Keystone Private Family Office – What does High Net Wealth look like in Australia?

As a leading Family Office Keystone Private team believe there is no typical family office client.

Every family or individual requires a tailored service specific to their circumstances.

We pride ourselves on our core values of independence, honesty and transparency to provide helpful advice and ongoing value to every family and business we work with.

Not everyone understands what a Family Office is and the role it performs for high net worth clients and how Keystone Private’s services could work for you.

The facts about High Net Wealth and what it means to your family.

Many families and individuals are unsure where they fit within the High Net Wealth environment. Most would consider themselves ‘wealthy’ but not ‘High Net Wealthy’, while those in the Ultra High Net Wealth category often say they’re just ‘doing alright’.

Definitions of High Net Wealth and Ultra High Net Wealth can be quite varied and depend on all kinds of factors including what time of year it is, who you ask and whether they are thinking globally or locally.

To simplify matters, let’s break it down and create some ranges to get an idea of where your family or business fits in the current environment and where Keystone Private’s services could work for you.

Net wealth in the finance industry is commonly described as the amount of investible assets that exceed your liabilities. So, this generally excludes the investment in your family home and any toys or ‘collectibles’ you may have.

Wealthy Individuals within Australia are generally deemed to be those with net investible assets (NIA) over $1M (or net of over $2.5M including the family home) and earning more than $250,000 per annum. Having said this, the ATO categorise ‘Wealthy Individuals’ as those who control a net wealth of $5M or more.

Furthermore, the ATO categorise High Wealth Individuals as those who control a net wealth of $50M or more and it’s this group that is regularly targeted by the ATO to ensure all of their tax obligations are being met.

In 2019, Forbes Asia listed the Top 50 Richest People in Australia whose net wealth ranged from $750M to Gina Rinehart who was valued at the time at approx. $14.8B. This group makes up a very small percentage of the Australian population and would be included in the Ultra-High Net Wealth category.

Within the Keystone Private family, we use the following broad categories as a guide only. The Keystone model isn’t based on how much you’re ‘worth’. Our model is based on how our team can best add value to your family & your family’s assets (including businesses).

  • Wealthy families/ Businesses: NIA between $1M – $50M
  • High Net Wealth families/ Businesses: NIA between $50M – $500M
  • Ultra-High Net Wealth families/ Businesses: NIA over $500M

Noting above, it is not what you have that determines whether a family office is right for you. It is what you need.

Ask the Keystone Private team to assist you understand your needs and what services may be relevant to your circumstances.

Keystone Private Advisory – The recession is officially upon us.

The recession is officially upon us following the release of June quarter GDP figures.

Stimulus packages, primarily the JobKeeper and cash flow boost measures, have maintained our economy on reasonable life support. 

Eligible employers will see the first financial impact of the extension in early November, as their JobKeeper payments are made at the revised rates in respect of payments from 28 September 2020, being:

  • $1,200 per fortnight for those working in the business ≥ 20 hours at 1 March or 1 July 2020;
  • $750 per fortnight for those working in the business for < 20 hours as at 1 March or 1 July 2020.

Employers will need to demonstrate a continued decline in turnover to qualify for the extended JobKeeper program beyond 4 January 2021 by demonstrating a decline in turnover for the December 2020 quarter, comparing December quarter 2020 actual turnover to December quarter 2019 actual turnover (30% decline if aggregated turnover ≤ $1 billion; 50% decline if aggregated turnover > $1 billion; 15% decline in turnover for charities and not for profits).

Employers should keep in mind that they may still be eligible for the extended JobKeeper program from 4 January 2021, notwithstanding that they may not have been eligible for the initial extension (28 September 2020 to 4 January 2021).

The revised JobKeeper rates from 4 January 2020 will be:

  • $1,000 per fortnight for those working in the business ≥ 20 hours at 1 March or 1 July 2020;
  • $650 per fortnight for those working in the business for < 20 hours as at 1 March or 1 July 2020.

The 2020/21 Federal budget has added to the stimulus measures, with key additional benefits available being:

  • A JobMaker hiring credit of $200 per week (for employees aged 16 to 29 years) or $100 per week (for employees aged 30 to 35 years). The eligible employees must work at least 20 hours per week and have received the JobSeeker, Youth Allowance or Parenting Payment before being hired.  Importantly, an employer receiving JobKeeper payments will not be eligible for the credit.
  • Instant asset write-off extended to new assets (no cost limit) acquired from 6 October 2020 to 30 June 2022 for businesses with a turnover less than $5 billion.
  • Temporary loss carry-back for companies with turnover less than $5 billion. Losses from 2019/20, 2020/21 and 2021/22 can be carried back and offset against taxed profits from the 2018/19 or later years.  Together with the instant asset write-off measure, this measure is a great cash flow boost, particularly for capital intensive industries.
  • Bringing forward personal income tax cuts so that they now commence from 1 July 2020 instead of 1 July 2022 – many employees will have already seen the benefit of these tax cuts in their take-home pay.

The Keystone Private Advisory team can assist you to navigate through the evolving COVID 19 stimulus environment. Reach out if you need assistance.

Keystone Private Wealth Open Advisory Panel – 100s of experts with 1000s of years’ experience

Most financial services and wealth management practices have some form of advisory panel or investment committee.

Such panels and committees are often populated with a mix of:

  • Industry heavyweights (the power)
  • Technical expertise (the boffin)
  • Semi/retired colleagues (the grey hair)

and are used for:

  • Compliance purposes (regulatory requirement)
  • A sounding board for ideas or problems (fair enough)
  • Marketing (me being a little cynical)

At Keystone Private we believe this formula is outdated and counterproductive to ensuring our clients have access to the broadest knowledge and experience base possible.

We think outside traditional methodologies and to demonstrate this have developed an OPEN ADVISORY PANEL concept to maximise the knowledge, experience and understanding available to our clients.

Through our extensive network or clients, contacts, industry colleagues, friends and family, we have access to 100s of experts with 1000s of years’ experience across every field of expertise. This expertise is available to assist across all aspects of the wealth management landscape as well as your business environment, family continuity considerations and beyond.

Why settle for the usual when you can access the exceptional?

The Keystone Private Wealth team and our Open Panel are available to assist at your request.

K2 Private Property More than just property.

Whilst K2 Private Property functions as  commercial real estate agency providing

  • Sales and acquisition
  • Leasing and tenant representation
  • Property and Facilities managemen

services across commercial, retail and industrial asset classes, it is so much more.

As part of the broader Keystone Private Group, we assist clients with

  • Due diligence
  • Contract negotiation
  • Structuring
  • Financing
  • Insurance
  • AFSL needs
  • Capital raising, and
  • Accounting and reporting needs

In simple terms K2 Private Property can provide a complete end to end service for the acquisition, ownership and disposal needs of a property owner, whether they be for an individual property owner or a portfolio within a funds management structure.

To find out how your current property landscape could benefit from something more than just an agency environment, touch base with us today.

Keystone Private Cyber – World-Class Cyber Security Services

Keystone Cyber Security is excited to announce an exclusive agreement with SYPAQ Systems to expand the cyber security services and solutions of both organisations.

The agreement will see these Australian owned companies unite to deliver world-class cyber security services to the Department of Defence, Defence Prime Systems Integrators, the broader National Security Community, other Commonwealth and State Government Departments, and private enterprise.

The combined experience and expertise is leading-edge, providing peace of mind to Australia’s most discerning organisations including the Australian Government and the military, where the protection of privacy, intellectual property, trade secrets and national security is paramount.

The combination of SYPAQ’s and Keystone Private Cyber’s decades of Defence and National Security experience provides the partnership with a deep and unique perspective on the protection of critical infrastructure that all Australians rely on, including cyber security obligations for owners and operators.

Keystone Private Cyber Managing Director, Ross Jackson said “We look forward to the opportunity partnering with SYPAQ brings.  We share values and philosophies that will underpin our relationship. The relationship enables our aligned service approach and proven expertise to continue to deliver the best quality information assurance services and to grow capability in the dynamic and increasingly hostile cyber environment.”

Keystone Private Cyber’s expertise centres on the delivery of tailored best practice security management to protect client’s high-quality information, aligned with their personal and business needs.

Cyber risk is often only identified when it is too late. Let Keystone Private Cyber help you get in front of potential problems before they arise.

Keystone Private Foundation – already making a difference


Keystone Private Foundation has now been operating for 18 months.

Whilst the philanthropic environment has been impacted by current COVID 19 circumstances (much like every other aspect of our lives) our Foundation has still been able to provide a number of philanthropic solutions to employers, employees and also a Private Ancillary Fund (PAF) in the process of vesting its capital.

The Foundation has already received numerous requests for funding from eligible charities, made its first distributions, and will be allocating the next round of distributions in the December/January period.

Should you be interested in our Foundation assisting with your philanthropic needs, please read more Keystone Private Foundation and reach out to the team.

Factors to consider in deciding whether you need the services of a multi-family office.

At Keystone Private Family Office our client relationships are driven by mutual respect, independence, transparency and integrity.

We are keenly aware that business interests allied with family continuity and wealth transition can be extremely complex, demanding at times, and highly emotive.

Our strategic oversight of this specialist area requires a deep appreciation for the values of relationships as every decision will impact loved ones and potentially affect family dynamics long into the future.

Factors to consider in deciding whether you need the services of a multi-family office. 

It is common for clients to want (or need) to separate their personal business and investment interests from their core business activity.

Whilst we can and do act in both capacities, at Keystone Private, we strongly encourage this separation as it has a number of distinct advantages including:

  • Allowing the core business team to concentrate on the business without the distraction of personal and family requirements
  • Providing a better framework for confidentiality around personal and family matters
  • Access to a skillset that may not be available within the core business team
  • Creating an independence framework around the need for business capital vs the desire to build up wealth outside the business
  • Allowing for smoother transition upon sale or transition of the core business
  • Ensuring that personal accounting, reporting and administration is not ‘left behind’

 There is, of course, a need to ensure that the advisors looking after the personal interests have an open and transparent relationship with the business team. There will often be a crossover between the two teams, and it is important to ensure minimal if any duplication of effort or cost occurs.

A number of other drivers can crystalize the use of a family office however the above is often that first inflection point where such considerations are raised.

If implemented well, the use of a family office can ensure that the evolution from wealth creation to wealth management and generational transition is achieved smoothly in a planned, pro-active and cost-efficient manner.

Full-service accounting, taxation and advisory services tailored to your needs.

The 2020 financial year has been different from any other.  Whilst businesses and employees have been slowed down and even halted over the past months, tax obligations remain.

Treasury and the Australian Taxation Office (ATO) have been tremendous in their respective efforts to create and administer a number of stimulus packages.  The Job keeper program and cash flow boost have allowed cash flow to be managed through this difficult time.  The ATO has also been accommodating with requests for deferral of tax payments.  The Keystone team has been working with our clients to ensure compliance obligations are met to access the relevant stimulus payments.

The economic impacts from business closures will continue through to 2021 and beyond. Cash flow management will continue to be paramount for success.  Appropriate tax planning through this period will assist in successful cash flow management.

Given the budget constraints, we expect that Treasury and the ATO will be looking at tax gaps.  The Top 500 private groups tax performance program, which is part of the Tax Avoidance Taskforce, aims to ensure that large private groups and high net wealth individuals are paying the appropriate amount of tax. 

Business owners in this target group should ensure they understand their tax risk management processes and are aware of potential focus areas of the ATO.

We are seeing calls from many quarters regarding significant tax reform to pay for what will now be a long-term budget deficit.  Whilst reforms such as a higher rate and broader base of GST, a re-think of property taxes away from stamp duties, and changes to income tax rates are all welcome ideas, in theory, the tight political reality may make such reform difficult, if not impossible in the near term.

Our key tax focus points for businesses over the coming months are:

  • Prepare cash flow projections for all taxes (e.g. income tax, GST, PAYG)
  • Review shareholder loans and manage required repayments (Division 7A)
  • Understand your risk areas in the event of ATO enquiry
  • Monitor your eligibility to enter the job keeper program (if not yet qualified)

The tax team at Keystone Private Advisory have enjoyed the first year of operation and are looking forward to assisting many more clients throughout the 2021 year and beyond.

Truly independent wealth services – July 2020 News

Keystone Private Wealth has been providing independent wealth management services to our family office and broader client base since incorporating in 2008. In recent years this included successful funds under management business with a dedicated investment team.

To maintain the fiercely independent approach expected of us by our clients, a decision was made to separate the funds under management function from Keystone Private Wealth and the broader Keystone Private group. This was finalised on 1st June 2020. Keystone Private Wealth will continue to provide its expert and truly independent wealth management services, including:

  • Development of wealth management framework
  • Capital allocation
  • Asset allocation
  • Manager selection
  • Fee negotiation
  • Reporting and administration
  • Investment due diligence
  • Investment committees and advisory board representation

The above wealth management process can be developed via a blank canvas approach or by building around an existing advisor and manager framework

K2 Private Property announce a NABERS Energy 6 stars rating for 55 Russell Street

K2 Private Property is an independent, specialist commercial real estate agency with an exceptional reputation for delivering outstanding results for clients.

We bring a wealth of knowledge, experience and professional acumen to every commercial and industrial property project.

We provide independent experience with integrity and honesty.

The K2 Private Property team are excited to announce Queensland’s first existing building to achieve a 6 Star NABERS ENERGY Rating – 55 Russell Street

This is the first time in Queensland an existing building has achieved this rating. The 6 Star rating is the highest available by the rating agency.

55 Russell Street, South Brisbane was awarded 6 Star Nabers rating following a 3-month upgrade program focusing on sustainability.

There are only 6 buildings in QLD that have this rating for the ‘whole of building’.

These include landmark new developments such as;’

111 Eagle St, CBD

123 Eagle St, CBD

1 William St, CBD

100 Skyring Terrace, Newstead

2 King St, Bowen Hill

The measures taken by K2 Private Property that has led to the 6-star rating include: –

  • Constant monitoring of AC temperatures to maximise the efficiency of the AC plant.
  • Constant electricity readings for both tenant and common areas which allowed us to provide a base building rating.
  • Clear identification of the tenant’s spaces to allow us to accurately calculate 24/7 operational spaces.
  • Removal and replacement of all 24/7 lighting in the fire stairs with LED lighting that includes microwave sensors to dim lights based on activity.
  • Removal and replacement of all car park lighting with LED lighting.
  • Installation of new sensors in the car park to allow lights to turn off when there is no activity.

The K2 Private Property team have been at the forefront of building upgrades over the last 10 years and most recently have completed upgrades for 333 Adelaide St, 420 George Street and now 55 Russell Street.

Feature Article

K2 Private in the News – Pacific Square snapped up for $20.9m in Marquette value play

Financial Review website - by Matthew Cranston

The below is from an article on the Financial Review website by Matthew Cranston dated 12 October 2016, at 4:55pm:

‘Marquette Properties has purchased the Pacific Square retail complex near AMP Capital’s massive Pacific Fair Shopping Centre on the Gold Coast for $20.9 million.

The Pacific Square property, while serving as a strong income asset for its new owners, is also one of the largest development sites on the Gold Coast and could offer an ideal residential property play into the future.

The deal, which was brokered in an off market transaction through K2 Private’s Stuart Moody, represented a passing yield of 7.2 per cent.

The single level retail and office asset at Mermaid Beach has 7355 square metres of net lettable area on a site of 17,300 square metres with 240 carparks.

The asset is 100 per cent leased to tenants who have been at the centre for an average tenure of 10 years.

Tenants include the Queensland state government, Supercheap Auto and Snap Fitness.

Pacific Square is Marquette’s fourth retail acquisition in the last six months alongside the St Lucia Village in St Lucia, Brisbane, for $10.2 million, Festival Towers in Brisbane CBD for $22.7 million and Bushland Beach Plaza in Townsville for $5.5 million.

Marquette Properties’ managing director Toby Lewis said the new property would allow his team to add significant value in the future.

“As well as being a stable investment with a significant rental reversion, the asset has enormous future development upside,” Mr Lewis said.

“We believe the current day development value and replacement cost value exceed the investment value price we have acquired the asset for.

“The asset has excellent retail fundamentals and is consistent with our investment philosophy of buying assets that we can drastically change the value of and be a ‘pricemaker’ at exit.”

Mr Moody said the property, which is zoned for eight levels of residential, was a prized asset.

“We see it as an awesome investment because it’s one of the largest development plays on the Gold Coast,” he said.’

About K2 Private

K2 Private is a boutique commercial Real Estate Service provider focusing on the private owners in South East Queensland. We aim to bring a fully integrated Property Management, Accounting and Transaction Co Ordination service to the private families of Queensland. K2 Private is a wholly owned subsidiary of Keystone Private – Queensland’s leading Multi-Family Office.

 

For further details please contact :-

Stuart Moody

Director – Property

0421 323 051