Financial PlannersNews Financial Services Provider Discuss Failling Oil Prices

What Falling Oil Prices Could Mean to Your Investments

We provide a full menu of financial services in Perth. While we can only provide specific information and recommendations during an individual consult, we do have access to a lot of information we can pass on to consumers. We came across some information we think is relevant to a lot of Perth households: the effects of falling oil prices.

Recently, in his column “Oliver’s Insights,” Dr Shane Oliver covered the effect of falling oil prices. Dr Oliver is the Chief Economist for our parent company, AMP Capital. He is also the AMP Capital Head of Investment Strategy and Economics. His article was called, “The plunging oil price – why and what it means.” We would like to pass on some of the information to you.*

In two years, oil prices have gone down 70%. This is because supply has surged in comparison to demand and because the US dollar is high. The price could fall as low as $20 per barrel, but Dr Oliver believes the supply will decrease soon.*

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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 PlannersNews Building a Solid Financial Foundation

Techniques for Building a Solid Financial Foundation

We offer a full menu of financial services from our Perth office. We have financial planners and financial advisors who can help you plan your financial life from now through retirement. We can’t give any specific advice on this blog, but we would like to give you a general idea of what it takes to build a solid financial foundation.

The more solid your foundation, the easier it is for us to help you attain your financial goals. Here are some of the fundamental techniques that we can help you execute.

Budgeting

If you aren’t satisfied with your budget or your ability to create one and stick to it, we can help. If you have a consistent income and can stick to a consistent budget, it allows you to know exactly how much you can afford to invest every month. Once we know that, we can offer further assistance.

Managing Cash Flow

This is tied into budget, but also into your investment strategy. For many, budgeting and cash flow are a constant tug-of-war between enjoying life now and having enough for retirement later. Our financial advisors can take a look at your finances and help you come up with a plan that is comfortable for you.

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Financial PlannersNews What the Government Says about Finding a Financial Advisor

What the Government Says about Finding a Financial Advisor

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.*

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Financial PlannersNews Industry Definition of Financial Advice

AMP Chief Questions Industry Definition of “Financial Advice”

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.” *

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Financial PlannersNews Reform of Educational Requirements for Financial Planners

FPA Proposes Reform of Educational Requirements for Financial Planners to Parliamentary Joint Committee

If the Financial Planning Association of Australia (FPA) has anything to say about it, the educational standards for financial planners and advisers, in Perth and across Australia, are about to receive a boost. As far as we are concerned, it can’t happen fast enough.

Approved Financial Planners and AMP

We would like to give a little background. Approved Financial Planners and our parent company, AMP, are on the record as being in favour of educational reform for the financial services industry. We have felt for a long time that the standards for entering the industry, both in Perth and nationally, are not stringent enough.

AMP has internal standards that are far more stringent than industry minimums. That is one of the main reasons we decided to partner with them. We feel that it is our responsibility to educate ourselves fully about the products we offer and about how our decisions affect our clients’ well-being.

One of the sadder parts of being a financial adviser in Perth is listening to clients tell us how other financial advisers had mismanaged their funds, either out of ignorance or out of a lack of ethics. We find both of these situations to be unacceptable.

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News Financial Literacy in Australia

The Government Wants to Make Us Smarter About Money

Those who offer financial services in Perth and across Australia are applauding an ongoing government effort. Courtesy of the Australian Securities and Investments Commission (ASIC), Australians are going to continue to become smarter about money. ASIC plans to enhance their website called “Money Smarts” and extend the reach of its Money Smarts program to more schools than it currently reaches.

The changes are part of a three year program that is designed to help raise financial literacy in Australia. The Organisation for Economic Co-operation and Development (OECD) is teaming up with ASIC to provide a national framework that encourages the government, business and education sectors to cooperate and help improve financial literacy.

This news comes on the heels of a recent OECD survey in which 15 year-olds across the globe participated in testing to determine their financial literacy. Australians came in fourth, only to China, Belgium and Estonia, out of 18 highly-developed countries. The baseline or average was 500. Australia scored 526 while China scored 603, beating second place Belgium by 62 points.

These changes are going to happen, even though funding for the program was cut 12% in the May 2014 budget.

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News Comparing Income Protection Quotes: Know the Pitfalls

Comparing Income Protection Quotes: Know the Pitfalls

Many Australians purchase income protection insurance and think they are fully covered, only to find out that their policy only provided partial protection and that they don’t have enough to cover all of their expenses. While it’s great to compare policies, a lot of people look for the wrong things and end up making bad choices.

Here are some pitfalls of comparing insurance protection quotes.

Limited Payment Periods

If one is permanently disabled and can no longer produce income, they would expect to be paid for the rest of their lives. However, many policies cap payments to periods of one or two years. We won’t recommend any particular length here, but be sure that you know exactly how long you will be paid in the event that something terrible does happen to you and you can no longer work.

Note that payment is often capped depending upon occupation.

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