Wealthwise for Retirement, Superannuation & Investment Advice
Wealthwise for Retirement, Superannuation & Investment Advice in Perth WA.
Ahead of the RBA’s meeting this week pundits are calling for the central bank to cut rates to help Australia’s two-track economy.
One of the most outspoken critics of the RBA’s fiscal policy is Tim Colebatch, economic editor of The Age. Writing in today’s Sydney Morning Herald, Colebatch argues
“Even a 0.5 percentage point cut – assuming the banks pass it on – would still leave rates too high.”
So, all eyes tomorrow on the Reserve Bank Board.
Catherine Leddin Joins The Wealthwise Adviser Team
Wealthwise are very pleased to welcome a new member to our team of financial advisers, Catherine Leddin.
Catherine has been in financial services for over 20 years, working with such companies as Minet, Deutsche Bank, and Westpac. She holds the Diploma of Financial Planning, and tertiary qualifications from UWA & Curtin.
Catherine is a great believer in the importance of planning, and encourages clients to ask as many questions as possible to ensure they understand the long term benefits of financial advice. She prides herself on listening to the client, and joins us from a boutique firm where she dealt largely with superannuation, wealth protection, and retirement planning.
The Principal of Wealthwise, Jamie Luxton, sees Catherine’s core skills as being a great fit with the Wealthwise Way:
“We are a very client-orientated company and Catherine’s emphasis on listening to the client and working with them as a partnership is very much what Wealthwise is about.”
If you would like to discuss your financial future with Catherine call her on (08) 9380 6333 or send her a message using our Contact Us page.
KEY POINTS:
• Most super funds offer insurance. However, it’s important that you ensure the cover is enough for you and your family.
• As your life changes, your insurance policies may need to change with you.
• We’re here to help. We can review your policies with you.
Research shows that only around 16% of people actually have life insurance.(1) Also, only 6%(2) of consumers have income protection, while one in six men and one in four women are expected to suffer a disability from the age of 35–65 that leaves them away from work for six months or more.(3) While these statistics can be confronting,the flipside is that checking, maintaining and possibly upgrading your insurance coverage can provide tremendous peace of mind.
What’s your most important asset?
Most people have insurance for their home and motor vehicle, but fail to cover their most valuable assets – their life and their ability to earn income over the long term.
Which policies are relevant to me?
There are four main types of personal insurance:
• Income protection – helps you meet your financial commitments by providing regular payments if you are unable to work due to sickness or injury.
• Trauma cover – provides a lump sum payment after the occurrence of a serious medical condition (such as cancer, stroke or heart attack).
• Disability cover – total and permanent disability (TPD) cover provides a lump sum payment if sickness or injury leaves you totally and permanently disabled.
• Life cover – a lump sum payment to your nominated beneficiary in the event of your death or a terminal illness.
How can I be sure I’m covered?
Given the various types of insurance available, it can become overwhelming or confusing about what is best for you. You also don’t want to be stuck paying for cover that you don’t actually need. We can review your polices with you and provide practical and ongoing advice on personal insurance.
I already have a personal policy, isn’t that enough?
If you already have personal insurance you may appreciate some of the peace of mind it can bring. The most important thing is that you keep your policy in mind and not just tucked away in a drawer. Do you know how much you’re covered for? As your life changes, it’s vital to ensure that your policies change with you. If you get married, take out a mortgage or have a child, take a look at your coverage. You may find that you are still covered sufficiently or that you wish to upgrade some or all of your policies.
But aren’t I covered by my super fund?
It’s true that most super funds offer some level of income protection and death or disability cover. However, it’s important to read the ‘fine print’ and ensure that the coverage you have is enough to provide for your family if the worst were to happen. In some cases, the default coverage simply isn’t enough if you have children or other family members in your care. For example, the average amount of lump sum death cover is just over $150,000.(4) Would this be enough for your family? Also, policies like income protection may have waiting periods for payment. Therefore, you need to know what these waiting periods are and how long you and your family can survive on a reduced or non-existent income.
Things like mortgage payments, car repayments, school fees and everyday expenses keep occurring no matter what. If you were to become sick, injured or if the very worst were to happen, you would want your family to be able to carry on as normal.
Case study – Tom’s story
Tom is a successful lawyer and is married to Janette. He has worked hard over the past ten years to accumulate valuable assets. To support his desired lifestyle, Tom decided on a $300,000 trauma policy to protect him against cancer and heart attack.
Unfortunately, last year Tom was diagnosed with prostate cancer and was unable to work for six months while he underwent treatment and recovered from the illness.
Tom was paid a trauma benefit of $300,000 from his policy which assisted with Tom’s recovery. The insurance policy replaced his income and paid his medical expenses. Without it, Tom would have had to rely on Janette’s income.
Tom continued to pay his annual policy fee and 12 months after the initial payment of the trauma benefit, Tom bought back his $300,000 trauma policy at standard premium rates.
Unfortunately, six months later Tom had a serious accident, suffering a major head trauma.
Tom and Janette were relieved that, as a result of the trauma policy, he qualified for another trauma benefit of $300,000.
Again, they were able to meet their expenses and Tom was able to recuperate with some peace of mind.
Source: CommInsure, Protection and peace of mind for life (based on CommInsure average claims in 2008 calendar year), page 18, 2011.
1 Roy Morgan Research, 6 months to April 2009, Australian population aged 14+.
2 Roy Morgan Research, see footnote 1.
3 Institute of Actuaries, Table IAD 89-93 – white collar males and females.
4 CommInsure, Protection and peace of mind for life (based on CommInsure average claims in 2008 calendar year), page 9, 2011.
Feature article:
“Are You Ready For June 30th?” – planning for the end of the financial year.
Overseas:
Australia:
Plus all the usual news roundups on the WA Housing Market, Fuel prices,
Celebrity Birthdays and Sports.
I was recently discussing long term investing with one of our long standing clients Tom & Margaret (who recently achieved over 25 years as clients).
Tom mentioned how that one of the biggest impacts on their current retirement position was how they started investing just a couple of hundred dollars a month and, even though they left their savings run a little late, they continued to build on their modest start (encouraged by yours truly) and eventually built a reasonable nest egg for their retirement.
Tom & Margaret are like many clients, particularly retirees, concerned about the volatility of investment markets. However they were somewhat reassured to learn that despite recent volatility their portfolio has returned nearly 8% over the last 3 years since the bottom of the GFC.
It was also interesting to note that over the last 25 years their portfolio had achieved a very similar result over the much longer time-frame, including the GFC.
For those clients interested we have a number of convincing papers on the future of financial markets and why a continuation of that level of growth is quite achievable.
On a lighter note, Margaret was happy to share a story where, after 40 years of driving, she unfortunately received her first speeding ticket! Margaret had been in a hurry to the chemist before they closed to get medication for an unwell Tom. Despite providing her legitimate reason for the offence and bringing her exemplary record to their attention – no leniency to waive the fine was forthcoming!
By Jamie Luxton, Principal of Wealthwise
At some point in our lives or in the life of a loved one we may have to consider moving into residential Aged Care.
It can be a daunting prospect and your mind will be full of questions:
How do I work out all these different fees? Do I need to pay a lump sum? Which facility should I choose? Can I negotiate over fees? Will this impact on my Aged Pension?
As if that isn’t enough to get your mind spinning, sometimes a condition or illness may mean there is precious little time to get a handle on all the issues. Sometimes the chosen facility may not have a room or a bed available at that point in time or they have a room but want a decision in a very short space of time.
The best way to help you find your way through this maze is to look first at how the Aged Care process actually works.
Before entering Aged Care a person must be assessed and approved by the government’s Aged Care Assessment Team (ACAT). ACAT helps older people and those who care for them decide what kind of care will best meet their needs when they can no longer manage on their own. ACAT is made up of a range of health care professionals who help to assess whether an individual requires Low Care or High Care.
If the evaluation indicates that Low Care is required the following can apply:
• An Accommodation Bond, which is a lump sum paid to the facility for the duration of the resident’s stay. This will be refunded upon leaving (less an annual retention amount).
• Daily Care Fee (maximum of $41.34 per day for standard residents).
• Income Tested Fee (depends on the level of income but up to $66.43 per day).
The alternative assessment is High Care, where the following costs can apply:
• Accommodation Charge (a maximum daily fee of up to $32.38 per day depending on assets).
• Daily Care Fee.
• Income Tested Fee.
The resident may request extra services in High Care which then also incurs an Accommodation Bond instead of the charge. If this is the case, the resident will also be charged a daily fee for those extra services.
So, does it all still seem too hard to navigate?
Basically, there are 2 choices defined by the ACAT team – Low Care or High Care. The latter does have an extension where you can elect to have extra services – a daily newspaper, a couple of glasses of wine or perhaps even a regular manicure. For these extras you would pay an additional daily fee and an Accommodation Bond rather than the charge.
It’s that simple!
Or is it?
All those fees could be more than the budget allows and a change in circumstances could mean a reduction or even loss of the Age Pension which could then exacerbate the cashflow problem. You might look at negotiating with the residence over the fees but, frankly, it’s not a high profit industry so that outcome is unlikely, unless you can demonstrate a clear benefit to them.
So is there anything you can use as a bargaining chip?
Well, one possible strategy is that you could try to negotiate to pay a higher bond, in which case you may get a reduction in fees and possibly improve your Age Pension. It’s not a strategy that can work for everyone but it’s certainly something to consider.
Conversely, some people may not have to worry about fees other than the Daily Care Fee if they have less than $40,500 in assets and are classified as a fully-supported resident.
Looking at all these considerations the message that comes through loud and clear is that, wherever possible, you should prepare early. Your action plan might include visiting a number of facilities to develop a sense of where you or your relative may be comfortable. It should also include getting specialist advice to help negotiate with the residence and to see how you might structure your financial affairs to maintain or maximise your Age Pension.
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The information within this article contains general financial product advice and factual information only and is not intended to constitute personal financial advice. It has been prepared without taking into account the personal circumstances, financial needs or objectives of any one person. Individuals are advised not to rely on this information when making their own investment decisions. Instead, they should seek professional advice. Where appropriate, you will be provided with a Product Disclosure Statement in relation to the product recommended. You should consider this document before making a decision to acquire the product in question. Whilst all care has been taken in the publication of this article (using sources believed to be reliable and accurate), no person, including Wealthwise or Financial Wisdom or any other member, accepts responsibility for any loss suffered by any person arising from reliance on this information.
This week’s Wealthwise Weekly Wrap on Youtube discusses Kevin Rudd’s (failed) leadership bid, good news for WA from Colin Barnett, the discovery of Australia’s biggest ever pink diamond in the Kimberley, and our Oscar predictions.
Many people use the Christmas/New Year period to reflect on the year that has just passed, often in a blur, and begin thinking about the future and how to achieve their hopes and dreams. The new year is a good opportunity to reconsider financial strategies and goals. Below is an easy-to-follow guide to getting your finances tidied up for the year ahead.
Our lives are not constant and our goals change slightly from year to year. Also, major life events such as serious illness, the birth of a child, inheritance, marriage and the death of a parent or spouse can all result in significant changes to our wealth management goals.
Not all goals are equal and to ensure you aren’t overwhelmed with the task ahead of you, it is important to rank and prioritise goals and decide what timeframe you want to achieve them in. Being realistic about your timeframe is essential to ensuring that your goals will be achieved.
Most industry experts agree that a short-term goal is one that can be achieved within a year or so. Medium-term goals typically require two to five years, and long-term goals usually take longer than five years. For example, reducing credit card debt is likely to be a short-term goal, whereas saving for a home deposit would often be a medium-term goal. Depending on your age, providing for retirement is a long-term goal. If your financial goals have changed, how will this affect your financial strategy? This is where the advice of a financial planner is critical. We have the tools and knowledge to create projections that take into account changes to your goals, and changes to your timeframes for achieving them. These projections will help you to see where your plans for savings, assets or investment contributions may need updating.
Make sure that your investments support your level of risk and your goals. We can develop a tailored analysis that best suits your individual risk preferences and goals. We can also review your portfolio and advise on any sell-downs or top-ups that would benefit you. Working with your accountant we will ensure changes are implemented in a tax-effective manner. Reflecting and thinking about your financial position and setting a clear path is critical to making sure you reach your goals.
Talk to your Wealthwise adviser to ensure you remain on track.
Source: www.financialarticles.com.au
This article is reproduced with permission.
The information within this article contains general financial product advice and factual information only and is not intended to constitute personal financial advice. It has been prepared without taking into account the personal circumstances, financial needs or objectives of any one person. Individuals are advised not to rely on this information when making their own investment decisions. Instead, they should seek professional advice. Where appropriate, you will be provided with a Product Disclosure Statement in relation to the product recommended. You should consider this document before making a decision to acquire the product in question. Whilst all care has been taken in the publication of this article (using sources believed to be reliable and accurate), no person, including Wealthwise or Financial Wisdom or any other member, accepts responsibility for any loss suffered by any person arising from reliance on this information.
It’s been another rollercoaster ride in financial markets, the Eurozone debt crisis front and centre. Sharemarkets have suffered, ‘safe haven’ bonds have been back in demand, lower-quality debt sold off, listed property markets have been mixed, and currency markets volatile. Looking ahead, the evolution of the Eurozone issues is difficult to predict, and extensively-diversified portfolios appear to be the best response to a wide range of potential outcomes. This will also allow for the possibility that current market sentiment is overly bearish and failing to allow for constructive developments both in the Eurozone and elsewhere.
The S&P/ASX200 Accumulation Index yardstick of Australian shares has for the most part tracked what has been happening in sharemarkets overseas.
The sharemarket began October positively at a time when markets believed that the Eurozone’s debt issues, and in particular Greece’s problems, were finally being addressed. Australian shares rose by 12.40 percent between 4 October, when Eurozone worries were very high, and 28 October, when the optimism ran out of steam. Prices have subsequently dropped back again, again mirroring overseas trends, the index declining 4.40 percent. The overall effect is to leave share prices up marginally on a month ago (+0.50 percent), and up two percent on three months ago. However, both figures flatter the performance of local shares – a better description would be that prices have not recovered from the sharp losses of early August, when the latest Eurozone debt issues kicked in.
The Eurozone debt crisis, and worries about its ramifications for global economic growth, dominated world sharemarkets over the past month. World sharemarkets were initially optimistic: between 3 October, when the MSCI World Index had hit its lowest point, and 28 October, when it seemed that a Greek bailout plan had finally been locked down, world shares rallied by 13.60 percent, regaining about half the ground they had lost since the onset of the latest Eurozone worries in early August. Since then, however, shares have slid again by six percent as investors’ concerns have shifted from Greece to some of the larger Eurozone economies (Italy, Spain, and even France). For the past quarter, world shares are showing a loss of three percent.
The emerging markets have been faring better, with prices unchanged over the past quarter: strong Latin American markets (+6.90 percent) have offset static Eastern Europe (+0.50 percent) and lower Asian sharemarkets (-3.60 percent). All that said, there are two factors in the background that are getting little or no attention in the current bear market mentality. One is that even on the latest downbeat assessments, the world as a whole is a long way from a recession. Asia is still in good shape, led by China and India, as is Latin America and most of eastern Europe (Russia and Poland in particular). The second factor is valuations: ‘the sky is falling’ thinking has meant that the dividend yield on German shares, for example, is now 3.60 percent, substantially in excess of the returns from cash or bonds, while the price/earnings ratio (accepting that this is not a perfect measure of value) is an undemanding 9.2 times profits. The same is broadly true of a number of other sharemarkets.
The sky might yet fall, but this is not the only possible outcome, although sharemarkets are behaving as though it is. Uncertainty and risk are certainly high, but a well-diversified portfolio ought to allow for the possibility that the outlook for world sharemarkets may not turn out as black as the media headlines might lead you to believe.
Source: Morningstar Economic Update: November / December 2011
This article is reproduced with permission from Morningstar.
The information within this article contains general financial product advice and factual information only and is not intended to constitute personal financial advice. It has been prepared without taking into account the personal circumstances, financial needs or objectives of any one person. Individuals are advised not to rely on this information when making their own investment decisions. Instead, they should seek professional advice. Where appropriate, you will be provided with a Product Disclosure Statement in relation to the product recommended. You should consider this document before making a decision to acquire the product in question. Whilst all care has been taken in the publication of this article (using sources believed to be reliable and accurate), no person, including Wealthwise or Financial Wisdom or any other member, accepts responsibility for any loss suffered by any person arising from reliance on this information.
Financial Wisdom, the financial dealer group subsidiary of Commonwealth Bank, has awarded its prestigious Western Australia Practice of the Year Award to Perth-based Wealthwise.
Mark Ballantyne, General Manager of Financial Wisdom, praised Wealthwise for its approach to providing financial advice: “The practice has developed a special Wealthwise Way that delivers consistent high-quality advice to clients.”
Jamie Luxton, Principal and founder of Wealthwise, sees this award as a validation of the company’s core values: “We are always looking at ways we can improve the value of advice we give to our clients. In the current financial climate, people are very conscious of the need to make sound, informed decisions in order to achieve their financial and lifestyle goals. It’s our job to work together with them to reach those goals.”
This is now the fifth industry award that Wealthwise has won since 2008. How important is it to receive this kind of accolade from your peers?
“Obviously, it is very gratifying to be recognised in this way on a regular basis. Our industry is based on establishing trust in the adviser-client relationship and the Practice of the Year Award is like getting a public vote of confidence,” says Jamie. “We have a great team here and our clients are always commenting on how helpful we are and how we are prepared to go that extra mile.”
So what makes Wealthwise stand out from all the other financial planning companies in Western Australia?
Jamie Luxton again: “I’d have to say it was our company culture. We actively promote a holistic approach to everything we do. We are constantly asking how we can improve ourselves both as advisers and people, and how we can help our clients improve their lives, not just financially, but in general.”