Feb172015
Mortgage BrokingNews Consumer Credit Regulation

Consumer Credit Regulation

Mortgage Broking, News

Besides financial planning, we also offer mortgage broking from our location in the Perth area. One of the first things that is done in the process of applying for any loan is to run a credit check. This credit report is an important part of determining whether or not you are able to obtain the financing you need for a home loan.

Unfortunately, some people don’t know their full rights under the National Credit Act and fall prey to predatory tactics. Courtesy of the ASIC’s MoneySmart website, we would like to remind you of some basic rights and safeguards that are designed to help consumers know exactly what they are getting into.

Obligations of Credit Providers

The National Credit Act establishes rules to help protect consumers from fraud. Everyone who wants to lease, provide or broker a loan must register with ASIC or work for someone who is registered.*

According to the National Credit Act, no credit provider may enter into any agreement with you that the Government would classify as “unsuitable.” This includes any contract that doesn’t meet your objectives or requirements. It also includes any loan which would inflict hardship upon you while trying to repay it.*

Read more
Feb122015
NewsSuperannuation Fund Basics of Superannuation

The Basics of Superannuation

News, Superannuation Fund

At Approved Financial Planners, we provide superannuation and self managed superannuation advice to our clients in the Perth area. We would like to present a short beginner’s guide to understanding superannuation. We have gone to the Government’s website, https://www.moneysmart.gov.au/superannuation-and-retirement/how-super-works, to gather some basic information that you may find helpful in understanding superannuation.*

What is Superannuation?

Superannuation is a process in which your employer currently pays 9.5% of your salary into a fund earmarked for your retirement. By 2025, this contribution would have increased to 12%. You are allowed to pay your own money into your super fund account to increase the fund. Money gained from super fund investments is usually taxed at a lower rate than the same investments made outside of your super.*

Choosing a Super Fund

Your money is usually invested into a super fund of your choosing. However, some employers decide where your funds will be invested. If you want to decide where your super fund will be invested, you must fill out a form from the Australian Taxation Office (ATO). It is called a “Standard Choice Form.”*

Read more
Feb42015
Financial PlannersNews What the Government Says about Finding a Financial Advisor

What the Government Says about Finding a Financial Advisor

Financial Planners, News

Financial advisors have become ubiquitous in Perth and for good reason. The current financial climate can be confusing with so many options and variables. More and more people are turning to professionals for help in managing their money. There are a lot of financial advisors out there and we are constantly asked how clients know they are choosing the “right” financial advisor.

We thought it might be productive to provide you with what the government has to say about finding a financial advisor. Remember that all information here is general and that none of it should be taken as specific financial advice or as a substitute for a personal, one on one meeting with a financial planner.

Referrals

The Australian Securities and Investments Commission (ASIC) notes what they feel are the two best places to find referrals: The first is professional associations. They mention the Financial Planning Association and The Association of Financial Planners, for example. Their second choice is to ask people you know if they are satisfied with their financial planner. When you find one who is happy with theirs, you can ask for the planner’s name.*

Read more
Jan122015
Insurance ProtectionNews Insurance Market in Australia

How False Confidence Affects the Insurance Market in Australia

Insurance Protection, News

Life insurance isn’t always a topic people want to talk about. In our Perth office, we see all forms as income protection insurance. Unfortunately, every time there is a study or a poll, it seems like more and more Australians are underinsured. This is often due to avoidance and denial, but it often happens out of a false confidence many have that “it can never happen to me.”

Unfortunately, “it” does happen to a lot of Australians every day. Nobody plans on having catastrophic illness or injury, but they still happen. The most recent survey showed up on an insurance industry website called RiskInfo, which publishes insurance industry news.

According to the poll, in which more than 1,000 Australians were asked questions about their life insurance coverage, 33% perceived themselves to be underinsured, while 23% said they were unsure if their current coverage was enough to protect their families if they died or became unable to work. Only 45% estimated that they were adequately insured. *

Some other results: of those who had only one of the four major types of insurance, more than 67% said they thought their coverage was adequate to protect their income and their families. *

Read more
Jan92015
Insurance ProtectionNews Insurance Checkup With Financial Planners Perth

Do You Need an Insurance Checkup?

Insurance Protection, News

One of the more important and underrated aspects of financial planning is income protection. To that end, we offer various forms of life insurance in our Perth office. We can’t give individual advice in a blog because everyone’s financial needs are different, but can offer some indications that it may be time to at least call a financial planner and ask for an insurance checkup.

Yearly Checkup

When you entrust your financial planning to us at Approved Financial Planners, we are always happy to offer a yearly insurance checkup. We feel that we owe it to our clients to provide them with the best in financial services. Consequently, we offer a yearly insurance checkup just to ensure that changes in your financial situation haven’t made it necessary to alter your coverage to better protect your assets.

Life Changes

Changes in your life often affect your financial situation because they can change your financial needs and priorities.

Changing Employers

If you change your employers, your entire financial situation can change. Different employers usually have different superannuation funds and different insurance plans. If you were depending upon your previous job for any kind of insurance, it is a good idea to find out what kind of insurance your new job provides.

Read more
Jan82015
NewsSuperannuation Fund Online Super Funds: A Recipe for Financial Disaster?

Online Super Funds: A Recipe for Financial Disaster?

News, Superannuation Fund

Considering how many qualified financial advisors there are in Perth alone, it is distressing to many of us to learn that a lot of people are using online self managed superannuation fund (SMSF) services.

It sounds great on the surface: appeal to your ego and tell you that you are capable of outperforming qualified financial planning professionals by simply visiting a website and establishing your own SMSF in a few clicks. We are sorry, but any financial advisor in Perth will tell you that it simply doesn’t work that way.

In the interest of full disclosure, we will mention that our parent company, AMP, offers five different SMSF products, with myriad variations to serve any need. We should also mention that we can’t give individual advice without talking to you and gathering enough information to provide that advice. However, we can tell you why online SMSFs are so risky and we can provide general information.

Individual Advice from a Professional

Online SMSFs may work for some people. Unfortunately, everyone’s needs are different. The reason we can’t give individual advice in a blog is the very reason that online SMSFs are so dangerous: they are a “one size fits all product” being marketed to people who all have different needs.

Read more
Jan72015
NewsRetirement Planning Planning For Retirement

Why it is Important to Plan Your Retirement

News, Retirement Planning

Whether you call it financial planning or retirement planning, it is never too early to start thinking ahead, especially if you plan on staying in the Perth area. While we can’t provide advice in blog posts, we can provide you with some general information regarding the planning of your retirement. Just remember that you need to call one of the financial advisors in our Perth office for individual advice.

Why is it so Important to Plan Your Retirement?

Once again, we can’t give anything that constitutes advice. What we can tell you, though, is that there is plenty of research suggesting that those who plan their retirements with specific goals are more likely to fulfil those goals than those who don’t have any goals. *

In a social or lifestyle sense, retirement goals may include lifelong learning, avenues for social engagement and intergenerational connections. Financially speaking, our retirement planners will work with you to set a retirement date and a retirement income. Then, it’s a matter of organising your finances to help you get there.

Read more
Dec232014
NewsRetirement Planning Downsizing Pros And Cons

Pros and Cons of Downsizing

News, Retirement Planning

One of the biggest questions in retirement planning, especially in a market like that in Perth, is whether to downsize or stay in your family home.

Remember that we can’t give any individual advice here because everyone’s situation is different. So, don’t constitute any of what we are saying as “advice.” That being said, here are some factors to consider when thinking about downsizing.

The Numbers: Who is Downsizing?

Our parent company, AMP, has some pertinent numbers on their website. According to research cited on the AMP website, approximately 25% of Australians between the ages of 55 and 64 relocated in the last five years. (1)

Four popular reasons were cited. 23% said they wanted to live in a smaller home. 22% said they moved for family reasons. 20% said they moved because they wanted a lifestyle change. 23% said they moved for reasons related to health. (2)

Pros and Cons

Ideally, downsizers who move into a smaller home enjoy their lives, happily ever after. They have less maintenance and smaller monthly bills because there is less space. They may have a nice addition to their “nest egg” from the profit of selling their old home and buying a smaller, less expensive one. They find it easier to get around. Some even opt for “sea change” and its more relaxed lifestyle.

Read more
Dec222014
Financial PlannersNews Industry Definition of Financial Advice

AMP Chief Questions Industry Definition of “Financial Advice”

Financial Planners, News

At Approved Financial Planners, we offer financial planning and other services to residents in the Perth area and across WA. We now have the benefit of having AMP Australia as a parent company. We chose to partner with AMP because they embody the same commitment to professional, ethical service that we do.

We are on the side of high standards for the entire financial planning and financial advising industry, making AMP the perfect parent company for us. Consequently, we were proud to hear of remarks made by AMP Limited CEO Craig Meller recently, addressing what our industry currently defines as “financial advice.”

Mr Meller was speaking about vertical integration, a model practised by AMP. During the speech, the subject of financial advice arose. He questioned the nature of financial advice as practised by many in the industry. According to Mr Meller, “Too many…self-interested parties…dumb down the definition of financial advice to (only include) product selection.” *

Mr Meller would go on to opine that this kind of “advice” was usually meant to “justify a certain position” and that it is “a million miles away from where the true value of advice lies.” *

Read more
Dec172014
Financial PlannersNewsSuperannuation Fund Invest SMSF In Property

Financial Planner Urges Caution when Investing SMSFs in Property

Financial Planners, News, Superannuation Fund

Self Managed Superannuation Funds (SMSFs) are being used to invest in property by many in the Perth area. However, a financial planner in Sydney is of the opinion that those planning to invest their SMSFs in property should be very careful and make sure they know whether or not their advice is impartial. *

Sydney financial planner and accountant Michael Hutton warns that investors should seek impartial advice instead of merely accepting advice from someone who is trying to make a sale. Mr Hutton is of the opinion that many of those who are entrusted with helping their clients maximise their SMSFs are forgetting that the SMSF is a long-term investment strategy that is meant to provide a better lifestyle during retirement. *

Mr Hutton believes that investment property works best as a long term investment and that rental yield on investment properties tends to be too low to offer immediate cash flow. He is also of the opinion that gearing a property can cause problems further down the line. He would rather that an investor enter retirement debt-free and that their retirement funds should be generated by solid assets. *

One problem that Mr Hutton feels investors and advisors fail to consider with investment property is that illiquid assets such as property can be difficult to unload at the proper time. He also points out that conveyancing costs stamp duty are incurred when transferring a property to a beneficiary. *

Read more