 "Many Australians want financial advice")
Money and Life
(Financial Planning Association of Australia)
A new ASIC report offers key insights into consumer perceptions of financial advice. Find out how to get off to the right start with your financial planning experience.
In an independent research study commissioned by ASIC, more than 2,000 Australians were asked about their beliefs and perceptions about financial advice as well as their experiences of receiving advice. The Financial advice: What consumers really think report, published in August 2019, shares findings from an online survey of 2,545 participants as well as group and one-on-one discussions. It presents a picture of a profession that Australians feel they need, but has some way to go in developing a sense of trust and value among consumers.
Many Australians want financial advice
According to the report, demand for financial advice among those surveyed is high. 41% said they planned to seek financial advice in the future. And nearly twice as many 79% acknowledged that 'Financial Advisers have expertise in financial matters I do not have'. These figures clearly demonstrate a recognised need for informed and professional advice among those surveyed.
In the 2017 Live the Dream survey and research report, the Financial Planning Association found that more than half of Australians (54%) saw financial freedom and independence as vital in their ability to 'live the dream.' So it's no wonder financial advice is on the to-do list of so many Australians.
Trust and perceived cost are barriers
But when it comes to actually seeking financial advice, a fair number never follow through on their intentions. The ASIC report found that 20% of respondents had thought about getting financial advice in the last 12 months, but hadn't gone ahead.
So just what is standing in the way of Australians taking steps to get professional advice on their finances? Figures from the report suggest that affordability, trust, and value are three significant barriers stopping Australians from meeting with a financial planner. 35% consider financial advice to be too expensive, 18% do not see the value in seeing a financial planner and 19% don't trust financial planners. For others it may simply be a case of not knowing where to start with the whole process of getting advice. In group discussions and interviews, people said they found it difficult to know how to find a financial planner and that they're getting quality advice.
Finding the right financial planner
Based on the experiences of people interviewed and surveyed for the ASIC report, asking around for a referral is often a good method of approach for finding a trusted financial planner.
But what if you don't know anyone who's had experience with financial advice? Many people may not encounter someone in their circle of friends or family who has been advised by a financial planner. If you do find yourself narrowing down your options based on your own research, there are tips from the ASIC report to guide you. In ranking the attributes they considered most important in choosing a financial planner, the following four scored highest with survey participants:
These findings tally with FPA research from 2017, which found the most common criteria for selecting a planner were trust, comfort, rapport, impartiality, tailored recommendations and reputation.
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 "Wills & powers of attorney")
MoneySmart
(ASIC)
Preparing for your family's future
No-one wants to think about death, but it's important to decide what will happen to your assets when you die. Find out how you can give instructions to your family about your legal and medical preferences should you fall ill or lose the capacity to make those decisions yourself.
Estate plans
An estate plan includes your will as well as any other directions on how you want your assets distributed after your death. It includes documents that govern how you will be cared for, medically and financially, if you become unable to make your own decisions in the future.
You must be over 18 and mentally competent when you draw up the legal agreements that form your estate plan. Key documents might include:
If you have made a binding nomination in your super or insurance policies, the beneficiaries named in those policies will override anyone mentioned in your will. If you have a family trust, the trust continues and its assets will also be distributed according to the trust deed, no matter what is written in your will.
Ask a legal professional to check your estate plan. A good estate plan should minimise the tax paid by your heirs, and help avoid any family squabbles.
Wills
A will takes effect when you die. It can cover things like how your assets will be shared, who will look after your children if they are still young, what trusts you want established, how much money you'd like donated to charities and even instructions about your funeral.
Your will can be written and updated by private trustees and solicitors, who usually charge a fee. Some Public Trustees will not charge to prepare or update your will if you nominate them to be the executor of your will. Other Public Trustees may only exempt you from charges if you are a pensioner or aged over 60. Check with the Public Trustee in your state or territory.
Smart tip
It's estimated that nearly half of all Australians die without a will, or 'intestate'. Don't let this happen to you. Make a will today.
You can buy will kits online but it's a good idea to ask a solicitor to review your will to make sure everything is in order. If a will isn't signed and witnessed properly, it will be invalid.
Keep your will valid and up to date as your legal rights change specifically, if you marry, divorce or separate; have children or grandchildren; if your spouse or beneficiaries die; or if you have a significant change in financial circumstances.
If you die intestate or your will is invalid, an administrator appointed by the court pays your bills and taxes from your assets, then distributes the remainder, based on a pre-determined formula, which may not be how you intended your assets to be distributed.
If you die intestate and don't have any living relatives, your estate is paid to the state government.
Testamentary trusts
A testamentary trust is a trust set out in your will that only takes effect when you die. Testamentary trusts are usually set up to protect assets.
Here are some reasons why you would create a testamentary trust:
A trust will be administered by a trustee who is usually appointed in the will.
A trustee must look after the assets for the benefit of the beneficiaries until the trust expires.
The expiry date of a trust will be a specific date such as when a minor child reaches a certain age or a beneficiary achieves a certain goal or milestone (e.g. getting married or earning a specific qualification).
Powers of attorney
Appointing someone as your power of attorney gives them the legal authority to look after your affairs on your behalf.
Powers of attorney depend on which state or territory you are in: they can refer to just financial powers, or they might include broader guardianship powers. You will need to check with your local Public Trustee.
The different types of power of attorney are:
You can prepare a few other documents to help your legal appointees and family as you grow older, including an:
The documents you choose to draw up will depend on your situation, and the responsibilities you're happy to entrust to others. Get legal advice if you are not sure.
Choosing your powers of attorney
Nominate people that you know are trustworthy, financially responsible, and likely to be around when you need them.
Your legal and financial housekeeping
Once your paperwork is in order, it will help your executor and family if you list the legal documents you have and where they are kept.
Here is a list of key documents to keep:
The NSW Government's Planning Ahead tools website gives more detailed information on advance care directives, wills, power of attorney and enduring guardianship.
A good will and estate plan can help make sure your wishes are carried out after you die, or if you are no longer able to make your own decisions.
Related links
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 "No need for crisis action: Treasury boss")
Colin Brinsden
(Australian Associated Press)
New Treasury boss Steven Kennedy doesn't believe there is a crisis warranting immediate spending from federal government, saying he is "cautiously optimistic" about Australia's economic outlook.
Addressing senators in Canberra for the first time since taking on his new role last month, Dr Kennedy believes the policy settings are right for the economy to strengthen.
"I'm cautiously optimistic about the way the economy is going to strengthen," Dr Kennedy told the Senate economics committee on Wednesday.
While there have been widespread calls for the government to do more, with economic growth at its slowest in a decade, Dr Kennedy said stimulus responses like those seen during the global financial crisis are "uncommon".
"A feature of the current weakness in the global and domestic economy is heightened uncertainty among consumers and businesses," he said.
"Given this uncertainty, medium-term fiscal and monetary policy frameworks can play an important role and contribute to a stable and predictable environment that is supportive of growth."
He said the the tax cuts that were instituted this year are having a positive effect on the economy.
The Treasury secretary said the drought has taken its toll on economic growth, but employment growth has been very positive, even though this has not resulted a marked lift in wages.
He said while there are a range of explanations for this, whether it be a change in demographics, technological or globalisation, it was a global phenomenon.
He said the most sustainable way to get wages up is through labour productivity.
But he warned there is still the potential for global shocks.
He said the de-escalation in trade tensions between China and the US is a welcome sign, but the situation around the UK leaving the European Union remains unclear.
"I am in no better place than perhaps anyone here to comment on the Brexit arrangements, but if they were to resolve themselves they would all be providing an upside boost to the global outlook and that would assist Australia," he said.
Dr Kennedy has just returned from Washington where he attended International Monetary Fund meetings and said it was pleasing to hear some more confidence in the outlook, particularly in the US.
But European countries continue to suffer weakness.
Last week the IMF downgraded its growth forecast for Australia for this year down to 1.7 per cent from 2.1 per cent.
As of June, Australian economic growth was running at 1.4 per cent, the slowest pace in around decade.
In the IMF's latest regional outlook for Asia and the Pacific, released on Wednesday, the authority also noted the region's growth will continue to lose pace in the short-term.
"Real estate markets will need to be closely monitored and appropriate macroprudential measures implemented," the report states.
But in a media briefing on the region on Friday, deputy director for the IMF's Asia Pacific department Jonathan Ostry said he believes Australian policies have reacted appropriately to the slow down.
New Treasury boss Steven Kennedy doesn't believe there is a crisis warranting immediate spending from federal government, saying he is "cautiously optimistic" about Australia's economic outlook.
Addressing senators in Canberra for the first time since taking on his new role last month, Dr Kennedy believes the policy settings are right for the economy to strengthen.
"I'm cautiously optimistic about the way the economy is going to strengthen," Dr Kennedy told the Senate economics committee on Wednesday.
While there have been widespread calls for the government to do more, with economic growth at its slowest in a decade, Dr Kennedy said stimulus responses like those seen during the global financial crisis are "uncommon".
"A feature of the current weakness in the global and domestic economy is heightened uncertainty among consumers and businesses," he said.
"Given this uncertainty, medium-term fiscal and monetary policy frameworks can play an important role and contribute to a stable and predictable environment that is supportive of growth."
He said the the tax cuts that were instituted this year are having a positive effect on the economy.
The Treasury secretary said the drought has taken its toll on economic growth, but employment growth has been very positive, even though this has not resulted a marked lift in wages.
He said while there are a range of explanations for this, whether it be a change in demographics, technological or globalisation, it was a global phenomenon.
He said the most sustainable way to get wages up is through labour productivity.
But he warned there is still the potential for global shocks.
He said the de-escalation in trade tensions between China and the US is a welcome sign, but the situation around the UK leaving the European Union remains unclear.
"I am in no better place than perhaps anyone here to comment on the Brexit arrangements, but if they were to resolve themselves they would all be providing an upside boost to the global outlook and that would assist Australia," he said.
Dr Kennedy has just returned from Washington where he attended International Monetary Fund meetings and said it was pleasing to hear some more confidence in the outlook, particularly in the US.
But European countries continue to suffer weakness.
Last week the IMF downgraded its growth forecast for Australia for this year down to 1.7 per cent from 2.1 per cent.
As of June, Australian economic growth was running at 1.4 per cent, the slowest pace in around decade.
In the IMF's latest regional outlook for Asia and the Pacific, released on Wednesday, the authority also noted the region's growth will continue to lose pace in the short-term.
"Real estate markets will need to be closely monitored and appropriate macroprudential measures implemented," the report states.
But in a media briefing on the region on Friday, deputy director for the IMF's Asia Pacific department Jonathan Ostry said he believes Australian policies have reacted appropriately to the slow down.
| Posted in:News |
 "Make your money last in retirement")
MoneySmart
(ASIC)
There are ways to stretch your retirement income to make your money last as long as possible.
Consider getting financial advice
Depending on your circumstances, you may want to seek financial advice to maximise your retirement income. For instance, if you have a substantial amount of super and want to invest some of it, a finance expert can help with investment options and tax advice.
Diversify your investments
With many retirees living beyond the age of 90, it's a good idea to invest at least some of your money in assets that will grow over time, like shares and property. This will help ensure your capital will grow in value to keep pace with inflation and your income needs. Spread your investments to avoid financial heartache in the future.
Manage your spending
A simple way to make your money last longer is to watch your spending. Use the budget planner to see how you currently spend your money and see where you can cut back to save for special items.
Take advantage of your entitlements
Even if you don't get the Age Pension, you may be eligible for other benefits, such as travel concessions, cheaper medicines and reduced council and water rates. The Seniors Card will also give you discounts on travel and some retail services. See our webpage on Over 55s your money.
Also see the Department of Human Service's Commonwealth Seniors Health Card webpage for more information.
Work part-time
Part-time work is a good option to ease into semi-retirement before fully retiring, or a way to keep extra income coming in. Here are some benefits of working part-time:
| Posted in:News |
 "What is an ETF?")
Money and Life
(Financial Planning Association of Australia)
Like the idea of effortlessly investing in a lot of listed companies at low cost, with a minimum investment outlay, and the potential to achieve good returns? If this sounds like you, then it could be worth exploring the benefits of buying what are called ETFs (Exchange Trade Funds).
While ETFs are by nature complex investment products, think of them as simply a basket of securities such as listed companies (aka stocks). In very simple terms, when you buy an ETF, you're actually buying a microscopic version of a particular market index.
Let's explain how that works. If you invest $500 in an ETF that's linked to a certain stock market index, let's say for example, the S&P ASX 200, that means your $500 is split up to closely reflect the largest 200 companies on the ASX.
How much of your $500 is invested in each stock depends on its actual weighting on the S&P ASX 200 Index.
For example, if the big miner BHP Billiton accounts for 10 percent of the S&P ASX 200 Index by market capitalisation (ie how much its listed stock are worth), then 10 percent of your $500 will be invested in this stock, and so on according to the weighting of the other 199 stocks on this index.
What are the benefits and risks of investing in ETFs?
For starters, there's a lot of variety to choose from when investing in an ETF. You can buy an ETF that tracks a basket of stocks on either a local or overseas stock market. Alternatively, you can even buy an ETF that instead of tracking the performance of a stock market index, tracks either currency exchange rates or the price of a single commodity, like gold or silver.
Secondly, by tracking a market index, your investment is exposed to much greater diversification than buying just one stock. ETFs typically cost you less in fees because their operating expenses are usually considerably lower than other investment products.
The other beauty of buying ETFs is that the (stock) price changes throughout the day (aka in real-time) and you can decide to buy and/or sell your ETFs at any time without entry or exit fees (while the stock market is open).
Another benefit of buying ETFs is you can do so with a minimum up-front investment. As an investor in ETFs, you'll also receive valuable tax breaks under the capital gains tax (CGT) discount rules. Then there are indirect advantages including franking credits that flow through to you directly via regular distributions.
Despite the benefits of buying ETFs, it's important to remember that they are designed to track a stock market index (or asset class), and if that stock market index falls in value, the price of your ETF would fall by the same amount.
Similarly, if you decide to buy an ETF that tracks an international stock market index, you need to find out how the entity operating the ETF manages their exposure to overseas currencies, and how your investment is protected if those currencies weaken against the Australian dollar.
How can you invest in ETFs?
ETFs are listed entities, and as such can be bought or sold just like any other listed company anytime during the stock exchange's trading hours. You can buy as many or as few ETFs as you want. But remember, broker fees will apply and the smaller the parcel of ETFs, the higher the proportion of overall costs the fee will be.
You can buy ETFs by contacting your stockbroker or financial planner, or by trading through an online broker.
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