Estate PlanningNews Superannuation Estate Planning is So Important

Why Superannuation Estate Planning is So Important

Estate planning is an important part of protecting your wealth and making sure that your surviving spouse and children have access to your superannuation fund. In Perth and beyond, it is reassuring to many to know that their families will be taken care of in the event of their death.

While the death benefit being paid to a surviving child under the age 18 or spouse can be tax-effective, there is more to superannuation estate planning. Vulnerable beneficiaries often need to be protected and funds need to be available to entities that are classified as “non-tax dependents.”*

What is a Testamentary Trust?

A testamentary trust is an arrangement or trust contained within a will and takes effect only after the person dies. It can be created using all or any part of the estate as assets. A will can contain many different testamentary trusts. A testamentary trust can allow for vulnerable beneficiaries to receive their funds while still preserving the tax efficiency for the spouse or children.*

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Business InsuranceFinancial PlannersNews Business Overhead Insurance in Perth

Does Your Business Have Business Overheads Insurance?

If you are an owner or a partner in a business, you may already know about business overheads insurance. We feel that business overheads insurance is an important piece in helping any business protect its assets if the owner becomes disabled and unable to work for up to a year due to sickness or injury. In a competitive business environment such as that in Perth, it can mean the difference between your business surviving or folding if you become temporarily unable to work.

Business overheads insurance is usually used to pay overheads such as payroll, rent, utility bills, office expenses and other fixed costs. The premiums are usually able to be deducted from your taxes and the policy covers up to 100% of business expenses that are deemed eligible.

AMP Business Overheads Insurance

We are associated with AMP and they offer a business overheads insurance policy. Here are some highlights.

Indexation: When the consumer price index (CPI) rises, AMP automatically increases your cover to reflect those rises.

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Insurance ProtectionNews Understanding Trauma Insurance

Understanding Trauma Insurance

Trauma insurance can take care of you and your family if you have a traumatic illness or procedure that makes you unable to work for an extended period of time. We have helped many Perth residents protect themselves from the financial consequences of conditions or procedures such as a stroke, a heart attack, cancer or even a major organ transplant.

Unlike income protection insurance or total and permanent disability (TPD) cover, trauma insurance pays you upon being diagnosed. The time that you are unable to work is irrelevant. Many of our clients in the Perth area have found trauma insurance to be the missing piece that completes their wealth protection program.

How Trauma Insurance Works

Trauma insurance pays you a lump sum if you are diagnosed with any medical condition specifically covered or have a medical procedure that is specifically covered. It is a standalone policy that pays you regardless of your ability to work. It is often used for medical and living expenses that are over and above those covered by TPD or income protection.

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NewsSuperannuation Fund Take Control With A Self Managed Superannuation Fund

Is it Time to Take Control with a Self Managed Superannuation Fund?

The self managed superannuation fund (SMSF) is a way that people in Perth and beyond can save for retirement. When employers make contributions into your super, you can choose to have them put it in their corporate fund, an industry fund, a retail fund or an SMSF. There are many factors to consider, such as risk, reward, fees and insurance.

Remember that this information is general in nature. We can’t really make any specific recommendations without an individual consult to fully understand your financial situation first. We would like to give you an overview of SMSFs to help you decide if you would like to know more about them.

Factors to Consider

An SMSF isn’t for everyone. There are some factors you need to consider. According to the Australian Taxation Office (ATO), you may need as much as $200,000 to set up a viable SMSF. In addition, you will need to be a trustee. That involves a lot of time and responsibility.

You will need to submit reports on deadline, constantly monitor your investment strategy, keep abreast of all changes in SMSF regulations and keep a keen eye on the market for investment opportunities. You will also need to choose someone such as Approved Financial Planners to set up your SMSF.

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Financial PlannersInsurance ProtectionNews Up To Date Wealth Protection Plan

Is Your Wealth Protection Plan Up to Date?

Wealth protection, also known as insurance, helps you protect yourself and your family. It helps you ensure financial security for yourself and your family in case something bad happens to you. We have been providing wealth protection and financial planning in the Perth area since 2005. We can’t provide individual advice without a consult, but here is an overview of how a solid wealth protection plan may protect you and your family.

The Four Basic Types of Insurance

There are four basic types of insurance cover: income protection, trauma cover, total and permanent disablement (TPD) and life insurance.

Income protection pays you up to 75% of your income in monthly payments during any period of time that you are unable to work because of injury or illness. This provides for your monthly expenses and keeps you and your family afloat while you are unable to work.

Trauma cover pays you a lump sum if you are diagnosed with a specific illness or medical condition outlined in the plan. Many plans also cover medical procedures such as bypass surgery. This allows you to focus on getting well instead of worrying about finances.

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Investment PlanningNews How Investment Planning can Help Your Money Work

How Investment Planning can Help Your Money Work for the Future

At Approved Financial Planners, we have over 40 years of combined experience in providing investment planning in the Perth area. In this era, more people are paying attention to their future. For many people in the Perth area, “saving up for retirement” isn’t good enough anymore. In addition, many are opting to turn their current superannuation funds into self managed superannuation funds.

Understanding Investment Planning

Effective investing makes your money work for you. However, investments carry an inherent risk. Generally, the higher the risk, the higher the reward. When we consult with our clients, we like to make a plan. That plan usually includes your goals, assets, current income, projected income and risk tolerance.

Your Investment Goals

Different investors have different goals. Some just want to pick a retirement date and a level of income that will allow them to live comfortably. Others can be more aggressive, wanting to create cash flow for now and for the future.

The first step is to communicate your goals. These can be short-term goals that you want to attain in the next 6 months to a year, medium-term goals that you want to attain in 2 to 5 years and long-term goals that are more than 5 years in the future.

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Financial PlannersInsurance ProtectionNews Financial Planner Discuss NDIS

Is the National Disability Insurance Scheme Enough to Protect You and Your Family?

Currently, the National Disability Insurance Scheme (NDIS) has two trial sites in the Perth area. The NDIS is under the umbrella of the National Disability Insurance Agency (NDIA). It is currently available for residents of two Perth suburban areas: the Lower South West and Cockburn/Kwinana.

What is the NDIS?

According to their Government website, the NDIS is a scheme in which the disabled are offered community assistance to help them live better lives. It is designed to assist not only people with disabilities, but their carers and their families. It is intended to provide those who suffer a significant and permanent disability. Assistance includes information, referrals, individualised supports and plans, early intervention and support to help access activities and community services.*

However, there is one thing that the NDIS isn’t: it is not Total and Permanent Disability Cover.

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Financial PlannersNews Financial Advisor's Duty Of Care

Does Your Financial Advisor Understand Duty of Care?

If you are looking for a financial advisor in Perth, you have probably noticed that there are a lot of choices out there. Financial advisors are bound by a concept called “duty of care.” The concept of having a “duty of care” is communicated in many different ways by statutes involving the provision of financial advice.

What is “Duty of Care”?

“Duty of care” basically means that your financial advisor is required to look out for your best interests and inform you of developments that may increase the risk of any investment they have recommended to you.*

Swan and Baker Pty Limited vs. Marando

It is best illustrated by a decision which was upheld by the NSW court of appeal last year: Swan and Baker Pty Limited vs. Marando. A financial advisor and the firm he worked for were accused of misleading and deceptive conduct by two investors. They were also accused of a breach of professional duty because they had provided negligent advice.*

In 2008, Mr and Mrs Marando invested $500,000 in the City Pacific Ltd Mortgage Fund on the advice of accounting firm Swan & Baker. The funds were to be invested for 90 days and available for reinvestment after the term had elapsed. Swan & Baker gave the Marandos a copy of a document called the Fund Product Disclosure Statement. Within the statement was a 14-day “cooling off” period that applied to new investments.*

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Financial PlannersNews Financial Advice For All Australians

Financial Planning Association of Australia Cites Intergenerational Report: Recommends Financial Advice for all Australians

The Financial Planning Association of Australia (FPA) cited a recent Government document as confirmation that all Australians need professional financial advice. As a firm that has provided financial planning help in the Perth area since 2005, we have always felt that a good financial planner can make a difference in anyone’s future.

2015 Intergenerational Report

The document in question is produced by the Treasury: the 2015 Intergenerational Report (IGR). According to the IGR, life expectancy will increase greatly in the next forty years. At birth, men are projected to have a life expectancy of 95.1 years, while women can expect to live 96.6 years. Today’s life expectancy at birth is 91.5 years for men and 93.6 years for women.*

The end result is that, by 2055, the ratio of working Australians to those who are over 65 will be 2.7 to 1. Today, that ratio is 4.5 to 1. In 1974/75, for comparison, it was 7.3 to 1.*

Mark Rantall, who is the FPA’s CEO, feels that it will be important for Australians to maximise their superannuation funds to rely less on age pensions. According to Mr Rantall, “The IGR makes it very clear that [those with higher superannuation savings are less reliant on age pension].”

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Financial PlannersNews Financial Planning Provides Psychological Benefits

Little-Known Research Paper Indicates that Financial Planning Provides Psychological Benefits

We have more than 40 years of combined experience in providing financial planning to the Perth area, but even we were surprised when we found a little-known research paper authored by Kym Irving from the Queensland Institute of Technology in 2012. The article was subsequently published by Australasian Accounting Business and Finance Journal in their special issue on Financial Planning.

According to Ms Irving, the traditional six-step process of financial planning not only impacts clients mechanically through results, but psychologically, too. One of the central themes of the article is that the physical reality of improved well-being also results in a better psychological sense of well-being.

The Six-Step Process

The very nature of financial planning is that it helps individuals create a series of positive, goal-oriented outcomes by helping them manage their funds and ensuring that they meet their financial goals. Ms Irving used a six-step model of financial planning that included:*

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