Mortgage BrokingNews Real Estate Investment Trusts Popular In Perth

Why Real Estate Investment Trusts are So Popular

Some financial planning professionals in Perth are recommending real estate trusts as an investment vehicle. Recently, the Head of Listed Real Estate for AMP Capital, Mark Ferguson, wrote an article for the AMP Capital blog, called “Australian real estate investment trusts—the right time to invest?”*

The article referenced the fact that Australian Real Estate Investment Trusts (REITs) on the S&P/ASX 200 A-REIT list have delivered a three year return to investors of 18.4$ in the three years ending 31 July 2015. Past performance is not indicative of future performance. They listed four main reasons for investing in REITs.*

Strong Risk-Adjusted Returns

The REIT sector is now seen as a “defensive” investment that offers a high yield. They became popular as a defensive investment shortly after the Global Financial Crisis (GFC). Mr Ferguson expects the market to “be more discriminating,” making the highest quality property portfolios managed by the most conservative capital policies more popular.*

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Financial PlannersNews Teach Children To Save - Financial Planning Perth

Teaching Children a Lifetime of Good Financial Habits

Any Perth financial planner can tell you that it’s never too early to start saving money, but we are serious about it. We believe that children should be taught good financial habits as early as possible. MoneySmart, the website of the Australian Securities & Investments Commission (ASIC), agrees with us.

Recently, we spent some time on the ASIC website and looked at an article called “Teaching Kids About Money.” According to ASIC, it is more important to teach kids about money now than in any previous generation. They believe that teaching kids about money will help them make better decisions as adults.

Budgeting, Spending and Saving: Crucial Skills

ASIC recommends teaching children how to budget, spend and save money as early as possible. They see it as a vital part of a child’s development. They have a video on the website called “Teaching kids how to budget to become financially savvy.” We recommend this video to children. Not only does it do exactly what it says, it also tells children about two MoneySmart apps: Budget Planner and TrackMySpend.

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NewsWealth Protection Start Protecting Your Hard-Earned Money

Is it Time to Start Protecting Your Hard-Earned Money?

Wealth protection is an important component for those planning their financial futures. We have helped many Perth residents do just that since 2005. When helping our clients save and produce income for their retirements, we see protecting that money as equally important. So do our friends at the Financial Planning Association of Australia (FPA), who recently wrote an article called “You’ve worked hard for the money, now it’s time to protect it.”*

According to the FPA, statistics indicate that Australians approaching retirement can expect to spend an average of 23 years between retiring and passing on. For some, their money could run out in as little as ten years, forcing them to rely on age pension as their sole source of income.*

According to the FPA, saving for retirement should be a “fundamental financial priority,” but so should protecting that income, especially for those in their “last few years in the workforce.” Many who are in their last few years of working aren’t as healthy as they were when they were younger and may not have enough sick leave to cover illness.*

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Financial Planners Active Asset Allocation Must Be Done Correctl

Why Active Asset Allocation Must Be Done Correctly

Financial planning, in Perth and across Australia, is a field that is constantly evolving. Recently, Dr Shane Oliver, Chief Economist and Head of Investment Strategy and Economics at our parent company, AMP Capital, published a wealth of information on active asset allocation.*

We would like to share some of the information with you to help you understand the importance of allocating your assets correctly.


In the long term, growth assets such as shares can provide huge returns due to compound interest. However, growth assets regularly go through periods of high volatility. This causes some investors to react to periods of low value by selling these assets off and resorting to cash investments, which don’t often produce losses but don’t produce long term returns, either.*

The key, according to Dr Oliver, is to use one of two strategies. The preferred strategy is to stick with assets for the long term and take advantage of the growth. However, Dr Oliver also recommends what he calls a “rigorous approach to dynamically varying the asset mix” if one can’t hold onto an investment long term or wants to take advantage of cyclical swings in the markets.*

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Investment PlanningNews Three Straight Years of Good Returns for Diversified Investors

Three Straight Years of Good Returns for Diversified Investors: How Long Will it Last?

The investment planning industry has had three great years. In Perth and across Australia, the past financial year produced a third consecutive year of “solid returns for investors,” according to AMP Capital Chief Economist, Dr Shane Oliver. Dr Oliver projects returns to “slow” in the coming year, but still provide “reasonable” returns. *

He attributes this to steady share evaluations and an economy growing fast enough to be healthy but slow enough to stem inflation. Here’s why.*

The Overall Outlook

Diversified investors who “moved beyond cash” saw solid returns. The average of superannuation fund performance was 9.9%, marking three consecutive financial years of growth at 9.9% or over. *

International equities ($A) provided a 25% return on investment (ROI). Australian listed property provided 20% ROI; global listed property returned 10%; international equities (Local) returned 9% and direct property returned 8%. Australian equities, Australian bonds and global bonds all returned 6%. Cash investments had the lowest ROI at 2.6%.*

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Investment PlanningNews Pitfalls of Property Investment

Do You Think Property Investment is a “Sure Thing”? Think Again.

Perth financial planners field a lot of questions about property investment on a daily basis. The concept sounds simple: purchase an investment property in a hot Perth suburb, rent it out and wait for capital gains to outperform all other forms of investment. But does it really work that way?

The Pitfalls of Property Investment

We have helped plenty of investors with well-managed investment property portfolios do well. So we aren’t saying that you can’t make plenty of money with investment property. However, there are plenty of pitfalls that can stop property investors before they gain a foothold in the market. Here are a few of them.

Unexpected Expenses

Were you ever a renter? Think back to what happened when something went wrong. Did the air conditioner go out? Did your roof suddenly spring a leak? Did an appliance such as a refrigerator or oven stop working? Do you remember who fixed the roof, replaced the appliance or bought a new air conditioner? It was the property owner.

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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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