Looking to Buy Property? Why not Use Your Super?

With average capital city house prices up 9% in 2013 to more than $539,000, investing in Australian property can seem like an unattainable dream. But did you know that you can use a self-managed super fund (SMSF) to buy property through your super – and potentially boost your retirement savings at the same time?

3 Reasons to consider Property investment With Your Super
1. Diversify into a high growth asset
A key benefit of SMSFs is that they offer a wider range of investment options than traditional super funds – including direct property. By spreading your savings across asset types, you can help reduce risk and create more consistent returns, while still investing for growth.

2. Build a bigger portfolio sooner
An SMSF can borrow to invest in residential or commercial property, with lenders typically funding up to 70% or 80% of the purchase price. So you can take advantage of low interest rates to build a bigger portfolio now, and potentially earn more income and capital growth in the future. As long as your returns outpace borrowing costs, you’ll come out ahead.
3. Potentially save on tax
SMSFs can use negative gearing to claim a deduction for borrowing expenses, just like individuals. And investing through an SMSF can have other tax advantages as well. Rental income paid to your SMSF is generally taxed at just 15%. And if you are over 55 and commence a Pension in your SMSF, then the rent you receive is tax free. More importantly after commencing a Pension in your SMSF, any capital gain when you sell the Property is also be tax free!

Tips and tricks to bear in mind!
While investing in property through your SMSF can be an attractive strategy, there are a range of rules you need to observe, plus some pitfalls for the unwary. Here are some of the most important.
1. Check your investment strategy.
Like any other investment decision, your property purchase needs to conform to your SMSF’s written investment strategy.
2. Use a non-recourse loan.
SMSFs can only use a limited recourse loan, when purchasing a Property. So if something goes wrong and the fund defaults, its other assets aren’t at risk.
3. Remember the sole purpose test.
Your investment must be for the sole purpose of saving for retirement – which means you can’t use your super to pay off your own home or buy a holiday home, for example.
4. Avoid related party transactions.
It’s also against the law to buy, sell or rent a residential property to or from a fund member, trustee or a relation. That means you can’t transfer a residential property you already own into your SMSF, for example. The rules for commercial property are slightly different, with business owners often choosing to buy premises through an SMSF, then rent them back to the business at commercial rates.

Elite Wealth Creators have been involved in the property and finance industry for over 20 years.  Our Investment Property Strategists deliver investment grade properties to the investment market and mediate between the developer and the investor. We also assist first home buyers in purchasing their first home in QLD through our house and land packages – this includes receiving $20,000 cash back towards their mortgage by buying one of our full turn-key packages.
Our service will take you through the complete process of buying positive cash flow property, including:
• educating you on positive cash flow and the ability to pay your mortgage off years in advance
• saving you thousands of dollars in interest
• supporting you in the decision on which property to buy
• assisting in the organizing of your finances, if required
• preparing you for settlement of contracts
• liaising with other professional advisers on your behalf if required.
Our Strategists specialise in delivering quality positive cash flow property and also helping investors pay off their mortgage years in advance

http://www.elitewealthcreators.com/
sales@elitewealthcreators.com
1800 GO ELITE

Wealth accumulation experts

Cash flow management

Managing your finances to meet your day to day requirements as well as your long term goals can be a complex task. We help you make it easier.

Diversified investment strategies

We consider a range of complicated issues such as taxation, legislation, protecting your wealth and assets, associated fees and costs, your attitude to risk and the risk of your investments. From that we devise a diversified, low cost investment strategy that meets your goals and needs.

Diversified superannuation strategies

For all of our clients, planning for your retirement starts today, regardless of your age. Putting in place an appropriate, diversified strategy is crucial to achieve your desired lifestyle in retirement. We advise clients who hold super in industry funds, SMSFs, retail funds and in corporate super plans.

Cash management trusts

We encourage clients to structure their cashflow so they know exactly how much is coming in and how much they are spending on a monthly basis. The Cash Management Trust hub is at the heart of this strategy.

Direct shares

Some investors like exposure to a diversified portfolio of various shares listed in the ASX. Quantum Wealth Advisors are experts who can cater to this strategy.

ETFs

For some clients who want exposure to markets, Exchange Traded Funds can be the ideal vehicle to gain such exposure and Quantum offers clients access to a large number of such products.

Managed funds

Using our proprietary research methods, we actively spend much time researching the managed funds which we think will outperform the market over the medium to long term. We can blend active fund managers with passive ETFs or a share portfolio to create a well diversified, strategic portfolio for clients.

We educate our clients

Quantum Wealth Advisors seek to both advice and educate their clients on Wealth accumulation

Elite Wealth Creators have been involved in the property and finance industry for over 20 years.  Our Investment Property Strategists deliver investment grade properties to the investment market and mediate between the developer and the investor. We also assist first home buyers in purchasing their first home in QLD through our house and land packages – this includes receiving $20,000 cash back towards their mortgage by buying one of our full turn-key packages.
Our service will take you through the complete process of buying positive cash flow property, including:
• educating you on positive cash flow and the ability to pay your mortgage off years in advance
• saving you thousands of dollars in interest
• supporting you in the decision on which property to buy
• assisting in the organizing of your finances, if required
• preparing you for settlement of contracts
• liaising with other professional advisers on your behalf if required.
Our Strategists specialise in delivering quality positive cash flow property and also helping investors pay off their mortgage years in advance

http://www.elitewealthcreators.com/
sales@elitewealthcreators.com
1800 GO ELITE

Cash and Property most favourable investment

Australia's two most popular investments namely cash and residential property have proved to be the strongest performers in to-days volatile markets, outperforming almost every other asset class and super fund.
According to an analysis of investment returns, residential property has offered the highest total returns during the past three years and cash has come in second place for the past five years.

Love affair for cash and property

Even though the international financial crisis and the economic downturn have both adversely impacted on sharemarkets, managed funds and the commercial property, Australia's love affair with residential property and cash has paid off.
Most residential landlords are still sitting on a strong capital gain, while other assets have fallen by up to 40 per cent. Landlords have also had the benefit of rising rental income as population demand for housing continues to increase.
Even the risk-free cash investors are sitting pretty enjoying some of the strongest returns for the last five years.
SuperRatings an independent superannuation research company stated that it was no surprise that cash had performed well.
Nathan Macphee SuperRatings chief operating officer stated that in almost all time period's cash was in front, however these investors had missed out on the big upturn of the past few months. If one looks at the last three months there has been a profound upturn across all the investment options except for cash.

Invest according to your risk profile

Mr. Macphee further stated that what it showed is that people needed to invest in the option that suited their risk profile, which meant they had to decide if they could survive a downturn like the one we had. If they can't survive for a couple of years in a downturn, then the lower-risk cash option is more appropriate.
However if they were investing for the long term and the majority of investors are, then they should be able to withstand a downturn.
Australian shares are still the best. They were down nearly 40 per cent but they are still the strongest performer over five years.


Elite Wealth Creators have been involved in the property and finance industry for over 20 years.  Our Investment Property Strategists deliver investment grade properties to the investment market and mediate between the developer and the investor. We also assist first home buyers in purchasing their first home in QLD through our house and land packages – this includes receiving $20,000 cash back towards their mortgage by buying one of our full turn-key packages.
Our service will take you through the complete process of buying positive cash flow property, including:
• educating you on positive cash flow and the ability to pay your mortgage off years in advance
• saving you thousands of dollars in interest
• supporting you in the decision on which property to buy
• assisting in the organizing of your finances, if required
• preparing you for settlement of contracts
• liaising with other professional advisers on your behalf if required.
Our Strategists specialise in delivering quality positive cash flow property and also helping investors pay off their mortgage years in advance

http://www.elitewealthcreators.com/
sales@elitewealthcreators.com
1800 GO ELITE

Boost your wealth through financial planning

Financial planning is crucial when it comes to your money. The first step in financial planning is doing a budget. This can help to ensure your wild money spending ways are kept under control by encouraging you to save for the future.
The next step in financial planning is to set up some money goals.
Ask yourself, for example, where you want to be financially in one month’s time, in a year’s time and in five years time. Stick to this, and you could see your wealth grow.

If you’re looking to grow your wealth through direct property, shares or through superannuation, you may need to enlist the services of an expert in financial planning, such as Switzer Financial Services.
A good financial planner can assist you in making the most of your money by showing you how and where your money can be invested to maximise your returns within a reasonable tolerance of risk.
They can also help you set out some long term and short term savings goals.
Some people don’t want to pay for help because they think it’s too expensive. However, getting help could potentially take your wealth to heights it would never have reached had you tried to do all this financial planning on your own.
Financial planning: keep this in mind
There is, however, an issue people need to be aware of before they take on the services of a financial planner. This relates to how financial planners are paid for their services.
At the moment, most financial planners are paid a commission for products they sell to clients. This creates a conflict of interest, which may cause you to doubt the ability of the financial planner to look after you money matters.
A financial planner may choose one product for a client over another because it pays the most commission and not because it is necessarily in the client’s best interest.
The financial planner may then receive a trail commission for the period the client is invested in that product. The financial planner continues to receive payment, even if no advice or assistance is provided to a client after the sale of the product is completed.
Many financial planners say they use a fee for service model and don’t accept commissions. Instead, they refund the commission to the client. If a financial planner says they charge a fee for service, ask them to spell out what this means.
A fee for service could mean the financial planner will take a percentage of the amount you invest. This is called a percentage based fee. So, if you invest $500,000 and the financial planner takes three per cent of that, for example, they will make $15,000. The conflict of interest arises from the fact that the percentage based fee for service model encourages financial planners to recommend you to invest more so they make more money.
In fact, if you don't have the money to invest, some financial planners may encourage you to borrow. This is what happened with Storm Financial: people put all their savings on the line and borrowed against their homes to buy managed funds recommended by Storm based on shares. As a result of the Global Financial Crisis, these people are now left with large debts and in many cases they have lost their family homes.
Tips for financial planning

• Do a budget and set goals.
• Visit a number of financial planners if required and make sure you’re comfortable with their personalities and their advice.
• Ask the financial planners to show how they are paid. Is it through a commission, a percentage fee based on the amount you invest, or a flat fee for service charged by the hour or session, etc.?
• Ask friends and family if they can recommend a good financial planner.

Elite Wealth Creators have been involved in the property and finance industry for over 20 years.  Our Investment Property Strategists deliver investment grade properties to the investment market and mediate between the developer and the investor. We also assist first home buyers in purchasing their first home in QLD through our house and land packages – this includes receiving $20,000 cash back towards their mortgage by buying one of our full turn-key packages.
Our service will take you through the complete process of buying positive cash flow property, including:
• educating you on positive cash flow and the ability to pay your mortgage off years in advance
• saving you thousands of dollars in interest
• supporting you in the decision on which property to buy
• assisting in the organizing of your finances, if required
• preparing you for settlement of contracts
• liaising with other professional advisers on your behalf if required.
Our Strategists specialise in delivering quality positive cash flow property and also helping investors pay off their mortgage years in advance

http://www.elitewealthcreators.com/
sales@elitewealthcreators.com
1800 GO ELITE

What Is the Best Form of Property Ownership for Me?

In planning your estate, it is customary to consider wills and trusts (as well as intestacy) as a means of property distribution. As a matter of fact, the manner in which you hold title to your assets may supersede provisions contained in other transfer documents. Likewise, significant tax benefits can be gained (or lost) depending on the characterization of your property.
Let’s take a look at the general classifications of ownership.

Sole Ownership

Sole ownership occurs when one owns a complete interest in property. Ownership is passed by the typical transfer documents, or by the laws of intestate succession. The complete interest is included in the estate of the decedent. Because of this, the beneficiary receives a full step-up in basis. This, in essence, brings up the original purchase price to the fair market value, thereby eliminating a capital gain.

Joint Tenancy

Joint tenancy exists when two or more persons share equal, undivided interests in property. Joint tenancy is not limited to spouses. Anyone can share joint interests, but there are tax benefits when this arrangement is shared only between husband and wife (qualified joint tenancy).
A joint property interest cannot be passed through traditional documents, such as a trust or a will. Ownership of a joint interest passes by “operation of law” to the surviving joint owner(s). Further, property held in joint tenancy will not be subject to probate.
Under qualified joint tenancy, half of the property is included in the first decedent’s estate. Because of this, the surviving spouse obtains a stepped-up basis only on the first decedent’s half of the property.
If any nonspouses participate in joint ownership, the entire value of the property is includable in the decedent's estate, reduced to the extent that the estate can prove that the surviving tenant(s) contributed to the cost of the property.
Another form of joint ownership — tenancy by the entirety — is similar to joint tenancy, but it can only be created between husband and wife. Unlike joint tenancy, an interest cannot be transferred without the consent of the spouse. Tenancy by entirety is only recognized in certain states.

Tenancy in Common

Tenancy in common provides an undivided interest in property between two or more people. Unlike other forms of joint ownership, however, these interests can be owned in different percentages.
A tenant in common can utilize the traditional transfer documents, but interest cannot be passed by operation of law.

Community Property

Under community property statutes, all property earned or acquired by either spouse is owned in equal shares by each spouse. The essential principle of community property is that the earnings of either husband or wife and the revenue from their property belong not to the producer but to the community of the husband and wife.
For estate conservation purposes, there are no restrictions on how each spouse can give away his or her half of the community property. There is no law requiring one person to leave his or her half to the surviving spouse, although, of course, many do.
Currently, nine states have community property laws: Arizona, California, Idaho, Louisiana, New Mexico, Nevada, Texas, Washington, and Wisconsin.
The amount includable in the estate of a decedent is based on his or her percentage of ownership. The beneficiary of the property interest receives a stepped-up basis on that portion of the property. It is important to remember that the beneficiary can be chosen by the decedent. This is in contrast to joint tenancy, under which the surviving joint tenant(s) automatically inherit the interest of the decedent.


Elite Wealth Creators have been involved in the property and finance industry for over 20 years.  Our Investment Property Strategists deliver investment grade properties to the investment market and mediate between the developer and the investor. We also assist first home buyers in purchasing their first home in QLD through our house and land packages – this includes receiving $20,000 cash back towards their mortgage by buying one of our full turn-key packages.
Our service will take you through the complete process of buying positive cash flow property, including:
• educating you on positive cash flow and the ability to pay your mortgage off years in advance
• saving you thousands of dollars in interest
• supporting you in the decision on which property to buy
• assisting in the organizing of your finances, if required
• preparing you for settlement of contracts
• liaising with other professional advisers on your behalf if required.
Our Strategists specialise in delivering quality positive cash flow property and also helping investors pay off their mortgage years in advance

http://www.elitewealthcreators.com/
sales@elitewealthcreators.com
1800 GO ELITE

Are you financially ready to buy a property?

If you’re saving for a property, it can be difficult to know when you have enough money to seriously go looking for your dream home. After all, a home loan is usually the biggest financial commitment you will make. Logic suggests you should save as much money as possible before you start looking for a property. So how much money do you really need to put a deposit on a property these days?
Everyone’s financial and life situation is different, along with their purchase requirements. However, there are certain considerations and general rules that will help you know when you’re financially ready to research a suitable professional lending institution to assist with your purchase.

Most lenders are generally willing to finance home purchases up to 95% of the property value, provided you have an exceptionally strong employment and savings / credit history, along with proof of a consistent savings plan. The loan amount will also strongly influence the lender’s decision. So if the property value is $380,000, you could obtain a home loan with a deposit of $19,000. However, you will also need to purchase mortgage insurance with less than 20% deposit.
If your employment and savings / credit history is not so strong, or you don’t have the ability to service the loan repayments, the lending institution would generally only lend up to 80% of the property value.
Mortgage Insurance
Generally, mortgage insurance is applicable for home loans above 80% of property value. The mortgage insurance company will compensate the lending institution for any losses incurred if you fail to make your home loan repayments, and if they can’t recoup from the sale of the property.
Say your home value is $400,000 and you borrowed $380,000. If you have only repaid $40,000 and can no longer make further repayments due to financial woes, the lending institution is $340,000 in debit. When they take possession of your home and put it on the market, they may only be able to sell for $330,000. Therefore, they have incurred a $10,000 loss on your home loan. This amount does not even include the interest they would have received on your loan.
Mortgage insurance can be paid upfront or included as part of your home loan. If including in your home loan, it’s important to remember that borrowing a higher amount not only means repaying that higher amount, but also repaying a higher amount of interest.
If your preference is not to pay additional money for mortgage insurance, you could have a guarantor for your home loan. A guarantor allows the equity in their own property to be used as additional security for your home loan. Your property will still be the primary security though. The most common example of this is a parent using their property as security for their child’s home loan. Be mindful though, if you fail to make your repayments, your parents could be forced to sell their property to repay your loan.
Home Loan Serviceability
Another important factor to consider when determining how much deposit you will need is your home loan repayment serviceability. This is your ability to comfortably make your repayments each month for the duration of your home loan, based upon your income, expenses and other commitments. This generates a figure which is known as your ‘debt service ratio’. Having a basic knowledge of how your serviceability is calculated can help you to understand if you are ready to purchase a property. You may be able to comfortably make your repayments now, however what happens if there is an interest rate rise, or your expenses increase dramatically.

Elite Wealth Creators have been involved in the property and finance industry for over 20 years.  Our Investment Property Strategists deliver investment grade properties to the investment market and mediate between the developer and the investor. We also assist first home buyers in purchasing their first home in QLD through our house and land packages – this includes receiving $20,000 cash back towards their mortgage by buying one of our full turn-key packages.
Our service will take you through the complete process of buying positive cash flow property, including:
• educating you on positive cash flow and the ability to pay your mortgage off years in advance
• saving you thousands of dollars in interest
• supporting you in the decision on which property to buy
• assisting in the organizing of your finances, if required
• preparing you for settlement of contracts
• liaising with other professional advisers on your behalf if required.
Our Strategists specialise in delivering quality positive cash flow property and also helping investors pay off their mortgage years in advance

http://www.elitewealthcreators.com/
sales@elitewealthcreators.com
1800 GO ELITE

Buying an investment property

Investing in property

When starting to invest in property it’s important to be clear on your property investment strategy. Are you going for high rental returns for the short term or are you going for long term capital growth?
If you’re thinking about investing in property for the first time, it’s important to seek professional advice. One of our financial planners will be able to help. Meet with a financial planner (Opens in new window).

Why property?

Investing in property has several benefits, including the potential to:

• Generate capital growth – increase in the value of your property over time  
• Generate rental income and yield – annual rental income less any costs divided by the purchase price of the property
• Gain potential tax advantages associated with negative gearing – with negative gearing you can deduct the costs of owning your investment property from your overall income, reducing your tax bill.

What should I think about?

If you’ve decided that investing in property is the way to go, it’s important to recognise that the way you might choose an investment property is a little different to how you would choose your own home.
These are some points to consider:

• Buy a property that fits your strategy, e.g. are you wanting to negatively gear? Refer to our article on Strategies for property investors for more information.
• Understand all the expenses including, stamp duty, strata levies, council and water rates, real estate commission.
• Consider getting Landlord Building and Contents Insurance ² to cover you if the unexpected happens.
• Plan - give your tenants a suitable length of lease and make sure you can cover repayments if the property is unrented for a period of time.
• Choose a loan that suits you and consider an interest only option as it will lower repayments and increase your cash flow.
• Keep up to date on the latest property trends.

Things you should know

• The information contained within this page is general in nature. It serves as a guide only and does not take into account your personal financial needs. Before you act on this information you should seek independent legal and financial advice. Westpac does not warrant the accuracy or appropriateness of this information.
• 1. Westpac Financial Planners are representatives of Westpac Banking Corporation, AFSL No 233714.
• 2. The information provided in this page is general in nature and serves as a guide only. It does not take into account your personal financial circumstances and needs. Before deciding to acquire a financial product please read the relevant Product Disclosure Statement which is available from our branches or from the Issuer of:
- Income Protection Insurance is Westpac Life Insurance Services Limited (ABN 31 003 149 157 AFSL No. 233728)
- Mortgage Secure Insurance is Westpac Life Insurance Services Limited ABN 31 003 149 157 (Westpac Life) and distributed by Westpac Banking Corporation ABN 33 007 457 141
- Landlord Insurance is Westpac General Insurance Limited ABN 99 003 719 319 (WGIL) and distributed by Westpac Banking Corporation ABN 33 007 457 141 (the Bank)
- Life Insurance is Westpac Life Insurance Services Limited (ABN 31 003 149 157 AFSL No. 233728).

Elite Wealth Creators have been involved in the property and finance industry for over 20 years.  Our Investment Property Strategists deliver investment grade properties to the investment market and mediate between the developer and the investor. We also assist first home buyers in purchasing their first home in QLD through our house and land packages – this includes receiving $20,000 cash back towards their mortgage by buying one of our full turn-key packages.
Our service will take you through the complete process of buying positive cash flow property, including:
• educating you on positive cash flow and the ability to pay your mortgage off years in advance
• saving you thousands of dollars in interest
• supporting you in the decision on which property to buy
• assisting in the organizing of your finances, if required
• preparing you for settlement of contracts
• liaising with other professional advisers on your behalf if required.
Our Strategists specialise in delivering quality positive cash flow property and also helping investors pay off their mortgage years in advance

http://www.elitewealthcreators.com/
sales@elitewealthcreators.com
1800 GO ELITE

What Is Property and Casualty Insurance?

Property-casualty insurance practices in the United States are based on British practices and started with marine insurers located in major U.S. ports. Even when our nation was young, we were concerned with protecting ourselves and our property and not much has changed since then. Property-casualty insurance is specifically designed to help protect your possessions from theft or destruction and your assets from being depleted through disaster or litigation claims brought against you.

The property side of a policy insures physical items, such as homes, commercial buildings, motor vehicles, and personal possessions or business inventory. Types of property insurance include homeowners insurance, fire insurance, flood or earthquake insurance, and automobile insurance.
These insurance contracts may have an “open perils” or a “named perils” clause. The open perils clause covers losses for reasons that are not specifically excluded in the policy. Typical exclusions are earthquakes, floods, and acts of terrorism or war. A named perils clause requires the actual cause of loss to be listed in the policy, such as fire, lightning, explosion, and theft.
Casualty insurance, or liability insurance, covers you for losses that you may cause to another individual or business. This is called “third-party” coverage. For example, if you have liability insurance on your car and another party is injured in a collision caused by you, your liability insurance will take care of the other person’s medical and repair costs. In addition, if someone sues you because of harm you may have caused to him or to his possessions, your casualty insurance may cover the cost.
Both individuals and businesses can purchase property-casualty insurance. Personal policies include homeowners insurance, renters insurance, and automobile insurance, whereas commercial polices are written specifically for businesses and other organizations and may include commercial general liability, workers’ compensation, and commercial property insurance.
If you are worried about protecting your possessions from damage and your assets from being diminished due to liability costs, then you may want to consider the types of property-casualty insurance that are appropriate for you. When selecting an insurance policy, make sure to examine all your options, as well as the positives and negatives of each type.

Elite Wealth Creators have been involved in the property and finance industry for over 20 years.  Our Investment Property Strategists deliver investment grade properties to the investment market and mediate between the developer and the investor. We also assist first home buyers in purchasing their first home in QLD through our house and land packages – this includes receiving $20,000 cash back towards their mortgage by buying one of our full turn-key packages.
Our service will take you through the complete process of buying positive cash flow property, including:
• educating you on positive cash flow and the ability to pay your mortgage off years in advance
• saving you thousands of dollars in interest
• supporting you in the decision on which property to buy
• assisting in the organizing of your finances, if required
• preparing you for settlement of contracts
• liaising with other professional advisers on your behalf if required.
Our Strategists specialise in delivering quality positive cash flow property and also helping investors pay off their mortgage years in advance

http://www.elitewealthcreators.com/
sales@elitewealthcreators.com
1800 GO ELITE

Five trends that could shape financial services

A flurry of new regulation, pressure to lower costs and the emergence of a tech-savvy generation of investors, will likely lead to the convergence of the retail and institutional investment markets in the medium term. Speaking at an investment briefing, Magda Wierzycka, chief executive officer of Sygnia, said they have identified five trends that could shape the future of financial services firms over the next five years.

1. Simplification of the retirement savings landscape
Wierzycka said new legislation in the retirement space aims to level the playing field and simplify the landscape.
But what has happened in the retirement industry over the last decade?
Although there has been a movement away from self-administered retirement funds towards umbrella funds, the number of self-administered funds has not shrunk over the period, but has “leveled off”, Wierzycka said.
According to data from the Financial Services Board (FSB), the number of self-administered funds grew from 3 056 in 2000 to 3 128 in 2012.
But the move towards umbrella funds has also in some instances been accompanied by a loss of control for employers, some members have made inappropriate investment choices, management and administration fees have been high in certain cases and a number of these funds have also experienced “messy” administration.
Wierzycka said some employers are demanding more accountability and when they don’t get it from umbrella funds, they approach other service providers to insert an investment administration platform between the umbrella fund and members.
Group retirement annuities are also regarded as a favourable alternative to umbrella funds, particularly for smaller employers.
2. Downward pressure on costs
Costs have been in the spotlight since National Treasury released a paper on fees in the retirement sector last year.
Wierzycka said everyone is waiting for the release of the FSB’s Retail Distribution Review (RDR) discussion paper, which is due to be published soon.
While some discussions of its contents have taken place, contradictory remarks have been made.
Wierzycka said early indications are that RDR will likely take two to three years to implement and that it will require certain commission structures to be capped. The paper is also expected to encourage negotiated remuneration models, and to require full disclosure.
In line with the outcomes of Treating Customers Fairly (TCF) any potential complaints could in future be made against service providers rather than against financial advisors who offer the advice.
But it is not only financial advisory fees that are under the spotlight. There has been an increasing focus on charges in general. This includes management fees in the active management space and administration fees.
3. DIY investment amongst Generation Y
Generation Y (loosely defined as those born between 1980 and 2000) is not interested in advice and don’t want to be told what to do, Wierzycka said.
“They know best but they do it digitally.”
These 20- and 30-year-olds believe they can manage their own investments, but want to do it as quickly, efficiently and cheaply as possible.
Wierzycka said while these consumers are currently not sitting on piles of money, they will be the savers of the future and technology will be a key differentiator between service providers.
But service providers who do offer online solutions must also be prepared to offer support.
Wierzycka said 50% of those who believe they can do it themselves, will at some point be in a spot where they will want advice and service providers need to be in a position to make an appropriate offering.
There have also been noises from new digital players in the industry with Facebook and Google indicating that they are looking at opportunities in the financial services space. Youngsters who are active on social media platforms will be the likely target market.
But as far as South Africa is concerned, software development is difficult. There is a skills shortage and it is expensive, Wierzycka said.
This could make it difficult for service providers to tap this market.
4. Additional savings products for high net worth individuals (HNWIs)
National Treasury’s proposal to cap the tax-deductible contributions to pension funds to R350 000 per annum in future, means that a group of HNWIs will emerge that will want to save more, but who won’t be able to do it in the traditional retirement fund vehicles of the past.
Wierzycka said this proposal would most likely affect senior and executive management in the corporate space.
Some individuals will start looking for alternatives, which will be in the retail space, she said.
Two of the key characteristics of HNWIs are a focus on capital preservation and the negotiation of fees.
These senior managers and executives could also influence the thinking of the board of trustees of pension funds and this could in turn have an impact on the offering to members. This means that if financial services providers can sell an idea to these individuals, there is a high likelihood that it could filter through to the boards of trustees and ultimately to members.
5. (All leading to) convergence of retail and institutional markets
Wierzycka said this trend is happening on three different fronts – in terms of the advice given, fees levied and the product offering.
Fund consultants are looking at ways of offering individual planning advice to members of their funds. The proposed defaults that could be introduced in pension fund savings vehicles in future, will also require advice.
Wierzycka said since the tax treatment of pension fund vehicles will be harmonised in future, there wouldn’t be any difference between a retirement fund and a retirement annuity (RA).
“So suddenly those two product streams are converging.”
There has also been a move towards the convergence of fees.
Wierzycka said commissions are negotiated and index-tracking funds are offered at the same fee in the retail as well as the institutional space. Unit trust fee discounts are increasing and institutional products are also offered in the retail space.
The convergence of products also means that retail products are making an appearance in the retirement fund (institutional) space – for example the emergence of group RAs.



Elite Wealth Creators have been involved in the property and finance industry for over 20 years.  Our Investment Property Strategists deliver investment grade properties to the investment market and mediate between the developer and the investor. We also assist first home buyers in purchasing their first home in QLD through our house and land packages – this includes receiving $20,000 cash back towards their mortgage by buying one of our full turn-key packages.
Our service will take you through the complete process of buying positive cash flow property, including:
• educating you on positive cash flow and the ability to pay your mortgage off years in advance
• saving you thousands of dollars in interest
• supporting you in the decision on which property to buy
• assisting in the organizing of your finances, if required
• preparing you for settlement of contracts
• liaising with other professional advisers on your behalf if required.
Our Strategists specialise in delivering quality positive cash flow property and also helping investors pay off their mortgage years in advance

http://www.elitewealthcreators.com/
sales@elitewealthcreators.com
1800 GO ELITE

Financial Empowerment: Strategies for Women

The demographics of women have evolved and changed rapidly over the last half-century. Currently, women outnumber men in American colleges and universities. This reversal of the gender gap is a recent trend. As of 2009, 57 percent of bachelor's degrees, 60 percent of master's degrees, and 52 percent of doctoral degrees were awarded to women, according to the Department of Education. Fortunately for women, this increase in education translates into increased influence—and affluence.

 
Their emergence as leaders, entrepreneurs, and innovators is indisputable. Women are no longer just in charge of the household and children. Now a prominent component of corporate America and business, they are increasingly assuming stewardship of family and business finances.
As a working professional mom of three children, I understand that women often have the best of intentions in managing their wealth, but often put themselves last. While it’s not true for everyone, men tend to associate wealth with prestige or power. Women tend to associate wealth with security and peace of mind.
Here is list of strategies that I use with my female clients to help them feel more financially confident and empowered.

1. Establish goals.  It sounds simple, but it’s not easy! Creating a financial plan that helps you see the big picture and establish short- and long-term life goals is a crucial step in mapping out your financial future. When you have a strategy and a financial plan, it’s easier to make financial decisions and stay on track to reach your goals. The planning experience should provide peace of mind, insight, and clarity to you and your family.
2. Focus on time in the market (not market timing). Being savvy about your financial future is not synonymous with trying to predict the best time to buy or sell investments so you can outperform the market. Focus on creating an integrated financial plan that connects your life goals with your investments. Plan to invest in the market for the long haul.
3. Raise your voice. There is no such a thing as a dumb question. There is no need to feel like people are talking down to you or over you. Case in point: One of my female clients approached her tax advisor about wanting to pay off her mortgage prior to retirement. Instead of letting her finish her question, he quickly responded, “Why would you think of such a dumb idea?” Fortunately, she decided to fire this gentleman. But I wonder how many women have encountered such a negative experience, and stick with advisors who are not listening or paying attention to what they want for their financial futures.
4. Value all of your contributions to the household, not just the financial ones. I will never forget presenting a financial plan to a couple when the wife, a highly specialized nurse who works in the neonatal intensive care unit (NICU), asked me why an advisor once advised her to purchase extra life insurance for her husband, but not for herself. She said that I was the first financial professional to validate – and value -- her many roles as mother, wife and professional.
5. Pace yourself. Allow time to make sound financial decisions. Many women are often struggling to balance their careers with their family responsibilities. It isn’t so much that women procrastinate doing their financial planning, but that they feel overwhelmed, overextended, and overworked. Ensure that your financial professional can provide the education, time frame, and comfortable setting appropriate for your needs.
   
6. Strive for balance, not perfection. Being balanced isn’t about deprivation or simply delayed gratification. It’s about balancing consumption today with anticipated consumption in the future. While planning for the future is prudent, we all have to live life a little now! For me, my green tea latte habit might seem extravagant to others, but when I have to get up early to take my son to swim practice, it brings serenity to my day.
   
   Elite Wealth Creators have been involved in the property and finance industry for over 20 years.  Our Investment Property Strategists deliver investment grade properties to the investment market and mediate between the developer and the investor. We also assist first home buyers in purchasing their first home in QLD through our house and land packages – this includes receiving $20,000 cash back towards their mortgage by buying one of our full turn-key packages.
   Our service will take you through the complete process of buying positive cash flow property, including:
   • educating you on positive cash flow and the ability to pay your mortgage off years in advance
   • saving you thousands of dollars in interest
   • supporting you in the decision on which property to buy
   • assisting in the organizing of your finances, if required
   • preparing you for settlement of contracts
   • liaising with other professional advisers on your behalf if required.
   Our Strategists specialise in delivering quality positive cash flow property and also helping investors pay off their mortgage years in advance
   
   http://www.elitewealthcreators.com/
   sales@elitewealthcreators.com
   1800 GO ELITE

Why Is Financial Planning and Analysis Falling Flat?

It’s a tough time to be leading finance. Current levels of business uncertainty—whether driven by hard-to-predict customer demand, new government regulations, or weird weather patterns—is complicating the task of managing financial performance. Meanwhile, private equity firms looking to cash out of acquisitions made during the recessions are pressing CFOs to create smooth glide paths for landing to their IPOs. In another corner, activist investors are demanding double-digit growth from publicly traded companies.

Unfortunately, new research by APQC shows that only 40% of 130 finance executives from very large organizations rated their financial planning and analysis (FP&A) capabilities as effective. Responses to several other survey questions underscore that FP&A at many companies is not very far up on the maturity ladder. What’s going on? Two thirds of survey participants said their finance teams are always swamped by basic financial management duties such as periodic forecasting of how performance is trending versus annual budget targets. They have little time for, say, investigating cost drivers or testing the probable outcomes of bundling and pricing options.

What is really sad is that 20 years ago CFO magazine was writing about the need for improvement in this area. The message was: to be relevant in the pursuit of strategic objectives, finance teams had to become stronger business partners and generate analyses that help decision makers increase economic profit. Today, a lot of work remains untouched. The research shows that most CFOs are willing to invest in better financial systems and data models, but they are not necessarily inclined to develop analytical talent or polish their FP&A process models. Indeed, only half of the survey takers reported that the business entities they serve are committed to expanding the mission of finance so that it adds more value to decision-making.
Nonetheless, there is one brighter spot on the horizon. Survey respondents indicated the move to rolling forecasts is well underway (see the figure below). When an organization conducts a rolling forecast of revenues and operating margins, it is anticipating and dissecting emerging trends that will impact the business four-to-eight months into the future. Coupled with regimens such as driver-based planning, rolling forecasts can help an organization be more agile in the face of fast-moving marketplace trends.


The APQC survey showed that organizations that do use rolling forecasts are better aligned with unfolding business strategy, are more effective at business analysis, derive greater value from their budgeting and planning processes, and have more reliable forecasts than those who do not use them. For example, 94 % of businesses that use rolling forecasts described their business analysis as effective. Only 50 % of those who do not use rolling forecasts described their analysis that way. Arguably, the move to rolling forecasts is a first step to take in building stronger FP&A capabilities. Still, it is good to see that the static annual budget is being augmented by a planning technique that can provide the business with a continually refreshed view of opportunities and challenges.

When it comes to the use of other relatively advanced planning techniques, the survey found that FP&A organizations that engage in scenario analysis or predictive analysis felt they are better aligned with unfolding strategy. It’s a decent bet that over the next 12 to 18 months, more finance teams will be looking at doing projects along these lines. But many will surely face a cross-road: “should we get started with these techniques and learn how to demonstrate their value to the business?” Or “should we wait until we’re asked by the business side to get up to speed? Surely, progress will evolve in stages. In all, this may be a good opportunity for CFOs to engage their planning teams in some soul-searching.


Elite Wealth Creators have been involved in the property and finance industry for over 20 years.  Our Investment Property Strategists deliver investment grade properties to the investment market and mediate between the developer and the investor. We also assist first home buyers in purchasing their first home in QLD through our house and land packages – this includes receiving $20,000 cash back towards their mortgage by buying one of our full turn-key packages.
Our service will take you through the complete process of buying positive cash flow property, including:
• educating you on positive cash flow and the ability to pay your mortgage off years in advance
• saving you thousands of dollars in interest
• supporting you in the decision on which property to buy
• assisting in the organizing of your finances, if required
• preparing you for settlement of contracts
• liaising with other professional advisers on your behalf if required.
Our Strategists specialise in delivering quality positive cash flow property and also helping investors pay off their mortgage years in advance

http://www.elitewealthcreators.com/
sales@elitewealthcreators.com
1800 GO ELITE

Are bookkeepers the next financial planners?

I recently learned the hard way how important it is to have a bookkeeper with their eye on the ball. It got me thinking about how much this industry has changed, and how regulation has not caught up with it. I foresee a time in the not too distant future when bookkeeping scandals will grace newspaper pages in the same way they have with rogue financial planners.
It's worth noting, as Matthew Addison, executive director of the Institute of Certified Bookkeepers explained to me, that bookkeepers who provide Business Activity Statement Services already need to be registered with the Tax Practitioners Board, which has its own legislated code of conduct, a complaints mechanism and a team that investigates complaints.

However, this only captures 12,000 entities registered with the board: it does not cover individually employed bookkeepers that don't need to register with the board. Addison estimates there are about 250,000 bookkeepers in Australia. It's pretty easy to do the maths and work out the lion's share of people who purport to be bookkeepers fall outside the regulatory structure.
Brad Callaughan, a director of accounting and advisory practice Callaughan Partners, agrees bookkeepers should be better regulated given they control the books of a business and lodge Business Activity Statements on behalf of clients.

"The ATO has always had a high focus on GST and PAYG tax and relying on an unqualified, unregulated person to do your BAS is not wise. When the Tax Practitioners Board brought in registration and education requirements for bookkeepers it was a welcome development in the profession. It now means that not just anyone can file BAS on behalf of clients; people need to do formal study and meet certain requirements. I'm not a fan of using bookkeepers for my clients and would rather do it in house at a very reduced rate to insure my clients get the best service possible," he says.
"Bookkeeping is the instrument that gauges of the lifeblood of every business by recording income and expenses. As such I believe high standards of bookkeeping are essential. It underpins and aids the success of any business, small or large," says Peter Horsfield from financial advice firm Smart Advice.
He explains the most important benefit good bookkeepers provide business owners is information about their own business, so that they can proceed with, or decline, opportunities presented to them with greater confidence, based on real information about their business performance.
"Bookkeeping plays such an important role in aiding reporting and decision making processes in a business, better regulation of this role is important and would have flow-on benefits for consumers, business owners and bookkeepers," Horsfield says.
It would mean bookkeepers would receive recognition as an important profession in their own right. It would encourage better professional advancement by allowing them to more closely partner with accounting bodies.
It would also open up a whistleblowing avenue for bookkeepers should they feel pressured by their employers or clients to manipulate or cook the books.
It would result in more consistent minimum standards and education across the industry and more formal avenues for further training. It would deliver greater certainty to employers and those engaging bookkeepers about the expectation of minimum standards.
All bookkeepers – not just those registered with the Tax Practitioners Board and those who are members of professional associations such as the Institute of Certified Bookkeepers – should be doing ongoing professional development and there needs to be a better disciplinary system in place covering the whole industry to deal with people in this field who act in an incompetent fashion, including penalties for people who make transgressions.

Elite Wealth Creators have been involved in the property and finance industry for over 20 years.  Our Investment Property Strategists deliver investment grade properties to the investment market and mediate between the developer and the investor. We also assist first home buyers in purchasing their first home in QLD through our house and land packages – this includes receiving $20,000 cash back towards their mortgage by buying one of our full turn-key packages.
Our service will take you through the complete process of buying positive cash flow property, including:
• educating you on positive cash flow and the ability to pay your mortgage off years in advance
• saving you thousands of dollars in interest
• supporting you in the decision on which property to buy
• assisting in the organizing of your finances, if required
• preparing you for settlement of contracts
• liaising with other professional advisers on your behalf if required.
Our Strategists specialise in delivering quality positive cash flow property and also helping investors pay off their mortgage years in advance

http://www.elitewealthcreators.com/
sales@elitewealthcreators.com
1800 GO ELITE

Managing five finance trends

Your financial plan needs to keep pace with larger socioeconomic trends. Here are smart ways to manage the five trends that we think are important to you over the next five years.
1. Your cash and bank savings accounts will continue to earn next to nothing. The combination of too much global debt,aging demographics and low energy prices force many countries in the developed world to lower the interest rates they pay on short-term notes. European countries are paying negative interest rates to short-term lenders, meaning the lenders must pay a fee to own debt securities.
Global economic growth remains muted, and there's little reason for the Federal Reserve to raise interest rates significantly over the next five years. This means that savers and investors continue to earn very low returns on their savings and fixed income portfolios.

2. Too much information is the norm. Technology allows smart marketers to better target financial product or service promotions to you via blogs, social media and emails. With so many investment options and relatively easy access to competitive products, analysis paralysis could cloud your decision. The growing abundance of information, however, does not provide actual insight into your personal situation.

3. The costs of investing will continue to come down. The growth of assets in exchange-traded funds and low-cost index funds suggests that investors want lower fees. In the world of investing where so many factors are out of your control, lowering your expenses is a smart way to try to boost returns. But cost is not the most important part of an investment strategy. Consistent savings, investment diversification and comfort with volatility are all larger factors in creating financial security.

4. Life insurance is going to get more expensive. As a result of the low interest rates and investment returns, insurance companies are likely to earn less on their portfolios, which in turn leads to premium increases for whole and term life policies. Premium income and investment portfolio performance are the chief ways insurers build capital, which they use to pay benefits.

5. Your personal information is more likely to be stolen. No electronic transaction is completely safe. Unfortunately, you can't fully control what personal information you provide while using new technologies (like Apple Pay or your Starbucks app), nor can you make sure the data security of the companies you do business with, including your health care providers.



Elite Wealth Creators have been involved in the property and finance industry for over 20 years.  Our Investment Property Strategists deliver investment grade properties to the investment market and mediate between the developer and the investor. We also assist first home buyers in purchasing their first home in QLD through our house and land packages – this includes receiving $20,000 cash back towards their mortgage by buying one of our full turn-key packages.
Our service will take you through the complete process of buying positive cash flow property, including:
• educating you on positive cash flow and the ability to pay your mortgage off years in advance
• saving you thousands of dollars in interest
• supporting you in the decision on which property to buy
• assisting in the organizing of your finances, if required
• preparing you for settlement of contracts
• liaising with other professional advisers on your behalf if required.
Our Strategists specialise in delivering quality positive cash flow property and also helping investors pay off their mortgage years in advance

http://www.elitewealthcreators.com/
sales@elitewealthcreators.com
1800 GO ELITE

Financial Planning: It's About More Than Money

Traditional financial planning is all about math and money. You look at how much you earn, figure out how much you will need in the future to maintain your desired lifestyle and try to come up with an investment plan that will help you reach the magic number that will allow you to retire. The process is generally about as exciting as balancing a checkbook and as emotionally draining as paying taxes. Unfortunately, many people choose not to deal with it all, preferring to put off worrying about the future until it arrives. Others go about the process with a sort of resignation born of the fact that, aside from death and taxes, your bills are just another part of life - they need to be dealt with because you don't have much choice. However, there's a quiet minority of investors that are taking a different approach. It goes by a variety of names, but "life planning" is one of the more frequently heard terms.

Life planning is different than traditional financial planning because the focus is more about who you are and who you want to be than it is about money. Unlike people engaged in the traditional planning process, people engaged in the life planning process don't look ahead in an effort to figure out how to maintain their current lifestyles in retirement. Instead, they look at how to change their current lifestyle to achieve the lifestyle of their dreams. Read on to discover how you can use this approach to financial planning.
The Ideal LifestyleMany people credit the baby boomers for this trend - former flower children who grew up and were absorbed by corporate America, but who never lost their ideals. Just as the boomers redefined their "golden years" as a time to be more active than their predecessors were, some want to go a step further and redefine themselves.
For these people, the concept of money is intertwined with the concepts of spirituality, creativity, family, service and other emotional aspects of personal satisfaction. Happiness is measured in more than just dollars and cents. It's not, "he who dies with most toys wins," it's, "he who gets the most out of life wins."
For many, it's more of a lifestyle change than anything resembling the retirement-planning process most of us are familiar with from 401(k) seminars at work or meetings with a financial advisor. The doctor who wants to be a painter, the law clerk who wants to be a poet and the city-dwelling office manager who longs for a cabin in the mountains are all increasingly turning to financial-service professionals for help in making those dreams come true. Of course, the money plays a big role too.

Money and SacrificeThere's just no escaping the money (or the lack thereof). The mailman who wants to become Donald Trump is probably out of luck. However, the attorney who wants to trade in her suit to pick up a hammer and open a repair shop might be able to do it in cash. The others have to make choices, so they work with a financial advisor in order to determine how to develop the financial plan that will allow them to realize their personal goals.

Rather than trying to earn more money or build a bigger nest egg, a significant number of people need to make do with less in order to achieve their goals. Giving up the big house, trading in the BMW and skipping the month-long trips to Europe can help decrease expenses and enable people to trade in their day jobs for lower paying, but personally-fulfilling, professions and past-times.
If living in a small apartment frees up enough cash to increase time spent on the golf course, some people are willing to make the trade. In order to exchange the stress of corporate management for the quiet bliss of a career grooming pets, some people are willing to take a significant cut in pay. When you don't like what you're doing and know how you'd rather spend your time, life planning can help you make the transition.
It's Your LifeIf your goal is simply to retire, still be able to pay the bills and maybe a take a few trips each year, that's one thing. If your goal is trade in your spot in cube city for spot behind the counter at your own bakery, that's another thing entirely. Instead of asking yourself, "How much do I need to save," ask yourself, "How am I willing to change my lifestyle in order to achieve my goal?"
From there, it's more about the mechanics of orchestrating a transition than it is about saving a certain amount of money or earning a certain rate of return on your investments. Just as each person has his or her own definition of happiness, the decision to pursue a lifestyle change is highly personal. It can involve enormous upheaval, but it can also result in enormous satisfaction. Prior to taking the leap, you should carefully examine your motivation and your financial resources. Then all you have to do is come up with the plan that will get you there.

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Elite Wealth Creators have been involved in the property and finance industry for over 20 years.  Our Investment Property Strategists deliver investment grade properties to the investment market and mediate between the developer and the investor. We also assist first home buyers in purchasing their first home in QLD through our house and land packages – this includes receiving $20,000 cash back towards their mortgage by buying one of our full turn-key packages.
Our service will take you through the complete process of buying positive cash flow property, including:
• educating you on positive cash flow and the ability to pay your mortgage off years in advance
• saving you thousands of dollars in interest
• supporting you in the decision on which property to buy
• assisting in the organizing of your finances, if required
• preparing you for settlement of contracts
• liaising with other professional advisers on your behalf if required.
Our Strategists specialise in delivering quality positive cash flow property and also helping investors pay off their mortgage years in advance

http://www.elitewealthcreators.com/
sales@elitewealthcreators.com
1800 GO ELITE

What New Tech Trends Mean for Advisors

While many advisors and firms have embraced technology, the industry still has some catch-up work to do.
Some innovations, such as allowing planners to work with clients in a more personal way, have been widely adopted. “You can tell an advisor he can do that paperwork in his client’s kitchen electronically,” said David Fetter, CEO of data solutions provider Fetter Logic, at the FSI OneVoice conference. “There’s real value in that.”
Other tech shifts have been slower to catch on.
“If you look at other industries, they are way ahead of what we do with data and how to drive better insights,” said Marc Butler, managing director & COO of Albridge, a Pershing affiliate and provider of data and performance reporting. “I think that is going to be really important for us over the next couple of years.”
And change is coming. Looking ahead, a group of panelists discussed which significant technology trends will play a role for planners.

1. Clients accessing data. “If you look at some of the research over the years, there has been this huge gap for a long time, where advisors don’t think clients need technology,” said Butler. “And the emergence of the client and consumerization of technology has driven a different outcome.”
A new push is coming from advisors whose clients are demanding portals or technology tools that allow them to access their own financial information, he explained. “A lot of investors want to have control over what they do, and a lot of it happens through a portal,” Butler said.
2. Cybersecurity. “A lot of these advisors are using [technology] services outside of the broker-dealer,” said Robert Sullivan, vice president of strategic solutions for Broadridge Financial Solutions, a provider of investor communications and technology for wealth management firms. “There is a whole cybersecurity threat that has emerged that I think is now becoming front and center.”
Butler explained that, because most advisors are heavily focused on finance and not on security, they should turn to outside help to protect their clients' information. “I do know that FINRA and the SEC are going to take a lot more interest in this, and, frankly, all of us should have a lot of interest in this as well,” he said. “I think this is something we need to start giving more thought to as an industry.”
3. Increased education. Brian McLaughlin, CEO of CRM provider RedTail Technology, criticizes the industry for not making technology education a priority at their conferences. “My suggestion for broker-dealers is that, when you do your event, move some of this information up at least toward the middle,” he said. “And the advisors are interested in this.”
One way advisors are being educated on technology is through videos and webinars. Butler discussed using platforms such as these to “at least scratch the surface” when it comes to education.
4. Integration of multiple devices. “I think unifying data and unifying workflow seamlessly across devices is where technology is heading,” said Fetter. “And we will get there woefully slowly as an industry, probably, but that is certainly where it is heading.”