TRADE SECRETS

February 2019 Edition

Happy New Year!

We trust you had a fantastic festive season and now that we are in early February you have had an excellent start to 2019.

In many ways, 2018 was an incredibly exhausting year.

It seemed a year of never-ending negative news relating to politics, geopolitical tensions, possible changes to taxation law, an intense spotlight on financial services and the superannuation system here in Australia and then to top it off, late in the year share markets around the world experienced significant volatility.

However, with a well-earned break we have spent considerable time in carefully identifying the most significant issues we anticipate for our clients in 2019, as follows:

Australian Federal election

Australia is due to go to the polls no later than November this year, and it would appear the disillusionment of Australian voters is at an all-time high. 2018 was a particularly bad year for Australian politics with yet another coup against a sitting prime minister (Turnbull), and a turbulent year peppered with political spite.

If there was any doubt in early 2018 as to the likely election result this year, the Wentworth by-election won by independent Kerryn Phelps pointed to a growing swing against the Liberal party. However, most significantly in late 2018, the Victorian state election exposed a collapse in the Liberal vote. Deep heartland Liberal seats fell as loyal Liberal voters switched to Labor.

In early 2019, it seems almost a foregone conclusion we will have a Labor government led by Bill Shorten. At this stage, the only questions of this election seem to revolve around the size of majority Labor will obtain and whether they will seize control of both the houses of parliament.

Franking Credit reform

The Labor Party is proposing a blanket ban on the refund of imputation (franking) credits in cash except for those who received a Centrelink Age, Disability or Carers Pension at the time of the policy announcement.

The implications of this proposed change have significant consequences for many, particularly those with SMSFs in the pension phase who are accustomed to getting a tax refund on completion of their tax return each year. In many instances, people rely on this refund of franking credits as it forms a critical part of their lifestyle income each year. As we have previously stated, we believe the proposal to ban franking credits is a terrible policy. This policy creates an unequal playing field for those that own shares, particularly SMSF investors.

Rather than protest against this policy reform, our thoughts have transitioned to the likely impact this will have on portfolios and pre-emptive changes to strategies which may need to be made.

We expect if this legislation is passed that Australian shares held for their high yield and fully franked dividends will become far less attractive. Examples include the Banks, Utilities, Energy, Building, and Private Health Insurance stocks.

Investments which will likely be seen as more favourable replacements will be Australian shares which do not carry franking including Health Care, Infrastructure and A-REIT stocks. Australian Small-Cap stocks may also become more appealing as the philosophy of predominantly investing for income using the franking system switches to investing for growth. However, the likely shift in capital markets will be the move away from investing in Australian shares with a greater emphasis on International shares.

It is important to note that should this tax policy be implemented it is expected that the change of legislation will not come into force until 1 July 2020 for FY20-21 onwards. Understanding the likely timing of policy implementation is critical as we need to be careful not to make changes too quickly to try to negate this proposed tax policy. It would appear there is a solid chance that many of our large “blue chip” Australian companies will endeavour to clear out their franking credits via special dividends and buybacks in the next 12-24 months. The recent BHP buyback and special dividend is a case in point. Australian Foundation Investment Company (AFIC) has also announced a special dividend in early 2019. A pre- emptive move to combat the loss of franking credit refunds made too early could be costly for investors in the short term.

At this stage, we will await the election result, and if the Labor party seize complete control of both houses of the parliament and the policy is passed, we will look to make the necessary portfolio changes with a gradual and considered approach.

The Royal Commission into Financial Services

The Royal Commission into the misconduct of the Banking, Superannuation and Financial Services Industry commenced early last year, and it is fair to say that by the time the hearings had been completed, significant reputational damage had been deservedly inflicted on the banks, AMP and the Financial Planning industry.

From our perspective, the Royal Commission spotlight was predominantly focused on the quality of financial advice provided by Australia’s bank-owned financial planners and AMP. The Royal Commission uncovered a shocking rap sheet of misconduct – including fraud, deception and outright lying. As an example CBA was labelled the “gold medallist” in charging fees for financial advice it never delivered. How is that possible?

From afar, we (GFM) have long observed that at the heart of the issue with financial advice provided by the banks and AMP is their deeply conflicted financial advice culture. Executives and sales teams were overtly and covertly rewarded for churning financial products, and not penalised for risk and manipulation. Customers interests were subordinated as the financial planners of these institutions were paid for “selling” their products, often not understanding the true nature of what was being sold to the client. It is shameful and should never have been allowed to happen.

The final report and findings of the Royal Commission were delivered on Monday, February 4, and while we welcome all of the recommendations of the report, we are a little disappointed that the final report did not ban vertical integration. Vertical integration has been rife in the industry with the banks and some financial advisers wearing the many different hats of being a product manufacturer, administrator, investment adviser and financial planner. We believe that structural separation of these operators is required.

That said, we welcome the banning of grandfathered commissions and the move to eventually removing any commission on insurance products. We also welcome that Financial Planners will be required to disclose if they are not independent and must annually renew ongoing fee arrangements to prevent obtaining fees for no service.

Fortunately, as all of our clients know, GFM is a privately owned financial planning and accounting practice. As we have no association or affiliation with any financial institution, we are encouraged by the findings of the Royal Commission with the banning of commissions and the lifting of adviser standards. Importantly, GFM is not a product manufacturer pushing the barrow of our product. Our objective has always been to conduct our business with transparency and to put the client first. Finally, it would appear, the industry is uniting to ensure these types of values become consistent in the industry.

The Productivity Commission into Superannuation

The independent (but government-funded) Productivity Commission delivered its draft findings on the entire superannuation industry in May 2018 and its conclusion at the start of this year.

The Productivity Commission found that the current super system has “structural flaws… harming a significant number of members, and regressively so.” It further added that “fixing these structural problems could lead to a significant increase in retirement savings.” The fundamental problems the report highlighted were the proliferation of multiple accounts and poorly performing funds on offer across the sector.

The Commission:

• Has recommended all APRA-regulated superannuation funds be required to carry out an annual outcome test across their portfolios.
• Stuck with the proposal to make insurance through superannuation opt-in for people under the age of 25. Insurance would end on accounts where no contributions have been made for at least 13 months, with the commission finding that unrequired insurance was effectively eating away the balances of these accounts.
• The commission has added in its final report that it recommends trailing commissions for financial advisers in the superannuation sector to be banned as soon as practicable.
• Has also suggested an independent inquiry into the total retirement income system, in a sign the commission wants whichever party wins this year’s election to go even further.

The Productivity Commission was less focused on SMSFs, although it emphasised that the size of an SMSF matters. The Productivity Commissions found that SMSFs with less than $1 million in assets perform “significantly worse” than other funds due to investment returns being eroded by the costs of running the fund and has recommended a minimum SMSF account balance of $500,000 for new SMSFs set up.

Having extensive dealings in SMSFs for nearly two decades, we do not agree with an imposed $500,000 minimum to set up a new SMSF. We feel around $300,000 is the more appropriate minimum to set up a new SMSF and still protect superannuation members.

What has become apparent to us over the last few years is that many smaller SMSFs have been set up by individuals who have overconfidence in their ability to make better decisions but little investment experience to do so. These self-directed investors usually chronically underperform through poor portfolio construction, lack of diversification, speculation and far too heavy a level of trading.

Investment markets

Sentiment in the share market turned negative towards the end of 2018 with both the Australian and global share markets experiencing their most substantial falls since February 2016. The significant reasons investor sentiment turned negative included:

• Increasing concerns about global growth with weaker economic indicators recently coming out of China and Europe are growing fears that global activity is slowing
• Rising U.S. interest rates and the fear the US Federal Reserve would overtighten (lift US interest rates too high)
• Concerns that the US-China trade war is likely to become prolonged and nasty
• Cooling sentiment around the digital giants or FAANGs (Facebook, Apple, Amazon, Netflix and Google) with recent earnings updates from (Google parent-company) Alphabet, Amazon and notably Apple disappointing the market

The calendar year 2018 reminded us that geopolitics and Government policy remain a significant driver of markets and economic conditions, but we suspect there has been an overreaction to these factors in the December quarter. Investors seemingly continue to find it easy to fear the worst still bearing the scars of the GFC (which was now ten years ago) although current global economic conditions bear no resemblance to the GFC.

When looking into 2019, it appears as though global growth is likely to weaken a bit further before stabilising. The most significant risk to the downside in global growth is China. A continued slowing in China would be a major concern for global growth and commodity prices. Domestically, the most significant fears are currently focused on the price falls in the Sydney and Melbourne residential property markets, where declines of somewhere between -5% to 10% have occurred.

On the flip side, global inflation is likely to remain benign helped by the 2018 growth slowdown and fall in energy costs. Valuations are now improved, and corporate profits are solid. Provided global growth doesn’t decline sharply, 2019 should be a healthy year for investors.

June has kindly written the article below on their family, working life, retirement and their experiences as clients of GFM Wealth Advisory since 1976. We much appreciate June’s contribution to Trade Secrets.

From our first meetings with GFM Wealth Advisory’s founder, Tony Gilham, in the 1970s there were indications that the business would be sure to flourish. Back then, discussions primarily centred around the general household and personal life insurance, but always concluded with a bonus awareness of any well-researched financial trends and pointers Tony considered worthy of sharing. This remains gratifyingly characteristic of the client-oriented team members of GFM to this day.

I was married at 20, while still at Monash University on a government Studentship, completing a B.A. and Dip. Ed. (Modern European Languages and Linguistics), I subsequently became a French, English and History teacher – a challenging vocation for an inexperienced novice in the Victorian High School system.

My first husband, John, was completing a ‘sandwich course’, combining studies in Production and Mechanical Engineering at Swinburne Tech, with sponsored employment in a metal fasteners manufacturing company. Money was limited. On the ‘sniff of an oily rag’, there was little left over after paying the bills to maximise super or invest for future wealth.

Two beautiful children arrived, and I was happy to be a mum and ‘manager of domestic affairs’, while John excelled as an engineer, transitioned into the world of business ownership (including a home reno/second storey insert building company). This culminated in founding and co-partnering a successful Business Management Consultancy – a lucrative industry in which John’s talent and experience continue to be sought after today.

While our personal family life, career opportunities and interests evolved – so did the professional reputation of GFM as an increasingly esteemed financial advisory and superannuation authority. Most notable – and consistent, was the company’s diligent quest to remain abreast of trends.

Regrettably, John and I separated. Subsequently, in second marriages both John and I remain committed clients of GFM – with our respective personal financial portfolios overseen by Paul Nicol and James Malliaros.

Ian Sunderland and I came together in 2002, via the strategic manoeuverings of mutual friends, and have been married for four years. Learning from boyhood to value the importance of building a financial nest-egg for the future, Ian became a committed investor, enabling him to retire in his fifties from an illustrious medical career as a Hospital Administrator and later, as an Investigator on the Victorian Medical Board.

Ian has observed James’ and the GFM team’s sustained endeavours to devise strategies to oversee the growth of my wealth. He has enjoyed attending the relevant and illuminating seminars – especially related to retirement and updates about SMSF trends and requirements and has since entrusted part of his investment portfolio to James’ care. Resonating with the philosophies of like-minded professionals, Ian feels part of the nurturing GFM family.

In combination, we share the love of four grown children from our previous marriages and now delight in the grand-parenting of three cheeky young cherubs. Extensive travel, a (tragic) passion for the Melbourne Demons, occasional TV extras’ work, theatre and good friends enhance our leisure time.

In recommending GFM Wealth Advisory to others – especially those previously ‘stung’ or cynical about the motives of financial planners, floundering with self-management of their portfolios or wanting ‘guarantees’ of profitable investment yields, we remind them that there is no crystal ball.

However, with GFM Wealth Advisory’s savvy understanding of the need for individuals to take more initiative in managing their super investment strategies which led to them pioneering in SMSFs combined with a unique ethical and personal approach, over a forty-plus year association, we are indeed happy to endorse GFM!

After joining GFM in March 2001 and having been an extremely valued and loyal employee of GFM for nearly 18 years, our project manager Lorraine Miller has decided to retire on the 30th of June.

Lorraine has performed the critical role of Project Manager within GFM of which she has been instrumental for the implementation and maintenance of our primary financial planning software called Xplan. The successful implementation of Xplan and continued improvements Lorraine has driven with our use of this software has allowed the business to grow while continuing to provide a highly personalised and efficient service.

On reflection, we were fortunate to have Lorraine for the latter part of her working life. After migrating to Australia from the U.K in 1973, Lorraine immediately commenced full-time work with Wrest Point Casino in Tasmania as a PA to the Casino Manager. During the 80’s Lorraine moved to Darwin and took on a position with the Minister of Education/Lands and Housing. Lorraine then settled in Cairns when she started a family having two beautiful children Steven and Kristy. Lorraine’s family then spent time on the Gold Coast and then moved to Perth where Lorraine worked for Burswood Casino.

In 1994, Lorraine relocated to Melbourne to work for Crown where she took up the position as Scheduling Manager and helped create an automated IT rostering system for Table Games. Lorraine was involved in the opening of the two Crown Melbourne casinos, both the old and current casino, an enormous challenge in its own right.

As Lorraine’s children were of school age, she decided to remain in Melbourne but scale back her professional working career to focus on the kids.

In 2001, as a friend of Mai Davies, Lorraine was asked if she wanted to work on a part-time basis assisting with the general administrative requirements of the business. Very quickly, it became apparent Lorraine’s corporate skills were not being put to their fullest capabilities, so we asked Lorraine to increase her working hours and take on a project management role, predominantly managing our databases, in which she excelled.

Although Lorraine may not be overly well known to our clients as she is not client facing, she has been pivotal in the steady growth of our business by implementing procedures and efficiencies via the use of our Xplan software. Lorraine has also been a champion of technology, heavily involved in our document storage scanning technology which makes our task of being a mailing house significantly more efficient.

On a personal note, Lorraine has been a wonderful friend of all the staff and a favourite for her honesty, willingness to tell it how it is but also willingness to be a good listener and support others when required.

Lorraine has decided to retire to the Gold Coast, an area that she loves and has many friends. Lorraine will not become a stranger of GFM as we expect she will pop in when back in Melbourne.

We wish Lorraine all the very best in retirement and we will miss her.

Kerry joined the team at GFM Gruchy Accounting in July 2018 as our SMSF Manager.

Before July 2018 and while completing her double degree in Arts and Commerce at Deakin University Kerry worked for a small accounting firm providing client services to individuals, companies, trusts and SMSFs. Before that practice merged with a larger one, Kerry had been admitted as a Partner within the firm. This gave Kerry the opportunity to explore and specialise in areas which interested her on a professional level and while completing a Graduate Diploma in Tax Law at the University of Melbourne she focused her attention on SMSFs.

Kerry’s move to GFM Gruchy Accounting was prompted by a desire to broaden her horizons, and she was attracted by the positive culture at GFM and the personal approach the practice takes to servicing its accounting and wealth advisory clients. In her role, Kerry enjoys the challenges of client contact, research, strategy building and continued professional development.

With both daughters recently completing their secondary education, Kerry is looking forward to taking the opportunity to return to her love of travel. Her first solo trip is being planned for Italy to visit the historic sites of Rome, and Denmark and Sweden to visit friends and family.

While at home, Kerry enjoys gardening and is busy with over a dozen fruit trees, mainly citrus and stone fruits, to take care of.

As an SMSF firm, we take a great deal of interest in research that is published by the SMSF Association, the ATO and industry participants such as Class Super, a leading provider of administration software for SMSFs. One of our main areas of interest is the choice of investments by Trustees.

ATO statistics show that most SMSFs have poorly diversified portfolios with significant exposures to just three asset classes. Further ATO data reveals that the average number of holdings in an SMSF is 18. Research by the SMSF Association found that 47% of SMSFs have more than half of their portfolio invested in a single asset class, usually shares or property. Most of those surveyed believed they could achieve diversification by buying a range of shares.

The most comprehensive source of information on SMSF investments is the Class SMSF Benchmark Report. The Report is a statistical analysis of the 160,000+ SMSF administered on Class Super, representing an estimated 27% of SMSFs in Australia. It provides data about what SMSFs are investing in and other metrics.

How are SMSFs invested?

It is understandable that SMSF Trustees tend to favour investments they’re familiar with. Australian Shares represent 36.3% of assets in the Class Benchmark Report, and 65% of SMSFs have exposure to Australian shares.

The chart below shows the top 20 Australian shares owned by SMSFs.

For example, 47% of SMSFs in the report that own Australian shares have an investment in Telstra, which implies that roughly 30% of SMSFs own at least one share in Telstra. Telstra also represents around 2.8% of the exposure to Australian shares for SMSF investors.

What would a stylised portfolio of the largest direct Australian share exposures look like?

It is evident that there would be many SMSFs that exclusively own Australian shares based on the statistics detailed earlier.

It is difficult to ascertain how SMSFs invested this way have collectively performed due to the wide range of direct Australian shares, as the large 20 holdings represent only 46.7% of the total exposure, meaning those outside the top 20 represent more than 50%.

A simplistic way to establish a proxy for how a typical SMSF direct Australian share investor has performed would be to construct a portfolio of the largest holdings in proportionate to how they are currently owned in the top 20. For example, the Commonwealth Bank represents 6.2% of the exposure to Australian shares, which equates to approximately 13.3% of the top 20 (6.2% ÷ 46.7%).

The chart below shows the sector exposure of the largest 17 Australian shares held by SMSFs based on this. These 17 investments represent 45.9% of the total exposure to Australian shares. South32, Cybg PLC and AMP have been excluded, due to their relatively small exposures and short tenure concerning South 32 and Cybg PLC. It is interesting, but merely coincidental, that when a cash account is added in, the total number of investments held in this stylised portfolio would be 18, which, as noted earlier, is the average number of holdings for an SMSF as per the ATO data.

There is a considerable overexposure to Financials at the expense of every other sector, bar Health Care and Communication Services. Diversification within an asset class is just as important as being diversified across different asset classes.

How has a stylised portfolio of the largest direct Australian share exposures performed?

The chart below details how the stylised portfolio has performed since the 1st of March 2013 to the end of 2018 against the S&P/ASX 200 TR Index, a period of five years and ten months. A buy and hold strategy has been assumed and dividends, where received, have been reinvested. Franking credits are not included in either of the calculations:

Over this period, the stylised portfolio has produced a return of 5.12% p.a. compared to 6.32% p.a. from the S&P/ASX 200 TR Index, underperforming by 1.20% p.a. The stylised portfolio has also taken on more approximately 10% more risk than the Index as measured by standard deviation (12.3% versus 11.1%), which intuitively makes sense due to the concentrated nature of the portfolio. The maximum drawdown over the time horizon (from the start of April 2015 to the end of February 2016), was 21%. Conversely, the worst drawdown of the Index was 14%.

How has the stylised portfolio performed against a diversified benchmark?

It concerns that only 31% of SMSFs have exposure to managed funds and 20% to Exchanged Traded Funds (ETFs), investment types that can potentially be used to diversify portfolios. Furthermore, managed funds represent only 12% of SMSF assets in the Class Benchmark Report while ETFs represent 3%.

The Australian sharemarket makes up less than 2% of the world’s total by market capitalisation. As such, limiting the pool of investments to Australia restricts the investment potential and diversification benefits offered by the global market.

The notion of not having all your “eggs in one basket” should be a cornerstone for any long-term investment portfolio. If your investment “eggs” are spread across a wide variety of asset “baskets”, then the negative performance of some investments will tend to be offset by the positive performance of others.

The chart below compares the performance of the stylised Australian share portfolio and the S&P/ASX 200 TR Index against that of the Morningstar Australia Multisector Aggressive Market Index. The Aggressive Market Index is a benchmark for diversified funds that have more than 80% exposure to growth asset classes such as shares and property, so is an appropriate comparison for the stylised SMSF portfolio. As at 30 June 2018, the Index had a 45% exposure to International Shares.

Over this period, the stylised portfolio has produced a return of 5.12% p.a., compared to 9.76% p.a. from the Morningstar Index, underperforming by 4.64% p.a. Again, the stylised portfolio has taken on additional risk (50% more, 12.3% versus 7.8%). The drawdown statistics are also alarming, with the maximum drawdown of the Morningstar Index being only 9%, compared to 21% for the stylised portfolio.

The sector tilts are more pronounced when compared to the Morningstar Index rather than the S&P/ASX 200 Index. Financials represent a more balanced 23% of the Morningstar Index, which is significantly lower than the stylised portfolio’s 51%. The stylised portfolio has no exposure to Technology. This sector represents 11% of the Morningstar Index.

In Summary:

It would appear as though the vast majority of SMSF Trustees remain self-directed and have made decisions that have impacted upon the performance of their portfolios. Unfortunately, a love of domestic banks and corporations such as Telstra has cost many SMSF trustees exposure to overseas assets, many of which have outperformed Australian assets.

Asset allocation decisions are involved and complicated. They require an understanding of a range of different matters. At GFM, we spend a great deal of time using the available tools we have to give us the edge when selecting investments and constructing portfolios.

This is where good advice can make a difference. While an SMSF is ultimately the responsibility of the Trustees to manage, they should be seeking the help of professionals to achieve more optimal investment outcomes.

The housing cycle and house prices continue to be of enormous interest to many Australians.

CoreLogic is the largest provider of property analytics in Australia, and according to their data to the end of December 2018, house prices in Australia’s capital cities are down almost 7% on average from their peak in September 2017. Sydney is down 11% from its peak in July 2017 and Melbourne is down 7% from its peak in November 2017.

Based on CoreLogic’s median dwelling price data, this means a potential homebuyer, on average, could purchase a home for approximately $43,500 less than the market peak in September 2017. In Sydney, this equates to a purchase $101,000 less than the peak in July 2017 and $76,000 less from Melbourne’s peak in November 2017.

Many property analysists believe Australian house prices could decline a further 5% – 15% in major capital cities during 2019 which, if occurring, would make Australian housing the worst performer out of 24 countries for the second consecutive year.

Although nobody can know for sure what is likely to happen to the property market over the next 12 months, home lending activity is expected to be the most significant influence on house prices in 2019. The graph below shows just how close the relationship between home lending and house prices is, with changes in home lending often preceding movement in house prices by around six months.

The decline in Australian housing prices during 2018 is thought to have been the result of four major factors. These are the flow of credit (i.e. home lending), auction clearance rates, foreign residential demand and house price expectations.

The flow of credit (i.e. home lending)

Recent data around home lending shows a downward shift in lending to owner-occupiers, which is the reason for an acceleration in the decline of credit. While lending standards have certainly tightened over recent months, data shows the demand for credit is having a more significant impact on lending than the tightening standards, with the number of loans falling as well as the value of the loans.

Auction clearance rates

Generally, there is a strong relationship between auction clearance rates and annual changes in house prices. Auction clearance rates around Australia have been trending down since the beginning of 2018, and more recently the clearance rate has dipped to 40%-45%, which has resulted in falling house prices.

In Sydney and Melbourne, the annual change in dwelling prices generally tends to be negative when the auction clearance rate is below 55%. With auctions a more popular means of selling in both Sydney and Melbourne, the latest news implies that dwelling prices in these capital cities will most likely weaken further in the short term.

Foreign residential demand

Since early 2012 demand for Australian property, particularly in Sydney and Melbourne, has been boosted by foreign buyers. However, over the past two years, foreign investment has declined, as a result of the increase in state government stamp duties levied at foreign investors and tighter capital controls out of China.

House price expectations

With falling auction clearance rates and negative market sentiment, there seems to be a mismatch between the expectations of both property buyers and sellers. Buyers keen to purchase for investment seem to have concerns about the capital growth prospects for house prices, leading to a reluctance to borrow to invest. This mentality, as well as the ongoing uncertainty around the proposed tax changes by the Labor Party if they win government (limits to negative gearing and a reduction in capital gains tax concessions) has contributed to new investor lending falling dramatically.

While evidence suggests that house prices will continue to decline in the short term, there will be significant variations between capital cities and suburbs within the same cities. However, the broader trend appears to be one of continuing mild price declines.

Significant issues to observe during 2019 that may influence home lending include:

• Outcomes from the Financial Services Royal Commission, particularly any consequences it may have on lending standards within the banking sector
• How prospective borrowers respond to the stricter lending environment
• Potential further interest rate cuts by the RBA in response to the downturn in dwelling prices which, if it persists, will impact consumer spending and the broader Australian economy

We feel it is vital to educate and keep our SMSF clients and Trustees informed of their role and responsibilities of being a trustee through the SMSF Smart Newsletter.

SMSF Smart is designed to assist existing SMSF trustees with their understanding of an SMSF. In August 2018, we commenced an eight-part education series that provides a knowledge refresh for longer-standing clients. For newer SMSF trustees, this series will assist to further build their knowledge base of the mechanics of your SMSF.

SMSF Trustees of GFM are sent the SMSF Smart Newsletter, and we encourage them to read this information. For those that don’t receive the SMSF Smart and interested in this information, all editions are available on our website, and we also post on our GFM Wealth LinkedIn Page. Please follow us for the latest updates. Links below.

The topics covered so far include:

• Edition #1 – An Introduction to SMSFs
• Edition #2 – Being A Trustee
• Edition #3 – The Trust Deed
• Edition #4 – Contributing to Superannuation
• Edition #5 – Withdrawing Money from Superannuation

For the SMSF Smart Newsletters, click here.

Please follow us on LinkedIn for the latest updates:

We will be holding our first seminar for the year on the topic “Our Preferred Investments for 2019 and Why”. This will be an excellent seminar for anyone interested in understanding how GFM goes about selecting investments and constructing investment portfolios. Many have asked us to consider running a seminar where we provide an in-depth insight into our research process and investment selection to better understand the investments we recommend.

The topics that we will cover include:

• The GFM research process and investment committee
• With so many available investments, how do we filter down which companies or investments to research?
• What available tools do we (GFM) have to give us the edge when selecting investments and to construct portfolios?
• Why reliable yield is essential to investment returns
• Constructing lower risk investment portfolios
• A deep dive into some of our preferred investments for 2019.

Invitations were sent to clients in January. If you would like to attend and have not yet reserved your place, please call Mai on 9809 1221 or email mai@gfmwealth.com.au



UPCOMING CENTRELINK SEMINAR NOON – WEDNESDAY 10TH APRIL 2019:

SAVE THE DATE

By Mai Davies

It has been two years since we held our last Centrelink Seminar. This is a popular and important topic for those receiving Centrelink Age Pension benefits or wondering about eligibility for themselves or a family member, and those potentially entitled to a health care card.

Centrelink planning is a complex and essential part of the financial planning process, and not understanding the system can lead to sub-optimal results. Unfortunately, we see many instances where eligibility for benefits are missed due to bad advice or a poor understanding of the system.

Our next Centrelink seminar will be held at noon on Wednesday 10th April 2019 at Leonda by the Yarra. If you are interested in attending, please save the date.

Invitations will be sent in early March. You are welcome to bring a friend or family member.



CHRISTMAS CARDS & CHARITABLE DONATIONS

By Mai Davies

For 20 years, instead of sending Christmas Cards, we have donated a comparable amount to charities. Our clients well support this initiative.

This year we had four nominated charities and have donated to each of them.

The 2018 money has been donated to the following charities as nominated by our clients:

• Australian Wildlife Conservancy
• Wheelchairs for Kids
• School of St Jude
• Greendale Wildlife Shelter

Disclaimer: This document is not an offer or invitation to any person to buy or sell any interest in or deposit funds with any institution. The information here is of a generic nature, and does not take into account your investment objectives or financial needs. No person should act upon this information without firstly seeking competent professional advice specifically relating to their own particular situations.

Copyright: © This publication is copyright. Subject to the conditions prescribed under the Copyright Act, no part of it may, in any form, or by any means (electronic, mechanical, microcopying, photocopying, recording or otherwise) be reproduced or transmitted without permission. Enquiries should be addressed to GFM Wealth Advisory.