We’re Putting the Spotlight Back on You

Your advice produces excellent results for your clients, and that’s something worth highlighting. At Elston, we’re invested in helping you add value to your business, by leveraging our expertise for improved performance. Together, we can give your clients the ability to capitalise on their strategic plan, with an emphasis on maximising tax efficiency.

As one of the largest* Managed Accounts providers in Australia, Elston offers customised systems and processes, developed and refined over many years. It allows financial planners and accountants to leverage Elston’s expertise and scale for improved performance for their clients.

Our ‘After Tax’ approach to investment management helps make investment returns less taxing. Managed accounts differ from other investment vehicles such as managed funds, in that client assets are held directly in their own name or entity. By utilising IMAs (Individually Managed Accounts) and SMAs (Separately Managed Accounts) to improve your clients’ after tax investment outcomes, we can help you demonstrate the value of strategic advice and structuring, resulting in a risk-free boost to returns.

What is After Tax Management?

After Tax Management acts as a ‘crossover’ between strategic advice and investment management. By using sophisticated order management, portfolio grouping and EOFY processes, we empower you to source tax alpha – adding value for your clients, while reducing administrative overheads for your practice.

The MDA Advantage is clear.

So what are some of the advantages of an MDA?

  • Being able to manage accounts individually means not only better control of the assets, but also better control of your client’s tax outcome.
  • Strategic planning and structuring becomes more relevant and the value of your advice to clients is easier to articulate.
  • Not only is this virtually impossible in a unitised structure, but strategic planning and structuring becomes largely irrelevant, as outcomes are at the mercy of how the Fund Managers have made their decisions.

 

Maximising Tax Alpha

Maximising Tax Alpha: a bright idea.

Alpha is the difference between a portfolio’s actual return and the return expected from the market (beta). If we exceed the benchmark, we have generated positive alpha. Most financial services firms treat alpha as purely an investment concept, but at Elston we see this very differently.

By avoiding or deferring tax, investors’ post tax returns are greater. At the end of the day it is the net return that reflects what investors end up with in their back pocket. This benefit above market returns is Tax Alpha. Following are two examples of how we can help generate Tax Alpha.

 

Example 1: The Benefits of End of Year Rebalancing

By taking into account the tax effects of rebalancing we can produce tax alpha and maximise value for your clients. Because each account is individually managed, we can make informed
investment decisions when it comes to investors’ tax consequences. For the financial year 2015/16, $10 million in tax was deferred for Elston’s clients, resulting in an average additional return of 2% for a client on the top tax rate. Over 10 years, this could result in $62,000 worth of tax saved for a $1 million portfolio in a superannuation account, as it moves from accumulation to pension phase.
Benefits of End of Year Rebalancing

Example 2: Proactive Management with a Tax Overlay

When making a decision to trade or not, Elston takes the tax consequences into account. For example, if an investor has held a stock for 360 days, this can be identified, and the sale
deferred for a week.

Proactive Management with a Tax Overlay

 

Let Elston light the way.

Elston Adviser Services provides comprehensive services to Professional Advice Firms, Accountants and Financial Planners, as well as customised mandates for not for profit, institutional and intermediary organisations. Over the last 10 years, Elston has grown to become one of Australia’s largest providers of Managed Account Solutions with a focus on capital preservation and total portfolio returns over the long term. With other services including financial advisory, outsourced solutions or practice management consulting, Elston can tailor a solution that suits your business and your client needs.

If you would like more information, please call 1300 ELSTON or email info@elston.com.au and an adviser will be in touch.

WARNINGS AND DISCLOSURES: This material has been prepared for general information purposes only and not as specific advice to any particular person. Any advice contained in this material is General Advice and does not take into account any person’s individual investment objectives, financial situation or needs. Before making an investment decision based on this advice you should consider whether it is appropriate to your particular circumstances, alternatively seek professional advice. Where the General Advice relates to the acquisition or possible acquisition of a financial product, you should obtain a Product Disclosure Statement (“PDS”) relating to the product and consider the PDS before making any decision about whether to acquire the product. You will find further details of the service we provide and any cost to you within the Financial Services Guide. Any references to past investment performance are not an indication of future investment returns. Prepared by EP Financial Service Pty Ltd ABN 52 130 772 495 AFSL 325 252 (“Elston”). Although every effort has been made to verify the accuracy of the information contained in this material, Elston, its officers, representatives, employees and agents disclaim all liability (except for any liability which by law cannot be excluded), for any error, inaccuracy in, or omission from the information contained in this material or any loss or damage suffered by any person directly or indirectly through relying on this information.

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