COLUMNIST ARTICLES

SMSF Trustees – Should You Purchase Collectables?

ACCOUNTANT

By Warren Strybosch

SMSFs trustees need to be aware of the various compliance risks surrounding collectables, as the asset class requires continued consideration and how it can impact a SMSF.

With low interest rates, SMSF trustees are looking for alternative investments to place their funds into which has led to an increase in collectables within SMSFs. However, care needs to be given to the restrictive rules surrounding the holding of collectables in a SMSF.

Collectables and personal-use assets include artwork, jewellery, antiques, artefacts, coins, stamps, books, memorabilia, wine, cars, bikes, recreational boats and club memberships. Bullion is not included as its value is based on intrinsic weight and purity.

One of the restrictions with collectables, is that they cannot be leased or used by a related party or stored in a private residence of a related party. The SMSF can only lease them to unrelated parties e.g., to an art gallery, and it must be possible to show the transaction was completely at arm’s length.

Even with vintage cars held with an SMSF, the related party cannot drive it for any reason, even if it is for maintenance purposes or to get restoration work done on the vehicle.

When it comes to storage of these type of assets, they must be remote; not located in a trustee’s private residence – that includes the land they own. As such, artwork and vehicles, cannot he displayed in a trustee’s home or stored in a purpose built shed on their property. Records must be kept by trustees showing how the decision was made to store the items.

Lastly, the items must be insured by the SMSF and not in a trustee’s individual name or under a business entity they might own. If the SMSF cannot insure the collectibles appropriately so that the asset is secure for members in the future, then the fund must dispose of that asset. Whilst collectibles are a different asset class to hold within the SMSF and may seem ‘sexy’ when telling friends and other’s you own such an asset, given the limited ability to use or display such an asset, trustees need to consider whether or not holding such an asset is worth all the hassle.

At Find Accountant, we provide SMSF tax advice. Our senior accountant is also an award-winning financial advisor. If you require SMSF advice or are considering whether or not to wind up your SMSF, then speak to Warren Strybosch at Find Accountant Pty Ltd.

Warren Strybosch

You can call them on 1300 88 38 30 or email info@findaccountant.com.au www.findaccountant.com.au

WARREN STRYBOSCH

Find Group

The founder of the Find Group of companies draws on his diverse background, which ranges form teaching, to serving in the army, to taxation and accounting, to coach and help clients live their best financial lives. A multi-award winner, Warren’s innovative approach in business means he was a champion of virtual financial advice long before the pandemic. Warren established the Find Foundation, which owns and operates across Victoria.

TOP 50 MOST INFLUENTIAL FINANCIAL ADVISER IN AUSTRALIA

What investments should I hold in my portfolio?

FINANCIAL PLANNING

By Warren Strybosch

Whether you own a SMSF, are an accumulator, or a retiree, it is a golden rule of investing to diversify your super/ pension assets. In other words, not to have all your eggs in one basket.

In the past, managed funds have been a very popular investment choice. There were single sector managers, index managers, growth managers, multimanagers, and so on. The list of fund managers has grown exponentially over the last 20 years as technology evolves. Whilst fund managers have been the main stay of investment for many years, Exchange Traded Funds (ETFs) and Listed Investment Companies (LICs) have grown in popularity. Whilst technology has made it easier to choose different types of investments, it is becoming unclear as to which type of investment should be chosen. For many, there is the fear they might miss out or be placed in the wrong type of investment. This is especially so for those who are moving into their retirement phase of their lives. They do not want to risk their hard-earned savings that has taken them over 30 years to accumulate being lost through poor investment choices.

So, what is the ‘right’ type of investment one should consider investing in?

To help you choose the right investments we have summarised the main technical points related to some of the key investments out there in the marketplace:

What are LICs and ETFs?

Listed investment companies (LICs) are the great grandfathers of the listed managed investment scene, with a history going back almost 100 years. LICs provide exposure to a basket of underlying securities, often shares, although increasingly there are funds providing exposure to other asset classes, such as fixed income.

Exchange Traded Funds (ETFs) invest in a basket of shares or other investments that generally track the performance of a market index such as the ASX200 Index or the US S&P500.

You can buy an ETF to give you exposure to an entire market, region such as emerging markets, market sector such as global health or technology stocks, or theme such as sustainability. They also offer investments in a wider range of asset classes, from local and international shares to fixed interest, commodities, currency, property, infrastructure and cash.

The most popular ETFs in 2020–21 were Australian and global equities, as sharemarkets rebounded strongly from the pandemic lows. The best-performing ETF were technology sectors and themes such as battery technology, robotics and AI and global cybersecurity.

Similarities:

1. ETFs and LICs are like managed funds in that are professionally managed but tend to have lower fees than most managed funds. 2. Like managed funds, ETFs and LICs, have your money pooled with other investors to create a large portfolio of assets. 3. All three allow you to gain exposure to other sectors and regions that traditional Australian shares cannot provide which in turn achieves greater diversification.

Differences?

1. ETFs and LICs can be bought and sold on the Australian Stock

Exchange (ASX) whereas most managed funds are bought directly via the fund manager themselves or through a financial advisor. However some fund managers are available via the ASX mFund Service but do not operate like shares. Where the price of shares, ETFs and LICs are live on the ASX, the un-listed managed funds, display the price at the close of trading each day. 2. Most ETFs simply passively track the index however there are some new

ETF players in the marketplace who claim to be active managers; utilising derivates, options and short-selling to try to outperform the index.Before choosing a fund, it’s important to understand how they work. Also look at their underlying investments, their performance and trading history, their tax status and distribution policy as well as their fees and cost. 3. LICs are companies traded on the ASX where the share price is determined by the market. They are closed-end structures which allow the fund manager to concentrate on investment selection without

having to factor in the possibility of money coming into or leaving the company. ETFs are open-ended which means units in the fund can be created or redeemed according to investor demand without the share price being affected. LICs are closed-ended investments, which mean they have a fixed number of shares on issue 3. LICs use a company structure whilst

ETFs, similar to managed funds, use a unit trust structure. 4. LICs pay company tax on their income and realised capital gains whereas ETFs are not required to pay tax on their income or realised gains.

LICs may hold on to their profits or pay them out as a dividend to their investors whereas, ETFs pass on all tax obligations to the investor who pays tax at their marginal rate. Despite the different ways these investments are structure for tax purposes, investors to tend to pay a similar amount of tax once income has been paid out. 5. ETFs tend to the more affordable of the three when it comes to fees with managed funds, especially active managed funds that charge a performance fee, being the costliest of the three investment choices to hold on to.

This information is current as at November 2021. This article is intended to provide general information only and has been prepared without taking into account any particular person’s objectives, financial situation or needs (‘circumstances’). Before acting on such information, you should consider its appropriateness, taking into account your circumstances and obtain your own independent financial, legal or tax advice. You should read the relevant Product Disclosure Statement (PDS) before making any decision about a product. While all care has been taken to ensure the information is accurate and reliable, to the maximum extent the law permits, Alliance Wealth and its related bodies corporate, or each of their directors, officers, employees, contractors or agents, will not assume liability to any person for any error or omission in this material however caused, nor be responsible for any loss or damage suffered, sustained or incurred by any person who either does, or omits to do, anything in reliance on the information contained herein.

Warren Strybosch

You can call them on 1300 88 38 30 or email

Triple Jab out now – a boost to all Victorians

By Warren Strybosch

Bendigonians will be one of the first group of Victorians to be administered the third job in a hope to reduce COVID numbers.

The third jab will only be available to those who have already had the two first jabs at least six months earlier.

The booster dose of the Pfizer vaccine will be offered to all eligible adults, regardless of the vaccine type received for their first and second shots.

Those wanting to receive their booster shot must provide proof of their first two COVID-19 vaccinations before they will be able to get the booster shot. However, the proof must be via your mobile device displaying the certificate or a copy of the certificate supplied via Medicare. It won’t be enough to simply show the card that was written on by the nurse who gave you the first and second vaccination shots as there are reports that some people have obtained these cards and falsified, they have been vaccinated already. For anyone caught with falsified documents we believe the fines are very hefty.

The booster dose will be offered to people over the age of 18 and who had their second COVID-19 vaccination over six months ago.

It is also believed that the health minister has stated that all state-run aged care residents and staff will be required to take the booster shot in the coming months.

It is reported that a Pfizer booster shot five months after a second dose reduces a person's risk of hospitalisation with the coronavirus by 93 per cent.

This is yet to be proven given we are all still living through the largest clinic trial on earth.

Victorian Nurses Can Be Fired But A Court Challenge Related To The Vaccine Mandate Is Likely Heading To Court

Many nurses are being forced to leave their jobs because they are either refusing to take the Covid-19 vaccination or refusing to disclose their vaccination status. A group of nurses from Monash Health, tried to stop unsuccessfully stop Monash Health, one of Victoria’s largest public health service, from allowing them to be fired – the court injunction was thrown out by the federal court.

A directive from Victoria’s chief health officer under the Public Health Act makes it clear that health workers must be fully vaccinated, having received at least their first Covid-19 vaccine dose by 29 October, in order to work in a healthcare setting. They must provide evidence of vaccination to their employer. As such, Monash Health has been given the green light to terminate it’s nurses if they do not take the jab. Justice John Snaden said that Monash Health had no choice but to fire them.

“…the evidence that there is very much suggests that the course that has been plotted has been plotted because Monash Health has formed the view that under the public health directions by which it is bound, they’re not permitted to do anything else [other than terminate employment],” he said.

Chris O’Grady QC, representing Monash Health, said the employer had simply been following the chief health officer’s directions. “In light of the CHO directions it goes without saying that anyone working in the health sector is going to have difficulty working in that sector absent their willingness to either be vaccinated or disclose their vaccination status,” he said. The only hope for those nurses who have not been vaccinated is the pending court case regarding the vaccination mandate. Snaden said when the matter goes to trial, if the court finds the vaccine mandate was unlawful, then the nurses would likely have their employment reinstated and receive back pay.

Therefore, the court had no reason to block disciplinary action including Monash Health firing the nurses in the meantime, he said.

Monash Health has given undertakings not to take action against the relevant nurses until the matter was determined. In light of Snaden’s decision, Health was now free to terminate the staff.

More COVID information on Page 93

Should you merge your finances with your partner?

By Money and Life

(Financial Planning Association of Australia)

If you’re in a relationship, it can be tricky to work out when to start sharing income and expenses. Here are a few ways to successfully merge money as a couple.

The COVID-19 pandemic has changed many aspects of our daily lives, and romance is no exception. While lengthy separations have led some relationships to end, other couples are choosing to move in together more quickly than they might have expected.

If you’re planning on living together, you might be wondering whether to merge your finances. Combining money is a big step for any couple, and not something that has to be tackled all at once. There are several ways to share money as a couple, and you might like to take it in stages.

Before you merge your finances

It’s important to be honest, open and transparent about your financial situation and expectations upfront. Money can become a source of tension in relationships, often due to mismatched values, poor financial habits or financial infidelity.

Before merging your finances, set aside a time to talk about your current financial situation, including any debts or bad spending habits. Discuss your shared goals and vision for the future. Put a financial plan in place to help you get there. And work out which approach to sharing money will work best for both of you, so that you can set up your accounts to manage household expenses.

Also keep in mind that once you’ve been living together in a relationship for a period of time, you’re considered to have a spouse for legal and financial purposes. This can have implications for your tax returns, government rebates and benefits, and, in the event of a split, can affect how your assets are divided up.

Read more: Advice for couples at tax time

Ways to share money

If you’re planning on moving in together, you’ll need to work out how you’d like to pay for your household expenses. There are a few different approaches to combining money, and each has its pros and cons. Here are some ideas to help you get started:

Proportional method

In this approach, each member of the couple contributes to household expenses in line with what they earn. For example, if one partner earns $100,000 a year, which is 66 per cent of the household income, and the other earns $50,000, which is 33 per cent of the household income they would each contribute accordingly. That means, if the monthly bills come to $3000, then the higher earning partner pays $2000 (66 per cent), while the other partner pays $1000 (33 per cent).

Pros: In this scenario, both partners spend the same percentage of their income towards bills, expenses and entertainment, while keeping what’s left over for themselves individually. That means you can both enjoy a better lifestyle than you could if you kept your money separate. It also relieves the stress of trying to keep up with a higher earning partner, or ‘budget down’ to the level of the lower earning partner.

Cons: One possible drawback to this method is that the higher earning partner could start to feel resentful about contributing more, or you could get into disagreements about whether an expense should be joint, or personal.

Related: Show your finances some self love

Equal shares

In this system, expenses are split down the middle, regardless of who earns what. You keep the rest of your income to spend how you like. That means you’re also responsible for paying down debts you’ve racked up on your own – your finances are essentially separate. Cons: If there’s a big disparity in incomes, this can limit your lifestyle to that of the lower earning partner. It’s also not a realistic way to manage many of life’s major events, for example, if you want to buy a home you’ll need all of your borrowing power. Or, if one partner needs to take time off work to have children, you’ll need to reassess the arrangement.

Related: Is your lifestyle affecting your borrowing power?

Going all in

Another option is to combine all of your finances. Couples who use this method only have joint bank accounts and credit cards, shared loans and so on. Each partner’s income is deposited into a joint account, and all of your household and personal expenses are paid from a joint account.

Pros: Both partners have complete transparency over the household finances. It’s also simple to manage, as you don’t need to worry about splitting bills. Having an overview of your whole financial situation can also help with financial planning and money management.

Cons: This approach can cause friction if your values and spending behaviour aren’t aligned. One partner can become resentful of the other’s spending, or, disagree with individual purchases they want to make.

As you can see, there’s no right or wrong way for couples to share their money. The most important thing is to keep talking regularly about your finances, and review and alter your approach over time, as your needs change.

Pros: This is a great option for people who value their independence, especially in the early stages of a relationship. Neither partner feels like they are contributing too much,or being subsidised. For more advice on reaching your financial goals as a couple, why not speak to a financial planner?

Less Children To Suffer From Heart-Attacks When Taking Pfizer

By Warren Strybosch

Pfizer adds ingredient used to stabilize heart attack victims in vax for kids

Buried on Page 14 in the Pfizer paperwork submitted to the FDA for the Covid vaccine for children is the following:

Vaccine formulation

Authorization is being requested for a modified formulation of the Pfizer BioNTech COVID-19 Vaccine. Each dose of this formulation contains 10 μg of a nucleosidemodified messenger RNA (mRNA) encoding the viral spike (S) glycoprotein of SARSCoV-2 that is formulated in lipid particles and supplied as a frozen suspension in multiple dose vials.

To provide a vaccine with an improved stability profile, the Pfizer-BioNTech COVID-19 Vaccine for use in children 5-11 years of age uses tromethamine (Tris) buffer instead of the phosphate buffered saline (PBS) as used in the previous formulation and excludes sodium chloride and potassium chloride. The packaged vials for the new formulation are stored frozen at -90°C to – 60°C. The frozen vials may bethawed and stored at refrigerator at 2°C to 8°C for up to 10 weeks.

Tromethamine (Tris) is a blood acid reducer which is used to stabilize people with heart attacks.

Here are known side effects: Respiratory depression, local irritation, tissue inflammation, injection site infection, febrile response, chemical phlebitis, venospasm (vein spasms), hypervolemia, IV thrombosis, extravasation (with possible necrosis and sloughing of tissues), transient decreases in blood glucose concentrations, hypoglycemia, and hepatocellular necrosis with infusion via low-lying umbilical venous catheters.

AMA encourages doctor’s not to abide by their own Code of Conduct

By Warren Strybosch

The AMA Victoria president, Dr Roderick McRae, said those who do not believe Covid-19 is real or a threat should update their advanced care directives and inform their relatives that they do not wish to receive care in the public health system if diagnosed with the virus.

“Covid-deniers” and “anti-vaxxers” should opt out of care in the public health system if they catch the virus as Victoria reopens, says the Victorian branch of the Australian Medical Association. This statement by the AMA seems to flies in the face of the code of conduct that doctors must abide by when dealing with patients.

The Good Medical practice (the code) describes what is expected of all doctors registered to practice medicine in Australia. It also is intended to let the community know what they can expect from doctors.

Under section 3.4 Decisions about access to medical care, the code states:

Your decisions about patients’ access to medical care must be free from bias and discrimination. Good medical practice involves:

• 3.4.2 Not prejudicing your patient’s care because you believe that a patient’s behaviour has contributed to their condition.

• 3.4.3 Upholding your duty to your patient and not discriminating against your patient on grounds such as race, religion, sex, gender identity, sexual orientation, disability or other grounds, as described in antidiscrimination legislation. • 3.4.7 Not allowing your moral or religious views to deny patients access to medical care, recognising that you are free to decline to personally provide or directly participate in that care.

We understand these are trying times for everyone involved, but we are disappointed that the AMA has politized their role and encouraged doctors and nurses to go against their core values of why they joined the profession e.g., to care for all people needing medical attention.

Maybe someone in his profession needs to remind Dr Roderick McRae of his own code for which he should be abiding by? This language can only be seen as inflammatory in a time that is already stressful for medical practitioners in Victoria.

Welcome back to Your Library!

We are so excited to welcome you back! From Monday 8 November, our libraries will open in line with government guidelines. Libraries will open:

• Monday-Friday, 9am-5.30pm• Saturday, 10am-1pm • Sunday, 12pm-5pm (select branches only) • *Some variations will apply. Find your local library here.

Your safety, and the safety of our staff, is our number one priority. When we reopen, all of our staff will be fully vaccinated. Conditions of entry will include:

Supporting you in proving your vaccination status and accessing your library

You must show proof of COVID-19 vaccination (or a signed medical exemption)

Density limits of 1 person per 4 square metres will apply

You must check-in using the Service Victoria app (available on our iPads in branch)

The hand sanitizer provided must be used before entry to the library

You must continue to wear a mask while indoors (unless you have a lawful exemption*)

Please do not enter the library if you are unwell

Printing your certificate

We offer a Print & Collect service. You can send

us your digital certificate and organise to have it printed and ready to collect when you arrive at the library.

Digital Certificate help

Need help setting up your COVID-19 Digital Certificate? We’ve prepared some guides for you to read or watch. We’re also holding a step-by-step online help session where you can get help from our friendly tech team.

Click & Collect continues

If you are unable to enter the library for any reason, you can still access our collections via Click & Collect. Browse, reserve, and arrange collection through the Your Library ERL app, or just call your local library.