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Lonsec Market Commentary – December 2017

Lonsec Market Commentary – December 2017 

The S&P/ASX 200 Accumulation Index rose 1.8% in December, with the energy and materials sectors rallying in the final month of 2017. In the US, the S&P 500 fell -1.6% in AUD terms but pushed to record highs through the month in both AUD and USD terms. The Dow Jones Index also rallied through December, breaking through 25,000 points in early January.

While there was no monetary policy meeting of the RBA in January, December’s minutes revealed the board’s continued ambivalence towards domestic conditions. Wages remain stable at a low rate, despite the 3.3% increase in awards and minimum wages in the September quarter.

The RBA has maintained the cash rate at 1.50% for well over a year, and appears content to wait and see how high other central banks go and how quickly. Although the September quarter GDP data showed growth of only
2.8% over the year with consumption spending flat, a range of other releases have provided some grounds for optimism.

Lonsec Market Commentary – December 2017

(Lonsec December 2017, Issue Date: 11-01-2018)

LIFE Quarterly – December 2017

LIFE Quarterly – December 2017

In this month’s edition of Prepare for Life, we look at using super to buy your first home. In its 2017 Federal Budget, the government announced its intention to introduce legislation that would allow first home buyers to access part of their super to purchase a home. The proposal is referred to as the First Home Super Saver (FHSS) scheme.

Contributions that may be withdrawn are limited to a maximum of $15,000 per annum, capped at a total of $30,000 plus associated earnings. This limit is ‘per person’. A couple may, therefore, have access to up to a combined $60,000 plus earnings.Withdrawals under the FHSS scheme cannot be made before 1 July 2018.

Is the FHSS scheme a good thing and are you elligible?

Quarterly Newsletter – December 2017

Lonsec Market Commentary – November 2017

Lonsec Market Commentary – November 2017 

The Australian share market looks set to finish 2017 on a positive note, with the S&P/ASX Accumulation Index gaining 1.64% in November, albeit under-performing global stocks.

In a continuation of October’s trends, the leading sectors were again Information Technology (+4.48%) and Energy (+4.15%), which has recovered from a mid-year slump to resume its rally. Similarly, Telecommunications (-1.60%) was at the bottom of the heap and the only negative sector.

The Australian economy grew at just below its trend growth rate in the September quarter, supported by a boost in consumer spending. While advanced economies including the US, Europe, Canada and the UK have begun the task of tightening policy, monetary conditions remain expansionary.

The RBA has maintained the cash rate at 1.50% for well over a year, and appears content to wait and see how high other banks go and how quickly.

In the meantime, the RBA’s growth forecast of 3.0% over 2018 is realistic, but may be a touch on the optimistic side. While there has been continued improvement in business conditions and the employment situation, low wages growth remains a sticking point.

Lonsec Market Commentary – November 2017

(Lonsec November 2017, Issue Date: 11-12-2017)

Lonsec Market Commentary – October 2017

Lonsec Market Commentary – October 2017 

The Australian market followed the world higher in October, after a disappointing run of negative and flat returns.

At its November meeting the RBA left the cash rate on hold at 1.50%, noting that monetary policy in other advanced economies is becoming less accommodative.

The ASX 200 Accumulation Index returned 4.01%, led by the Information Technology (+8.75%) and Energy (+6.50%) sectors.

Santos boosted Energy sector gains, beating expectations on production, revenue and costs, driven in large part by its Gladstone LNG operations. But it was Blackmores (+35.36%) that topped the leaderboard in October, posting a 28% rise in direct China sales, with the Chinese government having affirmed its commitment to the pilot of cross border e-commerce.

Lonsec Market Commentary – October 2017

(Lonsec October 2017, Issue Date: 10-11-2017)

LIFE Quarterly – September 2017

LIFE Quarterly – September 2017

In this month’s edition of Prepare for Life, we look at some of the key changes to Transition to Retirement (TTR), which apply from 1 July 2017. The general concessional (before-tax) contributions cap has been lowered from $35,000 to $25,000 and the fund earnings on assets financing a Transition to Retirement pension will no longer be exempt from earnings tax. The implication of these changes is very much dependent on your individual objectives, needs and financial goals.

The Great Australian Dream is a belief that, home-ownership can lead to a better life and is an expression of success and security. With Australian housing prices placing pressure on individuals due to affordability, it is important to assess your situation and discover what is an appropriate option as ‘bigger is not always better’.

What is your view of the use of facial analytics to determine ones biological ageing and individualised lifespan for the use by insurance underwriters?

Quarterly Newsletter – September 2017

Lonsec Market Commentary – September 2017

Lonsec Market Commentary – September 2017 

The Australian market had a fifth month of negative or flat growth in September, with the ASX 200 Accumulation Index returning -0.02% as commodity sectors pulled back.

At its October meeting the RBA left the cash rate on hold at 1.50%.

The unemployment rate remained steady at 5.6%. The participation rate remains high in historic terms, moving higher in trend terms throughout 2017 and sitting comfortably above 65%.

‘Globally, the MSCI World Index gained 0.68% in AUD terms, supported by US and European shares’.

Australian consumers still struggling to stay positive. ‘The Westpac Melbourne Institute Index of Consumer Sentiment rose 2.5% from 95.5 in August to 97.9, but pessimists still outnumber optimists’. There are concerns around interest rates, deteriorating housing affordability and rising energy prices these are impacting the level of confidence, offsetting the improved outlook for employment.

Lonsec Market Commentary – September 2017

(Lonsec September 2017, Issue Date: 11-10-2017)

We have had a number of enquiries about Loans v Gifts to Children

Loans v Gifts to Children

We have had a number of enquiries about Loans v Gifts to Children

In many families, there is a movement of money from parents to children. How do you want to record the transaction? Should it be a gift or should it be a loan?

Giving your children money. Loans vs Gifts

What is the best way to provide children with financial assistance. Many parents think they are being kind when they gift money to children. However, such is not always the best course of action. If the child divorces or goes bankrupt the money is lost.

But I love my children

There is nothing wrong with helping your children financially. However, it is important to protect the monies in case the following occurs:

  1. they divorce
  2. go bankrupt
  3. suffer from drugs
  4. suffer a mental condition
  5. stop loving you and there are family disputes
  6. you run out of money yourself, in your old age or retirement

Therefore, to protect your loan a law firm can prepare loan agreements that comply with the Family Court. Homemade loan agreements may not work as they carry less weight with the Family Court and Bankruptcy Court. Why take the risk, discuss with a lawyer your situation?

Documenting loans to children

Never ‘give’ your children money. Always ‘lend’ them money ‘payable on demand’. Get it back if something goes wrong.

A loan is not always for property and the grandchildren’s school fees. You can also fund the children’s Superannuation fund, discuss this with a lawyer.

At different times, it is common to benefit one child over another with money. If you benefit one child over another it can be  adjusted automatically at the time of your death. Say you lend one child $500,000 and the other child $300,000 that can be adjusted after your death. This will allow everything to remain fair.

When making loans to children:

  1. talk with all your children together about the loans
  2. never gift children money – only loan them money (this protects both you and them)
  3. don’t rely on home-made loans or IOUs – we can assist you in having a legally prepared Loan Agreement through a law firm.

Loan Accountants & Unpaid Present Entitlements

In a Family Trust the parents will often distribute income to the children to take advantage of lower rates of tax. The children never see the money. Instead, they loan it back to the Family Trust. This is called an Unpaid Present Entitement (UPE). Sadly, at any time the child can ask for the money. Deeds of Debt Forgiveness can be prepared.

It may be wise to speak to a lawyer about the following:

  1. Loans to children – get 100% of the money back if the child divorces, overrides the Family Court.
  2. Loans to high risk spouse – ‘safe harbour’ mum lends money to an ‘at risk’ husband who is a professional or business owner.
  3. Deed of Debt forgiveness – children forgive debt that the Family Trust owes them

(Legal Consolidated Barristers & Solicitors, 2017)


LIFE Quarterly – June 2017

LIFE Quarterly – June 2017

In this month’s edition of Prepare for Life, we recap on some of the key topics of this year’s Federal Budget, touching on bills that will see changes to the economy, housing affordability, tax, superannuation, education, aged care, social security and health.

It seems, in this day and age, with new technologies surrounding how we pay for things, we have lost accountability for our spending and sometimes living beyond our means.   We look back at the old days, before the plastic card and smart phone, to a time when we were better able to manage our monies.  If you would like to complete a new budget to help you better manage your funds, we will be happy to send this to you.

1 July is around the corner where we will see new legislation affecting contribution caps to superannuation, further limiting those of you who are building your retirement savings.  If you have any questions about how you can best utilise your time to contribute before June 30, do not hesitate to give me a call for a friendly chat.

As always, if there is anything in this issue that you’d like to discuss in further detail please do not hesitate to contact us

Life Financial Planners 2017 Q2

Federal Budget 2017

Federal Budget 2017 

The Australian Government is creating incentives to improve housing outcomes, including the proposed legislation of:

‘Helping first home buyers to save a deposit through voluntary contributions into superannuation’. This is still being considered

For further information about the budget visit

In addition, if you would like to discuss any of the Federal Budget topics feel free to contact Marijana Ravlich on (08) 9322 1882.

IFA Excellence Awards 2016

IFA Excellence Awards 2016

The IFA Excellence Awards are the only industry awards dedicated exclusively to boutique and non-aligned financial advisers.

LIFE Financial Planners is proud to announce that we have been nominated as finalists for the third year in a row in the category of Best Client Servicing – Company. As an independently-owned financial advice company that pride ourselves on providing the best personal advice and customer service we are extremely honoured to be finalists in this category again.


IFA 2016  IFA Excellence Awards 2016 IFA 2016