The Banking & Superannuation Royal Commission

You would be aware of the Royal Commission into the financial services sector. Over the past week, we have heard too many examples of poor behaviour by financial advisers where clients’ best interests have clearly not been front and centre.

As a financial adviser I take these revelations very personally and it saddens me that our industry has negatively impacted the wellbeing of some Australians.

As a self-employed advice practice committed to our clients, we take acting in your best interest and meeting our service obligations to you very seriously.

We are dedicated to helping you achieve your financial objectives so you can live the life you dream. That’s why I want to make it clear that we are 100% committed to looking after you and we are investing to improve our service to you even further. We always welcome feedback on how we can serve you better.

While the truth is sometimes hard to hear, our industry will be stronger as a result of hearing when we have failed community expectations.

If you have any questions about topics arising from the Royal Commission, or questions about how we work with you, please contact us.

Do the FANGS suggest the US stock market is turning down?

The amazing growth of technology related companies can be seen in the New York Stock Exchange FANG + index which has turned down recently after rising nearly 190% between February 2016 and March 2018. The FANG+ index is comprised of: Alibaba, Alphabet (Google), Amazon, Apple, Baidu, Facebook, Netflix, NVIDIA, Tesla and Twitter.

The recent fall in this index is being interpreted by some as a sign that the “bull” market in US stocks that has run since early 2009, post the Global Financial Crisis, may be coming to an end. This is just speculation, of course, but this index is worth watching as it may signal a broader trend emerging.

Respected fund managers, such as Magellan’s Hamish Douglas and Oaktree Capital’s Howard Marks, have become more cautious in recent times. Marks says that “the easy money has been made” in this long market upturn and Douglas is concerned that there is a real possibility that the US Federal Reserve (the equivalent of our Reserve Bank) may have to increase interest rates quite rapidly to contain US inflation. If that happens a sizeable share market correction is very likely.

Labor flags future changes to Superannuation

The Labor Party has stated it will definitely change the superannuation contributions rules, such as reducing the super contributions caps, if it wins the next federal election.

Speaking at the Financial Services Council BT Financial Group Political Series Breakfast in Sydney recently, Labor Senator Kristina Keneally outlined the exact areas her party would be amending with regard to contributions if it won back government.

“In 2016 we made it clear that we will oppose the government’s measure to allow catch-up concessional contributions and tax deductibility for personal superannuation contributions,” Keneally said.

“We will also lower the annual non-concessional contributions cap to $75,000 and further lower the high-income super contribution threshold to $200,000.”

According to Keneally, these changes will make the current system fairer.

Despite intending to scrap the ability to roll forward unused concessional contributions, a move widely recognised as one to help bridge the gender gap in retirement savings, opposition treasury spokesman Chris Bowen revealed at the same event the ALP was looking at several different plans to tackle the gender inequality issue, but would not confirm whether legislating that super guarantee payments be made for women on maternity leave was one of them.

Australian Migration Data is interesting

Whether you believe in a “Big Australia” or not, it’s helpful to know just what is happening with people movements in and out of the country. Population experts .id have analysed migration data from the Census and other Government sources and identified a number of interesting trends in respect of how many people are coming into Australia and from where. Amongst their findings are:

  • Over the last 20 years the number of long term arrivals classified as visitors (people such as students and workers on 457 visas) has grown rapidly whereas permanent arrivals haven’t changed much.
  • China is about to overtake New Zealand as the #1 country for short term visitors to Australia (tourists and students) whereas the number of Japanese tourists has almost halved over the last 20 years.
  • There were more than 500,000 visitor arrivals in 2017 who stated that their main reason for travel was education – an indication of the importance of the overseas student market in Australia. Many plan to stay long term if they are allowed.

SMSF – an update on issues that may impact you this financial year

We recently published an update on various issues that may impact your Self-Managed Superannuation Fund (SMSF), if you have one, this financial year. This covers such things as the transitional CGT relief election, transfer balance account reporting (TBAR) and the need for pension payments to be made before 30 June. Here is the link to the newsletter.

This newsletter contains general advice. It does not take into account your individual objectives, financial situation or needs. You should consider talking to a financial adviser before making a financial decision.

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