Australian Financial Practitioners Pty Limited in The Rocks, Sydney | Financial service

Australian Financial Practitioners Pty Limited

Locality: The Rocks, Sydney

Phone: +61 2 4631 1499

Address: Level 23, 25 Bligh Street 2000 The Rocks, NSW, Australia

Website: http://ausfinancial.com.au

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15.01.2022 How good is your superannuation/ pension fund? About this time of year, Australian media publish fund manager league tables on how well or otherwise your investments have done compared to others. Investors rush to these tables, some are jubilant that they had the ‘smarts’ to choose the better fund manager. Others are disillusioned. But should they be? Let’s take a closer look. The table below shows average Australian superannuation fund returns for different underlying inve...stments (Source: Superratings/ AFR 29 July 2017). Asset Allocation* 1 year 5 year 10 year Growth 11.8% 11.2% 4.6% Balanced 10.5% 10.0% 4.8% Conservative 5.3% 5.8% 4.6% * A refection of your attitude to risk of capital loss. First the ‘elephant in the room’; what no one wants to say. To achieve the results shown in the above table, you will need to start and finish the year/ period without contributing or withdrawing money into/ from your investment. Now how realistic is that for most investors? Now back to the table. The most interesting fact is that over the past 10 years it didn’t make any difference if you invested in a ‘growth’ portfolio (i.e. up to 90% in shares, property, infrastructure, and private equity) or a ‘conservative’ portfolio (i.e. up to 40%), the result was the same 4.6%! The reason being the impact of the Global Financial Crisis (GFC). What are the chances of another major market crash? This is not to say, just stick your money in a ‘conservative’ portfolio and leave it alone, but to recognize that your time horizon (i.e. how long before you need the money) is just as important as your risk appetite/ asset allocation. For instance, if you need to withdraw some moneys within a short period, a conservative investment approach is usually better. Hence, a return of just 5.3% over the past year may have been a good thing; at least for some of your money. Likewise, should you have time on your side (e.g. favourable longevity) and comfortable with high risk, then perhaps a more aggressive investment approach may be your cup of tea; again, at least for some of your money. The key is engaging with the market. As you can see, just comparing fund managers is largely irrelevant and probably just plain financially dangerous as most investors chase short-term returns. Instead, what you need to do is to continually consider whether your investments are producing a satisfactory return for your unique personal circumstances. This usually falls into the ‘too hard basket’ for most and is precisely where a licensed financial practitioner/ adviser may be able to help.

09.01.2022 ‘Use it or lose it’ Strange thing for a financial practitioner to say one would think. However, not as strange as the Australian government’s proposed new superannuation contribution rules. Under the proposal, from 1st July 2017, non-concessional contributions (i.e. not tax deductible) will be limited to $100,000 per annum provided, amongst other things, the contributor’s superannuation account balance is not more than $1.6 million. Now the really strange bit. It may still be... possible to contribute up to $540,000 prior to the 30th June 2017 and not worry about the total contribution limit of $1.6 million. This is due to timing differences between current rules and the proposed change. This window to contribute a large sum of money is short; it might be the last opportunity, so ‘use it or lose it’. That is, as long as you are able and eligible to make very large contributions into superannuation. The discussion begs the question why bother. Surprisingly, people often get confused between superannuation and retirement savings. Retirement savings represents your investments; being shares, property, term deposits or whatever. Superannuation represents the tax structure that can hold and report your retirement savings to the tax office. The tax effectiveness of superannuation often results in lower taxation in comparison to personal tax rates. Astonishingly, it even gets better, once retired and over 60 years old, withdrawals (i.e. pension payment) may become completely tax free to you; albeit, it may be limited to the first $1.6 million of superannuation. As the above is general advice, whether you ‘use it or lose it’, depends entirely on your personal situation. Please speak to a registered financial practitioner/ adviser for complete and comprehensive advice.

05.01.2022 HIGHEST RISK IN INVESTING I suspect you are probably going to say certain shareholdings, speculative property, or a particular financial product. Whilst you may be right to some extent, be prepared for a big surprise, as were most Australians after tuning into the 2018 Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry. To my horror, the big surprise was the greed of financial advisers and their organisations. There were numerous s...Continue reading

01.01.2022 Death of ‘financial whiz’ and missing $100 million Title got my attention as well. According to the Sunshine Coast Daily newspaper (1st August 2016), a body washes up on a Sunshine Coast beach (Queensland Australia), $100 million is missing and hundreds of investors are desperately trying to salvage their life savings. It appears that the 600 or so Australian & international investors were caught in a giant Ponzi scheme allegedly operated by unregistered financial adviser St...eve Halgryn (deceased) of Suncoast Financial Services/ SFS Global. If you are one of the investors, immediately contact the Australian Securities and Investment Commission (known as ASIC) on 1300 300 630 within Australia or +61 3 5177 3988 for overseas callers. If you are not, what can you do to reduce your chances of being caught in an Australian financial swindle? The first step is to check that the financial adviser is registered with ASIC by going to www.moneysmart.gov.au and in the search box, type in ‘financial advisers register’ and then on the listing click on the register. Yes, a bit messy and one would think the government would make it easier for consumers. If your financial adviser is not on the ASIC financial advisers register, run away as fast as you can and don’t forget to take your wallet with you. A word of caution, there are other similar sounding registers on the web, don’t trust them. In a later piece, I will cover how to compose a short list of registered financial advisers that you may wish to contact.