Interest Rates

Thursday, January 07, 2016

As it had been widely expected the RBA left interest rates on hold at its February meeting.  This marks the ninth month in a row with the cash rate remaining at 2%.
While the RBA is less upbeat on the global economic outlook, particularly for emerging countries, and has acknowledged a further slide in commodity prices and reduced appetite for risk it seems more upbeat on the Australian economy at least in terms of information released over the last few months.
Inflation continues to be seen by the RBA as remaining low and it has also acknowledged slowing property price gains in Sydney and Melbourne.
While the RBA retained an easing bias on the back of the low inflation outlook, the balancing of more positive domestic developments against recent negative global developments clearly enabled it to remain on hold for now. However, the RBA is clearly concerned about recent global and financial market developments and is waiting for more information in order to be able to judge its impact on global growth and the Australian economy.
Our view remains the RBA will cut interest rates again this year reflecting the risks around the global economy, weaker than expected commodity prices, still subdued growth in Australia at a time when the contribution from housing construction is slowing, a more dovish Fed threatening a higher Australian dollar and continued low inflation. However, this may not come till April or May.
However, whether there is another rate cut or not from the RBA, it’s hard to see rate hikes any time soon.

So the period of low interest rates – with the cash rate at a record low and bank deposit rates at their lowest since the 1950s – is set to continue.


New Year Refections

Friday, January 01, 2016

Welcome back to the 2016 year.

Hopefully you had some time for yourself as well as family and friends.  It's hard to believe we are almost through the first month of the year.

If there is anything we as a business can do to assist with your financial planning requirements, or assist family or friends please don't hesitate to contact us.

We look forward to speaking with you throughout the year.

Don't be 'too concerned
Global stock markets have had a rough start to 2016, but there are at least six reasons to be optimistic.
The selling pressure in global share markets has intensified over the past week despite the delivery of some positive economic data in China (the December trade balance) and the US (December non-farm payrolls). Pessimism is rife as global stock markets reel from the falls since the beginning of the year, with the Royal Bank of Scotland (RBS) recommending to its clients that they "sell everything except high-quality bonds".
While the economic data released over the past month has on balance not been particularly upbeat, it has not been disastrous either and has only confirmed already well established views about where the growth dynamics are at, and what the risks to that outlook are.
The key issue is tightening global financial conditions

While no new data points have prompted analyst to question previously held assumptions, several ‘half issues’ have combined into the perfect storm to knock regional share markets off recent elevated levels. While China and oil are dominating discussions about what’s happening, we don’t believe they are at the epicentre of the volatility. Instead tightening US financial conditions that may constrain global growth are increasingly having investors question the sustainability of elevated valuations and optimistic earnings forecasts in regional share markets.
But there are six reasons investors should "not be too concerned".
Number 1:
The falls in Chinese shares are more to do with regulatory issues and currency than fears about the economy.  Recent economic data out of China has been mixed rather than outright negative. Our view remains that Chinese growth this year will come in around 6.0 to 6.5 per cent and ongoing stimulus measures appear to be gaining some traction in helping ensure this.
Number 2:
A US recession is "unlikely", which, historically, means that any slump in shares will be shorter and shallower than if there were a recession.  Most economic indicators in the US are okay highlighted by continuing strong jobs data which is serving to keep consumer spending firing even though the strong US dollar has damped US manufacturing.
Number 3:
"Okay" economic data out of China and the US combined with good Eurozone indicators suggest the global economy is unlikely to slip into recession.
Number 4:
The current situation is "very different" to the GFC because lower oil prices and commodity prices are providing a "huge boost" to consumers and most businesses.
Number 5:
Monetary policy remains "ultra-easy", with the US Federal Reserve "very unlikely" to undertake the four rate hikes its 'blue dots' are indicating in 2016.
Number 6:
The sharp falls in share markets have made valuations become "quite attractive".  The gap between the grossed up dividend yield on Australian shares, which is now nearly 7.0 per cent, and term deposit rates, around 2.5 per cent, is back to around its highest level since the GFC.
Yesterday is not ours to recover, but tomorrow is ours to win or lose.......
Lyndon B. Johnson

Action is the foundational key to all success.......
Pablo Picasso


Lobby group petition urges LIF change review

Monday, December 21, 2015


A number of life insurance advisers have joined forces to form a lobby group that is urging the Senate to review legislative changes set to take place as part of the life insurance framework (LIF).

The Life Insurance Consumer Group (LICG), formed in November, had reached well in excess of 1650 signatures on its petition in its first week seeking support from advisers.

The group has urged as many advisers as possible to access the petition online at, saying it might be the only chance to voice their disagreement before the proposed LIF legislation was put before the Senate on 4 January 2016.

Speaking on behalf of the group, NOW Financial Group director Mark Dunsford said the proposals had not been given enough thought and consumers would not win as a result, because the laws as they stood would lead to further underinsurance.

“There is no doubt both the AFA [Association of Financial Advisers] and FPA were bullied into coming to that conclusion, and [Assistant Treasurer] Kelly O’Dwyer recognises that the decision was made before her time,” he said. 


read article


Advisor Lobby Group to push for Senate review for LIF

Thursday, December 17, 2015




A recently formed lobby group, made up of a number of notable life insurance advisers, will push for a Senate review into the Life Insurance Framework (LIF) and supposed misrepresentations by life insurance industry bodies to the Government regarding LIF.

The lobby group – The Life Insurance Consumer Group (LICG) – is also seeking a consumer impact study conducted by an independent organisation as well as a review of the costs to consumers if commissions are heavily reduced or removed and a review of consumer outcomes from direct or group life insurance policies.

According to the group’s website it will also provide the Government with a wide ranging set of data that contradicts that presented by the FSC, life insurers and banks around the cost of advice under LIF and the impact on consumers.

Speaking on behalf of the lobby group NOW Financial Group director Mark Dunsford said the group was non-political and not aligned to any adviser association and was seeking to “push back the myths around how the debate was framed and the flaws in the outcomes of that debate,” Dunsford said.

Dunsford said the group had received widespread support from across the risk insurance advice sector but was seeking to leverage the voice of all risk advisers through a petition, and was seeking 5000 names.

The petition states that LIF will not improve the quality or affordability of life insurance advice, nor will it increase competition among insurers to create better client focused products.

It encouraged advisers who did not believe LIF was beneficial in its current form and who made up the “unheard majority” to sign the petition before the close of the submission period on the draft LIF legislation on 4 January 2016.

Dunsford said the group had some ground to make up in correcting perceptions and refocusing the LIF debate on advice and not commissions.

“The Financial Services Council (FSC) and the life insurance companies used the Trowbridge Report to shift the debate from the quality of advice identified by ASIC to remuneration,” Dunsford said.

“This has been their agenda for the past few years and they have gained traction and driven a train through a legislative gap to focus on what advisers are paid.”

The LICG was formed in November and comprised of NOW Financial Group director Mark Dunsford, Empire Risk managing director Daniel Isenhood, GJO chief executive Greg Owen, Lambert Parkhill Financial Group managing director Ron Lambert, Life Insurance Direct chief executive Russell Cain, Bourke Financial Services director David Bourke, Bombora Advice managing director Wayne Handley, In Sync Financial Services principal Paul de Grande, Foundation Life Insurance and Mortgage Broking ,managing director, Patrick McLaughlin and Joe Perri and Associates , director, Joe Perri.

In November the LICG released a survey which found the proposed consumer benefits of the LIF model were not obvious and that many risk advisers remained sceptical of such claims from the Government and the Financial Services Council.

The LICG petition can be found at

Read article


Advisers Up In Arms Over Life Insurance Reforms

Wednesday, December 09, 2015


(LICG) is a group of advisers, business owners and industry leaders that are passionate about providing (an improving) and ensuring all Australians have access to quality, compliant and affordable Life Insurance advice.

The group with combined experience of hundreds of years, servicing well over a hundred Thousand Australians in implementing insurance advice and managing claims.

With time running out, it is imperative for our members of parliament to pause and carefully review the real and dramatic impact the current LIF proposals will have.

If you are in our industry and support what we are attempting to achieve - please visit and join our petition. 
Read article 

Many thanks

Mark Dunsford






How to avoid sexually transmitted DEBT!

Wednesday, December 02, 2015


There is a lot of noise in the public domain urging us to protect ourselves from STIs (sexually transmitted infections). We're encouraged to take off our rose-coloured glasses when it comes to new partners and to use protection.

Which is incredibly sensible advice and generally we all comply but when it comes to potential partners and our finances, it's another story entirely.

Without meaning to, we can find ourselves behaving recklessly and exposing ourselves to something that is potentially just as damaging and long lasting as any STI. We risk catching an STD (sexually transmitted debt.)

Now you may be thinking you don't have any money so you can't possibly receive an STD. Or perhaps you're thinking your partner knows what they're doing when it comes to your finances (and you don't) so you feel safe.

Read more:



Thursday, November 12, 2015



  1. Consolidate your super accounts.  Multiple accounts means multiple fees.

  2. Make sure you have all your super entitlements.  Go to SuperSeeker to find any lost accounts.

  3. Top up with voluntary contributions; it is one of the best investments you can make.

  4. See if you are eligible for the Federal Governments's co-contributors scheme, which can deliver a 50% boost to deposits.

  5. Check that the insurance in your super meets your needs.

  6. Tailor your investment risk to your age.  In general, young people should be more prepared to take on risk then older people.

  7. Think twice, and maybe even three times, before setting up your own self-managed super fund - and source quality advice.

  8. If you are over 55, consider a transition-to-retirement strategy.


How much does a full nest cost?....

Sunday, November 01, 2015




The financial toll on parents of adult children living at home

Whether you put it down to laziness, housing affordability, lavish lifestyles or wider societal changes, today almost one in three people aged 18 to 34 live in the parental home. That’s a figure up from about one in five in the 70s1.

And once a young person does leave home, the chance that they’ll return at least once before age 35 is almost one in two2. For these adult children, this living arrangement comes with a host of benefits, many of them financial – such as rent-free accommodation, bills paid and food provided – and parents are paying up.

But how much exactly? And what is the long-term financial cost of letting your adult children continue to live at home?


Why is it happening?

Broader social and economic shifts have left many young people with few other options. In the past, you left  home to move in with partners or get a taste of independence. More of us finished school earlier, fewer went to university, and full-time work began sooner. 

With residential property prices now at 4.8 times annual income3, young people are faced with high housing costs, whether they’re looking to rent or buy. And the 21st century job market demands more qualifications and postgraduate study, leaving older graduates with big HECS debts.


Taking a toll on parents

The parents of these children are mostly in their 50s and 60s – an age when, traditionally, you should be preparing for retirement. But now, parents often cover the costs of board, food, utilities and private health insurance for their 20-something kids at home – with Australians over 50 spending $22 billion a year4 on their adult children.

That’s all money parents could be saving. Even if you’re doing it gladly, you may be missing out on opportunities – like selling the family home and downsizing, and investing the money elsewhere.

Instead parents have less disposable income, and might be working longer hours and delaying their retirement plans. And that’s not to mention the fact that adult children are missing out on important financial lessons in  budgeting and bill paying.


Transitioning to independence

Young people may not understand the pressures they are placing on their parents. You’re all adults, so have a conversation about it. Explain that you need to think more seriously about saving for retirement, and it’s time or them to take on more responsibility.

If you don’t already, have them pay board and their own share of utilities. You could also set a timeline for moving out, with a six-month deadline that gives them time to establish some savings.

It’s a tough situation. With rising living costs and tough job markets, you might be worried about your children’s ability to pay their own way outside of the home.

But by supporting adult children at home, you may also miss out on opportunities and risk eroding your retirement funds.





Australians short of money in retirement

Tuesday, October 27, 2015


AUSTRALIANS have fallen more then $800 billion behind where they should be if they want to be financially comfortable in retirement.  And the gap between what you have saved and what we need is growing by about 5 per cent per year, according to new figures from research group Rice Warner.  

AustralianSuper chief executive Ian Silk said older Australians were among the most disadvantaged.  Women too were at a disadvantage as they were paid less and spent most of the time out of work-force to raise babies.

"The many baby boomers retiring now have only had the benefit of compulsory superannuation.. for 23 years and it began at just 3 pre cent" he said "the system has several decades to go before it reaches full maturity".

Rice Warner releases a Retirement Savings Gap report each year with the Financial Services Council.  The latest published results for June 2014 show the gap grew from $727 billion to $768 billion in just 12 months.  Unpublished estimates put the figure at more then $800 billion at June 2015.

"fundamentally we are not saving enough"

The super shortfall is also effected by longer life expectancies and tougher age pension rules.

The latest ASFA Retirement Standard says a retired couple needs an annual income of $58,784 to live comfortably while a single needs $42,861. To achieve this a couple would need savings of $640,000 when starting retirement, while a single would need $545,000.

- Anthony Keane-



Splitting heirs - Estate planning after divorce

Saturday, October 24, 2015


Dissolving a marriage is undeniably tough, regardless of the circumstances. Your focus is on getting through  one day at a time, rather than planning for what could happen in the future.

It’s easy to overlook the importance of reviewing your estate planning when you’re overwhelmed by the endless paperwork created by splitting assets, resolving debts, restructuring property, negotiating custody,  and finalising financial support.

Many people assume that a separation or divorce automatically voids legal documents prepared during a  marriage. That’s not the case. So if your ex-spouse is the last person you want to give your assets to when you die – let alone be responsible for a life and death decision on your behalf – you need to get onto it…fast!

Here are a few things you should consider:

Update your will

While you are separated (not yet legally divorced), your existing will is still valid and will be enforced. So if you  pass away, your ex-spouse will still receive everything you had intended when you were happily married. That  often equates to almost everything you own.  Divorce affects your will differently depending on where you live in Australia. In some places, divorce automatically makes your will invalid. In others, any provisions or gifts for your ex-spouse in your will become void.  Even though your ex-spouse is excluded (which may be one of your key objectives) it changes the distribution of your estate in a way that you may not be happy with.  It’s often best to make a new will clearly stating your wishes for your estate.

Appoint a new Executor

 If you had nominated your ex-spouse as the Executor of your will, this nomination also becomes void on divorce. Without an Executor, the Court will appoint someone to administer your estate, which could mean your estate is not handled in the way you wished. Wouldn’t you feel better knowing that someone you trust will be responsible for winding up your personal affairs?

Rethink your beneficiaries

When you set up many of your assets, you would have been asked to name a beneficiary – the person you would like your asset to be paid out to in the event of your death. It’s likely that you nominated your ex-spouse, so it’s time to change it. Start with your superannuation and life insurance, then check with your financial adviser if there are others that need attention.

Delegate a new power of attorney

 It’s also important to change your power of attorney nomination if it was previously allocated to your exspouse. Your power of attorney may make decisions on your financial, legal and health matters if you can’t make them yourself. Delegate this power to someone you trust – a parent, friend, sibling, or an adult child.

Divorce is never easy. And when it feels like the world as you knew it has collapsed around you, you might find comfort in restoring order to the foundations of your future. There’s nothing more important than protecting yourself, your children, and any others who depend on you.

Your financial adviser can help you with your estate planning. However, you should also consult a legal adviser.