Assignment 2: Statement of Advice

Bruce Cooper is a Farm Consultant and works from a small commercial office he owns in Moora. Bruce is 54 years old and has $460,000 in XYZ Superannuation. All of this superannuation is invested in cash earning 1%pa after fees. Bruce is considering establishing a Self-Managed Superannuation Fund to purchase his commercial office for $250,000 and invest the remainder in managed funds. Bruce purchased the property for $90,000 3 years ago.

Bruce also has $280,000 from an inheritance which he envisages that he will not need for over 10 years but does not want to put it into Superannuation as he will not be able to access it.

Bruce earns $183,000 gross of tax and SGC. He is not married, has no debt and is healthy. He considers himself to have a Growth risk profile.

YOUR TASKS

In the format of a Scaled Statement of Advice to Bruce give the following recommendations:

A recommendation to establish a SMSF. Include at least three advantages and at least three disadvantages relevant to Bruces situation.

Including calculations, recommend to Bruce that he buys the commercial property in his SMSF.

Recommend a suitable investment for residual cash in the SMSF

For the inheritance, recommend an Investment bond and give advantages and disadvantages of the recommendation.