Getting to the heart of the matter

Getting to the heart of the matter

The Heart Foundation has just completed its annual Heart Week event. It’s an opportunity to shine a light on the prevalence of heart disease in the community and what can be done to reduce the risks and achieve a more successful recovery.

Part of the Heart Foundation’s mission is to educate the public and health professionals on what can be done to prevent heart disease and rehabilitate those who suffer from it. As an insurer that is interested in improved health outcomes we want to support this goal by sharing some insights that may helpful to you.

Just how big are the risks?

Cardiovascular disease (CVD) is a major cause of death in Australia, with 43,603 deaths attributed to CVD in Australia in 2013. That’s 30% of all deaths, with one Australian every 12 minutes. It is estimated over 350,000 Australians have had a heart attack at some time in their lives.*

It’s not just men who are affected

While more focus may be given to men when discussing heart disease it is also an issue for women. It may come as a surprise to know that heart disease is the number one killer of Australian women and is four times more likely to be a cause of death than breast cancer.**

The good news is that a lot of these deaths are largely preventable and there is much that we can do to reduce our risks.

What are the causes?

The major risk factors include high blood pressure, high cholesterol, excess weight and obesity, physical inactivity, low fruit and vegetable intake, alcohol and smoking.

Nine in ten adult Australians have at least one risk factor for CVD and one in four have three or more risk factors.

What can you do about it?

Many of these risk factors relate to lifestyle, which means that it is possible to influence your risk of heart disease by adjusting to a healthier lifestyle. This includes:

  • Eating a higher proportion of vegetables, whole grains, fruit, nuts, legumes and fish
  • Making good fat choices, such as olive oil
  • Choosing reduced full fat dairy products and eating less salt
  • Regular physical activity, such as 2.5 to 5 hours of physical activity of moderate intensity per week
  • Do muscle strengthening activities on at least 2 days each week
  • Sit less and walk more.

Be aware of symptoms

Although chest pain or discomfort are common symptoms of a heart attack, this is not universal and the symptoms may present in other areas of the body.

This includes pain, pressure, heaviness or tightness in areas such as the jaw, back, shoulder, neck and arms. The symptoms for men and women can vary and research has found that women are less likely to experience chest pain.

The critical message if you think you may be suffering heart problems is to act early. For more information on warning signs and what to do visit

Protect yourself financially

One encouraging feature regarding heart disease is that survival chances are improving. In 2009, 63% of people were surviving heart attack, compared with a 45% survival rate in 1994.***

Many of those who survive go on to recover and have a normal life expectancy. While physical recovery is good news, surviving a heart attack may cause problems financially. A good recovery may depend on adjusting lifestyle, reducing working hours or lowering the stress of debt and expenses. All of these factors may require significant amounts of cash to make them possible.

This is where trauma cover can be so valuable. It can pay a lump sum benefit upon diagnosis that can allow you to make such lifestyle changes. If you want to know more, talk to your adviser about how trauma insurance can help you.



*** Australian Institute of Health and Welfare: Trends in Cardiovascular Disease 2012.


The window of opportunity looms

The window of opportunity looms

It seems like Christmas was only yesterday, but believe it or not, the end of financial year is just around the corner. That means it’s time to look out for opportunities to save on tax and boost your wealth accumulation plans.

There is no better time than the end of financial year to make a review of your financial situation to see what openings you can take advantage of to further your financial goals.

The stakes are high and time is tight, so we have summarised the key opportunities here to get you inspired to take action now.

With lots of noise coming from Canberra about superannuation concessions being under the microscope, it makes it doubly important to make sure you maximise all the benefits while you can.

Both sides of politics are walking a political tightrope in their quest to balance the budget without killing off incentives for individuals to self-fund their retirement. With an election on the horizon, who knows where the chips will fall on super concessions in the next couple of years.

Top up while you can

One area that has already seen changes in the last few years is that of contribution caps. These caps relate to maximum annual limits on any before tax contributions you make in a given year, (such as salary sacrifice arrangements or tax deductible contributions). Going above these limits may incur tax penalties.

The good news is that for this financial year the caps will remain as they were last year:

  • $30,000 if you are under 50 and
  • $35,000 if you turn 50 during this tax year or if you are older.

If your contributions this financial year have not reached the caps, then you now have the opportunity to top up and receive the concessional tax benefit on those contributions. The recent rumblings surrounding super tax treatment and the proposals announced in the Federal Budget means there is no certainty on what these caps will be in the future, so it may be wise to speak to your Matrix financial adviser now if you want to take advantage while you can.

Spouse contributions can trim your tax

Another tax saving possibility is the spouse contribution scheme. If your spouse is not employed or has part-time work with an income of less than $13,800, then you can make contributions to their super on their behalf and claim a tax offset.

A maximum offset of $540 is available if the spouse income is $10,800 or less and you make an after-tax contribution of at least $3000 to their super. The tax offset is progressively reduced until the spouse earns $13,800 or more in a year.

Co-contribution incentive still applies

Another incentive that is still valid this tax year is the government co-contribution scheme. This scheme gives you the chance to have the government chip in up to $500 to your super if your income is less than $35,454 and you make voluntary after tax contributions to your super.

The rate of co-contribution is 50 cents for every dollar you contribute. If you earn more than $35,454 the rate of co-contribution reduces on a sliding scale until it cuts out completely at $50,454.

Your adviser is ready to show you how you can make the most of your entitlements and grow your retirement independence, so talk to them now if any of these opportunities are of interest.


Budget super changes

Budget super changes

The 2016/17 Federal Budget contained some major superannuation changes. Some highlights are below, but bear in mind these proposals still need to be passed into legislation.

Contribution cap changes

From 7.30pm (AEST) on 3 May 2016, a lifetime non-concessional cap of $500,000 will replace the current annual caps. This cap includes all non-concessional contributions made since 1 July 2007 and any excess contributions will need to be refunded or a penalty tax of up to 49% may apply.

If you have already contributed more than $500,000 of non-concessional contributions between 1 July 2007 and budget night, no excess will apply however any future contributions from budget night may exceed the cap.

Concessional contributions caps have also been reduced to $25,000 per year for all ages from 1 July 2017. If your superannuation balance is less than $500,000, you can carry forward any unused cap amounts over a rolling five year period. A 30% tax on concessional contributions will now apply to those on $250,000 p.a. income.

$1.6million cap on super pensions

From 1 July 2017, a cap of $1.6 million will be placed on the amount of superannuation that you can transfer to a superannuation pension. Any balance in excess of this must remain in an accumulation account where earnings are taxed at a maximum of 15%. Those who already exceed this cap will be required to transfer the excess amount back to superannuation by 1 July 2017.

Other highlights include:

  • Abolition of the work test for those up to age 75 who want to make super contributions.
  • The tax exemption on TTR pension earnings will be removed from 1 July 2017 – earnings to be taxed at 15%.
  • From 1 July 2017, there will be no employment restriction placed on who can claim a tax deduction for personal superannuation contributions.
  • The $540 p.a. tax offset on spouse contributions has been opened up with proposed increases to the threshold to $37,000 and the age limit to 75 starting 1 July 2017.
  • From 1 July 2017 a low income concessional contribution tax offset of up to $500 is available if your adjusted taxable income is less than $37,000.

Your adviser can provide more details on how these changes may affect you.


Market update: Winter 2016

Market update: Winter 2016


The RBA has had interest rates on hold for an extended period and the recent appreciation of the Australian dollar will put some pressure on the RBA to further cut interest rates. The fall in our currency from around $1.10 US dollars to down in the sixty cents range helps our exporters and aids the post mining boom rebalancing of the economy to other sectors like manufacturing.

The recent rebound in the Australian dollar towards 80 US cents has hurt our exporters. If the RBA was to lower interest rates, parking cash in Australian dollars becomes relatively less attractive for foreigners and the reduced demand can cause it to move downwards.

Australian bonds

The fear of January drove investors to flee equities and seek out safe havens like Australian Government Bonds. This meant Australian bonds did well over January and into February. The turning of sentiment into March has seen some of this mini rally in bonds come off and the asset class had a small negative return over the month. However, bond investors have still seen a solid positive return over the year to date.

International bonds

International bonds have had a stellar first quarter this year. The heightened volatility in markets has reminded investors of the importance of bonds as effective portfolio diversifiers. High quality government bonds will tend to appreciate in price when stocks are falling.

Later in the quarter, central banks provided some impetus for bonds to rally. The European Central Bank and Bank of Japan made additional commitments to their bond buying programs. The US Federal Reserve indicated that there would be less interest rate rises this year than previously predicted. Prices of bonds move in the opposite direction to yields. Consequently, bond investors enjoyed a capital gain as yields ground ever lower.

Australian equities

Australian shares bounced back hard in March. Those sectors that had been punished the most in January benefited the most in the subsequent whipsaw rally. For example, the S&P/ASX Metals and Mining sub index lost 10% in January then put on 11% in February and 7% in March to end the quarter up a net 6%. More defensive sectors, such as healthcare, didn’t do as well. The Healthcare sub index ended the quarter in the red, losing 2%.

International shares

Those markets and sectors beaten up the most in January and the first half of February have rallied the hardest. For example, Chinese companies listed in Hong Kong fell 15% in January alone. In March they rallied 14%. The Australian dollar has appreciated over the quarter and so currency hedged international shares have outperformed unhedged.


Enjoy the benefits of volunteering

Enjoy the benefits of volunteering

Retirement is a time to put your feet up and enjoy life, but many people will still have a desire to keep their minds and talents engaged. Volunteering is a great way to do this.

A multitude of options

The opportunities to use your time, talents and labour can be found in a vast variety of situations and organisations. As a starting point, consider the many institutions in your local area, such as schools, community centres, charitable organisations, aged care institutions, hospitals and churches. They all need willing helpers to apply their hands, hearts and minds to help make a real difference. Beyond these places, you can combine the benefits of volunteering with your desire for travel through many overseas opportunities.

A win-win situation

It is not just a sense of altruism that attracts people to volunteering. Many discover a genuine sense of purpose and an opportunity to be mentally and physically engaged. In many ways it is an ideal way for retirees to redirect their energies and focus, after a lifetime of employment has suddenly come to an end. It provides an outlet for social connection and a chance to broaden your focus outside of your own personal world.

Something for everyone

To find a volunteering need that best meets your abilities and interests, the best place to start is to consider what talents, skills and experience you have built up over your years of work or raising a family. It is also important to consider the types of causes or needs that you feel personally drawn to. Once you have considered what you have to offer you can then seek out possibilities that may suit you.

A great starting point to locate thousands of opportunities is the Volunteering Australia website This site provides a search facility based on location, causes, types and events, so that you can easily match a position to your profile.

Why not make volunteering an integral part of your retirement planning and discover how it can open your horizons to a more fulfilling lifestyle.


Women and superannuation: Tips for success

Women and superannuation - Tips for success

When it comes to super savings, women in Australia are likely to have significantly less than men. The average Australian woman retires with around half the balance of the average man. This is because women (still!) earn less than men for equivalent jobs and they’re more likely to have a career break to raise children.

Combine this with a longer life expectancy and women are less likely to have enough for a comfortable retirement. Very few women think their super will be enough for retirement, and unfortunately many women don’t know how much they’ll need for a comfortable retirement or are leaving this issue to their partners.

Superannuation is one of the most important and efficient investments you can make. It is concessionally taxed, has flexibility with insurance and can provide added incentives when you contribute money.

Acknowledging that wages for women are still generally less than those of men and that women are more likely to take time away from paid employment to raise their families, growing superannuation can seem almost impossible.

However, none of the above will matter as retirement draws nearer. So, regardless of age or circumstances, women need to understand superannuation and start contributing as soon as possible.

Here are some tips that may help the process:

1. Have one superannuation fund

Many women have worked for a number of different employers and can end up with relatively small amounts in a number of superannuation funds. Multiple super accounts usually equals multiple fees. Consolidating your superannuation into one account will make it easier for you to track your retirement savings.

2. Find any lost superannuation

If you have changed jobs a few times, or had short term work contracts, you may have super accounts that you have forgotten or didn’t know about. You may have moved house and lost track of your superannuation. To search for lost super visit or call the tax office on 13 10 20.

3. Use salary sacrifice into superannuation

If you are currently working, you could talk to your employer about sacrificing some of your pre-tax income into super. Salary sacrifice can have tax advantages as you may reduce the amount of income tax you pay. This is not for everyone so you should seek financial advice as to whether this would be beneficial to you.

4. Make additional contributions

If you have some spare cash, you may want to make after tax contributions to superannuation. Many of the superannuation funds have the option to set up a regular direct debit, BPay or electronic funds transfer. Making additional contributions may give you access to the government co-contribution.

5. Government co-contribution

You may be eligible for a free boost to your superannuation. If you earn less than a specified amount and make a voluntary after-tax contribution to superannuation, the government could contribute up to $500 each financial year to your super account. This is a great incentive and could give your superannuation a real boost. Of course, these figures may change with Government policy.  To ensure you understand the conditions, seek financial advice.

6. Super splitting

You may be able to share part of the super contributions you or your partner make each financial year. Most funds now have super splitting available.

7. Tax deductions

Are you self-employed? That is, do you earn less than 10% of your income from an employer? If so, you may be eligible to claim a tax deduction for any voluntary super contributions you make. Be careful as contribution limits do apply.

8. Check your insurance

You may be surprised to find that you have Death and Total and Permanent Disability insurance through your superannuation fund. Some superannuation policies also offer Income Protection insurance. This is often a cost-effective way to structure your insurances. Insurance is a vital part of your financial security and you should make sure you have enough cover to protect you and your family. Again, this is not relevant for everyone so you should seek financial advice as to whether this would be beneficial to you.

9. Choose your super fund

Many of us do not make an active investment selection for our superannuation entitlements. Most people do have choice and you should make sure you are comfortable with how your retirement savings are invested. Do your research or seek advice.

10. Seek advice

There is a common theme. Research your fund and make informed choices when it comes to superannuation as this can make a real difference come retirement time. The internet has many great websites if you would like to do your own research.

Why not schedule a meeting with your financial adviser now?


Demystifying the aged care maze

Demystifying the aged care maze

The rules and costs involved in the aged care system can seem a daunting prospect to deal with, so if you are negotiating the system now or are planning ahead for the future this summary may be a good starting point.

How does someone access an aged care facility?

Once a person’s health is such that they may have trouble living independently or have difficulty with everyday tasks, they can request an assessment by a local Aged Care Assessment Team (ACAT, or ACAS in Victoria). This determines whether they can access an aged care facility or other aged care services.

An interview is conducted by a member of the ACAT team (usually a nurse, social worker or other health care professional), who may also ask to speak to the person’s doctor.

Selecting an aged care facility

Once a person qualifies for entry to an aged care facility it is then up to the person and their family to visit and select an aged care home that suits them. This may require inspecting various facilities and asking questions about the care and services offered and their cost structure. You can visit to search for possible aged care homes in your vicinity. This site also provides details to enable comparison of costs and services.

Once you have narrowed down the options it is advisable to make an application for entry at more than one facility, as availability can sometimes be an issue. Once a home offers a position, the person is given a Resident Agreement covering things like services, fees, rights and responsibilities. It is vital that the person understands this document and gets professional advice on any issues of concern before they sign.

What does it cost?

The costs of residential aged care are substantial, but government subsidies ensure that access is available to all. The amount you need to contribute toward the cost of care will depend on your financial situation and is assessed via an income and assets test. These costs can include:

An accommodation payment: This is for your accommodation in the home. Each aged care facility is required to publish its accommodation charge and this amount may be fully or partly subsidised, depending on your means testing. You can choose to pay your accommodation costs by a lump-sum, rental-type payments, or a combination of both. Lump-sum payments are refundable once the person leaves or passes on.

A basic daily fee: This covers living costs such as meals, power and laundry.

A means-tested care fee: This is an additional contribution towards the cost of care that some people may be required to pay, depending on the assessment of income and assets. Annual and lifetime caps apply to limit the amount of the means-tested care fee you will need to pay.

Optional extra fees: Some homes will offer additional optional services for an additional cost.

The importance of obtaining good advice

A financial adviser has the experience and knowledge to help guide you and your family members at a time when emotions may be running high and confusion may interfere with good decision making.

Good advice can help address critical questions, such as:

  • How to best fund the accommodation cost
  • What to do with the family home to achieve the best financial outcome
  • How to best preserve social security benefits
  • How to structure investments to optimise your means test situation and properly provide for ongoing income
  • What to do to ensure the person’s estate is protected for the benefit of beneficiaries

Even if the need for aged care is not imminent, it makes good sense to consider the issues in advance in order to relieve stress when the time comes to take action.


One guarantee you should always insist on

One guarantee you should always insist on

These days the word ‘guarantee’ is often flaunted about frivolously. It’s a mandatory inclusion on T.V. informercials and ‘guaranteed or your money back’ is pervasive on the products we see on our supermarket shelves. When the product in question is a mass produced consumer item, a guarantee is hardly a huge risk for the marketer. In the case of personal insurance, however, it takes on a whole new level of significance.

The two most important words in personal insurance

The diversity in personal insurance products has exploded in the last two or three decades. There are a host of products out there with a bewildering array of added benefits, optional extras, special discounts and increasingly generous definitions. All of that diversity, however, makes very little difference if the policy you are looking at does not contain two critical words; guaranteed renewable.

In essence, when the words guaranteed renewable are included on a life, income protection or disability insurance policy, it means that the insurer is making a binding commitment of enormous proportions. When you consider that the consequence may end up leading to the payment of hundreds of thousands of dollars in lump sum benefits or thousands of dollars a month in income replacement benefits, it is not something that either the insurer or the customer should take lightly.

What does it actually mean?

When a policy includes the words ‘guaranteed renewability’, it effectively means that the insurer is bound to keep the insurance cover in place until the customer chooses to stop it or until the policy expiry (for example, at a pre-determined age), whichever comes first.

If the customer has a change of employment, deterioration in health or takes up a high risk recreational activity after the policy is put in place, it has no effect on the cover. The insurer cannot alter the terms of the insurance cover or cancel the policy as a result of such changes in circumstances. The cover is locked in until the customer chooses otherwise. The only obligation on the customer’s part is that they keep premium payments up to date.

A commitment not taken lightly

Some people may perceive that obtaining life or disability insurance involves an excessive amount of disclosure, with questions about personal health and habits, details of family history and even the need for doctor’s reports or medicals. While this may seem inconvenient at the time, it is important to look at the need for such information in the context of the responsibility and commitment the insurer is taking on.

If they are going to offer cover with a guarantee that they must keep it in place no matter what, then it sheds some new light on why they need to have a full suite of information to assess and underwrite the cover at the outset. Insurers only have one opportunity to get their decision right before they take on an obligation of such magnitude.

Some moderate inconvenience when purchasing life and disability insurance is a small price to pay for the immense security and peace of mind that a comprehensive personal insurance plan can give. Customers who have seen their family’s livelihood and lifestyle preserved through the cash cushion of lump sum or income benefits from their personal insurance would no doubt consider the application and assessment process to be a very small sacrifice indeed.

Don’t be caught with substandard cover

The importance of making sure your personal insurance is guaranteed renewable cannot be overstated. No matter what ‘bells and whistles’ a policy may have, they cannot make up for the fundamental need to have cover that has the inbuilt foundation of guaranteed renewability.

If you have any doubts or concerns about your insurance plans in this regard, then don’t hesitate to contact your financial adviser to review your situation.


Monthly market review: February 2016

Monthly market review - February 2016

How the different asset classes have fared

(as at end February 2016)

Table - February 2016


The RBA left the official cash rate on hold at 2% for the 9th successive time at its 2nd of March meeting. The central bank last took action with 0.5% worth of cuts in the first half of last year.

The statement accompanying the decision made reference to the measures taken by APRA to dampen down property lending, particularly for investment properties. Frothy property prices, particularly in Sydney and to a lesser extent Melbourne, has been one factor staying the RBA’s hand from cutting interest rates further. This may now be less of a restraint, allowing the RBA to loosen monetary policy further in order to support the post mining boom rebalancing of the economy should this become necessary.


Bonds benefited from the continued risk adverse sentiment in February. This was despite many government bonds around the world (but not in Australia) sporting negative yields. That is investors are, in effect, paying governments for the privilege of lending to them. Bond investors seem more interested in return of their capital than the return on their capital. Expectations of deflation are also a factor; meaning while the nominal return is negative the real return could still be positive if prices fell further than the negative yield. In a world of negative interest rates the 2.5% yield on the 10 year Australian Government Bond doesn’t look too bad.

Australian equities

Although Australian shares finished in the red in February, there was a meaningful rebound in the second half of the month. At mid-month the All Ordinaries index was down by over 5%. Some recovery in sentiment globally saw investors, who sensed the New Year sell-off as overdone, stepping in and driving the market up. This provided some relief for shareholders of resource stocks, with the ASX 200 Materials sub index putting on 7.6% over the month.

International shares

The sharp falls that have characterised 2016 so far gave way to a bounce from mid-February that ameliorated some of the losses.

A recovery in the oil price, along with other commodities, was one factor in the improvement in sentiment.

US economic data later in February was also mostly positive helping to ease concerns that the world’s largest economy was tipping into recession.

Finally, concerns that central banks were out of ammunition eased. With the Bank of Japan and the European Central Bank still firmly in easing mode and the market pricing in little chance of the US Federal Reserve further increasing interest rates, markets seemed to believe stimulatory monetary policy would continue to back stop share markets.



1Bloomberg AusBond Bank 0+Y TR AUD, 2Bloomberg AusBond Composite 0+Y TR AUD, 3JPM GBI Global Ex Australia TR Hdg AUD, 4S&P/ASX All Ordinaries TR, 5MSCI World Ex Australia NR AUD, 6Vanguard Intl Shares Index Hdg AUD TR, 7MSCI EM NR AUD, 8S&P Global Infrastructure NR AUD, 9S&P/ASX 300 AREIT TR, 10FTSE EPRA/NAREIT Global REITs NR AUD


Life changing checkpoints

Life changing checkpoints

While no two people will ever have exactly the same life experience, there are key events in life that can have a profound effect on our priorities and financial situation and our financial success depends on planning proactively around them.

Finding our feet in the early years

Our twenties and thirties are a succession of milestone events, such as starting a career, a family, a home and a mortgage. The decisions you make in these formative years have a major impact on your future financial success and security, so it is critical to make well informed and thoughtful decisions about good savings habits, well controlled use of debt, developing a strategy to grow your net worth, taking advantage of superannuation opportunities and the protection of lifestyle through personal insurance.

Building on an established base

As you move to middle age your income may well be increasing, your family expenses and you may need to upgrade the size of your home and expand your mortgage. Your personal insurance must be continually reviewed to reflect the burgeoning financial responsibility and your investments and super need to gain increasing sophistication and diversity to ensure you are maximising wealth accumulation.

Making the most of new opportunities

As we move deeper into middle age there will come a point where expenses and income will peak and start to taper off. Children leaving home and a mortgage being paid off present golden opportunities to accelerate your wealth creation. Setting yourself up for retirement takes over as your financial priority, including the maximising of tax benefits and taking advantage of transition to retirement strategies.

Retiring in style

Once you finally take the plunge into retirement your focus once again changes toward the selection of investments and income stream plans that will provide a worry-free lifestyle and maximise social security.

Advice is critical

Your financial adviser can provide you with objective and informed guidance to help you manage all of the financial decisions you need to make throughout your life. It pays to have qualified, professional advice on your side every step of the way.


Market update: Autumn 2016

Market update - Autumn 2016

Cash and bonds

As widely anticipated, the US Federal Reserve finally moved off zero and increased cash interest rates by 0.25% in its last meeting of 2015 held just before Christmas.

A number of market commentators now view this as a mistake with no signs of inflationary pressures, financial market dislocation and data showing the US economy barely grew at all in the last quarter of 2015, all suggesting a rate rise wasn’t warranted.

While we are probably unlikely to see the Fed doing a complete backflip and cutting rates; it seems likely the pace of monetary policy tightening will be very gradual.

In Australia, the RBA sat pat for the 7th meeting in a row in December leaving the cash rate at 2%. With the ebbing of the mining boom a decent case can be made for the central bank to cut rates further in order to aid the difficult rebalancing to other sectors of the economy.

However, the RBA does not want to push residential property prices (particularly in Sydney) even higher and so has found its hands tied. Last year, non interest rate tools were introduced in order to dampen down some of the more speculative elements of the housing market. The effect of these “macro-prudential” policies has been the banks have increased interest rates on loans to investors in residential property. This in turn is now showing up in property price data, with prices flattening out over the last few months. It would seem then, that the RBA’s hands are no longer tied and we wouldn’t be surprised to see rate cuts in 2016.

Australian equities

This less than stellar performance of Australian shares reflects the fate of commodities generally as falling Chinese demand met increasing global supply. With mining and energy stocks making up a good proportion of the ASX the end result isn’t too surprising. Both the resources and energy sub-sectors of the ASX 200 lost a quarter of their value over 2015.

Other sectors had a happier 2015 and ensured the past year wasn’t a complete washout for Australian shares. Utilities were the top performing sector returning 23%. Consumer discretionary (18%), industrials (16%) and healthcare (16%) also did well.

International equities

The depreciating Australian dollar ensured currency unhedged international equities outperformed hedged last year. While it was a lot easier call to make when the Australian dollar was north of $1.10 US dollars, we think the Australian dollar still has room to fall a bit further as the Australian economy continues to negotiate the difficult transition forced upon it by the end of the mining boom.


Keeping your brain healthy

Keeping your brain healthy

Taking care of our brain health can make a difference in how well it functions well into old age and can help combat degenerative brain disorders that are increasingly prevalent. Here are a few pointers to help you take action now.

Keeping physically fit

Generally speaking, any exercise which is good for your heart is going to benefit your brain too. Aerobic exercises are ideal and also help fight high blood pressure, diabetes and high cholesterol.

A simple exercise program that gets your heart rate increased on a daily basis is all you need. Walking, cycling, swimming and group exercise classes are ideas that we can all incorporate easily into our lifestyle.

Sleep is vital to maintaining memory and clarity, so make sure you get a regular 8  hours every night. Anxiety, depression or other mental health concerns will also impact brain health, so seek professional help to manage such conditions.

You are what you eat

Diet can also play an important role in your brain health. A balanced overall diet aimed at controlling weight, blood pressure and cholesterol is the basis to start from. It is also important to include foods that are high in antioxidants and folate. Some key foods include leafy greens, berries, red grapes oily fish, legumes and cereals.

Excessive drugs and stimulants are negatives, so limit the intake of things like alcohol and caffeine.

Exercise for the mind can help

Our brains naturally begin deteriorating from around the age of forty and unused parts of the brain will tend to stop working. Fortunately, in the same way that we strengthen our bodies through exercising, flexing your mental muscle can help limit deterioration.

Recent research has indicated that memory and problem solving puzzles and activities can have a positive effect on keeping our faculties in tune. By challenging the brain it can create new pathways and effectively regain mental functions that have suffered attrition.


Part-time work in retirement

Part-time work in retirement

Retirement is a goal we all look forward to, but many of us like the idea of continuing to work part-time in retirement as a way of keeping stimulated and socially connected, as well as supplementing income. If you choose to do this, however, it is important to be aware that it may impact on your age pension entitlements.

Be aware of the limits

Fortunately, the government does allow some level of income to be earned without impact on the Centrelink or the Department of Veterans’ Affairs pension. A single person is permitted to earn up to $162 a fortnight, while couples can earn $288 a fortnight.

Once income exceeds these amounts there is a sliding scale of reduction in the pension. Every dollar earned in excess of the threshold will result in a reduction of fifty cents off the pension for singles and twenty five cents for couples.

Extra benefits from the Work Bonus

As an added incentive, the government has also implemented the Work Bonus Scheme to benefit those who are earning income as employees, (the scheme is not available to self-employed). The scheme allows you to earn an extra $250 per fortnight, over and above the earning limits described above, without it being assessed under the the pension income test. That equates to a substantial total of $6,500 per year.

An important feature of the Work Bonus Scheme is the way it caters for those who may only be working occasionally. The scheme allows you to accrue the $250 per fortnight limit during the times you are not working and then lets you apply the accrued allowance during periods when you are working.

Hypothetically, you could have no employment for the first nine months of the year and then work part-time for the final three months of the year and still gain full benefit from the scheme by being allowed to apply the full annual limit of $6,500 all within those last three months.

Remember, Centrelink and the Department of Veterans’ Affairs will also look at the value of your assets when calculating how much pension you receive.

Planning retirement income

If you want to know more, talk to your adviser, who can help you coordinate your income mix to ensure you maximise your entitlements.


Make sure your super passes into the right hands

Make sure your super passes into the right hands

Your super can potentially be your biggest asset, so it is vital to make sure it benefits the right people if you were to pass on prematurely. While the objective is simple, achieving that objective may be more involved than you think.

Your super can amount to hundreds of thousands of dollars and in most cases is only rivalled by the family home as your largest single asset. While it is primarily intended to provide income in your retirement, it takes on a very different role if you were to die prematurely. Your beneficiaries, such as your spouse and children, may rely on accrued benefits and any insurance payments in your super to fund their ongoing livelihood and financial security.

This means that arrangements you make for your super to be passed on efficiently and accurately are essential, but such arrangements can come unstuck if they are not planned carefully.

Is a ‘nomination of beneficiary’ on your super enough?

You may be aware that you are able to make a directive to your super fund known as a ‘nomination of beneficiary’, which allows you to specify who should receive your super balance if you pass on. This allows the super balance to be allocated directly to the nominated beneficiaries without having to be processed through your estate.

While on the surface this may seem like a reasonable and efficient way to deal with this issue, nominating a beneficiary may not turn out the way you want, if your beneficiary’s circumstances change in the future.

For example, once the money has been paid to a child, your super fund has no further control over it and it simply forms part of that child’s assets. If that child is married at the time of receiving the super monies and then down the track has a divorce, the super you have left to them may be split along with other assets as part of the divorce settlement. Would you be happy for an estranged son or daughter in law to benefit from your super?

Concerns over mismanagement

Another potential outcome of passing on your super via a nomination of beneficiary is the risk of the funds being mismanaged or spent frivolously or contrary to what you intended. For example, one of your children may come under the influence of friends or a spouse who has undesirable motives. The money may be wasted on unnecessary spending or poorly invested, resulting in your intended beneficiary not being looked after as you would have hoped.

A trust arrangement may be the answer

Rather than relying on a nomination of beneficiary approach to bequeathing your super, a more practical solution may be to set up a trust into which your super is paid upon death. You can set rules and conditions within the trust that govern how funds are distributed and what they can be used for.

A trust can effectively limit any risks of funds being misused and protect them from acrimonious divorce settlements. It can even shield the inheritance you pass on from any bankruptcy proceedings if one of your beneficiaries has a business failure after your death.

A trust simply allows you to maximise control over your estate when you are not there to do it yourself.

Professional advice is essential

Setting up a trust can, of course, be quite a complex process and requires skilled attention to ensure it is personalised to your requirements and legally robust enough to fulfil its intentions. This makes it essential to engage professional legal assistance. Apart from the initial set up, there will also be ongoing taxation matters to deal with to keep the trust compliant. While all of this may incur cost, it can be a small price to pay for the peace of mind that it can provide.

If you would like to investigate further, we are happy to discuss how this may work for your situation and to refer you to the proper legal assistance to get things organised, so feel free to contact us anytime.


Market update: Summer 2015

Market update: Summer 2015


There have been a series of small increases in some lending rates for housing, as banks seek to bolster their capital following recent changes in capital requirements. This is good for the banks, the additional capital makes them more secure, but it is being paid for by consumers. The Reserve Bank of Australia (RBA) remains on hold with official cash rates remaining steady at a historical low of 2.0%. The question of whether the RBA will cut rates further remains open. With no sign of inflation picking up, and early indications that housing prices are softening, there is scope for further rate cuts.


Australian bonds are likely to be caught between two competing forces, the slowing Australian economy should be positive for bonds; while the prospect for rate rises in the US could see bonds under pressure. How this balancing act plays out remains to be seen. Our best guess at this stage is that the former is the preeminent influence and that bonds appreciate modestly in price as the local economy slows.

Australian equities

The Australian share market sold off again in September, following on from the falls in August. Subsequently, October saw some recovery.

The resources sector continues to be out of favour even though the two big miners BHP and RIO hold world class assets and are the lowest cost producers of iron ore in the world. The banks and healthcare companies are clearly the market favourites. We have some concern that the amount of leverage inherent in the banks may pose some problems should a slowdown in China and the local economy lead to bad debts rising, and house prices falling. Healthcare companies look attractive in terms of industry dynamics, but are expensive relative to their own history.

International equities

The quarter ending September was not a good one for shares. It was also not a good one for the Australian dollar, but the depreciating currency provided some buffer from share price falls for currency unhedged investors in international shares.

As with the Australian share market, international markets rebounded in October. Emerging markets continue to look attractive from a valuation perspective, while US shares seem somewhat overvalued.


Fighting melanoma in the sunburnt country

Fighting melanoma in the sunburnt country

As Australians, we take a lot of pride in the fact that we lead the world in many arenas, such as sport, science, business and the arts. Unfortunately we also lead the world in another area that is not so desirable. As the nation with the highest incidence of melanoma, it’s high time we turned the tide.

It can start as a seemingly innocuous spot on the skin, but can quickly develop into one of the most aggressive and potentially deadly diseases. Melanoma affects more Australians per capita than any other country in the world. In fact there are 30 cases diagnosed every day* and in 2009 there were 48,364 Australians living with the disease**.

Melanoma is projected to make up a massive 10.2% of all cancer diagnoses in Australia for 2015** and to underscore its seriousness, an expected 1,160 males and 515 females will die from it in 2015**.

Why is it so prevalent here?

The sunny climate is certainly a starting point, but genetic and lifestyle factors compound the risks considerably. The simple fact is that Melanoma risk increases with exposure to UV radiation. That means excessive exposure to the sun that causes sunburn, will impact on your chances of contracting it – particularly if the exposure is while you are young.

The high proportion of people with fair skin, freckles, light eye colour and light or red hair also affects the high incidence rate. A first degree relative who has had melanoma will also increase your risk of contracting it.

Easy ways to reduce the risks

Despite the increased awareness of the risk factors, almost 14% of adults, 24% of teenagers and 8% of children are sunburnt on an average summer weekend***. This highlights the need to follow the well-known prevention routine; slip on a shirt, slop on some sunscreen and slap on a hat. This is still the best primary defence and has now been supplemented with further advice to ‘seek some shade’ and ‘slide on some sunglasses’.

Early diagnosis makes a big difference

Even the most sun-safe person still needs to be aware of the early warning signs of a melanoma. Checking yourself regularly for the appearance of a new spot, or a change in an existing freckle or mole is the start, but you also need to be checked professionally on a regular basis too, either by your GP, a Skin Cancer Clinic or a Dermatologist.

An excellent reference for self-checking can be found in the ‘Preventing Melanoma‘ section of the Melanoma Institute of Australia website.

Good news on treatment and survival

A five stage rating system is used to define the extent and development of the cancer and treatment options vary depending on the stage the cancer has reached. This may be limited to surgery and excision if it is detected in early stage, but may also include radiotherapy, chemotherapy and drug treatments if it is more advanced.

It’s a relief to know that of those suffering skin cancers in Australia, 90% have a chance of surviving for 5 years** and complete cure is possible, but success relies heavily on early detection and hence the need for regular check-ups.

Being prepared to fight the disease

Having the financial resources to obtain the best treatment and to adjust your lifestyle and work situation is an important part of facing diseases such as melanoma. A well-planned personal risk management strategy should include insurance protection that pays you a lump sum benefit for specific trauma conditions, such as Early Stage Melanoma.

Trauma insurance is an ideal way to help fight the financial impacts of cancer because it pays a lump sum benefit, which you can use to pay off debts, supplement your income protection, fund a sabbatical, or any other purpose you choose.

Your adviser can help you to plan your risk protection strategy to give you the financial means to help you focus on getting better.




Follow these five health essentials

Follow these five health essentials

The gimmicks and fads bombarding us on the web and in the media can become overwhelming, so here is an attempt to get back to basics with five essentials that keep it simple.

Get moving

Our bodies need to simply get in motion to stay healthy. This is especially important if you work in a sedentary job or spend a lot of your recreation time in front of a screen. Make time each day for at least 30 minutes of exercise that gets your heart rate up and muscles engaged. A brisk walk, a stretching routine or some basic floor exercises are things we can all do for fun and for free.

Go to sleep

Sleep is often an underrated factor in mental and physical wellbeing. Aim for a good 8 hours if you want your body to properly recharge. It can help relieve stress, boost creativity and even aid learning ability. Aim for a regular bedtime and limit pre-bedtime exercise, eating and screen time, so that your body can wind down.

Drink up

We naturally lose 2.5 to 3 litres of water every day so it makes sense to put it back. Fluids are essential for many functions including blood flow, waste disposal, joint function and digestion.

Get some rays

Catching some daily sun is important for Vitamin D production, which aids calcium absorption and may even influence other health factors such as blood pressure and our mental disposition. Of course you should always take precautions against the sun’s harmful effects, but avoiding it completely means you may be missing out on important benefits.

Eat well

Rather than looking for wonder diets and super foods, focus on the basics of a healthy diet. Seek a wide variety of food groups, with a predominance of whole grains, high fibre cereals and vegetables, coupled with moderate amount of lean proteins, dairy and fruit.

Form some healthy habits around these five essentials and reap the benefits of better health.


How to choose a retirement village

How to choose a retirement village

Australia has over 2,200 retirement villages which cater for over 5.7% of the over 65 population. The idea of hassle-free living in a community setting is appealing to many, but how do you go about selecting the village that is right for you?

Retirement villages provide the attraction of combining an independent living space with shared facilities and services. They generally provide a feeling of security, increased opportunity for social contact and access to a variety of lifestyle activities.

If you or someone you care about is considering making the move to a retirement village, there are a range of issues to examine and compare in order to make a sound choice of village to meet your needs. Here are some of the more important ones to keep in mind.

Are you prepared for the change?

If you have been in your current home for some time, making the move can be quite an upheaval. That makes it imperative to give some thorough consideration of how your life will change in a new location. Will access to family and friends be more limited? Will you be able to readily source medical, health and recreation facilities and services that you want and need? How handy is the prospective village to shops and public transport?

Quality of life within the village

You need to be satisfied about the quality of the village’s property, amenities and service. This begins with the physical aspects of the buildings and how conducive the village set up is to a worry free lifestyle. Is there sufficient privacy for your unit/villa? Are common areas well-appointed and appealing? How well kept are the gardens and traffic areas? Are there noise issues coming from main roads or public places, such as clubs and shopping centres?

You also need to look deeper into the ‘vibe’ of the village. A good barometer for this is the happiness and friendliness of the people who live and work there. Talk to staff and other villagers and see how welcome they make you feel. Don’t be afraid to ask direct questions about the best and worst characteristics of living there.

Your quality of life is also impacted by how accommodating the village is to the people and activities that are important to you. Does the village have rules on pets? Does it have adequate provisions for entertaining family and friends who visit? Are there a variety of facilities, such as a library, bar, café, dining room, sporting facilities and social programs?

Understand the financial commitments

It is vital that you get a firm grasp of the financial aspects of living in the village. This should include gaining a complete picture of not just the upfront costs, but the ongoing maintenance fees, upkeep costs that the resident is responsible for and exit fees and capital gain sharing arrangements if you ever decide to leave. Don’t take anything for granted and be upfront in asking for documentation that can be scrutinised by financial and legal professionals. It is unlikely that you will be able to fully understand all the contractual and financial intricacies, so employ some professional assistance to make sure that there are no surprises down the track.

What about the future?

While you may well expect to spend a considerable time residing in the village, eventually there may be health or ageing issues that require a change in living situation. Check what the village offers in terms of medical or emergency support and how it caters for added services, such as cooking, cleaning and laundry. Such services may make a big difference in how practical it is to ‘age in place’. If movement to higher care accommodation becomes necessary, does the village have transition arrangements and what are the costs involved?

We are here to help

If you are considering the possibility of a retirement village, it’s a good idea to consult your adviser to assist with the financial aspects and to help refer you to the appropriate professional.


Get savvy to save on life cover

Get savvy to save on life insurance

While most people recognise the value of life insurance, no one likes to pay more than absolutely necessary for cover. Fortunately there are ways that you may be able to reduce net costs without compromising on security.

The possibility of a sudden death or disability striking your family is a financial risk that is too great to ignore. Statistics tell us that:

  • In a ten year period, one in five families will be impacted by the death of a parent, a serious accident or illness that renders a parent unable to work*
  • Overall deaths in Australia between ages of 25 and 64 amount to 25,124**
  • On Australia’s roads alone there were 1,156 deaths in 2014***

Simply hoping that “it won’t happen to me” is not really a valid option, when your family’s comfort and security is at stake, but for some there is the challenge to fit the cost of insurance into their budget. The good news is that there may be ways to reduce net cost, using strategies that creatively take advantage of legitimate tax saving opportunities.

How Steve and Georgia lowered the net cost of their life cover

Steve and Georgia and their two young children were a single income family, with Steve earning around $100,000 as a sales manager, while Georgia chose to stay at home to care for the two children.

Conscious of wanting to ensure future security, they arranged their life and disability cover with the help of their adviser. During their discussions the adviser also explained how careful arrangement of their cover ownership could reduce the net cost of cover.

Their cover package included life, TPD, income protection and trauma cover. The adviser suggested that by moving the ownership of the life and TPD components under Steve’s superannuation fund they could achieve substantial tax savings. The trauma cover and income protection cover would remain under personal ownership.

How the Life and TPD tax saving was achieved

The tax savings were achieved by Steve arranging with his employer to salary sacrifice the $1,800 life and TPD insurance premium. This simply involves diverting $1,800 of his pre-tax income into his super, thereby avoiding income tax on that amount. With a 39% marginal tax rate, (including Medicare levy), this resulted in a tax saving of $702.

Without this strategy the $1,800 premium would need to be paid from after-tax income, which at Steve’s tax rate would require $2,950 of gross income – a difference of $1,150.

To achieve further savings, they were also able to increase the amount of salary sacrifice into Steve’s super to then transfer into a super account in Georgia’s name to cover her life and TPD premium as well. Such savings could occur every year and could enable the money saved to go toward their lifestyle or perhaps be diverted into their wealth accumulation plans.

Get savvy on life insurance - savings table

The value of seeking advice

This is just one example of how an adviser can help to increase the efficiency of your financial plan to help you achieve your goals and advance your financial security and growth. While this particular strategy may not be suitable for everyone, it does illustrate how clever use of the available rules can garner substantial savings.

* The Lifewise / NATSEM Underinsurance Report 2010

** Source: ABS, Deaths, Australia, 2013

*** Road Deaths Australia 2014 Statistical Summary, Bureau of Infrastructure, Transport and Regional Economics


Don’t gamble on financial advice

Don't gamble on financial advice

In an age of information overload and pervasive social media it seems everyone has an opinion they want to share. Being able to discriminate between what is useful and what is fanciful is increasingly important – especially when it comes to financial issues.

A little knowledge can be a dangerous thing

Ever had the temptation to jump on the web whenever you get an unusual pain to try to ‘self-diagnose’ what it might be? Or perhaps you have noticed a new wonder diet on your social media news feed that just happens to contradict the diet you read about last week. A little knowledge can be a dangerous thing and when it comes to the internet a lot of discretion needs to be applied to the relentless clamour of opinion and advice from sometimes dubious sources.

Of course having the ability to access information and do research at the touch of a button can be extremely useful. The internet has empowered us through the democratisation of information, but while the benefits are undeniable, there is also a danger of ill-informed opinions and vested  commercial interests being mistaken for well-considered and independent advice. This is particularly important to recognise when it comes to something as critical as your financial wellbeing.

Be careful who you listen to

The internet is not the only place where you may find questionable financial advice. Many of us have friends or family who feel compelled to give their heartfelt opinions on investment ideas. We open the newspaper and we are assaulted with exaggerated commentary about markets being a “blood bath” or in “free fall”. Then there is the hysterical reporting on the property market.

The bottom line is that advice on critical areas of our lives should always be taken from professionals. If you have an illness you see a doctor. If you have a legal problem you talk to a lawyer. For your financial future it is always best to use a professional planner who can give you advice that is independent, well researched, takes into account your priorities and goals and provides a sober long-term view of what is right for your situation.


Market update: Spring 2015

Market update - Spring 2015


The Reserve Bank of Australia (RBA) cut the official interest rate over the past quarter to a historical low of 2.0%. If economic and financial conditions deteriorate in the coming months the RBA may make further cuts to stimulate economic growth, although market expectations are that rates will remain unchanged for sometime.

Australian and international bonds

Australian and international bond yields have risen in recent months primarily due to the market unrealistically pushing yields down to levels that did not adequately reflect the risks. The rising yields have resulted in bond values falling, as bond yields and price move in opposite directions.

Australian equities

The Australian share market has had a good run and now seems to be taking a breather. With expectations that economic growth will remain fairly subdued into 2016, it is unlikely that company earning growth will be strong for sometime. Therefore whilst the recent falls in the market have made valuations more attractive, investors will continue to need to be selective.

International equities

In recent weeks, developed equity markets have become more volatile in response to the Greek debt crisis and valuations in some markets that already appeared stretched (particularly in the US market). However we remain confident that opportunities remain, particularly in non-US markets including Europe and Japan, where valuations are not as extended.

Furthermore for Australian investors the prospect of further depreciation in the Australian dollar means unhedged international equities are likely to continue to see a boost to returns.

Emerging markets

In the past few weeks, we have witness a dramatic fall in one class of shares in the Chinese share market. This class of shares is largely open to, and traded by, Chinese retail investors, and therefore has little direct impact on Australian investors. We continue to find selective opportunities exist in these markets, especially given valuations remain cheap when compared to share markets in the developed world.


Listed infrastructure has followed many equity markets down in recent months but has delivered solid returns over the past year. The fundamentals of this sector-solid predictable companies with cash generative business models make it a preferred investment option for those investors with a longer term investment horizon.

Listed property

This sector has been one of the strongest performers over the last year. In more recent months performance has slipped a little. The sector remains underpinned by solid asset backing.


Reverse parenting: When is the right time?

Reverse parenting: When is the right time?

There are often signs that an ageing parent is having challenges with day-to-day life. Sometimes, through pride and because they don’t want to be a burden, they will try to minimise these issues.

Most people want to stay in their own homes for as long as possible. They may want control over what type of help will be put in place or be concerned that they will be pressured to move into a care facility. It’s best to talk with your parents long before the signs start to show, so that they are part of the decision process rather than on the outer.

Some of the signs that your parent may need help include;

  • Problems walking and frequent falls
  • Poor judgment or forgetfulness, such as leaving the stove on, or leaving the house unlocked
  • Disinterest in personal grooming and infrequent bathing
  • Difficulty preparing meals, lack of interest in food
  • Mishandling finances, bills left unpaid
  • Problems managing medications and scripts
  • Difficulty getting to social events
  • Increased confusion or memory loss
  • They seem lonely or sad

You will need time to do research

When making your choice of living arrangements, it’s important to know what services are provided and which are not. Assisted living facilities generally provide private living quarters and 24-hour staffing to help residents with basic services such as administering medications and meals. They do not provide skilled nursing services; however, nursing homes do.

The cost of power bills, food and social activities may also not be included on some accommodation options. You need time to find the service most suited to your parents’ needs.

Finally, the issue of cost needs to be addressed. While this is the last thing you want to be worried about, the reality is you need to know how your choice will affect you and your parents financially.

Our financial advisers can provide comprehensive cash flow analysis based on possible accommodation fees, living costs, tax implications and the financial treatment of the family home. You will quickly know what you can afford and, importantly, the impact on your financial situation after the move into aged care.

If you think it’s time to consider these options, please talk to us.


Hobbies can help you heal

Hobbies can help you heal

Coping with life’s stresses can often benefit from keeping the mind active and creative and many people are now finding that taking up a hobby can be therapeutic.

In days gone by pursuits such as sewing and woodwork were more of a necessity than a pastime, but did they make people happier? These days computers and TV’s take up our leisure time and offer a lot less in terms of healthy mental activity.

Engaging in a hobby can therefore help restore some balance.

Does it make a difference?

A study quoted in the Journal of the American Medical Association looked at a group of 30 women who regularly engaged in sewing. By testing key indicators, such as blood pressure, heart rate and skin temperature before and after various leisure activities, it turns out that sewing produced distinct improvements. This contrasted with more negative stress responses when they switched to other activities, such as playing cards or video games.

It seems that hobbies can produce a relaxation response that brings a sense of mental and physical wellbeing. Employing the creative side of our minds and concentrating on a skilled task can refocus our thoughts into the present, rather than dwelling on past events and experiences that cause us anxiety.

A welcome break from a hectic lifestyle

Hobbies are sometimes typecast as being a waste of valuable time or an indulgent obsession. Perhaps it is time to take a fresh look at how they can refresh the mind and the spirit – especially when we are re-adjusting to life after a personal loss or unexpected change of circumstances.

The challenge is to make the time and space that can be allocated specifically toward a hobby as a valuable and restorative practice. Perhaps a positive first step is to take a course or join a club to gain motivation and meet like-minded people. Making the effort may well be the catalyst to greater fulfilment and enjoyment of life.


Ensuring financial freedom if major disability strikes

Ensuring financial freedom if major disability strikes

Believe it or not, premature death may not be the worst that can happen to your family financially. A permanent medical condition that stops you from ever earning income again can result in even greater financial challenges. Fortunately, there is an answer.

Most people have at least a rough idea of the financial impact that the death of a breadwinner may cause. Mortgage, living expenses and education costs have to be provided for. Similarly, many are conscious of the need to replace income if they take extended time off work due to an operation or an unexpected illness.

But what if something more permanent happens? Something that prevents you from ever earning income again, but leaves you with a relatively normal life expectancy.

Such a condition may actually cause even greater financial burdens than death, because of the additional expenses related to the sickness or injury that are on top of the debt and income needs that you need to provide for.

Injuries such as paraplegia or a major head trauma, or sicknesses such as cancer or depression, can result in permanent disability and permanent income loss and can incur surprisingly high additional costs for treatment and adapting of your lifestyle and living situation.

Let’s take a closer look at what this might entail and what you can do about it.

Getting the basics taken care of

The first priority is to relieve yourself of the financial worry of a mortgage and other debts and provide an ongoing income to cover basic living costs that you and your family need for at least a reasonably comfortable lifestyle.

Medical treatment

Many medical conditions require a range of ongoing tests to be carried out well into the future. Operations may be required and medications can also be a significant extra cost. Then there may a desire to pursue alternative therapies or more advanced treatment options in other countries, which are beyond the scope of health insurance alone.

Adapting your home to your needs

Your lifestyle may benefit from renovations and specialised provisions around the home to make life more comfortable and convenient. This can include ramps, bathroom and kitchen customisation and door widening – all of which can incur substantial costs.

Gear and gadgets

Specialised gear, such as wheelchairs, lifting machinery, exercise equipment and automation of doors and appliances, can make life a whole lot more liveable for certain medical conditions. There may also be an opportunity for medical equipment to be brought into the home, instead of relying on external services and institutions.

Rehabilitation expenses

Physiotherapy, occupational therapy and other specialised assistance for rehabilitation can be an ongoing and necessary aspect of living with disability and can improve quality of life.

In-home assistance

You may wish to (or need to) employ in-home nursing care and other domestic help around the home to relieve stress on family.

Transport costs

Specialised transport may be needed to ensure you have as much freedom of movement as you want.

The best way to fund these costs

The staggering costs that these factors can incur are generally not covered by health insurance or Medicare and cannot be funded out of your income protection. Life insurance is designed to pay in the event of death or terminal illness, so it is of no use if your life expectancy is still relatively normal and advancements in modern medicine are improving survival rates all the time.

The best solution to funding these costs is with purpose built insurance that pays a lump sum benefit, which you are free to spend as you please. That is exactly what total and permanent disability insurance is. It gives you the freedom and independence to make the most of life, no matter what the circumstances.

Plan your risk protection professionally

Your adviser can show you how a comprehensive total and permanent disability plan can fit into your risk protection strategy in the most economical way, so don’t hesitate to discuss your concerns.


The hidden dangers of an unplanned estate

The hidden dangers of an unplanned estate

While most of us are aware of the importance of making a Will, there are other estate issues that may not be so obvious and can have dramatic consequences on family security. It’s not just for the wealthy – all families need to plan for financial, legal, medical and child care decision making to ensure their wishes are carried out accurately.

Estate planning may sound a little intimidating or irrelevant, but this umbrella term covers a range of essential financial and legal arrangements that any individual can and should make for the proper care of what they own and the people they love. It is integral to your future planning if you want future situations handled with minimal impact on family and in alignment to your wishes.

Your will is a starting point

Even with modest assets and property, there can be severe delays, disputes and upheaval if you were to suddenly pass away without a Will. A Will clearly specifies what you want to happen and who you want to benefit if you are no longer around. The absence of a Will leaves your family in the hands of an appointed administrator who may make decisions that are not consistent with your wishes and may result in unnecessary delays and costs in estate distribution.

Once in place, it is essential that it is reviewed periodically to make sure it adapts to your changing circumstances.

How will medical decisions be made?

The reality of medical and health issues impairing decision making is a critical issue to deal with in an estate plan. A sudden accident can leave your family with massive decisions to make about treatment, accommodation and assets, so it is essential that they have some formal reference point to avoid undue stress.

It is not just the elderly who need to plan for this situation. Serious and chronic medical conditions can occur at any age and can dramatically and permanently affect your ability to manage your own health decisions or financial affairs.

Fortunately, there are ways to cope with this eventuality and relieve stress on your loved ones. An Enduring Power of Attorney gives a legal basis for passing your decision making authority to someone you trust if you are unable to make decisions for yourself on legal and financial matters.

Enduring Guardianship can also delegate your authority to someone you trust for making critical decisions on issues such as medical treatment and nursing home care, if you are not able to yourself. These tools are there for your benefit and to help you ensure your wishes are carried out effectively and responsibly to your satisfaction.

Providing for the care of children

No one would ever knowingly compromise the welfare of their children, but we can unwittingly leave things up in the air if we don’t make formal plans to set out our wishes. An Enduring Guardianship lets you specify who you want to care for your children if you suddenly die or suffer a medical event that prevents you from providing care for them.

It is a simple step to take, but can make a huge difference to their future and the peace of mind that comes from knowing your children will be well looked after is well worth it.

Failing to attend to this valuable provision for their future may leave them exposed to the judgements of external authorities and may leave your family with the prospect of applying to a government tribunal in order to allocate guardianship responsibilities.

Ask for help to secure the future

Your adviser can be a valuable facilitator on these issues. They can refer and consult with other professionals to make sure your situation is well managed and your beneficiaries are left with security.


How to decide where to invest

How do you decide where to invest?

There are a number of things to consider when you are deciding where to invest – whether it be property, shares, cash or something else.

Troy explains the basics including goals, diversification, asset classes, cash flow and capital growth.


Market update: Winter 2015

Market Update Winter 2015


Following the Reserve Bank of Australia (RBA) decision to cut the official interest rate to 2.25% in February, they did so again in May to a record low of 2%. Financial markets, however, are expecting additional rate cuts in the coming months. The only question appears to be how far the RBA will cut further in this cycle, given the current rate is at a historical low.

Australian and international bonds

Australian bonds delivered strong returns in the past 3 months. With interest rates currently at very low levels, it would seem likely that future returns to this sector will be lower. A weak Australian economy would be the best environment for further gains in bonds. A strong US recovery by contrast would probably see bonds struggle.

Australian equities

The Australian equity market performed strongly in January and February this year as interest rates were cut. However the market has drifted throughout March and closed a little lower by the end of the month. With Australian corporate earnings and profitability remaining subdued, valuations are becoming less attractive.

International equities

Developed equity markets performed strongly early in the year supported by US economic strength, lower oil prices and continued central bank stimulus. However, the recent rise in prices has resulted in a further ratcheting up of already stretched valuations, especially in the US. We therefore believe that greater opportunities exist in non US developed markets particularly in Europe and Japan.

Furthermore, for Australian investors the prospect of further depreciation in the Australian dollar means unhedged international equities are likely to continue to see a boost to returns.

Emerging markets

Overall the valuations in emerging market (EM) equities look cheap when compared to share markets in the developed world. Emerging markets can no longer be treated as a monolithic block in our view. There are good reasons why some EMs appear cheap, with some economies facing significant challenges. Others, in contrast, appear to offer some good opportunities.


Listed infrastructure did well over the quarter and has outperformed the broader market over the full year. Investors have sought out these solid predictable companies with cash generative business models.

Listed property

Property topped the performance tables for the quarter, and indeed for the year. The primary driver of this remains the global
search for yield. How much further this can carry the sector, however, is becoming increasingly questionable. The yield-driven demand for the sector may yet carry prices higher but a repeat of this year’s spectacular returns looks unlikely.


Why is goal setting so important?

Why is goal setting so important?

Goal setting helps motivate us to make decisions and take action to achieve the things we want out of life, including financial independence.

Watch Troy explain why goal setting is so important.


End of financial year tips

End of financial year tips

Tax time is upon us once more and as our thoughts turn to getting our paperwork in order, it makes a lot of sense to review some of your other financial affairs for the year ahead too. Here’s a quick checklist to get you started.

Refresh your goals

Goals are what drives any financial plan, so it is important to review them annually. Consider short term goals, such as holidays, as well as longer term aspirations, such as retirement. Make them as specific as possible to stimulate action.

Your financial blueprint

The success of any venture requires a plan and your financial wellbeing is no exception. Speak to your adviser if you feel there are gaps in your planning or circumstances change. Planning is the real “secret” to wealth creation and financial security.

Get a grip on credit

Loans and credit cards can undermine your plans and your motivation, so make this coming financial year the one where you take back the initiative. It can’t always be fixed overnight and there is no need to set unrealistic targets, but big inroads can be made if you get organised, target debts with higher interest first, consolidate where possible and follow a deliberate monthly strategy to get back in control.

Super season

Are you maximising your super opportunities? The self-employed should be looking to maximise tax deductions before 30 June and employees should consider the tax benefits of salary sacrificing into super if not already doing so.

Personal insurance tax savings

Your life, disability and income protection insurance plans may hold tax opportunities too, such as pre-paying annual premiums on income protection before June 30 or moving some insurances into your super.

Plan for your tax refund

It’s easy to look at your tax refund as a chance to spoil yourself, but why not plan ahead now to direct it toward your financial goals instead?

Use tax time as a catalyst for improving your financial health and talk to your adviser about how they can help.


6 steps for setting and achieving goals

6 steps for setting and achieving goals

Goal setting is a really important part of achieving the things in life you want to achieve.

It may seem like a simple thing to do, and there are many different techniques out there.

Today, I thought I’d share my method. It’s simple, fast and helps me focus on the things that are most important.

1. Clear my mind

I start by clearing my mind of all the other things that might be going on at the moment.

You could do that by exercising, going for a walk, meditating, or simply just closing the door and committing to focus on the task at hand.

2. Brainstorm

I then get all those things I want to achieve out of my head and on to paper. I write like a mad man and don’t do much filtering at this point.

I challenge myself to get to 100 goals, to help me think big and broad.

3. Categorise

For each of the goals, I then put a letter next to each to help me categorise them:

  • [P] for personal
  • [L] for lifestyle
  • [F] for financial
  • [B] for business (you might use [C] for “career”)
  • [T] for toys

4. Decide the top three

Then, from each of the categories, I decide my top three. That means choosing my top three personal goals, my top three lifestyle goals, my top three financial goals, and so on.

5. Get specific

For each goal, I then start to flesh out all the details:

  • Get super specific e.g. Rather than “renovate house”, I will break it down into something like, “upgrade outdoor entertaining area with new timber furniture”
  • Put a timeframe around each goal e.g. by 1 September 2015
  • Decide on a dollar value for each goal (if applicable) e.g. $3,000
  • Get clear about why the goal is important e.g. so we can enjoy long lunches with our family and friends, outdoors over summer

6. Work out the “how”

This is where I start delving into exactly how I’m going to achieve each goal.

I often find I need to work backwards a little.

For example, say you have a goal to renovate your kitchen, and you’ll need $20,000 to do that. You could reduce your spending, increase your savings or increase your income (or all three).

You might decide that to achieve that savings amount, as well as other career goals, doing some additional study might be a way to secure a higher paying role e.g. increase your salary from $60,000 to $80,000. And that extra study and increased income, will ultimately help get that new kitchen.

I also have a one year planner, that breaks down the action steps for each of my top three goals for the next three months, each week and each day.

Taking action and making progress every day is pretty powerful. But it can be both motivating and sometimes pretty frustrating. Let’s face it; it’s pretty hard to achieve everything you want, all of the time.

However those daily and weekly actions do have an impact. And you will find that hitting those medium term goals, is likely to happen if you’re consistent with your regular actions. Sometimes things may take a bit longer than you planned, but you’ll get there in the end.

Have you downloaded your free goal setting worksheet?

Take the first step towards achieving your dreams and get your free Goals Journal.

It’s not about what you earn

It's not about what you earn

I’ve had many people say to me, they think they can’t go to see a financial adviser because they don’t have $100,000 or more to invest.

My opinion is that you have to start somewhere.

We have clients who earn a lot, and we have clients who earn only a little. And what we often find is that it is the clients who earn less, that do a whole lot better.

“It’s not about what you earn. It’s what you do with what you earn, that matters.”

If you have a disciplined approach to money and a smart structure around how you manage your cash flow, what you earn doesn’t matter so much.

If you’re earning $500,000 a year, but spending $600,000, then you clearly aren’t going to be moving forward in terms of achieving your financial goals and accumulating wealth.

That’s why, right from the outset, it is vital to understand your spending habits – what’s coming in (gross income) and what’s going out (spending).

Beyond that simple rule of thumb, to spend less than what you earn, there are other things to consider that will have an impact on your wealth, regardless of your income:

  1. legally minimising your tax
  2. reducing your debt sooner so you pay less interest
  3. maintaining a comfortable lifestyle

We call those three things – tax, debt, and lifestyle – the “three way struggle”.

And that’s where what you do with what you earn, is important.

It starts with the basics of ensuring you live within your means. Then, you can create leverage through managing your cash flow more effectively.

Part of this simple strategy is to increase your level of net income, by legally reducing the level of tax you pay.

Your net expenditure is also important, because if you can widen the gap between what you spend and what you earn, then you create a surplus (big or small).

Then, you can use those extra funds to reduce your debt and accumulate assets (which can also produce additional passive income).

For example, if you’re paying $12,000 tax per year, and you can legally reduce that to $10,000 tax per year, then you can invest or pay down debt (maybe both) with the $2,000 difference.

While the numbers may seem small, when you repeat that over many years, it can make a big impact on reaching your financial goals.


Gramping gets families together

Gramping gets families together

The pace of modern life is making it increasingly difficult for all generations within families to get together to enjoy each other’s company. One idea that many families are finding as the answer to this issue is to go ‘gramping’.

Gramping simply involves having the three generations in a family going off to a camping location where they can rekindle family relationships and enjoy each other’s company in a relaxed and fun environment. It can also be a great way to reduce or share the cost of a holiday if the budget is tight.

Benefits for all generations

Camping holidays have the intrinsic attraction of getting back to nature that appeals to all ages. Many parents are seeing it as a novel way of getting their children back into meaningful contact with elder members of the family. It’s perhaps the shared experience of camping that helps to fuel interaction and a simple desire to have fun together: – whether it is cooking and chatting around an open fire, pitching in together to share camp chores or enjoying an all-in game of cricket or volleyball.

Kids love the adventurous aspect of it, while their parents can enjoy the benefit of having some extra child-minding around. For grandparents, it’s a chance to strengthen connections with both generations, which may have been hindered by the distraction and isolation of technology and the busyness of the workaday world.

An easy, low-cost holiday option

Apart from the social benefits, gramping offers the advantage of being generally a lower cost holiday compared to staying in hotels or resorts. Amusement is based on family games and the attractions of the natural environment, rather than pricey theme parks or other tourist attractions. The novelty of camp cooking makes meals cheaper too.

Many holiday parks offer comfortable cabins for those less inclined to sleep in a tent, so gramping is still an option for family members who are not so mobile. It’s a great way for extended families to reconnect.