XTOOLS+ Entities

Table of Contents

Welcome and Introduction....................................................................................................................3
Using this Guide ........................................................................................................................................4
Session Focus .............................................................................................................................................5
Prerequisites ...............................................................................................................................................5
Expectation ..................................................................................................................................................5
Session outcomes .....................................................................................................................................5
1.0 XPLAN and the Advice Process ....................................................................................................6
2.0 Navigating XPLAN (Refresher) ......................................................................................................7
3.0 Creating the Client in XPLAN..........................................................................................................14
4.0 Current Scenario in XTOOLS+ .......................................................................................................23
5.0 Create Proposed Scenario ..............................................................................................................41
6.0 SMSF Strategies ..................................................................................................................................42
7.0 Company - Strategies .......................................................................................................................51
8.0 Trust No. 1 Strategies (Family Trust) ............................................................................................52
9.0 Charts, Exporting and Comparing Scenarios ...........................................................................56
10.0 Locking Scenarios ............................................................................................................................58
Conclusion ....................................................................................................................................................59
Support and Contacts ..............................................................................................................................60

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 system 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

This course will illustrate how a SMSF, a Company and a Trust are setup in CALM. It also takes a look at how various strategies relevant to these Entities are implemented and modelled in CALM.

The course will also focus on understanding the implications of the selected strategies.

Prerequisites

XPLAN Training session (one of the following):

• New User - Admin
• New User - Adviser
• New User - Risk Advice
• XTOOLS/XTOOLS+ Wealth Creation Workshop

And have good knowledge of Microsoft Word and Financial Planning concepts.

Expectation

What can you expect from today's session?

• Demonstrations
• Case study
• Hands on activities

Session outcomes

After completing this workshop, you will be able to:

• Create/add a SMSF, a Company and a Trust into CALM
• Enter strategies relevant to these entities into CALM
• Project the full financial position for the Entity Group;
• Model multiple scenarios involving other entities.

Note: This workshop aims to provide you with the knowledge to use the Entities functionality in XTOOLS+. It is NOT a strategy based workshop.

1.0 XPLAN and the Advice Process

1.1 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 of providing quality and efficient recommendations to clients.

2.0 Navigating XPLAN (Refresher)

2.1 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.

2.2 XPLAN Components

2.3 Logging into XPLAN

1. To login, access your designated website by typing in your website address.
2. The login page for your website is displayed
3. Enter your User ID and Password and click 

2.4 Navigating the XPLAN Interface

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

Title Bar

The title bar contains a number of links and functions, and is always displayed.
Home, Add and Quicklinks lists:

Xplan – This button name can be customised and the default name is XPLAN. It contains links to your User Dashboard, News and administration and module functionality (depending on your User Capabilities only some links may display)

Add - allows for creating a new:

• Client
• Group
• Professional Adviser
• Referrer
• Supplier
• User
• Case
• Diary Event
• Note
• Task
• Thread

(Depending on your User Capabilities only some links may display)

Quicklinks - a customisable list where you can add links that you frequently access. All links in the XPLAN list can be added as Quicklinks.

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.

Icons

	Notification messages are commonly generated by XPLAN when a report has been generated. The number of unread notification messages displays beside the icon (as shown)
	Sticky Notes allows you to write short on screen notes which stay attached to a client or a specific page. When you load a page with a Sticky Note a small icon displays that is clicked to open the Note.
	Open a Time Taken Ticker
	Access XPLAN Help
	Access your Preferences
	Logout from XPLAN

Searching

The Quick Search box allows you to search for entities, notes or tasks.

Navigation menu

The navigation menu displays on the left of the currently accessed Page. It allows for navigation between modules and within the current module. When using a Wizard, the navigation menu can also display the pages within the Wizard, allowing you to move between pages as required.

You can collapse and expand the navigation menu by clicking the expand/contract button:

When collapsed, the current page expands horizontally to fill your web browser.

Main Page

The current page displays in the Page area.

Client name - when a client has associated entities, such as a companies, trusts or SMSF, you can click the client's name and select an entity to access it

Control buttons - buttons for the current page, such as for editing fields or moving between Wizard pages, are always located on the top-right.

Panels - some interface elements display as panels. Each panel is controlled by panel buttons. Like pages, panels can also have control buttons for editing the data within the panel.

Panel buttons - each panel has its own control buttons. Depending on the functionality offered by a panel, some or all of the following buttons may display:

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

2.5 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.

3.0 Creating the Client in XPLAN

3.1 Introduction

In XPLAN, client information is entered into the Client Focus module. These details can then be seamlessly transferred to other components e.g. XTOOLS+ & Risk Researcher, to be used in crafting appropriate financial planning for the clients.

Scenario

The clients for this case study are Adam and Kate “Your Surname”. They are planning to retire at age 60 and have come to you to seek advice on their current and future financial situation.

Overview

• Adam and Kate have 2 Children – Josie & Ben.
• Adam is employed by a non-related company as a Marketing Director, and earns $95,000.
• Kate has a Consulting Company – “Your Surname Consulting Pty Ltd.” and is also employed by the Consulting Company as an Administrator. A Discretionary Family Trust – “Your Surname Consulting Family Trust” owns all shares within Your Surname Consulting Pty Ltd. All members of the family are beneficiaries of the Consulting Trust.
• The company has a trading income of $100,000 a year.
• Company expenses are;; 1) Kate’s Salary $20,000 p.a., 2) SGC for Kate at $1,800 p.a., 3) Business expenses of $15,000 p.a.
• In addition, they have a Family Trust which was setup under Adam’s parent’s Will - ‘Your Surname Family Trust’. It is a Discretionary Trust. All members of the family are beneficiaries of the trust.
• They have a Self-Managed Super Fund – “Your Surname Retirement Fund” which was set up 5 years ago. Adam and Kate are members of this fund. Your Surname Retirement Fund Pty Ltd acts as the corporate trustee of the Your Surname Retirement Fund.

Work with your facilitator to create the clients in XPLAN using the details given on the following pages.

Fact Find Details

Client Details

Contact Details

Risk Profile

You have now created the client entity. The remainder of the fact find information will be entered into the XTOOLS+ Input screens for the purposes of this training session.

Employer Details

Income and Expenses

Dependants

Other Information

Lifestyle Assets

Liabilities

Financial Assets

Key Details

Income and Expenses

Assets and Liabilities

Company Details

The Your Surname SMSF has a corporate trustee (Your Surname Retirement Pty Ltd) for their SMSF. As this is purely a trustee company, we do not need to set it up for cash flow modelling purposes in CALM.

Trust 1 Details

Assets and Liabilities

Trust 2 Details

Assets and Liabilities

Self-Managed Super Fund (SMSF) Details

Assets and Liabilities

Entity Structure Map

3.2 Client Objectives

What the clients hope to achieve

• Adam and Kate would like to boost their retirement savings so that they are able to live comfortably when they are retired.
• Adam and Kate would like to retire when Adam is 60.
• They would like $80,000 p.a. (after tax) to fund their retirement lifestyle.
• They have $140,000 of retained earnings in Your Surname Consulting Pty Ltd and would like to tax effectively withdraw these funds to assist in paying down their mortgage.
• Adam and Kate are trustees of the Your Surname Family Trust, and would like to know the possibility of using the equity in the property to make further investments.
• They want income from the Trust to be distributed in a more tax effective manner.

3.3 Our Recommendations

Strategies

• To make both concessional and non-concessional contributions to Adam’s super to boost his retirement savings
• To make a Non Concessional contribution to Kate’s super of $20,000 (in Period 2).
• To commence a Transition to Retirement strategy within the SMSF for Adam when he is 55.
• To commence an Account Based Pension from the SMSF for both Adam and Kate, when Adam is 60.
• To use the equity within the Your Surname Family Trust to borrow funds and purchase a diversified investment portfolio based on the client’s risk profile. They would also like regular contributions being drawn down from the loan.
• Make tax effective withdrawals from Your Surname Consulting Pty Ltd via retained earnings to pay down the mortgage.
• Adam to gift $20,000 to the Trust (in Period 1).
• To make tax effective distributions from the Trust to the beneficiaries.

Hint: To withdraw retained earnings from the company to the Trust 2 then to Kate in a tax effective manner, we probably shouldn’t withdraw it all in the first period. The withdrawals will increase the Client’s cashflow which should be directed to paying down the Client’s home loan.

4.0 Current Scenario in XTOOLS+

4.1 Overview

Current Cashflow refers to the client’s current situation. The process of SoA development begins with the planner having a strong understanding of the client’s current situation and in particular, that client’s current cashflow position.

This topic focuses on creating a client’s consolidated current cashflow position in XTOOLS+.

4.2 XTOOLS+ Overview

XTOOLS+ is the module where detailed cashflow strategies are modelled in XPLAN. It enables users to create and compare multiple financial planning scenarios for a client. These scenarios can be projected for up to 50 years.

The XTOOLS+ module is used to analyse a client’s current position as well as proposed scenarios. All information regarding a client’s income, taxation and projected asset values that populate the Statement of Advice can be drawn from the XTOOLS+ module.

4.3 Creating the Current Cashflow Scenario in XTOOLS+

Launching XTOOLS+

1. From the navigation menu select XTools > XTOOLS+ > CALM
2. Scenario Selection screen is displayed
3. Type “Current” and click 

4. The “Input: Basic Details Screen” is displayed

4.4 XTOOLS+ Personal Details

Key Details: Confirming Adam and Kate’s details:

1. Projection Start Date: Start of financial year (recommended to avoid pro-rated figures)
2. Users have the option to use the “Future Key Dates” field to mark important dates such as “Retirement Date” etc, if this event does not fall on 1 July.
3. Select the retirement date for the client

Setting up Other Entities

1. On the same page at the bottom, in Companies used select 1 and enter the Company name in the box provided. In the Trusts Used section select 2 and enter the Trust’s names in the boxes provided. Also in SMSF Used, select Yes and enter the name in the box provided:

Once you have entered the above details, the Navigation Menu on the left hand side of the screen, will update to include the new entities. You can also navigate to the Input > Options page and select how you wish the Entity names to appear in the Navigation Menu. Also within this page, you can select where you want to import assets from, IPS or Client Focus.

The Navigation Menu will then update to reflect your changes.

Children information

Add the details for Ben and Josie as per the screenshot below:

Import Wizard

In the top right corner of the Main Page, there is a button that allows the bulk import of Client Focus Information. By clicking on it, a new Wizard Page will then open. A preliminary warning is the first page to show, warning users that only information for the Client and/or Partner will be pulled through and NOT for any additional Entities. After clicking Next, Users need to identify which Sections and Entities information needs to be imported for. At the top of each column, there are “Select All” or “Deselect All” buttons to select/deselect all items in that particular column.

Users then work through a series of pages, each one dedicated to the import of information for each section where “Import” was selected on the initial page.

Income and Expenditure

1. The Individual > Cashflow > Income and Expend screen is displayed.
2. Enter the income for Adam. Note that we will not enter Kate’s income details here, as it will be entered into the Company input screens as expenditure to the company. This is because the company is a related entity, and therefore we can show the origin of the cash flow. This is an important concept when  looking at inter-entity modelling.

Leaving the Witholding PAYG Tax option as No will leave the income as a gross figure. Should you wish to show net income, click on the hyperlink and change the option to Yes. You can also select Custom. If you are using Key Dates in your scenario, selecting Yes from this option will give you more accurate taxation details.

3. Enter the expenses – Current and Retirement. Note the time periods for the expenditures:

Assets

1. Click on Assets > Holdings in the Navigation Menu bar to enter the assets for the clients.
2. Add Adam and Kate’s assets.

• Add the CBA shares. Click on Add Investment, select Class: Domestic Equity and enter the details of the Shares.
• Add the Bank Account. Click on Add Investment, select Class: Domestic Cash and enter the
  details.

3. Click on Assets > Income. This screen allows you to enter whether the income from the asset is to be reinvested or not. The income from Adam’s CBA shares is being reinvested until his retirement. To enter this detail, click on “Add reinvest Period” and select CBA.

4. Click on Assets > Rates and Fees. Apply custom rates and fees with an income rate of 1% for the Cash Account.

Principal Residence

1. To enter details of Adam and Kate’s Principal Residence, click on Property > Holdings in the Navigation Menu Bar.
2. Click on “Add Property”, and select “Principal Residence”. Enter details of this property.

• Retain Principal Place of Residence (PPR)

3. Click  (top right) to move to the next screen which is the Rates and Fees screen. Enter Growth as 5%.

Home Contents and Motor Vehicle

1. To enter details of Adam and Kate’s Home Contents and Motor vehicle, click on Non Financial > Holdings in the Navigation Menu.
2. Click on Add Holdings, select the holding, and enter the details. Ensure both the Home Contents and Adam’s Car are added to the Holdings page.

This only has an effect for Centrelink purposes, so you can enter the Centrelink value rather than the market value if you prefer.

Superannuation

1. The clients do not hold any individual super accounts. Their entire super is in their Self-Managed Super Fund. However we need to set the parameters for the Client and Partner Super Contributions on the Individual > Super > Key Info page.

a. Under the Superannuation Account section, ensure the “Hide Accumulation Fund” option is set to Yes for both Client and Partner

b. Other Options should be set as appropriate to each Entity. For today’s example, ensure all options are set either to Pro Rata or SMSF.

c. Bring Forward option should be set to Never.

2. Enter details in the Accumulation section to ensure that Adam’s SGC is directed to the SMSF. Click on Individual > Super > Accumulation.

a. Ensure that the super balances are Zero for the clients.

3. Change the Employer Contributions from SGC to Nil. Check that ‘Total Employer Contributions’ is Zero. This will ensure that no contributions are going into Individual Retail Super Funds.

Liabilities

1. To enter details of liabilities, click on Liabilities > Loan Details. Enter the loan details provided.

2. Click (top right) to move to the next screen which is the Rates and Fees screen. Enter Details.

3. Click (top right) to move to the next screen which is the Repayment screen. Ensure
Details are appropriate.

4. Click on Liabilities > Associate and link the liabilities with the corresponding assets. This linking will give us a Gearing Ratio in the display screens.

For Input>Individual

• You can enter multiple key dates.
• DO NOT press the ‘ENTER’ button as this will finish the Input section and direct you to the Display screens.
• Always leave ‘Income Support Calcs’ as ‘Include’ so it will calculate income support for the clients if they are eligible.
• The PPR<->Investment Status box is where you can select a date when the client exchanges properties from Principal Place of Residence to Investment status.
• You can enter a negative ‘-’ indexation % to depreciate non-financial assets items if necessary (e.g. for a motor vehicle).
• Always leave ‘Repay Loan’ as ‘Yes’ unless you want to capitalise interest. Even paying ‘interest only’ is repaying the loan, just not the principal.
• Association is also used when calculating Income Support entitlements. Only debt which is associated with an asset will be used to reduce assessable assets under the Assets Test, and used to offset deductible interest against rental earnings under the Income Test.
• Centrelink states that any debts that use the family home as security will not offset the Income and Assets Test amounts. Therefore, CALM excludes any debts associated with the family home from means testing.

4.5 Navigating XTOOLS+: Company Details

In the Navigation Menu Bar, click on Surname Consulting Co > Capital. This is where you will enter the company details.

NB: The company hasn’t paid any dividends since establishment, but Adam has advised that the company will shortly be distributing Dividends from Cashflow (hence “Apply Shareholder Dividends” is set to “Yes – From Cashflow”).

1. Enter the ownership portions for the clients.
2. We will leave the Centrelink Control as 0%. By doing so the client and partner will be assessed on the gross income they receive from the Company.
3. Shareholder dividends can be applied from Cashflow or Net Profit After Tax (NPAT):

a. ‘Cashflow’ will use up cashflow and retained earnings to pay dividends

b. NPAT pays dividends based on the net profit after tax for that year.

Income and Expenditure

1. Click  (top right) to move to the next screen which the Cashflow > Income & Expenditure screen. To enter the income details click on “Add Income.” Note the income from the company should end at Kate’s retirement:

2. Enter the expenditure of the company. This is where you will enter Kate’s Salary and SGC Payments:

Assets

3. Click on Assets>Holdings in the Navigation Menu bar. Enter details.

4. Click (top right) to move to the next screen which is the Rates & Fees screen. Enter the details.

Liabilities

Note: If a Shareholder Loan exists it is not to be included under the Surname Consulting Co > Liabilities screen as it can be fully recorded in the Surname Consulting Co > Capital screen.

4.6 Navigating XTOOLS+: Trust Details No 1 - Family Trust

Capital

1. In the Navigation Menu Bar, click on Surname Family Trust > Capital. This is where you will enter the Trust details:

2. The unitisation section allows you to select who is to receive the regular distributions. Any surplus income or capital allocated to Corpus can be re-allocated as discretionary distributions in Cashflow > Distributions.

3. XPLAN will automatically distribute the regular Trust income according to the percentages set here. Retained income (not distributed) in the Trust will then be recorded and tracked as Retained Earnings in Corpus and will be taxed in the Trust at the highest Marginal Tax Rate.

4. Automatically Apply Income Distributions - Yes; and Capital Distributions - No.

5. “Return Child Dists to Client/Partner” – set to No.

Assets

6. To enter the asset details click on Assets > Holdings and enter financial assets only (Cash Account and IAG Shares).

7. Click  (top right) to move to the next screen which is the Rates and Fees screen. Enter Details.

Investment Property

8. To enter details of property held under the Trust, click on Property > Holdings in the Navigation menu bar.

9. Click on “Add Property”, select “Investment”. Enter details of the property.

10. Click  (top right) to move to the next screen which is the Rates and Fees screen. Enter details.

4.7 Navigating XTOOLS+: Trust Details No 2 - Consulting Trust

Capital

1. In the Navigation menu, click on Surname Consulting Trust > Capital. This is where you will enter the Trust details:
2. The Trust hasn’t distributed any income since establishment, due to the consulting company increasing its retained earnings. At present in the event the consulting company distributes a dividend, then 100% of the trust distribution is distributed to Kate.

2. The unitisation section allows you to select who is to receive the regular distributions. Any surplus income or capital allocated to Corpus can be re-allocated as discretionary distributions in Cashflow > Distributions.

1. XPLAN will automatically distribute the regular Trust income according to the percentages set here. Retained income (not distributed) in the Trust will then be recorded and tracked as Retained Earnings in Corpus and will be taxed in the Trust at the highest Marginal Tax Rate.
2. Details of the beneficiary loans are recorded in this screen. This is where the funds come from Adam and Kate for the beneficiary loan from this trust to the company.
3. There are no Capital Distributions.

Assets

4. To enter the asset details click on Assets > Holdings and enter financial assets only.

5. Click  (top right) to move to the next screen which the Rates and Fees screen. Enter Details.

4.8 Navigating XTOOLS+: SMSF Details

1. In the Navigation Menu, click on Surname Retirement Fund > Capital. This is where you will enter the SMSF details.

2. If you want the investments to be pooled together select Segregate Assets as ‘No.’ Otherwise each investment added to the SMSF will need to have ownership by one of the members.

3. ‘Auto-allocate contributions to assets’ will automatically distribute the contribution to the assets within the SMSF.

4. ‘Apply Investment Reserve’ - When SMSF assets are projected on a pooled basis, you can specify use an Investment Reserve. This will allow you to use a specified crediting rate for member balances which will be used to determine the interest calculated for each account.

5. Enter the details of the client’s opening balances.

6. In the ‘Employer Contributions’ section, select SGC for Adam and Kate. The SGC amount shown for Kate is the amount entered in the Consulting Company as an expense.

7. Click  (top right) to move to the next screen which is Key Details. Confirm that the details are correct.

Cashflow

8. Click  (top right) to move to the next screen Cashflow > Expenditure.

9. Enter the fees details, by clicking on “Add Expenditure” and selecting “Accounting Fee.”

Assets

10. Click on Assets>Holdings in the Navigation Menu. Enter details.

11. Click  (top right) to move to the next screen which the Rates and Fees screen. Enter the details.

Investment Property

12. To enter details of the property held under the SMSF, click on Property > Holdings in the Navigation Menu.

13. Click on “Add Property”, select “Investment”. Enter details of the property.

14. Click  (top right) to move to the next screen which is the Rates and Fees screen. Enter details.

 NOTE: You also have the opportunity to indicate on the SMSF > Assets > Property > Leasee page if the entity leasing the investment property is a part of this Client Group eg. Consulting Company.

Once all the data has been entered, you can view the outputs by expanding the Display Menu, and then choosing the page that you would like to navigate to.

 The CALM display screen is displayed showing an overview of the client’s current position. Go to the Display > Individual > Cashflow > Consolidated screen and complete the following tasks:

i. Change Display period to 1 to 10 years, then every 5th period.

ii. Check if the clients have any surplus income.

• Information entered into XTOOLS+ is saved automatically each time the page is changed / reloaded.
• When selecting a To date within XTOOLS+, there is the option to select the client or partners life expectancy by choosing Client LX or Partner LX from the drop down menu. The client’s life expectancy will be displayed in brackets beside these options.
• Tax Details (Navigation Menu): This page allows users to select whether tax is being withheld, the client’s tax offset eligibility and if the clients have private hospital cover.
• Indexation (Navigation Menu): Allows the user to adjust the salary, tax indexation and superannuation contribution indexation assumptions.
• Economic Assumptions (Navigation Menu): This is where assumptions as well as tiered adviser fees are entered (if applicable).
• Options (Navigation Menu): allows user to modify the display in CALM.
• Centrelink Assessment: Based on the individual's control of the company, you should enter the percentage to be included in Centrelink calculations. Note that the amount assessed by Centrelink may differ significantly from the shareholders actual entitlement to income or assets.
• Beneficiary Loans will be assessed as financial investments in the Centrelink calculations of the individual entities.

5.0 Create Proposed Scenario

5.1 Recommendations

Within SMSF

• Adam would like to start a Transition to Retirement Strategy at age 55 and both Adam and Kate want to fully retire when Adam is 60.
• Adam wants to make both Concessional and Non Concessional Contributions to his Super to increase his retirement wealth.
• They wish to make a Non Concessional contribution for Kate of $20,000 in Period 2.

Within the Company

• Withdraw retained earnings in a tax effective manner to pay down their mortgage.

Within the Trust No. 1

• They want the distributions from the Trust to be distributed in a more tax effective manner.
• Within the Trust, Adam and Kate also wish to Gear using the equity they have in the Investment Property. They also want to continue to draw down on the equity to make regular contributions.
• Adam to gift $20,000 to the Trust in Period 1.

5.2 Creating the Proposed Scenario

On the display page of the current scenario, Click on the drop down arrow on the scenario name at the top left of the screen. Select “Save As” and enter ‘Proposed’ as the name of the scenario. Click “Save.” IMPORTANT – Make sure to click on Save and not just hit enter as this will have negative impacts on your new Scenario, the main of which is that majority of financial information entered in the “Current” Scenario is deleted during the creation of the new Scenario.

Once the screen has refreshed you will be in the Proposed Scenario where we will work on the proposed strategies.

6.0 SMSF Strategies

Stage 1 - Now

• We will recommend that Adam makes Concessional Contributions (Salary Sacrifice) and Non
  Concessional Contributions of $10,000 each per annum from now to age 55.
• Lump sum Non Concessional contribution of $20,000 for Kate in the second period.

Stage 2 - At age 55 (Adam)

• Start a Transition to Retirement strategy at age 55 for Adam.
• Make Concessional contributions to the maximum limit available to Adam until age 60.

Stage 3 - Retirement

• Start Account Based Pensions for both Adam and Kate, when Adam is age 60

6.1 Stage 1: Super Contributions for Adam & Kate - Now

1. To make Concessional Contributions (Salary Sacrifice), click on Display > Surname Retirement Fund > Accumulation > Account > Adam3
2. Click on the Expand Button  next to Contributions (EOP), to expand and display additional contribution options.
3. Click on the text box for the first year the Salary Sacrifice contributions are to begin (Salary Sacrifice Contributions Requested) and then choose ‘Fill’. If the ‘Fill’ option is not available, press ‘Enter’, which refreshes the page and the option should now be available.

 4. Enter the number of inputs (2 years – up to Age 55 for Adam), value $10,000. Click OK:

5. To make Non Concessional Contributions (post tax) for Adam, on the same screen click the text box for the first year the contributions are to begin and then choose ‘Fill’ (Contributions EOP;; Personal Contributions). Enter the number of inputs (2 years), value $10,000. Click OK.

6. Press ENTER to update the calculations for Adam’s page, or click on the same page name from the Navigation Menu.

7. Make a Non Concessional Contribution of $20,000 for Kate in Year 2.Press ENTER to update the calculations for Kate’s page, or click on the same page name from the Navigation Menu.

 Work with your facilitator to find out how much surplus cashflow is available after Adam and Kates Contributions.

6.2 Stage 2: Transition to Retirement (Adam - Age 55)

1. To start the TTR pension for Adam, in the Navigation menu click on Input > Surname Retirement Fund > Pensions > Account > Add Account. This will add another page under the Account heading, and will change name once you complete the Description field on the new page.

2. To rollover the super funds into a Transition to Retirement Pension, click on the Add Pension drop menu and select Rollover: Account Based Pension, then enter the details as below:

 Work with your facilitator to check if the TTR pension for Adam has started.

Check the amount of surplus cashflow for the clients at age 55 (Hint: Go to Display > Individual > Cashflow > Consolidated).

6.3 Stage 2: Salary Sacrifice from Age 55 to Age 60 to the maximum contribution limit

1. To make Salary Sacrifice Contributions for Adam, in the Navigation Menu on the left hand side go to Input > Surname Retirement Fund > Capital.
2. Under the Salary Sacrifice Contributions section, change the Increase Salary Sacrifice Contributions to Concessional Limit option to “Yes”.
3. Then select the Period hyperlink and change the duration of the increased Salary Sacrifice
   contributions.

4. Go back to the display pages to ensure the additional Salary Sacrifice has initiated (Display > Individual > Cashflow > Consolidated for the expenditure item of increased Salary Sacrifice, and then Display > Surname Retirement Fund > Accumulation > Account > Adam(C) to ensure the receipt).

 Work with the facilitator to answer the following questions:

i. Check the contributions for Adam are within the contribution limits.

ii. Check the contribution tax payable on 1 Jul 18.

iii. Check whether there is any excess contribution tax payable.

 NOTE: there is also a Limits and Thresholds page where these ranges can be checked

6.4 Stage 3: Start Account Based Pensions for Adam and Kate at retirement

Work with your facilitator to start new pensions for Adam and Kate when Adam reaches retirement age 60.

Note: Kate will also retire when Adam retires.

1. Navigate back to Input > Surname Retirement Fund > Pensions > Account > Add Pension

2. This time we will add the Allocated Pension for Adam at Retirement. Enter the details as follows:

3. Repeat the steps above to create Kate’s Pension

• If a TTR strategy has been adopted and pension started, remember to fully commute the TTR pension and rollover this pension to a new Account Based Pension at Retirement.
• It is also possible to commute or rollover existing pension and accumulation accounts at the end of each year, so that at the commencement of each year, all of your funds will remain in pension mode. This can be done by selecting the Re-boot Strategy option on the page for the specific Pension.

7.0 Company - Strategies

Recommendations

Withdraw funds in a tax effective manner to pay down their mortgage.

7.1 Withdrawing Funds

1. We start by withdrawing funds from the Company Cash Account. To do this, on the Navigation Menu on the left, click on Input > Surname Consulting Co > Assets > Transactions.
2. Click on Withdrawals and select ‘Cash Account (Surname Consulting Co.), from – “1 Jul 2014” to “01 Jul 2016” of $70,000 p.a. and 0% indexation.

Work with the facilitator to answer the following questions:

i. Check whether the two payments of $70,000 have been withdrawn from “Surname Consulting Co’s” Bank Account?

ii. Check whether the distributions have been made from Trust No 2 to Kate.

iii. Check to see if the imputation credits have been applied to Kate?

iv. Compare the difference in Tax Payable by Kate and determine the additional percentage of tax paid on the withdrawals of funds.

v. Check to make sure additional cash flow is paying off the mortgage?

3. Once the funds have been confirmed as being received as part of the Distributions from Trust 2 – Surname Consulting Trust, then select the Display > Individual > Liabilities > Joint Page and allocate the $70,000 funds directly to the Liability instead of going through at the end of period as part of Surplus Cashflow allocations.

8.0 Trust No. 1 Strategies (Family Trust)

Recommendations

• Using the equity in the property, borrow $100,000 to invest as a Lump sum into a Diversified Aggressive Portfolio.
• Borrow an additional $10,000 for the next 8 years to invest into the Diversified Aggressive Portfolio.
• Adam to gift $20,000 to the Trust.
• They want the distributions from the Trust to be distributed in the most tax effective manner.

8.1 Establishing a Geared Investment Portfolio

1. Create the Geared Asset for the Family Trust No. 1. On the Navigation Menu on the left click on Input > Surname Family Trust (T1) > Assets > Holdings.
2. Click on Add Asset and select ‘Profile: Aggressive’, to establish an investment asset in line with the risk profile. Set the Asset to $0 and cost base to $0 (we will then borrow the $100,000 to invest as a transaction).

8.2 Establishing an Equity Loan

1. To establish an Equity Loan, on the left hand side in the Navigation menu click on Input > Surname Family Trust (T1) > Liabilities > Loan Details.
2. Click on “Add Liability,” select Interest only and enter the details of the loan. Commencement Date “1 Jul 14,” amount $100,000, term 8 years (96 months), and Credit Limit is $180,000 (i.e. Initial $100,000, plus 8 years times $10,000).

3. Click , the Rates and Fees screen will appear. Enter the interest rate for the loan, 8%, and the Deductibility should be set to 100%.

4. Click  , the Repayments screen will appear. Select Yes and Repay Loan.

5. To complete the setup of the Equity Loan in XTOOLS+ we need to link the loan to the associated asset. This can be done by clicking on Liabilities >Associate:

6. Select type ‘Asset’ as we are linking the loan to a financial asset.

7. Select ‘Investment Portfolio’ in the Associated Assets box.

8.3 Purchase Investment using Equity Loan

By selecting the Loan Commencement Date of the Loan as 1 Jul 14, the system will drawdown the loan and place the funds as surplus income. We now have $100,000 available from the loan.

1. To invest the $100,000 into the Investment Portfolio, we need to go to Display > Surname Family Trust > Assets > Details.
2. Scroll to the bottom of the screen to the Investment Portfolio and click on the arrow next to Investments. In Investment > Start of Period enter $100,000 in the 1 Jul 14 column. Press “Enter.”

3. The Investment Portfolio is now established.

Borrowing Equity (Instalments)

1. To establish Instalments, in the Navigation Menu click on Input > Surname Family Trust > Assets > Transactions. Select Investment Portfolio from 1 July 2014 to 1 July 2022, and $10,000 pa:

2. We have already established the Loan with a credit limit of $180,000. In the Navigation menu click on Display > Surname Family Trust > Liabilities > Details and select the Dropdown Menu next to the “Drawdown” option. In the row titled “> Start of Period” and add $10,000 in each of the periods 1 through to 8 (1 Jul 2014 through 1 Jul 2022). Then either hit enter OR click on the page in the Navigation Menu that you are currently on. This will refresh the scenario with these new cashflows.

3. You can check these cashflows by heading back to the Display > Surname Family Trust > Cashflow > Consolidated to make sure the funds are drawing down from the Loan and are being directed into the Investment Asset.

Work with the facilitator to answer the following questions:

i. Check whether the Investment Portfolio has been set up in Trust No. 1.

ii. Check whether the regular contributions are going to the Investment Portfolio. 

iii. What is the balance of the Portfolio in year 2?

iv. What is the balance of the Loan in year 2?

v. What is the LVR in year 4?

• Earnings from the company can be retained by the company. This can be done from the Input/Surname Consulting Co/Capital screen, by selecting No in the ‘Apply Shareholder Dividends section.’
• By selecting the Start Date of the Loan as ‘Start’, it is assumed that the loan is already in existence.

8.4 Tax Effective Distributions

Currently the Client’s Distributions are as follows:
Adam – 40%, Kate – 40%, Josie – 10%, Ben – 10%.

You can change the distribution levels by going to the Navigation Menu; Input > Surname Family Trust > Capital and changing the distribution percentages based on your calculations.

Work with facilitator to:

• Check the total distribution received by Adam and Kate. 
• Tax payable by Adam, Kate, Josie and Ben.

Once you have done the above activity:

• Change the distribution levels as follows:

Adam - 30%, Kate - 55%, Josie - 10%, Ben - 5%, and then;

• Check the total distribution received by Adam and Kate.
• Tax payable by Adam, Kate, Josie and Ben. 

8.5 Gifting to the Family Trust - Steps for gifting

1. We recommend they gift $20,000 to the Trust.
2. To enter the gifting details, on the Navigation Menu click on Display > Surname Family Trust > Cashflow > Consolidated.
3. The first item on the consolidated page is the gifting area from individuals. Enter $20,000 and press “Enter” to recalculate the modelling or click on the same page that you are on in the Navigation Menu.

 Check your surplus cashflow to ensure that the client has sufficient funds in hand. To do this go to Display > Individual > Cashflow > Consolidated and check the net cashflow.

9.0 Charts, Exporting and Comparing Scenarios

9.1 Charts

You can view charts for all entities and also consolidated entities.

1. To view the charts click on Charts in the Navigation Menu
2. Select the entity and the chart you wish to view. For example, click Charts > Individual > CALM (PV) to ensure clients can meet objectives.

You can click on the arrow in the top right-hand corner  and select 'Download Chart Image' to either print or save it on your computer. 

9.2 Export Display tables to CSV

To export any display page as a CSV file:

1. Place cursor at the top right hand side of the screen and click on the Cog icon:

2. Choose Export as CSV from the menu

3. A menu will appear; click on Export as CSV to export the display table to an excel sheet.

9.3 Compare Scenarios

To compare scenarios (in Display):

1. Click on the scenario name and
2. Select the 'Compare To' and the scenario name you would like to compare.
3. A new window will open with the two selected scenarios. 

9.4 Compare Charts

1. To compare charts or graphs select Scenario Index in the Navigation Menu. From the scenarios index click on “Compare Chart” at the top right of the page.

2. Select the Scenarios you want to compare by ticking the box next to their name, and then Compare

3. When you click on Compare you will be directed to the Compare Charts > Returns Screen. From the navigation menu on the left hand side you can select the chart you wish to view.

10.0 Locking Scenarios

XTOOLS+ scenarios can be locked, preventing any changes being made. By locking a scenario, XTOOLS+ takes a snapshot of all current inputs, results, charts and legislative information at the date of locking. Data within a locked scenario can still be exported or saved to a new scenario.
Locked scenarios can only be unlocked by users with the User Capability ‘Unlock XTOOLS Scenarios’. As the calculations for results and charts in XTOOLS rely on factors such as the client's current financial situation and current Legislation and taxes, unlocking a scenario can cause significant changes to the results.

10.1 To lock an XTOOLS+ scenario:

1. In the client menu, go to XTOOLS > XTOOLS+ > CALM. This will take you to the Scenario Index.
2. From the Scenario Index, click on the padlock icon under Action. You will be given a warning message asking you to confirm that you do wish to lock the scenario. The scenario will now lock in the background and a message will be sent on completion.

Conclusion

Summary

Congratulations! You have completed the XTOOLS + Entities course

You would have worked through the process of creating and editing Entities such as Companies, Trusts and SMSF’s for a client using XPLAN.

Review Learning Outcomes

You should now be able to:

• Use XTOOLS+ to do strategy modelling and comparisons.
• Analyse cashflow screens in XTOOLS+.
• Set up Companies, Trusts and SMSF's
• Model compare and lock strategies
• Compare and save Charts.

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 - 6pm Monday - Friday.

Customized 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

Consulting Services/Tailored Solutions
IRESS' consulting service offers a focused review of a dealership/practice and identifies how our Wealth products can improve business efficiency.

IRESS' consulting service offers a focused review of a dealership/practice and aims to identify how XPLAN can be better utilised to improve business efficiency. While all aspects are covered, key areas may include:

• Assisting with the development and implementation of workflow processes
• Fine tuning SOA
• Designing and implementing SOA.

For further information contact your Account Executive or the Senior Project Consultant:

Andrew Wootton
Senior Project Consultant
07 3011 4700
awootton@iress.com.au