Midwinter launches new planning tool

Financial advice software provider Midwinter Financial Solutions has launched a new tool designed to find the right balance between an account-based pension and a term allocated pension (TAP) that will deliver a client the best possible net income in retirement.

The latest module to be released on Midwinter’s Reasonable Basis software, RetireMax, allows financial advisers to compare their pre-September 20, 2007, TAP/account-based pension strategy as well as find the strategy that will provide the maximum outcome for their client in retirement, from an income, capital access and Age Pension perspective.

Like the rest of Reasonable Basis, the new tool also aids advisers in satisfying their disclosure obligations under the Financial Services Reform Act by guiding them in justifying their product and strategic recommendations.

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Midwinter general manager of strategy and technical services Matthew Esler said RetireMax would protect advisers who were under the misapprehension that a TAP purchased before September 20, 2007, would provide a far greater level of Age Pension and income in retirement than an account-based pension because of the 50 per cent asset test exemption.

“Most advisers believe that investing in a complying pension, most notably a TAP, before September 20 will give the best result for their clients in retirement, [with] some even getting their clients to borrow money to invest in a TAP before September 20 to ensure they access the 50 per cent asset test exemption,” he said.

“However, they are failing to consider the significant impact of incomes tests combined with the new asset test taper rate.

“Advisers can use RetireMax to protect them from making a planning error, and it should alleviate legal concerns into the future, especially if the client realises the original advice was not optimal and their capital is now locked into an income stream which is non-commutable.”

The new tool has been time coded to automatically take into consideration the current rules leading up to September 20 and legislation changes after that date.

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