Financial PlannersNews Steady Capital or Sustainable Income

Do You Need Steady Capital or Sustainable Income?

As providers of a wide range of financial services in Perth, we have helped a lot of your neighbours achieve their financial goals. However, there is no such thing as a “one size fits all” investment because everyone’s individual situation is different.

One of the basic questions we like to ask our clients is whether they are looking for steady capital or sustainable income. Recently, our parent company, AMP Capital, addressed the effects of the low cash interest rate on cash investments. While a low cash interest rate is good for the economy, it tends to reduce the value of cash investments such as term deposits.*

As you probably know, the cash interest rate is still at a record 2.0%. For comparison, it was at 7.25% in August 2008 and 4.75% in November 2011. *

Cash Investments

Term deposits and other cash investments have traditionally been regarded as “safe” investments because the value of those investments is usually stable. Historically, interest rates have been enough, even when in a “low” cycle, to provide adequate return on investment (ROI). However, interest rates are now at record low levels.*

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Financial PlannersSuperannuation Fund Pitfalls For Setting up an SMSF

Setting up an SMSF? Watch Out for These Pitfalls.

A lot of Australians are opting out of their employer’s superannuation funds and setting up self managed superannuation funds (SMSF’s). At Approved Financial Planners, we have helped numerous people in the Perth area with their SMSF’s.

According to the Financial Planning Association (FPA), though, some costly mistakes are common among those establishing SMSF’s. Here are a few of them.

Letting Your Money Sit

Some Australians who opt for SMSF’s put their money into them but just let it sit as cash. The FPA stresses the importance of those who establish an SMSF having a plan and a strategy for how their funds are going to be invested.*

Inaccurate Assessment of Costs

It can cost a lot of money initially to set up an SMSF. Then there are ongoing costs, such as investment fees, legal advice and ongoing accounting. If there is a corporate trustee, it will cost money to maintain the trustee structure.*

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Investment PlanningNews Investing In Current Financial Year

The Current Financial Year: 3 Tips for Investing Now

One of our more popular financial services is investment planning. We know people in Perth work hard and expect life to repay them in kind. One of the best ways to ensure that you are able to enjoy the fruits of your labours is to invest your money wisely.

Recently, Dr Shane Oliver, Chief Economist and Head of Investment Strategy at AMP Capital, published a blog piece called, “3 tips for investing in the new financial year.” The piece consisted of a short video with three investment tips for the current economy. We would like to tell you about them.*

Turn Down the Noise

Dr Oliver expects plenty of volatility in the coming financial year. However, he also sees the “noise” surrounding volatility as a distraction that can “knock you off your strategy.” In other words, Dr Oliver warns that the “noise” of short term losses can cause an investor to abandon an asset due to short term losses instead of waiting for the asset to rebound in the long term.*

Diversify Your Portfolio

Dr Oliver warns against becoming too “confident in one particular asset” because it can make you too dependent upon the performance of that asset. He prefers a diversified approach that offers protection in case one asset performs poorly.*

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Financial PlannersNewsSuperannuation Fund Right Choices As SMSF Trustee

Making the Right Choices as an SMSF Trustee

With over 40 years combined experience in the financial services industry, we have been providing advice on self managed superannuation funds (SMSF’s) to Perth area investors since self management of superannuation funds became an option in late 1999.

Recently, our parent company, AMP Capital, conducted research on what SMSF trustees considered to be the most difficult part of managing an SMSF. The research was conducted by Investment Trends.*

Poll Results:*

Most Difficult Task:*

27%: Investment selection.
24%: Keeping track of SMSF rule and regulation changes.
23%: Administration and paperwork.
19%: Finding enough time to conduct investment research.

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Financial PlannersNewsSuperannuation Fund Splitting Super With Your Spouse

Splitting Super Contributions with Your Spouse

Superannuation splitting is a concept that we have shared with a growing number of our Perth area clients. Known as “super splitting,” it is a way you can split your before tax or concessional super contributions with your spouse. The two most common types of concessional super contributions are your arranged salary sacrifice contributions and your employer’s mandatory contributions under the superannuation guarantee.*

If your super fund allows you to do it, you can split contributions to a different fund or within the same fund. While contributions can be split, your super fund’s account balance cannot. If you wish to split your contributions, you must be in a de facto relationship or married to the person with whom you are splitting your super contributions.*

To receive split contributions, your spouse must be under 55 years of age or between 55 and 64 but not retired (other conditions may apply). If your spouse is 65 or more years of age, you cannot split any superannuation contributions.*

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Financial PlannersNews Financial Information If Getting A Divorce

Getting Divorced? This Information Could be Valuable to Your Financial Future.

We are biased, but we think Perth is the best place to live in Australia. However, even Perth isn’t immune to marriages ending in divorce. While it is important to have the right divorce lawyer, it is also important to have the right financial planner.

According to a recent blog post by the Financial Planning Association of Australia (FPA), one out of three marriages will end in divorce, after an average period of 12.2 years. The average age of divorce for men is 44.1 years, while the average age for women is 41.5 years.*

The FPA notes that in the absence of a prenuptial agreement, known as a BFA or binding financial agreement, the distribution of assets is negotiated. The longer and more deeply lawyers are involved, the more of your assets end up being paid as legal fees. The FPA recommends an “amicable asset split agreement” whenever possible.*

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Financial PlannersNews Financial Planners Help Balance Present and Future Lifestyle

How the Right Financial Planner can Balance Your Present Lifestyle with Your Future

In Perth, financial planners have an important job to do. We have to help you live the kind of lifestyle you want now while helping you plan for your future. Most people want to live well now, but they want to have enough money to live well in the future, too. We understand that and are experts at helping you strike that balance.

We know that everyone has different “drivers” in their lives. Some like to take vacations. Some like to play golf. Some like to fish or boat. Some like knowing that their children’s college education will be taken care of for them. Some place the most importance in the house they live in.

In Perth, it can be quite expensive to do many of these things. That makes it even more beneficial for people to maximise every dollar they earn, both in the present and the future.

How We Help You Meet Your Goals

At Approved Financial Planners, it all starts with your goals. When you talk to one of our financial planners, we can start with your goals. Then, we find out your resources, such as assets and income. We also take your monthly expenses into consideration. Your superannuation fund is also important. Some people decide to use a self managed superannuation fund and make extra contributions through the fund.

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NewsSuperannuation Fund Defined Benefit Super Scheme

Defined Benefit Super Scheme? Why a Super Checkup May Be Beneficial.

Many Government or public sector employees have PSS defined benefit superannuation funds. We would like to explain the difference between an accumulation-style superannuation fund, a defined benefit superannuation fund and a self managed superannuation fund.

When you retire, especially if you plan to stick around the Perth area, you don’t know how much money you will need to live the lifestyle you want. We feel it is helpful for those with defined benefit supers to understand their options.

What is a PSS Defined Benefit Super Fund?

A PSS defined benefit super is so named because the benefits you receive upon retirement will be “defined” or based upon final average salary (FAS), your contribution rate and the amount of time you were a PSS member. The Australian Government and other participating employers offer this kind of super fund.*

Why is it Different

Other super funds are invested for you. You can either gain money or lose money. The amount of money you eventually collect is dependent upon how much money is in your super fund. When you retire, you can collect your super as a monthly payment (retirement income stream), a lump sum or a combination of both.**

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Investment PlanningNews Spot an Investment

Can You Spot an Investment Before it Becomes a Trend?

If you happened upon this page, you are probably interested in investment planning and live somewhere in the Perth area. At Approved Financial Planners, we provide a full range of services such as financial planning and mortgage broking to our Perth area neighbours.

We are often asked what the “new trends” are regarding investing. While many investors like to jump on the newest trends, those who prosper the best are usually those who can spot investments before they become trends. If an investment is a trend, it often means that too many people have already “jumped in.”

Our parent company, AMP Capital, has identified what they believe will be an investment trend and a new asset class soon: global listed infrastructure.*

The Global Listed Infrastructure Team of AMP Capital is led by Tim Humphreys. Mr Humphreys holds a Bachelor of Engineering Degree with Honours from the University of Sheffield. He applies his knowledge of engineering to the financial field and is known as a skilled infrastructure analyst.*

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Mortgage BrokingNews Lenders Tighten Up Investment Property Loans

Game Changer: Lenders Tighten Up Investment Property Loans

At Approved Financial Planners, we combine mortgage broking and financial planning into a “one-stop” shop for Perth area residents. Recently, the Australian Prudential Regulation Authority (APRA) issued a memorandum to lenders demanding that they adhere to a 10% cap on the growth of property investment lending growth.*

Lenders are doing this by making it more difficult for property investors to obtain loans. The intent is to slow areas such as Sydney, which is in an extremely strong growth cycle, while allowing the rest of the economy to flourish under the record low RBA cash interest rate. *

According to Shane Oliver, Chief Economist for AMP Capital, the term for this is “macro prudential regulation” and was popular before the financial deregulation of the 1980’s. It refers to using prudential lending controls as a tool with which to influence the economy.*

According to Mr Oliver, “time will tell” whether or not the 10% cap will help APRA achieve its goal of boosting the entire economy. While APRA is demanding that lenders adhere to the 10% growth rate, compliance is officially voluntary. Mr Oliver believes that lenders will comply so they don’t force the APRA to create more regulations. *

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