masterkey Super Fundamentals (as per case study). Then enter the Balance and Contributions details.

        

        Note: The balance will be the amount to withdraw unless you nominate a min amount to be retained e.g. Employer super. SGC is calculated by default. You can include Insurance by clicking in the tick box.

     8. Click on the Save button. Now add the client’s other super fund – REST. SGC is 0% for this fund. These added funds can also be deleted or edited

        

     9. . Clicking on  will bring you to the Investment Option, Asset Allocation and Fees input for each super fund. In this screen click on the Add New button under each fund to select the investment option. You can allocate across multiple investment by % or $. You will also notice super funds like REST have a default investment option which is preselected, but you can delete and reselect if necessary

        

        Note: Also look for icons like  to provide explanations

     10. Choose investment options and allocate as below.

         

     11. Move to the Asset Allocation tab.

         

     12. Move to the Fees Summary tab where you can view and edit if necessary the client’s super fees.

         

     13. Click on .This screen is where you add your new recommended superannuation plan. Click on the Add Super button. We will select the Colonial First State FirstChoice Personal Super plan as our recommended and it is to receive the SGC.

         

     14. . Clicking on will bring you to the Investment Option, Asset Allocation and Fees input for the new super fund. In this screen click on the Add New button under the fund to select the investment options. Again you can allocate across multiple investment by % or $. Select at least 3 investment options, then allocate. We will allocate by %. Again this is accessing SuperSolver information.

         

         

         • Check Asset Allocation tab.

         • In Fees Summary tab set the Proposed Fees

     15. Now click on  . This screen will confirm super plans being replaced.
         
     16. Click on  . This screen shows each super plan being replaced and the features being gained and lost.
          Select each tab and review gained and lost features.
     17. Click on  . This will show an illustration of the projected wealth at retirement.
         
         With your trainer, answer these questions:
         
         • Is the client better off?
         • . If so, by how much?
         • What is the proposed projected wealth?
     18. Click on  will take you to the last screen. ‘Set followup’ takes you to Tasks and ‘Make an appointment’ takes you to Diary.
         
         
         

9. Engage – Planning for Retirement

   • Introduction
     Engage allows for a planner to provide a single-issue member advice in a timely and efficient manner. This will ultimately enable your business to provide appropriate, accessible and affordable advice to more members. These Engage tools are designed to be interactive with clients. We need to assess what capital the client will have in their super at retirement, determine if it is sufficient to meet their retirement needs, and what can be done to make this happen.

     This Engage tool accesses XTOOLS functionality
     

   • Using the Engage – Planning for Retirement Calculator

     1. Select your client

     2. In the client menu go to Engage and you will see the available tools:

        

     3. In our case select Planning for Retirement. As we used the Retirement Funding XTOOL, you will notice the scenario name here. Enter a different scenario name, for example Scenario 2, and click on 

   • The first screen shows the client basic details with a new interface look:

     

   • Enter required information by clicking in the box or selecting options. You will notice at the bottom of the screen where Client Objectives or Adviser Strategy notes can be added during the interaction with the client. Move through the tool by clicking on Next.

     

   • The next screen is Income Details. Enter the salary and hit ‘Tab’ button on the computer will automatically populate SGC value. Alternatively you can use the slide bar underneath. Under these fields you can also click on the words or edit button to add other income.

     

   • Click on Next to enter super details. Also look for  to provide explanations e.g. definitions and limits of concessional and non-concessional contributions.

     

   • Next is retirement income objective: choose amount of $60,000 pa. Click on Next.

   • In this screen add retirement objectives. Click on the Add button: Let’s add the Home

     Renovations of $150,000 first. Click Done.

     

     

     NB In this calculator you only add the retirement objectives. i.e. do not add Living Expenses up to retirement as we did in the XTOOL. This calculator makes a lot of intuitive assumptions to keep it simple for the client.

   • Continue to add the remaining retirement objectives

     

   • The same as alll XTOOLS, you will find that information saved as you go.

     The next screen is a summary screen. You have tabs at the top for graphical display of capital, contributions, savings, etc. On the top right a summary of income required and income available.

     

   • . Click on the Additional Information button at the bottom to add details such as partner information and assumptions;

     • Additional Details tab:

       a. Include age pension – No.

       b. Non Super Assets - $5,000 (Bank Account)

     • Partner Details tab:

       c. Partner details – as below

       

   • Back to the ‘Balance at Retirement’ tab on the Summary Screen we see the client has a major shortfall of capital and income. If the client has a shortfall of capital to produce the required income you can use the Super Contributions and/or Retirement Objectives tabs to optimise the client’s position, or use edit buttons and hyperlinks to adjust information.

     

   • So now you can interact with the client and discuss strategies. E.g. Check their retirement objectives: are they realistic? Go to the ‘Retirement Objectives’ tab and select Amend your =retirement expenditure. Make no changes

     

   • . If the client chooses to retain these objectives, they will need to contribute to their capital. Let’s say the client is prepared to Salary Sacrifice only $100pw. Go to ‘Super Contribution’ tab and select Amend your super contributions as below.

     

   • If this in not editable:

     When the tool is set to “Optimise Every Year” you will not be able to amend the contributions, as optimising every year will mean that contributions will vary between each year. We do not wish to display inputs for each year of the projection, so we only display contribution amounts for the first year.

     When “Optimise Every Year” is turned off, it will solve for the optimal amount of contributions in the first year, and index thereafter – we display an input field in this case.

     To enable this input field, check that “Optimise Every Year” is unticked from the amend popup:

     

     If this checkbox is not visible, please have your site administrator check XPLAN > System Settings > Engage > Adviser > Planning for Retirement > Content>Optimise Every Year > “Editable” = “Yes”

   • We can see this has improved their position but not solved it:

     

   • Go to the Retirement Objectives tab. Let’s now optimise their position. Firstly click on the question mark button: . You need to be aware of how this works.

     

     Click OK

   • Now click on 

     This will solve the client’s position with the amendments in the right panel:

     Risk profile: Growth -> Aggressive

     Expenditure: Reduce by $6,000pa

     Retirement age: Now 69 rather than 65

     

     

     • Client does not want to work past age 66 so amend as ‘Not negotiable’

     • They still want $60,000pa, so amend as ‘Not negotiable’.

     • By how much does the client need to reduce their Yacht goal to meet their retirement objectives?

       HINT:

       1. Analyse the result by amending the Retirement Expenditure to exclude the Yacht. What result does this give you?

       2. Or analyse the result by reducing the amount paid for the Yacht to an appropriate amount. Does this give the client a better result

   • Once you have agreed to the optimum strategies with the client, click on Next. This will present a summary page.

     

   • Next takes you to the last screen with these choices. ‘Set followup’ takes you to Tasks and ‘Make an appointment’ takes you to the Diary

     

   • When you have completed a scenario you have the option to create a scenario in another Engage tool. You can set the name of the new scenario, carry across data from this tool to the new tool, and to link the scenario to a Case (if you have a Case created).

Conclusion

Summary

Congratulations! You have completed the XTOOLS and Engage workshop.
This course on using XPLANs scenario based, quick projection calculators, XTOOLS and Engage, for a young couple in accumulation phase covered:

• XTOOLS and Engage navigation and data entry;

• Using the calculators to model client scenarios;

• Using XTOOLS to:

  • Analyse a client's lifestyle goals;

  • Project their Retirement Funding;

  • Analyse a TTR strategy;

  • Take into account a client’s cash flow, assets and liabilities.

• Using Engage to:

  • Analyse the effect of consolidating super;

  • Project their Planning for Retirement;

  • Take into account a client’s cash flow, assets and liabilities.

• In this course you became familiar with the design and function of these, and became competent in the use of them.

• Again, there are alternative workshops for learning about XTools+, which is XPLANs full cashflow strategy modeling tool.

Review Learning Outcomes

You should now be able to:

• Understand the function and use of 3 XTOOLS calculators, and 2 Engage calculators;

• Understand the function and design of XTOOLS and Engage calculators.

Support and Contacts

What do I do if I have problems using XPLAN?

• Contact the XPLAN support centre on 1300 1300 69 (option 1)

• Email your enquiry to xplansupport@iress.com.au

• Contact your Account Executive

The Help Desk will be operative from 7am – 6 pm Monday - Friday

Customised Training

We offer a wide range of training and consulting services to get the most out of XPLAN for your business.

IRESS offers customised XPLAN training for any dealer groups or financial planning practices that require tailored training solutions for their staff. We discuss your specific needs, agenda items and timeframes, and develop an agreed training agenda based on your requirements. This training is chargeable based on the number of attendees, time and location of training required.

For further information contact your Account Executive or the National Training Manager:

Andrew Roberts

National Training Manager

03 9018 5813

aroberts@iress.com.au