Money Matters SPRING 2015
Estate Planning
A Message To Remember Shane Webcke turns his loss into our gain.
Why you should take action before it’s too late.
Investment Market Things are volatile and could be for some time.
The Chat
Why Estate Planning should not be something to dread
Ignoring Your Financials? This could actually be damaging your health.
Financial Services.
Insurance.
Business Advice.
Prepare for the future We’re here to help
Welcome letter Hello and welcome to our Spring edition of Money Matters. Over the course of the past year, our business has been revitalised – taking a slightly different direction towards “advice” being the key to the value we provide to you, our clients. The change in licensee to Keystone Partnership and the new brand to ClearWay Advice and Financial Management, have both been part of this focus on the provision of advice.
What’s
NEW
MISSION BEACH OFFICE - WE’RE MOVING Our focus is always on our service to you, our clients, and we are continually looking for ways to do things better and smarter. The successful business merge earlier this year has resulted in our teams working closer together, and from this our Mission Beach based team will be relocating to the Innisfail office as of the 1st October 2015.
The changes to our licensee and corporate image are beginning to settle and we’re confident in the decision we’ve made and believe they have set our business and all involved on a solid path for the next five years and beyond. Part of the process has been the new website (www.clearwayadvice.com.au) and a new Facebook presence (@clearwayadvice), which we encourage you to take a look at next time you’re online. These online platforms allow us to increase the reach of the value we provide through the sharing of relevant and education organic content and articles that we know will benefit you all.
We’re excited to have the team in one location and the opportunity to better service clients through increased resources, including increased opening hours and team members.
We do have another exciting change this month that sees the entire ClearWay Advice team located in one office. For the last three years we have operated from two offices, one in Innisfail and one in Mission Beach, however we have decided to consolidate the team to the Innisfail office. We feel that this move will allow the staff to fully function as a cohesive team and will also add resources, and creativity. The Mission Beach office will close on 30th September.
The Mission Beach office will be open until the 30th September 2015.
This issue includes articles on estate planning, sharing the importance of this aspect of financial planning and how it can be a complex process. However, with appropriate advice and assistance the process can be very useful and can help you avoid expensive legal issues at a later date. We’ve also included a on this page, short inspiring note from Alan Weiss, an author of business related books and training material. Along with this an extract from a recent article produced by Russell Investments on the current markets volatility called “Looking Ahead”. The final points of this article are simply that fear is the root cause of most losses in markets, and staying in the market remains the best strategy to achieve your financial goals. For more information on any of the articles included in this issue, please do get in touch. Thanks for taking the time to read this Spring edition of Money Matters. The information and articles contained in this newsletter are general by nature, and are not all-encompassing, nor do they take your personal circumstances into consideration. If you’d like to chat about any information included here and how it may impact your specific circumstances, please contact us. (07) 4078 0900, client.service@clearwayadvice.com.au
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We will continue to see clients on location in the Mission Beach area, should you wish to have a face to face meeting without travelling to Innisfail. To arrange an appointment call us on (07) 4078 0900.
MEMO from Alan Weiss’s It was 14 years ago that a client manager, Leon Rawitz, and I decided to drive back from LA when we realized planes might not fly again for weeks. We drove back in 2.5 days to the east coast, spending a brief night in Denver and in Charleston, West Virginia, where we parted ways and he went south, I north. We had a dollar gas station map (no GPS) and his cell plugged into a car charger. We watched thunderstorms in the Rockies, the vast expanse of the flat midwest, and the bustle of morning rush hours in the larger cities. We talked about philosophy, business, religion, finance, and the great ambiguity surrounding us. We contact each other today on the anniversary, and I've given him the tattered map, framed, with our journey highlighted. I am deeply saddened to this day by the misery and loss of 9/11. But here we are, carrying on, as individuals and a country, in freedom and with optimism. We should remember that, when we are angry that a client won't return a call, we don't get the room we want, or someone cuts us off on the road. We are not what's done to us, we are who we can be. www.alanweiss.com
INSIDE Regulars 01 Welcome Letter Practice Principle Peter Jordan provides a newsletter update
01 What’s New? All the news from ClearWay Advice and Financial Management
08 What we do The advice and services that we offer
Features 04 A Message to Remember Shane Webcke as Queenslands work safety ambassador
05 Ignoring Your Financials
Can this actually be bad for your health?
06 The Chat Estate Planning shouldn’t be something people dread and here’s why
07 Market update A summary update from Russell on the current market
A MESSAGE
to remember
ormer Brisbane Broncos, Queensland and Australian Rugby League Star, Shane Webcke, has an important message for us all: “I lost my dad in a workplace incident, so I know first-hand that family and loved ones are the most important reason for work safety.” Having been affected by something that we should all guard against, be aware of and unfortunately be prepared for, he has since gone on to become an ambassador for Workplace Safety. Workplace accidents take the lives of hardworking sons, daughters, mothers and fathers all-too-often. In addition to the heartbreak that comes from such a tragedy, the havoc of losing the main income from the household adds unnecessary additional stress. Shane Webcke now works with Workcover QLD on campaigns to help raise awareness of Workplace safety. To see more on the campaign, visit www.worksafe.qld.com.au
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“
One day my dad went to work and never made it home...
“
F
Shane Webcke, Queensland Safety Ambassador
IGNORING YOUR FINANCIALS
does eect your health
R
etirement should not be looked at from a pessimistic perspective; rather than simply signifying the end of your working life, it is the start of a new life. Financial advice is key to planning your future. The Canadian Financial Planning Standards Council (CFPSC) recently completed a wide ranging, longitudinal study which sought to understand the real value of financial advice. The results proved that the positive affects of advice were even greater than initially expected. The surprise came in measuring well being; it was found that a comprehensive financial plan lead to higher satisfaction. The CFPSC measured emotional well being, financial well being, overall contentment and achievement of life objectives and in each case found that people with a comprehensive plan measured better. A client of a
Financial Planner is more confident in their financial situation and the direction of their retirement planning. They also have a greater propensity to save. This matches the findings of a Finnish survey which explored the impacts of stress on health. The survey not only found that stress can impact health, but also that financial stress had the greatest impact on a person’s health of any type of stress. These findings align with our experience as Financial Planners. Our clients are more confident in their future and have the knowledge and tools at their disposal to make the decisions that are right for them after having worked with us. This results in a greater ability to deal with the challenges of retirement and living for, what could be, 30 years without an income like many of us will need to.
If you’d like assistance with your financials, contact us on 07 4078 0900.
Financial advice is key to planning your future.
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THE CHAT you shouldn’t dread having Estate Planning might not be the hottest topic amongst younger crowds, the unfortunate reality is that you never know when or what you need to be prepared for. Whilst less common for younger people to be struck by illness, it does happen.
I
t’s not easy to broach the subject of Estate Planning, but it is necessary. Anything can happen and the older we are, the more likely it will. Your mum has dementia or your dad fell and he hasn’t fully recovered; now what? It’s difficult to talk to your parents about ‘the inevitable?’. The reality is that if you don’t it could complicate things immensely for all involved. Starting a conversation around this topic with family and parents shouldn’t be something to be feared; sorting the issues provides a weight off for all involved. There are many reasons why people choose not to; perhaps your parents’ paperwork is in a mess and you are dreading dealing with it, maybe you have in mind that they have already sorted out their affairs with a professional and don’t require your assistance. It could be that money isn’t
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something that gets talked about in your family or it might even be that the raw emotion of the subject is too difficult for either yourself or your parents to handle. Estate assets can be defined as assets that are ‘personally owned either outright or as tenants-in-common with another person or entity.’ Once conversation is underway, it should become easier to talk about - in fact, parents generally wish that they had started the process sooner. Before approaching them, shake off the thought that ‘you know what’s best’ and be sure not to make the mistake of going in over-prepared with a plan in place for them. Consider your parents at every step of the way; ask them what they have in mind for the future and make efforts to centre your Estate Planning conversation around working together to find an outcome that all can agree upon.
Scott Sullivan of Brisbane, who was diagnosed with Motor Neurone Disease (MND) at just 38 years young, is someone who knows this all-too-well. MND is an incurable disease that has claimed the lives of many. Stephen Hawking, a famed cosmologist, has attracted media-attention for this disease for many years and by all accounts, should have died from it eons ago. It is a disease which claims your physical mobility. Your mind stays active, alert even, but there is no response from your body to take simple instructions; eventually it claims your ability to speak and even breathe. At the time of diagnosis, Scott had no Life Insurance. He had given thought to it, but that is as far as he got. Luckily, he had success in his job and as such, was able to afford to live out the remainder of his days without concern for the financial security of his wife and two young children. Scott and his family found themselves in an extremely difficult and confronting situation that could happen to anyone without a moment’s warning. MND is not hereditary and like many diseases it strikes without a moment’s warning. As difficult as it may be, talking through and sorting out your Estate Planning, could eliminate a sea of challenges during the hardest of times. Start the conversation today and prepare both yourself and your family for the future.
China: We expect continued short-term volatility, but longer-term growth
MARKET UPDATE looking ahead
We are likely to see continued pockets of turbulence in China, its Asian trading partners, and commodity prices, and we remain cautious on these markets in the near-term, given the broader economic headwinds. While downside risks have clearly escalated, we do not expect an uncontrolled deceleration of the Chinese economy. With over $3 trillion in reserves, the Chinese government has both the ability and willingness to cushion its economy. In addition, recent high frequency indicators on housing prices and retail sales have shown tentative signs of stabilisation.
United States: Healthy growth expected, but the timing of the Fed’s interest rate hike is more uncertain US employment growth remains robust and the broader economy has reaccelerated after a slow start to 2015. We continue to expect healthy US real GDP growth of 2.5-3% over the next 12 months, which should help push the global economy forward.
Europe: We expect continued recovery, given strong fundamentals What should you do with your investments — and what is Russell Investments doing? Markets rise and fall, particularly over the short term. If you’re a long-term investor, it’s best to avoid knee-jerk reactions at the risk of ‘locking in your losses’—because you don’t truly feel the pain of market declines until you sell investments at a low. Sometimes, short-term volatility provides good buying opportunities. As always, Russell Investments is continually monitoring its funds and seeks to help clients manage risks through diversification. Our multi-asset team has deliberately reduced exposure to shares recently. Volatility in emerging markets has further validated our stance, and we have been satisfied with our defensive position. Source: Russell Investments
European financial markets have faced significant downward pressure in recent weeks. But the domestic euro zone economy continues to improve, and boosts from a cheaper exchange rate, lower oil prices, aggressive monetary policy, and attractive relative valuations, provide the building blocks for our continued expectation of strong performance in this market over the next 12 months. We are closely monitoring the situation for potential opportunities in this market given the strong fundamentals.
Australia & New Zealand: A bumpy road to recovery with an end to the resources boom The overarching challenge for the Australian and New Zealand economies, and for their associated share markets, is an end to the resources boom. This can be seen in the plunging prices of bulk commodities, such as iron ore and coal (Australia) and of agricultural commodities such as milk and timber (New Zealand). However, economic growth rates in the order of 2.5% in these countries still compare favourably with growth in recovery-mode regions such as the Eurozone, Japan, and even the US. Weaker commodity prices are not all bad news – they are driving currency weakness, which is proving to help tourism and import-competing industries; and they are keeping inflation low, thereby giving the Reserve Banks of both countries scope to cut interest rates further, if required. The net yield on Australian shares now stands at 5.1%, which is twice that of interest-bearing alternatives such as term deposits. | 05
Clarity. Confidence. Security. Opportunity.
ASSET PROTECTION
Australia and New bumpy road you to have the WeZealand: work withAyou to ensure recovery with anappropriate end to theprotection resources boomfor all of your in place assets and to secure your financial future. The overarching challenge for the Australian and New Zealand economies, and for their associated share markets, is an end to the resources boom. This can be seen in the plunging prices of bulk commodities, such as iron ore and coal (Australia) and of agricultural commodities such as milk and timber (New Zealand). However, economic growth rates in the order of 2.5% in these countries still compare favourably with MONEY MANAGEMENT growth in recovery-mode regions such as the to a budget is a difficult Eurozone, Japan, Sticking and even the US. Weaker task. We commodity prices are bad news – they havenot thealladvice and tools youare need to get driving currency weakness, which on is proving toto help your budgeting track and stay on track. tourism and import-competing industries; and they are keeping inflation low, thereby giving the Reserve Banks of both countries scope to cut interest rates further, if required. The net yield on Australian shares now stands at 5.1%, which is twice that of interest-bearing alternatives such as term deposits.
What should you doSUCCESSION with your investments — & ESTATE PLANNING and what is Russell Investments doing?
Planning and preparing for the future, is essential, whatever eventuality Markets rise and fall, particularly over the short term.lies ahead. If you’re a long-term it’s you bestevery to avoid We’reinvestor, here to help step of the way. knee-jerk reactions at the risk of ‘locking in your losses’—because you don’t truly feel the pain of market declines until you sell investments at a low. Sometimes, short-term volatility provides good buying opportunities. As always, Russell Investments is continually monitoring its funds and seeks to help clients manage INSURANCE SERVICES risks through diversification. Our multi-asset team With exposure our help to you can have confidence in has deliberately reduced shares recently. Volatility in emerging markets has further validated your household, farm and business insurour stance, and weance have been Come satisfied with our policies claim time we are there defensive position. to support you in getting back on track.
WEALTH ACCUMULATION Your future is impacted by the saving and spending decisions you make today. Saving in the right structure at the right time is key and we will guide you in the right direction.
RETIREMENT PLANNING It is never too early or too late to get advice on your retirement. We are can guide you on the right decision for you in this area.
SUPERANNUATION & SMSF Superannuation decisions have a lasting impact on your retirement future. We can help you to understand and identify the right structure for your situation and goals.
ACCESS A BETTER TOMORROW Gain access to clarity, confidence, security and opportunity in all elements of your financial future and insurance protection by engaging with our team today.
Source: Russell Investments
P: (07) 4078 0900 | F: (07) 4078 0980 Level 2, Centrepoint Arcade, 8 Rankin Street | PO Box 1759, INNISFAIL QLD 4860 Email: client.service@clearwayadvice.com.au www.clearwayadvice.com.au Joredg Pty Ltd as trustee for the Jordan Hybrid Fixed Trust t/as ClearWay Advice and Financial Management. ABN 93 745 037 799. ClearWay Advice and Financial Management is a Corporate Authorised Representative No.473095 of Keystone Partnership Pty Ltd ABN 22 169 650 720, Australian Financial Services License (AFSL) No.466137. Authorised Representative of NAS Insurance Brokers ABN. 60 096 916 184 Australian Financial Services License (AFSL) No.233750.