The Good Adviser Blog

The Good adviser blog offers practice principals and advisers the opportunity to follow Financial Services Partners online to get a feel for the kind of dealer group we are. You can expect to see highlights from Financial Services Partners events and professional development days, experience FSP DNA – our value proposition to help you deliver quality advice in action – and of course general news and developments.

One of the unique aspects of being a part of Financial Services Partners is our culture. In many groups, there is competition between advisers. This is certainly not the case at Financial Services Partners. Like our advisers, we realise that there is a lot to be learned from peer to peer idea exchange.

Jargon Juggernaut

Please note the following article is general advice only and may not reflect your current financial situation. Please refer to the Disclaimer on our website for more information –

Financial DirectionsSelf Managed Super Funds (SMSF):

An SMSF is a superannuation fund that can be controlled and managed by the individual. Anyone who chooses to manage their own SMSF must do so in accordance with the law and ensure they are aware of legislative changes as and when they occur.

An individual with an SMSF is the trustee of the fund and many have a professional financial planner manage the SMSF on their behalf as they do not have the time or all the necessary skills to manage the SMSF entirely by themselves within the ever changing financial and economic landscape.

Within an SMSF, the investments must be separate to any personal and business investments.

If your SMSF is a complying fund, it is taxed at a rate of 15%.

If you would like to know more about whether setting up an SMSF is the right strategy for you, speak to a financial adviser who can give you more information related specifically to your personal financial situation.

Gearing and Geared Investments:

One option for building wealth is to look at gearing which is the borrowing of money to invest in assets that will produce an income. Examples of gearing include shares or managed funds.

Gearing is a high risk investment option as you need to be aware that the investment may decrease in value and if you have borrowed to invest then you will be paying interest on the loan.

However, if the investment returns exceed the after-tax cost of borrowing to invest, then you will make a profit on your investment.

Negative gearing is when the return is less than the cost to borrow to invest. In some cases you can claim the loss as a tax deduction against other taxable income which will turn the negative loss in to a benefit for the investor.

If you are interested in finding out more about gearing and how geared investments might be incorporated in to your wealth management strategy to accumulate wealth with a long term view, speak to a financial adviser who can discuss how gearing might affect your overall financial plan.

Dollar cost averaging:

This is an investment technique that is favoured by some investors who want to reduce their market risk. Instead of investing in one lump sum, the investor will spread out the amount they wish to invest over a period of time, usually several years, and will invest a certain amount at regularly intervals over this time period.

By spreading out the time frame in which investments are made, the number of shares held in an investment may be higher than if you were to purchase in one lump sum, so the closing price of the shares when you wish to sell, may increase the value of your shares due to market volatility.

Dollar cost averaging as an investment technique is not right for all investors. It depends on your individual financial goals, whether you have a long term or short term view of investing and your tolerance to risk.

If you would like to find out more about dollar cost averaging and if it is right for you, speak to a financial adviser who can give you more information specifically related to your situation and how this particular investment technique may affect your financial portfolio.

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Positioning your portfolio in a changing environment

2012 was yet another uncertain year for the global economy with modest returns across all asset classes. The year ahead is showing some more hopeful signs from which investors can benefit if they follow the right strategy.

Positive signs in the global economy
The US has shown signs of a slow and steady recovery and while unemployment remains high, improvements in the housing sector and consumer spending are starting to have an impact.

While Europe remains weak, the good news is that the European Central Bank has been steady in seeking to find a solution that will contain banking issues to the region, allowing the rest of the world to resume its recovery.

Back in our region, there are better signs of economic activity and growth in China, which is good news for our resources sector. Other emerging markets in Asia and Latin America also have improved growth outlooks.

How these factors are impacting investment markets?
There is no doubt that the trend is away from cash toward growth investments as conditions improve. Attractive valuations in growth assets, stronger profit growth and continued low interest rates globally will fuel the demand for equities and drive market growth in 2013.

Domestically, the likelihood of further interest rate falls and some resurgence in Chinese demand will tend to push the Australian sharemarket forward, despite weaker growth and profit outlooks.

Cash investments continue to lose their attraction in the low interest rate environment both globally and at home, with the latter still having room for further cuts. Government bonds are suffering from low yields that are not expected to pick up unless there is a stumble in expected economic growth.

On the property front, unlisted commercial property and infrastructure should retain attractive yields, while property securities and housing prices will experience only modest growth.

How can your investments be best positioned to benefit?
In an environment that is in a state of flux and with opportunities in growth assets now emerging, the two key principles we want to emphasise are diversification and a focus on long term outcomes. It is simply too risky to be tempted by ‘short term fixes’ and attempts to ‘pick the market’ in such unsettled global conditions.

Diversification across various cash and growth markets is critical to limiting risk of sudden movements in any one sector. It can also position your portfolio for more stable returns and possibly better outcomes over the longer term.

While the flight to the safety of cash investments was understandable a couple of years ago, an overweight in cash now represents a significant long term, ‘opportunity risk’ that will generally be of more concern than any short term fluctuation risks in growth investments.

Retirees must also consider their ‘longevity risk’ – the possibility they might outlive the ability for retirement savings to generate income. An effective way to limit this risk can be to use growth investments that have the potential to protect capital.

By all means you should hold some of your portfolio in cash to fulfil your short-term needs, but diversity across various asset classes can be a durable long term solution.

In a volatile environment we offer the skill and experience to balance your personal risk profile with the need to build a diversified portfolio that can endure market fluctuations. We can also tailor a portfolio to balance your income needs with longer term capital preservation.

If you are concerned about how global uncertainty is affecting your investments, or would like to review how your portfolio is positioned, feel free to contact us to discuss your personal situation.

Download your copy of The Key Newsletter Summer 2013

Happy Australia Day

Please note the following article is general advice only and may not reflect your current financial situation. Please refer to the Disclaimer on our website for more information –

Australian Flag SydneyAhhh Australia Day. A time that conjures up images of barbecues  picnics, fireworks, more Australian flag paraphernalia than one thought possible and of course, that all important public holiday after which, the end of the holiday period really hits us and we are back in to the full swing of our working week, looking anxiously forward to the next public holiday, Easter.

Whilst many of us will be avoiding sunstroke on Australia Day and ensuring we get in to the spirit with a proper Aussie BBQ surrounded by good friends, food and beverages, there will be members of our community accepting their citizenship and proudly calling themselves a ‘new’ Australian.

Some of our new citizens may have been established in Australia for a long time, with good social and family networks. Others may be brand new to our sun burnt country and they will be focused on establishing a support network, friendship groups, securing  employment and setting themselves up with bank accounts, schools for their children, entering the property market as an owner or tenant and navigating the Roads & Traffic Authority to be issued with a driver’s licence. It is a big challenge, yet exciting at the same time.

In 2011 – 2012 the number of people to receive their citizenship in Australia was a staggering 84,183 and of the 180 countries from which they originated, the most common nationality to become an Australian citizen was the United Kingdom followed by India1.

With so much cultural diversity in Australia we are fortunate to be exposed to a variety of different foods, sporting events, entertainment and diverse fashion. So, out of curiosity, what have the British people brought to Australia that we now freely enjoy?

Apart from colonisation in 1788, the English language and the Union Jack, can the humble meat pie be claimed as a great British influence in Australia? The meat pie can be traced back to ancient Egypt and later Greece with various forms of a pie being developed around the world and adopted in to many cultures. The Cornish pasty, a similar version of the meat pie, originated in Cornwall for workers underground who needed something warming and filling for the long and dark days in tunnels and mines.

In Australia we enjoy the delightful tastes of both the meat pie and the pasty and it is likely that this is a British influence that we freely enjoy in Australia as part of our rich and diverse culture. Get out the pastry dish and stock up on beef, so you serve up some meat pie and sauce this Australia day!

To all of our new Australian’s, congratulations on this milestone in your lives.

To Australian’s new and old celebrating our national day, enjoy the celebrations, stay safe and remember one of our national slogans – be sun safe and slip, slop, slap, wrap.

Happy Australia Day.

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Further Reading:


8 Tips to beat your midlife crisis

Please not the following article is general advice only and may not reflect your current financial situation. Please refer to the Disclaimer on our website for more information –

Men and women alike, we all go through it at some point – the mid life crisis! But how do we beat it?

1. Change = a new look – are you looking for a quick fix? Then set yourself a spend limit and then get a new haircut, buy a new wardrobe and wear your new style with pride. Tip: Try not to go too drastic. Tie die, dreadlocks or a Mohawk may be a decision you live to regret.

2. Avoid big ticket items – ever wanted that Ferrari you keep seeing in the window? Well it can stay there. This may be a spontaneous purchase but just remember that the bills aren’t.

3. Become a Yes-man with limits – this may be the time you have chosen to relive the old days but remember what has changed. You probably have more responsibilities financially and should be careful just how much money you spend during this life stage. Start saying yes to more opportunities to catch up with friends and to do things you may not usually do but always remember your wallet is not bottomless.

4. Treat your midlife crisis like a virus – it is infectious. The others around you will soon be affected by your midlife crisis. Whether it is a change in attitude or a full personal transformation. This is especially if you have anyone dependant on your income.

5. If you keep looking in the rear view mirror you could smash your car! – The past is the past. On your life path look forward to see where you are going instead of where you have come from. Write a bucket list, get a new hobby or bring something uncompleted from your past to the future. Just keep all of these steps in mind.

6. Visited your local gym lately? A large part of a midlife crisis is based on appearance. If you are not happy with your physique then be proactive and go to the gym. Try to avoid 24 month commitments because the abandon rate on gym memberships is very high! Why not try a pay as you go solution?

7. Get a fresh cup of perspective – this is a perfect time to do some volunteer work to change your perspective on your current situation. Donate to charity or volunteer some time.

8. Remember it will all be over soon- say this over and over again. This is not a permanent state of mind. It will all be all over soon.

If you would like to discuss how you can fund your mid life crisis and have a nice nest egg ready for the next stage in your life, whether that be a transition in to retirement, an early retirement or otherwise, then speak to one of our Financial Advisers, we would love to hear from you!







Choosing the right personal insurance

If you only do one thing this year…
We all start the year with great intentions. So many new year goals to aspire to, goals we generally stick to for a month, three months if we are really committed, then the year gets busy and life takes over and the goals we set in January fall by the wayside. This year, how about getting your goals set and complete within that first, motivated month? If you only do one thing this year, check that your personal insurance cover is in place, and is correct for where you are at this stage of your life. With suitable advice and the right insurance policy in place, you could save yourself time, effort and energy should an unexpected event occur this year.

What life insurance?
Whilst many of us may have insurance on our homes and our cars, it is likely we are not insured ourselves and probably do not realise that having life insurance is an important financial safeguard for our family and loved-ones if the unexpected occurs. Discussing life insurance can be a sensitive topic, but without planning for the unexpected, it could be incredibly difficult for many families to maintain their current standard of living. Life insurance should provide financial security for your dependents if you die. Generally, the policy should clear the mortgage and significant debts, and provide a nest egg for the family. There are many policy options and ways to purchase life insurance such as contacting a provider directly either online or over the phone, purchasing through your superannuation, or talking to a financial adviser. Purchasing life insurance involves making decisions such as choosing which cover level is suited to your needs and which benefits you should consider. The options and range of policies available can sometimes seem complex. So what are the ways to select and purchase a life insurance policy that is suitable to your circumstances?

Ways to purchase insurance
Online and over the phone offers convenience, often with minimal or no medical information required, and the approval process can be immediate. When comparing insurance policies online, it is important to do the research and ensure you understand exactly what is included and excluded in each policy. Direct life insurance may be quick to arrange, but you may be less able to select and tailor a policy that suits your needs so if you do decide to purchase direct, understand any policy exclusions before you sign up. Some direct life insurance policies reduce the amount of cover as you age whilst others may exclude cover of pre-existing conditions at the time of applying. Cover provided by direct insurance may also have lower payouts than a policy arranged through a financial adviser, so it is important to read the ‘fine print’ if you don’t have a financial adviser to assist
with your decision. If you choose to engage a financial adviser to assist you with your personal insurance cover, one of the benefits is that they do the research so you can choose suitable policy with the right coverage and amounts for your needs and budget. They can also assist with processing a payout in a timely manner, should you need it. This is an important key benefit as it is a process you will most likely not want to go through alone if you are dealing with a difficult time in your life. A tailored life policy arranged through a financial adviser can often be more economical and better value for money, with the added benefit of confidence that the policy is more likely to be suitable to your circumstances as your adviser has helped to source the most appropriate policy for you. It is not a ‘cookie cutter’ solution and service.

What’s next?
If you feel you, or a member of your family, would benefit from a review of your personal insurance policy or would like to discuss the type of policy that is right for you right now, why not contact our office and make an appointment to discuss your individual situation and options? We would love to hear from you.

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Silly season to serious saving

Please note the following article is general advice  only and may not reflect your current financial situation. Please refer to the Disclaimer on our website for more information –

Christmas only comes once a year but when it does our bank accounts certainly feel the wrath of the season. With many of us using our credit cards for our gift purchases, wining & dining we all too soon feel the New Year sting with the silly season bill. So how do we go from serious spending to serious saving?

Here are our top 10 tips:

1. Have a goal – Without an end goal you will always get lost. For best results set an achievable savings goal and a date in which you would like to reach it.

2. Pay off the plastic – Be sure to pay off the credit card before the interest rate kicks in. You only want to pay back what you actually spent.

3. Give it up – Consider giving up an expensive habit like smoking, the extra glass of wine with dinner every night or the morning coffee at your favourite café.  If we take smoking as an example and we assume you smoke a pack of cigarettes a week at $17 a pack but you made your New Year’s Resolution to quit, you would be saving yourself approximately $816 per annum. That is worth thinking about!

4. Write a grocery list – Do you ever go to your local supermarket with the intention of buying bread and milk and walk away $60 poorer? This may be because you didn’t have a written grocery list. Write your shopping list and then commit to walking out of the store only with what is on the list.

5. Fill up midweek – With the cost of petrol on the up and up this is one place you can save a little money.  From observation, it would seem the cheapest fuel prices are in the middle of the week so try and get in the habit of fuelling up on a Wednesday or Thursday.

6. Cheap Tuesdays – Everyone loves cheap Tuesday because we can nab a bargain! If you love a night of take away pizza and a movie rental then why not splurge on a Tuesday?! You are allowing yourself a treat and your wallet will thank you for it!

7. Pack lunch – You would be surprised just how much you can save by not buying the $7 deli sandwich or getting takeout each day.  All it takes is for you to set your alarm a little earlier in the morning or go to bed a little later so you can prepare your packed lunch. Maybe a new lunch bag is on your Christmas wish list?!

8. Don’t eat out, eat in – Why not invite your friends over for a casual dinner party instead of going out and then hope the favour is returned!

9. Shop online – Shopping online has a lot of benefits, including the ability to compare prices, ease of access and you can also find some great bargains. You may be less inclined to make some impulse purchases!

1o. Befriend Ebay and Gumtree – Every Christmas we all get one present that has us scratching our heads as to why someone would choose that gift for you. Instead of throwing it out with the wrapping paper it came in why not sell it online? After all, one man’s trash is another mans’ treasure.

If you would like to discuss how you can start to become a serious saver and work towards a financial goal, then speak to one of our Financial Advisers, we would love to hear from you!









How to put the Super back into your Super Fund

Please note the following article is general advice only and may not reflect your current financial situation. Please refer to the Disclaimer on our website for more information –

If you have ever wanted a good reason to be more proactive about managing your super, here it is…

Long gone are the days of saving your money under the mattress for your retirement, but what is a better option? Statistics show that more than six million Aussies would have been better doing the old mattress trick rather than opting for their employers’ default superannuation fund over the last five financial years1.

Shocked?! But it does not have to be all doom and gloom, there are some super funds performing well, it is all about the right selection for the right person.

Did you know, thanks to the global financial crisis, fees and taxes the dollars invested in a typical employer default fund went backwards? Recent research by SelectingSuper, part of the Rainmaker research group, estimates that of the 83 employer default super funds available over the five year period, a staggering 51 delivered negative annual returns for members1.

Let’s crunch the numbers:

$10,000 invested into the worst fund a decade ago would be worth $12,800 today.  However the same amount invested in a more appropriate, higher performing fund would be worth $19,100. That is a potential $6,300 growth on your investment just for being invested in a more appropriate fund1!

Is it now the norm for Australian’s to be complacent about their superannuation? Is that why we tend not to question poor returns and underperformance? How could we be making the most of our superannuation dollars?

All very good questions and ones we should all reflect on from time to time.

Let’s be pro-active Australia!

We need to start thinking about superannuation more proactively and in the context of a future savings plan. If you elect to be put in to your employer’s default super fund you may not be in the most appropriate fund for your hard earned superannuation payments. If you take an active approach and seek the advice of a qualified financial adviser who can discuss and compare different types of superannuation funds available to you, you have the opportunity to select the option that is right for you.

Being in control of this choice could make a significant difference to the amount of superannuation you have at retirement age – and no one wants to reach your retirement age only to realise there is not enough money to retire on!

For some professional guidance on strategies you could consider to put the super back in to your super fund, be proactive and call one our financial advisers today. We would love to hear from you!

1. Source: “Workers’ funds are not so super” by Jessica Irvine on 8th October 2012

Spend vs invest – striking the right balance

Please note the following article is general advice only and may not reflect your current financial situation. Please refer to the Disclaimer on our website for more information -

Buying a well made suit to wear to work – is that spending or investing?

If you are like me, one of those people who struggles with the balance between when is a good time to spend hard earned cash and when is a good time to invest for a rainy day, then this is for you!

What is spending? Spending1 is paying out or disposing of money, wealth or resources. It is also the employment of labour, thought, words or time on some object or in some proceeding.

What is investing? Investing2 is putting money to use, by purchase or expenditure, in something offering potential profitable returns, as interest, income, or appreciation in value.

It seems from the above definitions spending and investing are similar concepts but one is a disposal and the other is putting it to good use. An investment can also on occasion sometimes be defined as spending with a purpose or higher expectation.

Let’s look at the economy, the statement “we are going to spend $2 billion on another stimulus package” would be considered to be spending as it is the disposal of money. However, if we rephrase this to read “we are going to invest $2 billion in infrastructure and our children”, it is clearly implying an investment as it is putting the money to good use.

How about the stock market? Most people would consider stock market activity as an investment with a time horizon. Buying a home is a long-term investment whereas short selling on the stock market is a short-term investment.

So is spending money on a home investing? My answer would be ‘investing’ when house prices are increasing, however, if prices are decreasing is that still investing? 451 Old Pacific Highway, Mooney Mooney Creek is a waterfront acreage on the Central Coast.  The initial asking price was $1,550,000 a couple of years ago, it is now asking $895,000- a decrease of 42%. (Source: SQM Research). With such a steep decrease in profit is this considered spending of hard earned cash to live somewhere nice, or investing in the hope the market goes back up?

Everyone thinks about spending and investing differently and the balance is going to be vary based on your individual situation, goals and tolerance to risk.

Are you interested in a discussion about getting your balance right? Why not contact our office and make an appointment with a financial adviser? We would love to hear from you!

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Further Reading: 

Spending vs. Investing: Sometimes, There’s a Difference By: Derek Thompson, Senior Editor, The Atlantic (


Income protection for business owners

Work hard, play hard

As any business owner would tell you – it’s tough  building your own business. You work exceptionally  hard amongst some other 2.13 million businesses  trading in Australia 1 , years of blood, sweat and tears poured in to your work so that you will own  a successful business that funds your lifestyle now and  will one day fund your retirement.

Imagine for a moment what would happen if you suffered an illness or injury that prevented you from  working for a few weeks, a few months or even a few  years. What would happen to your business? Your clients? Your employees? Your future?

None of us like to consider the negative ‘what-ifs’  in our lives and this is especially difficult when your  attention and energy is focused on the day-to-day running of your business, driving it to success. But  when you have worked hard to achieve something  you are proud of and could stand to loose in the  event of unfortunate accident or illness, it is worth taking the time to seek some professional advice and  consider your options – the process may not be as expensive and time consuming as you first thought!

Failing to protect your business and your income is a common theme amongst the self-employed but the right cover for you should provide you with suitable  options and some peace of mind.

Consider your level of protection

Income protection and business expenses insurance is essential for business owners who do not have the luxury of relying on sick leave, annual leave, salary
continuance and workers’ compensation in the event of illness or injury.

If ill or injured and unable to work, income protection insurance can provide you with a regular payment in place of your salary, and business expenses
insurance can provide you with a monthly payment to cover the costs of your ongoing business expenses such as electricity bills, equipment hire and regular
advertising costs. In some instances, the premiums are tax deductible.

Seeking financial advice regarding the types of cover available, how they differ and what level of cover they  can provide, will give you options to consider and a little peace of mind if you are concerned about what would happen to you, your family and your business in  the event you are unable to work. It is worth investing the time and energy in to having these conversations.

What’s next?

If you feel you, or a member of your family, would  benefit from a discussion around insurance and  income protection for business owners, why not contact our office and make an appointment to discuss your individual situation and options? We would love to hear from you!

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1 Data from the Australia Bureau of Statistics

Download your issue of Keeping in Touch November edition

Are you a financial warrior or worrier?

Please note the following article is general advice only and may not reflect your current financial situation. Please refer to the Disclaimer on our website for more information –

In my group when it comes to friends and money I split them off in to two categories. They are either a financial warrior or a financial worrier. Either they feel financially confident and free or they feel out of control and disempowered.

I fall in to the latter of the categories. I worry about money. I always worry I won’t have enough, I worry that I am sometimes being too extravagant with my hard earned cash and I worry that I don’t spend enough time and energy getting the right advice so that I can put a proper plan in place and enjoy some financial freedom.

I envy my friends who are the warriors. They have a good financial plan in place that they aim to review annually to take in to consideration any changes that have impacted their life in the last 12 months. Their financial adviser keeps them on the right track, ensuring their plan matches their financial goals and lifestyle and looking out for other opportunities, such as investments, to build more value in to their financial plan. These friends lead a nice, comfortable life and are realistic when it comes to their spending.

So, with my goal before Christmas being to get my finances in order, I need a place to start. I sought advice from a financial adviser and they had 5 tips to get me started.

1. Establish goals – I need to decide what it is I want and when I want it so I have a specific and measureable goal.

2. Gather relevant information to assist with strategy development – this is information that would help a financial adviser know more about me, such as what investments, insurance, income protection, savings accounts, property, superannuation accounts, income etc I have.

3. Work with a financial planner to develop a financial plan – look at their recommendations and consider what I am comfortable implementing. I may not do them all at once, but at least I have the right information to get started slowly.

4. Take care of my superannuation – having multiple accounts, paying multiple fees, not being in the right type of fund with the right type of investments and generally ignoring its existence is not smart. The sooner I start paying attention to my superannuation, the better I can expect my lifestyle will be in retirement.

5. Insurance, insurance, insurance – can you afford not to be insured? Yes it is an expense now but one that will benefit you should anything unforeseen happen which would set back your financial plan should you not be insured. If I provide a financial adviser with my age, occupation and lifestyle then they can discuss the different types and level of cover available to me and the alternatives I could consider.

When considering professional advice it is important to choose an adviser you can trust as you will need to have an open and honest relationship with your adviser because this will be a long term relationship.