Kelly+Partners Post Issue 2

KELLYPARTNERS.COM.AU

THE

KELLY+PARTNERS

POST

ISSUE 2: JANUARY–JUNE 2017

BRETT KELLY INTERVIEWS HARRY TRIGUBOFF

INTERVIEW WITH IMELDA ROCHE

BMF AND KELLY+PARTNERS JOIN FORCES

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HARRY TRIGUBOFF

AUSTRALIA’S WEALTHIEST PERSON 2016 This interview is from Business Owners’ Wisdom by Brett Kelly

H

ow a child born in China in 1933 and who spent his early childhood in a Russian community south of Beijing ends up as an Australian property legend makes for an interesting story. Trained as a textile engineer, Harry came to Australia in 1948 and drove taxis and owned a milk run before building his first block of apartments and establishing Meriton in 1963 at the age of thirty. A rare individual, the founder and managing director of the Meriton Group of companies has been responsible for the construction of almost fifty-five thousand residential dwellings in Australia. www.meriton.com.au

BRETT KELLY: Is there a driving idea or a particular person or event that’s had a significant impact on your life?

HARRY TRIGUBOFF: When I came to Australia I was a textile engineer, but I couldn’t see any future in it. And that was right. I don’t think anybody made much out of it. So I was looking for different things, I was trying all kinds of things when a friend of mine told me that his father had spoken to the boss of Stockton Holdings.

The old fellow told him that his son should become a builder. So he came to me and he said, ‘What do you

think of building apartments?’ I said, ‘Terrific idea.’ I was already selling a bit of real estate so I knew a bit. I went and bought my first site and I made more money on that site proportionally than I have ever made again. I knew that was where I had to be.

BK: Excellent. So, is there a saying that really sums up your approach to life or a quote or a motto?

HT: I only like to be involved when there are problems.

When there are problems, I come with an instant Continued on page 16 >

It’s not the big who beat the small anymore, but the fast who beat the slow.

It’s not the amount of marble in your reception, but the relevance of your insight It’s not an accident who succeeds today, but the deliberate choice of a capable team It’s not the latest management fad, but proven principles It’s not those who talk about business, but those who, like you, are doing the business Kelly+Partners Chartered Accountants,they help business owners who want to go somewhere.

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THE KELLY+PARTNERS POST

CONTENTS

WAYS TO ENGAGE

January–June 2017 | Issue 2

It’s easy – choose the option that works for you

KELLYPARTNERS.COM.AU Visit our website for information and news.

From the CEO: What inspires us?

David Gonski launches Kelly+Partners’ Sydney CBD

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HEALTHY

Time to turn on your mental spam filter Gut Feelings: You should listen to them Put the spring into your step The 20-minute workout

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WEALTHY

Harry Triguboff: Australia’s wealthiest person 2016 How does your asset allocation stack up?

Successful family businesses Update on superannuation Update on taxation The greatest sales deck I’ve ever seen The 15-minute retirement plan

THE KELLY+PARTNERS APP Receive updates and feeds with the Kelly+Partners App.

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WISE

Brett Kelly interviews Imelda Roche Equal pay for monkeys Eight great books to grow your knowledge Jack Cowin’s 13 instructions for life

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KELLY+PARTNERS

EVENTS Look out for upcoming events in 2017 and see how you can contribute.

PLAN TO WIN 2015 – revisited PLAN TO WIN 2016 – revisited BMF and Kelly+Partners join forces Introducing the new Southern Highlands team Kelly+Partners’ 10-year gala awards dinner Norths Rugby Club: We are the champions Spotted a Kelly+Partners Mini yet?

Steve Waugh Foundation: The Captain’s Ride Office locations Great Events in 2017: Save the dates Good neighbours Betty Zerefos Memorial Golf Day

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Edited by PAULA BOOTH, GRAEME GLADMAN AND ELLA MARTIN | Creative Directors BRETT KELLY AND GARY CHESTNEY Feature Writers BRETT KELLY AND JOSH THOMAS | Contributing Articles ANDREW SIMMONS , TONY NUNES, KIM MEREDITH, MARCUS HAMILL, EMILY SCHOFIELD, TRENT DOUGHTY AND VANESSA SIROTIC Art Director GARY CHESTNEY | Graphic Design GARY CHESTNEY | Advertising by CERRONE, ROUND 12 COLLECTIVE & KELLY+PARTNERS Brand and Content Director BRETT KELLY Published by WESTERN WEEKENDER SUITE 2, 42-44 ABEL STREET, JAMISONTOWN NSW 2750 Images ADOBE STOCK IMAGE LIBRARY | Illustrations GARY CHESTNEY | Photography TRUDI HURT & GARY CHESTNEY

The information contained in this newsletter is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

THE KELLY+PARTNERS POST

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WHERE DOES INSPIRATION COME FROM?

WHAT INSPIRES US?

A

s I sat down to write this introduction to our second issue I was seeking the answers to the two questions above. I was also seeking inspiration as to what message I wanted to communicate to our many readers in this edition, when suddenly the answer became blindingly obvious to me; and could be captured in a single word – inspire.

As a verb ‘inspire’ signals action, an occurrence, or a state of being. I considered its description, its meaning and its relevance to all of us – not just in business or commerce but in our daily lives, and interactions with family, friends and the broader community.

I also considered the powerful role that inspiration provides as we look to external sources that might inspire our own behaviour and goal setting. To me, being inspired means looking externally, constantly searching for clues, stories and examples that will allow me to set new goals, move in new directions, new experience new things. Inspiration of course can also be a two-way street.

We seek out inspiration from others, but we also inspire others through our actions.

Our colleagues, our family and friends and, yes, even those we meet in business – we all have the capacity to inspire them through our words and deeds.

Inspiration or being inspired makes us all strive to

achieve more and, if not successful, at least we know we have given it our best shot.

Leo Burnett, one of American advertising’s legends, founded a highly successful business and global advertising agency on a single inspirational maxim: ‘When you reach for the stars you may not quite get one, but you won’t come up with a handful of mud either.’

Our 2017 editions of Kelly+Partners Post promise to showcase many opportunities for those looking to be truly inspired and to reach for the stars.

Within our three key topics of Healthy, Wealthy and Wise you’ll discover what others have achieved, how they did it and what pitfalls they had to overcome – everything from getting fitter and healthier to becoming wiser and wealthier.

I hope in reading this edition that you find the inspiration to set new goals and by doing so become an inspiration to others.

“The most important thing is to try and inspire people so that they can be great in whatever they want to do.”

BASKETBALL GREAT KOBE BRYANT

Brett Kelly Founder and CEO, Kelly+Partners The information contained in this newsletter is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

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THE KELLY+PARTNERS POST

DAVID GONSKI

LAUNCHES KELLY+PARTNERS’ SYDNEY CBD OFFICE

Coming together is a beginning;

>

Staying together is progress;

The information contained in this newsletter is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

>

Working together is success

THE KELLY+PARTNERS POST

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Introduction by Emma Alberici

David Gonski is Chairman of both the ANZ Bank and Coca-Cola Amatil.

He’s the Chancellor of the University of New South Wales and Chairman of the University’s Foundation. David’s President of the Art Gallery of NSW Trust and he’s on the Board of the Lowy Institute for International Policy.

He’s also Patron of the Australian Indigenous Education Foundation and the Raise Foundation which is an Australian charity providing mentoring programs for young people in high schools and the community. We don’t have enough time for me to list all the other extraordinary titles David Gonski has held, things he’s done and been involved in, suffice to say he’s a very busy and in demand man.

Nonetheless, he took time out to provide a summer reading recommendation to subscribers of the Sydney Morning Herald recently.

His choice was a book called The Stupidity Paradox: The Power and Pitfalls of Functional Stupidity at Work; that’s the truth. Apparently Malcolm Turnbull’s now reading it, so let’s all hope he gets a good lesson. Join me please in welcoming to the podium David Gonski.

T

hank you, Emma, ladies and gentlemen. Can I firstly say I’m very honoured to be here. Little did I know that I’d get the gift of a lifetime; right through since 2011, when I wrote that report, I thought only seven people read it. Now I know there’s an eighth that’s fantastic – and I’m sure some accountant will tell me what percentage increase that is. Let me say I’m very honoured to be here. I didn’t realise that it would be in a sauna that we’d be talking so I have about 400 pages and I will abbreviate. Firstly, can I say when I was asked by two Barrys and a Brett to do this I thought I could talk about education. I don’t think they thought that was such a good idea so I thought a better topic is how good the banks are in Australia... And how maligned I feel the ANZ is in particular... But for

Success isn’t always about greatness, it’s about consistency.

Jill Segal perhaps NAB as well... But I want to say that they wanted me to talk about why I became a client of this firm so many years ago and it allowed me, firstly, to dispel one vicious rumour and the rumour is, I do suffer from the fact that I remember everybody’s face but I don’t remember everybody’s name, which when you’ve graduated over 60,000 students it’s pretty difficult. So, I want to deny categorically that 25 years ago, I chose this firm because everyone who came to see me was called Barry. I think at one stage, by the way, a David came, which was easy. But I wanted to say, and by the way, I also should dispel the rumour just while I’m here, it apparently may be true but Brett can talk about it, that when this negotiation, this marriage started, I’m told that Brett is an excellent negotiator who signs all

Consistent hard work leads to success.

Greatness will come.

The information contained in this newsletter is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

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THE KELLY+PARTNERS POST

“I believe that artificial intelligence, self-driving cars and so on will not cause great angst is if we can re-engineer ourselves to follow maybe a couple of Barrys and a Brett and this firm generally in rising above just the mundane in delivering services and ideas with humanity.”

his letters Mr B, as distinct from Mr Brett, just in case they might think his name was Barry.

Ladies and gentlemen, I had great difficulties working out what to say to you – what happened 25 years ago – but then I started to reminisce and it’s actually interesting, as I look at all of you. It’s quite amazing the clientele that’s in this room. One of my first employers is standing there – from Price Waterhouse, oh sorry – my dentist is in this room, stockbroker’s here, there’s even a brain surgeon out the back and this place is teeming with people who could talk better than me on any subject.

But the thing that occurred to me is one of the reasons that I came here 25 years ago, is that an old man, who wasn’t so old when he started to advise my family, when we came here in 1961 from South Africa, had provided us with accounting advice next to no-one.

Why? Because he cared, because he was professional in the way he did it. He called in the children. He helped my father, a brain surgeon himself, to understand what business is about which was quite an achievement. He looked after, at times, our money, he engendered it and

the fact that my mother can retire in style today was his work. The problem that he couldn’t solve – and maybe someone in the audience can – is ageing.

25 years ago he turned 70 and he decided, not realising that he’d still be alive today at 95 – and some of you may know who I’m talking about – that he should stop doing work, particularly for aggressive young business people like me. And so I looked for professional people; to care about me and, indeed, people who would help me when perhaps the decisions I had to make were not as obvious.

I must say the two Barrys came to the fore and 25 years later, even though they’ve now become a Brett, it’s fine. And I’m delighted as Barry Mendel told us 400 times that he’s not retiring, I must say he told me that the other day and I did remember but that’s a great relief to have that. And that then gave me what I thought I could talk to you about, for just three or four minutes and that’s the question of professionalism.

That’s the reason I’m here and that’s what makes these guys different to a lot of them.

I want to tell you a secret – which probably won’t

be a secret after I tell you – when I was a young and very aggressive partner at Freehills – David Smithers might remember – I insisted on us bringing in a thing called timesheets. I believed that was the only way to make a partnership actually work. As far as I was concerned, I was the only one who worked and everybody else lived off my earnings; I was wrong.

We then accounted in ten-minute slots and made sure that we billed accordingly. Park that for a minute.

Two weeks ago, sitting on a big board that I do, we put out a big tender to law firms and we chose a leading law firm as our major law provider, on their hourly charge-out rate. We didn’t ask who would deal with us, we didn’t ask what professionalism would be brought to bear; we made an assumption that of the big four/ five in Australia, it would be pretty good. What is happening to professions is that they are becoming commoditised and indeed this is premiered, not just in law or accounting but it is all around us.

And then let me take you to the current debate on artificial intelligence. Suddenly all of these maniacs, including me, who had timesheets and made

All you need in this life is ignorance and confidence, and then success is sure

The information contained in this newsletter is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

THE KELLY+PARTNERS POST

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“It is proven that our customers like the professional touch. They like the person that cares about them. They like the person to interpret what’s there.”

commodities of wonderful professionals, we basically now worry that maybe artificial intelligence might cause unemployment; that machines might be able to take over from us. I would like to put to you that the maintenance of a professional attitude, no matter what you do, whether you’re my dentist, my stockbroker, accountant or lawyer or whatever, is what elevates one from a machine.

And I, even though my children say I’m lousy with machines, computers and so on, I will underwrite that basically unemployment of enormous proportion, which is talked about, will become like what happened when I was a kid, and those of you in Australia at that time might remember, every teacher talked about the yellow peril and by the year 2000 (I wrote it down in a little book in case I forgot) we’d all have six cubic metres, that’s all to live in. Well of course it happened today, in this room when I wrote the speech.

Interestingly, by the way, because I hate sport, I was quite impressed with that because I realised there’s not a lot of sport in six cubic metres. But the fact is it didn’t happen. And the reason I believe that artificial intelligence, self-driving cars and so on will not cause great angst, is if we can re-engineer ourselves to follow maybe a couple of Barrys and a Brett and this firm generally, in rising above just the mundane in delivering services and ideas with humanity and some thinking; trying to solve problems in perhaps a way that a machine can’t. Interestingly – and I mean there’s got to be some add-in for the ANZ Bank here – if you go down to our new branch which is down the corner – very welcome there too – usually women but sometimes men will stand there with an iPad. And they will, with that iPad, be able to tell you where you should go in our three-storey branch. Let me give you a secret; that iPad tells them exactly the answer and you could use that iPad but it is proven that our customers like the professional touch. They like the person that cares about them. They like the person to touch the screen and interpret what’s there and perhaps take the difficult question of whether the coffee is free or not free depending on how much they’re putting in the bank.

My point – and this is what I wanted to put to you – we need to fight basically commoditisation, and it’s not just, as I say, the elite, it’s everybody. Do the job with a bit more compassion, a bit more thinking, a bit more broadness and you know what else the prize is? It’s not just that we’ll avoid a lot of unemployment but we’ll have a better time.

And then Barry won’t have to retire; every day will be an exciting day for him. Because, if I may leave you with one thought, if Barry Mendel had done his job in a way that artificial intelligence could do it he would have retired 20 years ago and, even worse, no-one would have noticed.

Ladies and gentlemen it’s a real honour to be here. I did have, as I said 300 pages still to go. You’re welcome if you want to have a look at it. I thank you very much for listening to me and I do hope some of you agree and if you don’t – tell me why you don’t.

Lets be professional and fight artificial intelligence.

“What is happening to professions is that they are becoming commoditised and indeed this is premiered, not just in law or accounting but it is all around us.”

If everyone is moving forward together, success takes care of itself

The information contained in this newsletter is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

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HEALTHY

THE KELLY+PARTNERS POST

TIME TO TURN ON YOUR MENTAL SPAM FILTER Imagine if your email didn’t have a spam filter and, for every relevant message, you had to sift through hundreds of messages related to Nigerian money scams, Viagra and offers from Chinese printing companies.

Meditating helps filter out the internal and external ‘noise’ and negative self-talk, providing us with the clarity of present-moment awareness. As we learn to quieten the ‘monkey mind’, we quickly become less stressed, more creative, more productive and more adaptable to the demands of life, making meditation a proven competitive advantage in business and in life.

The main thing to do is relax and let your talent do the work

The information contained in this newsletter is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

CHARLES BARKLEY

THE KELLY+PARTNERS POST

HEALTHY

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10 SIMPLE MEDITATION TIPS TO GET YOU STARTED

1.

THERE’S NO NEED TO SWAP THE SUIT AND TIE FOR ROBES Meditation can be done anywhere – in an office chair, on the bus, in your car (while a passenger or parked of course) on a lounge, sitting up in a bed. There’s no need to tie yourself in knots like a pretzel. Just sit comfortably with your back supported.

2.

WHAT TO THINK ABOUT THINKING

One of the most common misnomers about meditation is that the mind needs to be silent.

The fact is thoughts will come for even the most experienced meditator. Instead of fighting thoughts, just observe them and bring yourself back to your breath. The more you practice this, the easier it gets and the sooner you discover that the key to silencing the mind is being completely indifferent to all of your thoughts.

3.

IT’S AS SIMPLE AS BREATHING

Close your eyes and take a few deep conscious breaths. Now allow your breath to fall into its own natural rhythm. Keep your gentle awareness on the breath, noticing the way your stomach expands and contracts and the way your breath feels as it goes in and out of your nostrils. Thoughts will pop up and that’s completely OK. If thoughts come, just smile inside and gently bring your awareness back to the breath.

4.

IT’S NOT A STILLNESS COMPETITION

If you need to scratch an itch or shift to get comfy, you can. There’s no right or wrong way to do it, so just sit comfortably and relax.

5.

DON’T TRY TO MEDITATE Meditation might be the only time in life where not striving hard for a goal is actually beneficial.

When we meditate we’re not trying to achieve anything or get anywhere. The process is the goal.

We’re not interested in trying to control the mind or stop the flow of thoughts.

6.

START SHORT To start with, practice this simple meditation technique every morning for five minutes. As you become more comfortable you can slowly increase the time to 10/15 minutes.

7.

GO FOR QUANTITY OVER QUALITY

No, that isn't a typo. When it comes to meditation, the saying ‘quality over quantity’ doesn’t apply. Instead, you should practice being completely unconcerned about the quality of your meditations and instead strive for quantity.

In other words, be as consistent as possible. The quality of your life will improve the more you sit.

Golf is a spiritual game, It’s like Zen. You have to let your mind take over.

8.

PUT IT ON YOUR ‘NOT TO DO LIST’

For many people the thought of adding another thing to the ‘to do list’ is unfathomable. Rather than thinking of meditation as another thing we have to do, try reframing it as 10 minutes to ourselves with absolutely nothing to do.

9.

WE’RE NOT PRACTICING TO GET GOOD AT MEDITATING We don’t meditate for the experience that we have during the meditation. We meditate because it enriches our life in every way.

10.

MEDITATION IS NOT MEDITATION

There are a myriad of different meditation techniques out there, with differing degrees of difficulty and results. If you want to go deeper with your practice, it’s good to find a technique and teacher that suits you.

Marcus Hamill is a filmmaker, writer and meditation teacher.

For more info visit www.mh-meditation.com

AMY ALCOTT

The information contained in this newsletter is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

HEALTHY

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THE KELLY+PARTNERS POST

GUT FEELINGS

YOU SHOULD LISTEN TO THEM Want to spend fewer days sick? Lose weight? Have more energy? Be more productive?

Then the first thing you need to do is make sure you are looking after your gut health, which can affect everything from your mood to your performance.

Article by Emily Schofield (Personal Trainer)

Success seems to be connected with action.

Successful people keep moving.

The information contained in this newsletter is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

They make mistakes, but they don’t quit.

CONRAD HILTON

THE KELLY+PARTNERS POST

HEALTHY

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WANT MORE OF KELLY+PARTNERS? CLICK

MAKE 2017 YOUR MOST PRODUCTIVE YEAR YET!

W

ith a new upon us, it’s time to set goals for the year ahead. Working with corporate clients, optimal energy levels and productivity are a big focus, and sometimes it comes down to your hormones. After completing hormone assessments with clients over the last year, I have found that most individuals’ gut health is far from optimal. It is very often underestimated how big a role the gut plays in achieving goals such as weight loss, improved energy levels and immune function, mood regulation and several more.

Gut health has become a notable topic recently, with some great research showing how much it actually affects our day-to-day life. The gut performs many functions in the body; it houses 70 per cent of our immune system and also provides a protective barrier to toxins or nutrients that don’t belong in the bloodstream.

If you pinch the skin of your eyelid, you will have an idea of how thin the lining of the gut is. This lining helps regulate what can be let into the bloodstream and what needs to be kept out. However, elements of everyday life can damage this lining and lead to a loss of good bacteria in the gut, which can result in it becoming leaky and overly permeable.

Things such as stress, poor diet, antibiotics, NSAIDS, the pill and some medications allow bad pathogens into the bloodstream, triggering an inflammatory response.

So where does all of this lead us? Having a leaky gut can result in: • Mood imbalances • Hormonal imbalances • Immune system imbalances • Poor quality of sleep • Food allergies • Weight gain The gut is now referred to as the second brain, and I find that most people who have an inflammatory diet or are eating something they are intolerant to are not happy or feeling their best. Our gut health is hugely influenced by diet. Poor food choices such as sugar and trans fats lead to inflammation. When these foods are consumed regularly, inflammation becomes chronic.

When you have your immune system constantly switched on through poor dietary habits, stress and toxic exposure, you can become allergic or intolerant to the foods you are eating. What’s more, while you remain in this chronic inflammatory state you can’t recover well from sickness or injury. All colds, types of flu and allergic responses are rooted in your gut.

THE GUT IS NOW REFERRED TO AS THE SECOND BRAIN Here are some things you can to do improve your gut health: 1. Take probiotics.

Probiotics restore life to your intestinal tract. They play an essential role in immune modulation, control unfriendly bacteria in the gut, nutrient absorptionmetabolism and hormonal regulation.

2. Eat resistant starch.

There are certain bacteria in your gut that can only feed off resistant starches.

If you are eating a low carbohydrate diet, it is

important to still include resistant starch, such as sweet potato or small amounts of brown rice.

3. Avoid foods you don’t tolerate well.

If something gives you gut symptoms such as bloating, distention, abdominal discomfort, gas or GI pain it’s time to eliminate it from your diet. The most common things that people are intolerant to include gluten,

dairy, soy, peanuts, prawns, shellfish and whey protein.

4. Take fish oil.

The omega 3 it contains decreases inflammation and helps improve gut integrity.

5. Manage your stress.

Stress will make any food intolerance or allergy you may have worse, so reduce your stress levels to decrease your cortisol and inflammation.

Performing and feeling your best comes hand in hand with maintaining good gut health. More and more research is highlighting the link between gut health and mood disorders.

Even with your best intentions, if you are not feeling well your performance and energy will suffer. Make 2017 your most productive year yet by looking after your gut, staying healthy and improving your overall wellbeing.

The secret of success is to do the common thing uncommonly well

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JOHN D. ROCKEFELLER JR

The information contained in this newsletter is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

HEALTHY

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THE KELLY+PARTNERS POST

PUT THE SPRING INTO YOUR STEP A sharp and focussed mind begins on your plate.

Why not give these energy boosting recipes a try?

Recipes supplied by Vision Personal Training

THAI PRAWNS

ZUCCHINI FRITTERS

PROTEIN BERRY SORBET

NUTRITIONAL INFO (per single serve) Carbs: 25.4g Protein: 35.7g Fat: 5.6g

NUTRITIONAL INFO (per single serve) Carbs: 4.4g Protein: 3.5g Fat: 1.5g

NUTRITIONAL INFO (per single serve) Carbs: 11.7g Protein: 26.2g Fat: 2.4g

INGREDIENTS (serves 2) • 10g coconut oil • 15g spring onions (sliced) • 200g new potatoes, peeled, boiled and cut into chunks • 300g green prawns • 10g coriander (chopped) • 100g snow peas (halved) • 10ml tamari soy sauce • Juice of 1 lime • 40g Thai red curry paste

INGREDIENTS (serves 12) • 1 cup zucchini (grated) • 1 large egg • 250g onion (diced) • 75g grated reduced fat Bega shredded cheese • 40g cornflake crumbs • Salt and black pepper to taste

INGREDIENTS (serves 1) • 80g frozen berries • 30g banana Vision protein powder • 30g vanilla yogurt • Juice of 1 lime

METHOD 1. Stir fry spring onions and cooked potatoes in pan till crispy 2. Add prawns & curry paste until prawns begin to cook 3. Add tamari, coriander and snow peas 4. Finish with lime juice and serve

METHOD 1. Preheat oven to 180 degrees 2. Spray baking sheet with cooking spray 3. Grate 1 cup of zucchini and wring out excess water 4. Combine all of the ingredients and season with salt/pepper 5. Spoon 1 tablespoon of mixture and roll into small balls 6. Place on tray and bake for 16-18 minutes, turn half way and cook till golden

If you eat well, you work even better

The information contained in this newsletter is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

METHOD 1. Blend all ingredients together in a food processor or high-speed blender 2. Serve immediately to enjoy a chilled, guilt-free treat

FERRAN ADRIA

HEALTHY

THE KELLY+PARTNERS POST

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THE 20-MINUTE WORK OUT Finding time to stay healthy is tough.

Fortunately, all you need is 20 minutes of exercise per day to get fit.

E

xercising every day may seem a bit daunting, but if the time commitment is small it will be a lot easier than you think. A daily routine also comes with the benefit of starting a good habit, and that will make it easier to continue your exercise routine as time goes on.

This sample routine is for those days when time is short but you still want to have an awesome workout.

The limited duration of this plan involves many exercise techniques to quickly fatigue the muscles such as ‘tri-sets’ and ‘super-sets’.

This high-intensity routine is centered on building muscle and strength while introducing a muscular endurance component. The good news is that 20 minutes is all you need to get in and out of the gym.

While it is not recommended that you perform this routine daily, it has been created specifically for those who are time poor. There should never be an excuse to not workout and eliminating time as a factor is one step in the right direction. So those of you that can make time, try this routine and use this only on timelimited days.

For those of you that don’t have an hour block to exercise, this routine will provide the best effort for the time allowed.

PRINCIPLES OF 20-MINUTE TRAINING

Type: weightlifting Time: 20 minutes Reps: 10-12 Sets: 2-3 Rest period (between sets): 30 seconds Rest period (between same muscles trained): 2-3 Days Training days per week: 3 days Intensity: high Weight load: moderate-high

A FEW TERMS YOU SHOULD KNOW Supersets For those of you who don’t recognise the term ‘super-setting’, it simply means to perform one exercise then go right to the next exercise without a break.

For example, you perform a set of bicep curls and when finished you immediately perform a set of triceps press downs.

Your body is a temple,

Tri-sets The same principles apply as with super-setting except that instead of two exercises involved there are now three. From the example above, you would perform a set of bicep curls, then tricep press downs, then a set of hammer curls right after that.

WHY THE 20-MINUTE TRAINING ROUTINE WORKS

Moderate weight loads are lifted and without rest in many instances to create a high-intensity workout due to the time frame of the training. This allows your body to get the best workout available in this short time.

Major muscle groups are trained first. These are trained primarily with compound exercises which require more time and energy while also producing the most muscle build potential. Smaller isolated exercises follow for maximal muscle fatiguing and growth while usually being super-setted.

Small recovery periods: small recovery periods means less time in the gym and more high intensity muscle building action in the gym. This is the basis behind this workout and is the key to saving both your time and building muscle. 30 second breaks sets is all the recovery time you get between sets.

Increased muscular endurance: When you start doing this routine you will find it will leave you out of breath. Over time you will increase your ability to exercise harder and with shorter rest periods.

Burn more fat: you will be constantly moving with this routine as you build muscle and burn fat. It works all components of fitness and you should be out of breath and sweating by the end of 20 minutes. If not, you didn’t work intensely enough.

THE 20-MINUTE TRAINING WORKOUT ROUTINE

Note: if you find that you cannot recover in time for the next workout, try exercising every three days instead of every other. You will still get three workouts a week with that extra rest day needed.

Monday: full body workout • Squats (3 sets X 10 reps) • Super-sets with bench press (3 sets X 10 reps) • Lunges (3 sets X 12 reps) • Tri-set with pull-ups (3 sets X 12 reps) • Tri-set with leg press (3 sets X 12 reps)

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but only if you treat it as one

• Dumbbell bicep curls (3 sets X 10 reps) • Super-sets with tricep dips (3 sets X 10 reps) Tuesday: rest day Wednesday: full body • Squats (3 sets X 10 reps) • Super-sets with bench press (3 sets X 10 reps) • Lunges (3 sets X 12 reps) • Tri-set with pull-ups (3 sets X 12 reps) • Tri-set with leg press (3 sets X 12 reps) • Dumbbell bicep curls (3 sets X 10 reps) • Super-sets with tricep dips (3 sets X 10 reps) Thursday: rest day Friday: full body • Squats (3 sets X 10 reps) • Super-sets with bench press (3 sets X 10 reps) • Lunges (3 sets X 12 reps) • Tri-set with pull-ups (3 sets X 12 reps) • Tri-set with leg press (3 sets X 12 reps) • Dumbbell bicep curls (3 sets X 10 reps) • Super-sets with tricep dips (3 sets X 10 reps) Saturday: rest day Sunday: rest day Each set of exercises for a given day targets your chosen muscle group and incorporates cardio as well.

The goal is to keep moving with very short breaks for the full 20 minutes. This will keep your heart rate up while you’re doing exercises like push-ups, which aren’t designated as cardio exercises. In many cases you’ll also get cardio-specific exercises like interval sprints to pair with the work you’re doing on your arms, legs and core.

Some exercises will take on both at the same time naturally, and some routines will incorporate a little bit of everything so you’re not completely ignoring any muscle group.

You can choose any combination of exercises from each group to make up your 20 minutes. Some involve a single activity, others have multiple choices. What you choose should vary over time – your body gets stale if you do the same thing every day – and how many reps you can fit in depends on the rest intervals you need.

Article sourced from http://www.directlyfitness.com/ store/20-minute-workout/

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ASTRID ALAUDA

The information contained in this newsletter is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

WEALTHY

PAGE 16

< Continued from page 1 solution – and it’s always wrong, but it doesn’t matter. I get all the people around me and I make them all think at once with me and I promise you, our solution is always the best.

BK: As a group.

HT: That’s it. That’s how you do it.

BK: Excellent. I think everyone’s read enough about you not to labour the details of your history, but you’ve bought this block of land.

You’re nota builder. You don’t have any experience or university qualifications but you now have this block of land. How much debt did you have and how concerned were you about the prospect of your first project?

HT: Right. I went into it because I knew that there was a big demand. Believe me, that demand has never changed from the day I started which is fifty years ago.

So that’s the main thing, there’s a demand. You have to have demand. I went to the bank manager in the ANZ and I was lucky. They were training him for big things.

His name was Rex Davidson. If you ask anybody in the ANZ bank, nobody had ever heard of him but he ran the bank. And he liked horses. So he told me, ‘I’ll lend you the money, Harry. And when you reach the roof, I’ll come with you. I’ll tell you if you are a builder or you aren’t. And if you are, I’ll give you more money.

Then, it doesn’t matter. But that’s when I’ll decide.’ So I waited until I got to the roof. I called him and he had a look, this way and that. He said, ‘Yeah, Harry, you’re a builder. Now I’ll give you any amount of money you like.’ He became the chief lending officer at the ANZ bank. I don’t know if there’s such a title anymore, but that’s what he was.

until he retired. Now, his son works for me, another son worked for me. They’ve been with me ever since.

BK: Often, as people make money in one thing, they assume that they’re brilliant at everything and get involved in other activities. We’ve seen a lot of people not do so well when they do that.

You mentioned that you stayed on the site all the time and, as I understand, in the last fifty years you’ve pretty much stuck to just building residential apartments.

HT: I think being clever is very good, but you must like what you do. It’s impossible to like everything so, if you find one thing that you like, stick to it. And until you find that thing, keep looking. Because the main thing is, you have to like what you do and then the rest will come by itself.

BK: When you started that project, did you intend having your own business and not work in someone else’s?

THE KELLY+PARTNERS POST

HT: Yes, I wanted to be by myself. I tried to be a public company. It lasted a few months. That was not my cup of tea. I sold the shares for 50 cents. I bought them back for $1.20. Everybody was happy.

No problems.

Because I was in love with the company, how could I sell it?

BK: Was it love at first sight in the property industry?

HT: Yes. I liked it. That’s very important because if you like it, people in the business will like you and they will probably work better than if there wasn’t that relationship.

It’s very important.

BK: So, even now as you build seemingly bigger, better, best, you get on top of the project, you’re still there very often?

HT: Yes. Every morning, I’m there. I mean, I go a bit later, now, of course.

BK: Did you stay with him for a long time?

HT: For quite a while, but of course, they sent him to Melbourne because that’s the head office. And then, I used to go to him in Melbourne, spend half an hour with him, he’d give me another loan, and I’d come back.

BK: And off you’d go again. You make it sound so simple. Did you hire builders, subcontractors?

HT: I took a foreman. I was lucky he was always drunk.

In those days, bricklayers were very hard to get. Then, this young bricklayer came to me, a Scotsman. He was a nice fellow. You see, in Scotland, the bricklayer is the chief contractor.

In Australia, it’s the carpenter. So, he was teaching me what to do. Every night he would tell me what materials we needed the next day and I’d get them.

He’d use them that next day, and that way, I learned very well. I had no other job and nothing else, so I stayed all the time on that site. I was so dirty, worse than all of them. I was dusty and all, but I learned how to work. After that, of course, I started two or three more jobs at once, but I knew from the beginning – I never started the second job until I’d finished the first.

So I got to know the whole process, how to get in and how to get out. And that bricklayer stayed with me

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If you are willing to do more than you are paid to do, eventually you will be paid to do more than you do

The information contained in this newsletter is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

$$$$$$$$$$$$$$

WEALTHY

THE KELLY+PARTNERS POST

‘I only like to be involved when there are problems. When there are problems, I come with an instant solution.’

BK: A bit later than you did. So today, what does the typical Harry Triguboff day look like? Is there one?

HT: Yes. Every day is similar. I get up. I read the paper. When I’ve finished reading the paper, I take my medicines, I go for a walk. Every day, I go for a walk. Go for a walk, have my breakfast with my dog. Then I go to work. I go around the jobs then I work in the office. I get to work at 11 o’clock or 11.30 but then I stay until 6 to 7 o’clock. I work enough hours. So that’s every day.

BK: That’s the day. Excellent. What do you think are the most critical issues facing Australian business right now and certainly your business?

HT: Well, we are very lucky that China adores us. I like my business; they like this country. It’s not only a matter of money. They like it. So that’s good. They help us.

But of course, this is still not their home. Their home is China. And even though we are very successful in selling to so many Chinese now, I am always fighting to get Australians into the market. The market is good when the local people are in it and believing it and supporting it. And that’s what I want.

That is why I’m always fighting the Reserve Bank – its interest rates make it impossible for people to buy.

The governor knows it, but it’s not his fault. It’s the whole group of them that run that place. He will leave and another will come. It will always be the same. It will never change. So, there’s this one problem that we have. It’s that we must get those interest rates down.

The other thing is that people have lots of money in super, but they have no money in the bank. And the super funds are not built to help people buy property, so they can’t afford to buy property, which they should buy. Instead, the super funds spend money on shares and other things. So, I want that to be changed.

The third big problem here is that politicians run the place. It’s very hard to be a politician and run it. A politician wants to be popular with everyone. Well, it’s OK to be popular, but there’s very little you can do because you want this, he wants that. What does he do? No good. So, more power has to be given to the doers, to the mechanics. And laws have to be made so that they get the power. The politicians must be prepared to let go of the power so that they can do it.

For instance, it’s much easier to work in Queensland than it is in New South Wales. I think that we have sent ten different ministers from here to Queensland to see how they do it.

BK: There is a lot of talk about immigration. What is your view on immigration?

HT: Well, we are a huge country and we need a lot of people. Unfortunately, our philosophy is very much entwined with what they do in Europe and America and everywhere else. This is different. We are a huge country and you cannot run it with no people. I will give you an example. You talk about mining. If you go to Lake Eyre, you will see that there are no roads. There

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“I only like to be involved when there are problems. When there are problems, I come with an instant solution.”

are no railways. There is nothing there. You cannot develop if you don’t have facilities, so we must develop facilities. We won’t develop them unless we have people. We cannot do enough unless we have people.

People must come. We need them and it is good that we can pick everybody who wants to come here. But it is no good picking them if they understand cricket or they understand something else. They must be useful.

They must be workers. So unless we bring them, it is no good. Of course, for housing, they all believe in housing and they all need housing so it is terrific.

BK: Harry, you have the tallest project in Sydney, the tallest project currently in Brisbane and you’re about to lose the crown to yourself again. Are you competing with someone else or is it an approach?

HT: Always with myself. I don’t compete with others.

Others do not exist for me. I do not worry about it. I never diversified. I do not need to diversify. I stick to what I like and I know what I can do. I know what the country needs and what the people want. So I don’t compete with anyone and they cannot compete with me because unfortunately, when they go to a certain site, they become public companies and in public companies, they tell them to diversify. So he might have been good at doing what I’m doing, but suddenly he starts doing ten other things of which probably eight are no good. No competition.

BK: Having had the success that you’ve had, it is understandable that you have that confidence now, but did you always have it?

HT: Probably, always. Yes, no problem. It’s very important, very important. All of you must have confidence when you go to a bank. If you don’t have confidence, then the bank gets more scared than you are. So always be confident. Now, when you work with the bank, you must make them your partner. They must know everything. Give them all the problems, let them work for it, and then when they know your business, they are your friend. But if you run away from them, you’re gone. Absolutely.

BK: Is there anyone that’s really inspired you, whether it was your parents or a friend, someone else in business or society generally?

HT: Well, I look at successful people and I see some of them are still older than I am, they are the ones that give me confidence. If they can do it, I can do it.

PAGE 17

BK: The legendary American investor, Warren Buffett, says that he doesn’t believe in diversification. He believes that concentration leads to concentration. So you share that view?

In terms of your business, I read an article that mentioned many of your managers provide onepage summaries of their projects or business plans or current status of their project. I was intrigued by that. Can you explain that to me?

HT: Every weekend I take home a pile of papers that I think is very important and I go through them. Some things I don’t understand and some things I don’t agree with, so I make notes. Then, the next week, they fix them, and I look at it again and so on. I continue looking all the time. Now, the page that you’re talking about, that’s different. When I first started, I had one page. Now, I have six pages. That is all I have and that summarises all the movements I have to know.

BK: And what’s in the six pages?

HT: It says how many units we have for sale, how many we have got deposits on, how many we have exchanged, how many units we are leasing, how many units are up to the roof, how many units are started, and how much empty land I have. That is all. Money doesn’t come into it. It’s nothing to do with the money.

BK: I’ve also read that you were very advantaged during the global financial crisis and subsequently because you have little or no need for debt. Can you talk to us about that? You talked about the bank being your friend – it doesn’t sound like you need a friend at the bank anymore.

HT: No, no. They need me. I give them money! Best friend. Even easier.

BK: So now you are a good depositor.

HT: Very good.

BK: There is a lot of talk now globally around suitable levels of gearing on all sorts of assets and projects. What do you think is a suitable level of gearing on the types of projects that you run?

HT: It depends. When you start, you need the bank because you cannot start without the bank 100%.

So you get from them whatever you can. You should always pay them back because then they will give you more. You pay them back, they give you more. But then when you reach a certain size, you must decide what you want to do. Do you want to work for them or do you want to work for you? That is when you start getting less into debt. Debt means that you will not grow as fast as you could, agreed? But then, it gives you peace of mind because sometimes, when you are over-extended, it is very difficult.

The banks have a very short memory and that is worldwide. It is not only here. We learn from the others, actually.

That is what they do. When there is a boom, when things are easy, banks compete with each other. They want to give you more money than you need and you grow very quickly. Then you are in a big hurry and

Opportunities don’t happen, you create them CHRIS GROSSER

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The information contained in this newsletter is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

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PAGE 18

you grow as fast as you can and they give you more than you have asked for from them. Then if something happens – and in today’s world, it is nothing even to do with Australia, maybe. Greece, I don’t know.

Something that is nothing to do with us. Then suddenly a new face appears at the bank and says you owe them money. Seeing that that could always happen to you, you should always be well secured. You should give him not as little as possible, but as much as possible so that everybody is happy. The bank manager deals with you in the beginning but it is not necessarily the bank manager who finishes with you. So these are the things of life. But to start, you need them, grab as much as you can, pay them as quickly as you can and then be comfortable.

BK: Now, Harry, I know that you’ve got some great cars – when is the right time to buy your first Bentley?

HT: Well, first of all, you must be able to pay cash for it because the moment you take it out, it is not worth half of what you paid, you must understand that.

Money must not matter to you. I used to have beautiful American cars when I first started. Oh, yes. It is really a nice one.

Drive around the Cross in this car, beautiful, very nice. But we didn’t get a Bentley, we went for American cars. I had every type of big American car there was and then I went for Mercedes, but they are a bit dull, you must admit. Good car, but dull. Bentley is a very nice car. I love them, you know. You sit up there and look down on everything. Of course, SUVs now have taken that away, but before that, very nice.

BK: You’re the man.

HT: That is how you do it.

BK: Very good. What is the best and worst client, customer or supplier lesson that you’ve had?

HT: Best time, right. So things were very tough in 1973.

Citibank came into Australia. They were going to make a lot of money. Then, in 1974, they decided that I was broke. I proved to them I was not broke. They were convinced I was. I paid them all the money back and around 1975, I think it was, they gave me a cheque for two million dollars because they never believed I would pay them back. So what did they do? They thought that they could stop me from building, but they couldn’t.

Because I started the buildings on my money I told them, ‘Right, it is mortgaged to you, take this halffinished building.’ So then they started pleading with me not to do it to them. I said I will do it to you because that is the way I will pay you back. I had a list in my office and every day I showed them how I diminished the debt. Every day I diminished the debt, every day. I built one, I sold two. I built one, I sold two. Every day.

They were so happy. That was the best relationship I’ve ever had.

‘First of all, you must be able to pay cash for it because the moment you take it out, it is not worth half of what you paid, you must understand that.

Money must not matter to you.’

Healthy Relationships

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THE KELLY+PARTNERS POST

“First of all, you must be able to pay cash for it because the moment you take it out, it is not worth half of what you paid, you must understand that. Money must not matter to you.”

BK: Fantastic, what’s the worst?

HT: The worst one I had was with a subcontractor. He was a nice boy, but he was a bit crazy. Now, I have my way of paying. He disagreed with the way I paid him so he came into my room with a gun wrapped up in a piece of paper. It was lucky that the girl who was with me saw him and she started screaming. I had my other fellow there and he grabbed him and took away the gun. His father came to me and he told me that the boy was not right in the mind. He was a good worker, but that was bad – whenever you get a subcontractor, you must be careful.

BK: Alright, talk to us about taxation. What is your view on tax, how has it affected you and how much do you like it. Do you enjoy paying it?

HT: Well, taxation is like this. Tax used to be easy once upon a time. We used to buy loss companies, we used to go into mining. We did all kinds of things, it was very simple. Then they decided to get tough with us and all these big ideas disappeared. As they disappeared, suddenly I owed money to the Tax Department. I think I owed the most money in the country at that time. So they came to me and said, ‘You owe us money.’ Very good. ‘How much money?’

I asked and they told me. ‘Bull, it’s not that much,’ I said. So we worked it out and we reduced it.

I learned one thing: I shouldn’t assume that I will not pay tax because those days are gone. There were big companies who disagreed with me and they did not pay the tax and they are still fighting them thirty years later, but I paid the tax after we agreed on the price and I became the best friend of the Taxation Department, best friend.

Since then I pay them tax, but what I do is I keep lots of my properties. If you keep the properties in this country and the capital gain is there you don’t pay tax, which is beautiful. You only pay tax on the rent. You don’t pay all the tax on rent either because you have depreciation.

That is the beauty of my business. I build the property, I’ve already made the profit, and I don’t pay tax because I keep it. Then I lease it and I don’t pay all the tax on the rent because of depreciation, so I pay very little tax.

I do pay tax though on the ones I sell, alright.

So what we do in my case is I buy a lot of empty land because I think I can get a very good floor to space ratio on the land. The government realises at last how important it is to have housing, so if you can explain to them that what you say is right and what they say is wrong, then you make even more money on that.

In the meantime, you keep the land and of course it

doesn’t bring an income, so that’s again how you avoid, in my case, taxes. It’s all legal, that’s how you do it.

BK: It’s very interesting. There’s a great book that some French academics published on billionaires.

They studied thirty-two billionaires and how they became billionaires. They said that there was a great wealth-driving event at one point and one of the ones that they have demonstrated was that tax is a huge driver. Obviously, if you can minimise paying 30%+ tax, the cumulative effect of that over a long period of time – certainly over fifty years – is enormous. Is there one thing that you think that anyone who wants to succeed in business should definitely not forget?

HT: Well, the bigger you become, the harder you work, so if you think that by being bigger you will be able to relax, you’re wrong. So decide now if you are prepared to work hard. If you aren’t, don’t bother.

BK: Do you still sign all the cheques? I did hear that rumour.

Accountability • Admits mistakes when wrong • Accepts responsibility for behaviours, attitudes and values Safety • Refusing to intimidate or manipulate • Respecting physical space • Expressing self non-violently Honesty • Communicate openly and truthfully

The information contained in this newsletter is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

THE KELLY+PARTNERS POST

HT: No. BK: How hands-on are you in the business?

HT: Very hands-on. As much as times allows it.

BK: What about the role of your family and spouse in terms of growing this business? How much of an impact does a business that size have on you and your family?

HT: Well, the first two wives, they didn’t take much interest. Two daughters, not much interest. Our grandchildren – one, the big granddaughter takes an interest. The other three are still too young, so there is still hope. I hope I will change the daughters first. But, you know, to change them also requires a lot of work from me. It is one thing to make money, it’s another thing to make what I do attractive to them. So far I haven’t succeeded. But I keep trying.

BK: Now, you are over fifty, what are your future plans? What are your personal future plans? What are your plans for Meriton?

HT: I will keep on doing the same thing. I think I still have a few years left. You know, build seventy storeys now, eighty storeys, maybe build a hundred.

BK: How high can you get?

HT: As high as the councils approve. They sometimes change their minds. The problem with building tall buildings is it’s not the best way to make money. You see, when you spread the building over lower levels, say ten floors, twelve, fifteen floors, you can build many at once. When you build one tall one like that, you are limited because you can only build in that little space,

WEALTHY

so therefore it takes a long time. But we are making changes so that we can make it more quickly.

BK: OK, now explain the changes to how large property developments are approved in New South Wales. Can you talk to us about that and also what happened up at Warriewood?

HT: Well, after many years, the Labor government and the state government, understood that councils would not approve large property developments. And if they did approve, it would be in such a way as to make sure that the developer would go broke. That is even worse because the developer puts his last money in, the bank gives him the money and the rest is history.

So then they decided that the state government would approve big projects. That was going very well, but O’Farrell decided that he would say that the councils should get back the power. Of course, he wanted to control them so he said he was thinking of cottages. You see, where you get approvals and cottages, nobody protests. Everybody is very happy because the councils don’t have any money so they approve anything, very easy. What they overlooked is that people don’t want to live where we can build cottages. Cottages were built in the wrong place. I said we should renovate, rebuild, fix the old cottages. We have so many thousands of them, hundreds of them, millions of them, just fix them. Big job.

Don’t worry about new ones, just fix them. But now we have the problem. What will happen when the councils regain their power? I hope that we will learn how to contain that power, but at this stage it’s not sure yet how it will happen. So we might have even less

PAGE 19

production than before. Even though you can produce cottages, which nobody wants, it will be difficult to get approvals for apartments, which everybody wants.

Now, what happened in Warriewood was I bought some land and they wouldn’t approve what I thought they should approve. It had nothing to do with their code so I went to Sartor. He was the minister and he said, ‘I can’t do anything with these guys because they control the upper house.’ McTaggart was a member, he was an independent. Anyway, they got re-elected and now, McTaggart is gone, Labor is controlled and we come up with the same plans, which were approved by the Department of Planning but not by Sartor. They saw the plans again and they said, ‘We’ll approve it.’ I got the approval.

So then the mayor of Pittwater, which is Warriewood, decided he was going to go against us. It was a very interesting case. I had the planning department on my side and the council. Normally it is the developer who is objecting. I love that, you know. It wouldn’t even matter who won, but just that picture. Something I waited fifty years for. I saw the picture. That council on that side, not on this side and now I’m on this side I’m like the council for once. I got approval. It was very dangerous what I did, because in their hearts, the planning department would be on their side not on my side. So since I had the approval, I started building and I built as fast as I could.

Then I decided what would the judge do, tell me to pull down the building? Very hard. The council was scared to put an injunction on me because then they would be liable to pay if they were wrong. So, there they are, whingeing over there. Some things are worth seeing in life! They were whingeing and I was building and building and I told them, have a look today, have a look tomorrow. Anyway, thank God the judge decided we were right, 100% right and they have to pay my costs.

BK: What’s your best tip for dealing with council?

HT: The tip with the council is this: they have a code.

Now you have to decide whether that code will allow you to make a profit. If it does not allow you to make a profit, then leave the development. That is what I’m talking about.

BK: If you look back over your projects, some are more successful, some are less successful. Is there a common theme for the ones that go very well?

HT: Yes. You must build in the right place. It must be convenient. That’s the easy thing of dealing with the Chinese. They’re very logical. It’s very easy to understand what they like. They are the main market and they are the ones who will buy from you. So, you have to be near the transport, you have to be near the city and you have to be near good schools. If you’ve got those three things, you can’t go wrong. The next thing is you have to decide on the size of the apartments.

If you go to the local agents they will tell you to build mansions. Don’t listen to them. Decide in your mind what you think is the best size. It doesn’t mean it has to be the smallest and it doesn’t mean it has to be the biggest. Usually, if you go for two bedrooms, make them 80 squares, one garage, you can’t go wrong.

Support • Supporting each other’s choices • Being understanding • Offering encouragement • Valuing opinions Cooperation • Asking not expecting • Accepting change • Making decisions together • Willing to compromise Trust • Accepting each other’s words • Giving benefit of the doubt The information contained in this newsletter is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

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THE KELLY+PARTNERS POST

HOW DOES YOUR ASSET ALLOCATION STACK UP? Article by Trent Doughty

H

aving worked in the wealth management industry for more than 20 years, I have had the pleasure of working with private clients across the region in the stewardship of their investment portfolios. It is a tremendous responsibility to be entrusted with a client’s future means of financial wellbeing. During this period I have assembled what I believe are the keys to not only growing wealth, but also protecting it. One of the key factors to ensuring optimal investment outcomes and protection is asset allocation.

Asset allocation is the implementation of an investment strategy that balances risk and reward by adjusting the percentage of each asset in an investment portfolio according to the investor’s risk tolerance, goals and investment time frame.

More than 80% of a portfolio’s return and risk are determined by this investment policy. Shorterterm tactical decisions and the selection of specific investments or managers are important as well, but only once the fundamental structure of a portfolio has been defined.

In recent years, declines in interest rates have led to healthy returns in most developed bond, property and equity markets. Absence of a severe economic downturn or deflation, both of which seem unlikely in the near term, and returns in high-quality fixed income are likely to be low.

This forces investors to look for alternative sources of return higher up the risk curve. But where to invest is a challenge because global central banks have affected not only fixed income yields but also assets such as stocks and property.

Favouring the local share market is a common and understandable behaviour of Australian investors.

Home assets represent an important allocation in all portfolios, however they should not completely dominate. Investing predominantly or exclusively in Australian shares may introduce an unwanted sector bias in a portfolio, such as banks or mining. Moreover, a portfolio may become too exposed to specific economic and monetary cycles.

By contrast, investing globally reduces exposure to individual country risks while providing a broader range of growth opportunities. This was demonstrated in 2016, and our forecast of equity returns for the coming years continues to suggest that investing globally in equities offers useful diversification benefits and growth opportunities.

Alternative Investments are increasingly gaining importance as a cornerstone of diversified portfolios,

SAMPLE ASSET ALLOCATION

Hybrid Securities 8% Alternatives 5%

International Equities 24%

Cash 5%

Fixed Income 14%

Australian Equities 24%

Property 13%

particularly in a world of low interest rates and yields.

Alternatives typically represent 10-15% in a balanced to high-risk profile.

This is broadly in line with that of pension funds and endowments around the world. Alternatives encompass a broadly diversified universe including hedge funds, commodities and private equity.

These investments typically respond to different drivers than traditional assets such as bonds and stocks.

They also act as inflation protection in periods of rising inflation, while benefiting from falling yields in periods of declining inflation. They therefore play an attractive role in diversifying, stabilising and indeed optimising portfolios.

Remember, it’s never too late to give your existing portfolio a revamp. Asset allocation is not a one-time event, it’s a life-long process of review

Wealth is the ability to fully experience life HENRY DAVID THOREAU

The information contained in this newsletter is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

and refine. This is the Kelly+Partners Wealth Management system. It is important to also recognise that there is no one standardised solution for allocating your assets. Individual investors require individual solutions.

Please contact: Trent Doughty @ trent.doughty@kellypartners.com.au to arrange a no obligation conversation to discuss your current asset allocation model.

Trent Doughty MBA (Finance), SA Fin, Dip.FP Senior Client Director, Wealth Management

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THE KELLY+PARTNERS POST

PAGE 21

FAMILY OFFICE SERVICES

SUCCESSFUL FAMILY BUSINESSES Article by Vanessa Sirotic

THE NEXT LEVEL As your growth achieves your desired outcomes there will likely be events that get you thinking about taking your family office function to the next level.

Your thoughts may turn to items such as: • Ensuring wealth is transferred to future generations

Understand the family

Step EIGHT

Enjoy

Growth is good, but unsustainable growth is a success killer By trying to retain control over every aspect of your family and your business, working extraordinary hours and requiring each and every item be signed off by you, the business suffers.

Instead, establish a formal corporate structure including an advisory committee of external financial, management and governance professionals. Consider a cage rattler to ask the hard questions about business performance.

Governance roles are often blurred in a family business. Establishing a formal structure frees you to concentrate on working on the business – building relationships, winning contracts and nurturing your young colleagues and family members.

As sustainable growth is achieved you may see the advisory committee evolve into a board of directors and as more success comes your way you can appoint an independent chairperson and/or non-executive director.

This gives you a sounding board and an opportunity to run ideas or concerns past a clever, independent mind. This is especially useful for delicate peoplerelated issues.

Board meetings keep you accountable to your strategic plan, week to week and month to month.

Effective boards ensure things get done and provide a forum through which you can discuss the merits of opportunities that present themselves. You may not always agree with the outcome of board discussions, but you can take solace in the fact that such thorough discussion and robust process protects your business from rash and costly decisions.

Board meetings provide a forum through which difficult issues can be raised. This facilitates an objective viewpoint and allows you to explore solutions from a commercial perspective without things getting personal.

This can be an invaluable tool for family and closely held businesses.

The ultimate benefit? You can bring these same principles, structures and disciplines to your clients’ businesses to support their sustainable growth.

Step ONE

Step TWO Review strategy & structure

Live your legacy

WHAT OTHERS SAY

Step THREE

Family Flight Plan

Step SEVEN

Get Governance & Compliance correct

Plan your estate

Step FOUR Step SIX Manage your wealth

Review & Agree scorecards

Step FIVE

er

I

Coordination of trust responsibilities The family office provides invaluable services in helping trustees successfully assume their responsibilities in administering family trusts and educating the beneficiaries.

Document

& file o Pr

s yours like most successful family businesses? First it was a converted garage or similar, then a shared space, then your own space. Next came all the extra administrative tasks and pretty soon you could only get your core business done after-hours or on weekends.

Collaborate & Professionalise

A c ti

liv

THE TRIGGERS

o

n&

De

• Growing family wealth to accommodate expanding generations • Consolidating assets • Separating family wealth from operating business • Sudden influx of liquidity • Resolving family conflicts • Centralised risk, reporting and management • Philanthropic coordination • Changes in family structure Families are vastly different, but almost all are startlingly similar in their desire to ensure smooth intergenerational transfer of wealth and reduce intrafamily disputes.

Key outcomes from further developing your family office include: Education One of the key roles of a family office is to be an educator and mentor, preparing owners to be responsible.

Confidentiality of information Family offices provide tight protection for the family’s privacy and security of financial information.

Continuity of the family Many families rely on the family office to foster a sense of community and family unity over time.

Coordination of advisors The family office serves as a conductor, coordinating the expertise and talents of many external advisors.

Wealth strategy A core purpose of the family office is in developing an integrated wealth strategy and coordinating wealth transfer, tax planning and investment considerations.

Ultimately, one of its key roles is to be an integrator of financial strategies.

Intergenerational alignment Family offices help families understand and capture the benefits of shared ownership by assessing the impact of each decision on individual and family goals.

How has the family office helped others? We took a few key points raised by attendees from world-class family office conferences held over the past year to share with you.

“A platform to communicate amongst the family, it creates a framework in which the family can navigate.

It creates a level playing field, for all members in the family, it defines expectations, and irons out any potential conflicts. We encourage families to look at three angles – family governance, investment governance, and operational governance.”

– Gregorie Imfeld, Head of Family Office, Pictet Wealth Management “When families become more financial managers, they should be as professional and as successful as they have been in their business, which means putting the right governance structures in place and putting the right investment organisation in place. That’s absolutely key.”

– Rudolf Hauser, Senior Investment Manager, Pictet Wealth Management With large amounts of wealth at stake, and close personal ties to the family structure, family office services are invaluable to ensuring enduring family success.

TALK TO AN EXPERT Kelly+Partners would like to introduce you to Vanessa Sirotic, Client Director, Business and Family Office Services. A skilled independent family office advisor, Vanessa understands that a family’s story is an important asset comprised of human, intellectual and financial capital. Each story is vastly different, but startlingly similar in their desire to ensure smooth intergenerational wealth transfer. Recognising that succession is an ongoing process, best implemented through a thoughtful and intentional transition. Vanessa has successfully facilitated many significant family leadership transitions.

Vanessa Sirotic CA, B.BUS (ACC), B.SC Client Director, Business and Family Office Services E: vanessa.sirotic@ kellypartners.com.au

The information contained in this newsletter is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

A HIGH LEVEL, STRATEGIC BUSINESS COURSE DESIGNED TO...

Grow your sales, profit and income Turn your business into a highly saleable asset F ree up your time, dissolve business stress and improve your lifestyle.

‘IF YOU WANT YO GO PLACES, MOVE FORWARD BOTH PERSONALLY AND IN BUSINESS, I HIGHLY RECOMMEND GROW PROGRAM’.

- Scott Evans | Managing Director of Game Farms

‘EVERY PERSON IN THE ROOM COMES FROM A DIFFERENT PERSPECTIVE AND THE GROWTH IS PHENOMENAL. BORROW, BEG,PAY OFF, WHATEVER IT IS , GO TO THE COURSE’.

- Jim Aitken | Founder of Jim Aitken & Partners

‘THE TOOLS THAT ARE GIVEN TO YOU ARE TOOLS THAT YOU CAN ACTUALLY TAKE AWAY AND MAKE A DIFFERENCE IN YOUR BUSINESS THAT DAY’ - Louise Cordina | CEO The Cordina Group

‘I DEFINITELY RECOMMEND IT TO ANY BUSINESS OWNER THAT WANTS TO GROW THEIR BUSINESS, WHETHER YOU’RE STARTING OFF SMALL OR WITH AN ESTABLISHED COMPANY I THINK YOU CAN GET A LOT OF VALUE OUT OF THE SESSION.’ - Andrew Simmons | F ounder and CEO of Vision Personal Training

www.growprogram.com.au

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THE KELLY+PARTNERS POST

PAGE 23

UPDATE ON SUPERANNUATION The information contained in this article is current as at 22 March, 2017.

Article by Kim Meredith

SUMMARY OF SUPERANNUATION REFORMS

I

n the May 2016 Budget the Government proposed major reforms to Superannuation Legislation. Then in September 2016 the Treasurer, Mr Scott Morrison, announced that “Following extensive consultation, the Government will amend the package to improve the measures that seek to restrict superannuation being used as an estate planning vehicle, while providing greater support for Australians investing in their superannuation with the primary objective of providing an income in their retirement.” This included dropping the controversial $500,000 lifetime non-concessional contribution cap. According to Treasury releases “the changes improve the fairness, sustainability and integrity of the superannuation system”.

Since then most of the legislation to implement these reforms has been passed by Parliament and received royal assent.

The Australian Taxation Office (ATO) are progressively releasing Law Companion Guidelines and other information to assist Trustees and their advisors understand all of the changes. This will also provide Trustees with some clarity around how the ATO intend to administer some of these changes.

Most of the changes will apply from 1 July, 2017 and some contain transitional or grandfathering measures.

These changes will require superannuation members to review and/or adjust their current strategies for contributions, investments, retirement, pensions and estate planning.

Following is a summary of the main aspects of these changes:• The objective of superannuation will be set down in legislation for the first time - “the primary objective of the superannuation system is to provide income in retirement to substitute or supplement the age pension” (not passed by Parliament as yet).

According to the Government this will guide the development of future superannuation policy and require new legislation relating to superannuation to be accompanied by a statement of compatibility with this objective. There is also a list of subsidiary objectives. It is interesting to note, however, that there is no mention of adequacy included in this objective. I think it would be naive to hope that this will improve the stability of the superannuation system.

• Increases to the income threshold for spouse

• •

•

•

•

•

•

contribution tax offset to encourage additional low income spouse contributions.

Low Income Superannuation Tax Offset (LISTO) to replace the low income superannuation contributions.

From 1 July, 2017 the annual non-concessional contribution cap will be reduced from $180,000 to $100,000. There will continue to be ‘bring forward’ provisions for people under age 65 ($300,000 in three years) with transitional provisions where the ‘bring forward’ has been triggered prior to 1 July, 2017. Keeping in mind that age and corresponding work test requirements will still apply for contributions.

From 1 July, 2017 individuals with total superannuation balances of $1.6 million or more will no longer be able to make non-concessional contributions. Where fund members are approaching the $1.6 million total superannuation balance graduated ‘bring forward’ non-concessional contribution caps will apply.

From 1 July, 2017 the annual concessional contribution cap will be reduced to $25,000 for all individuals (currently $30,000 or $35,000 if you are 50 years old or over). Also the 10% test will be removed to allow deductions for member contributions for all individuals up to the cap (age and work test restrictions will still apply).

The Threshold for Division 293 tax (additional 15% tax on concessional contributions) will apply for individuals with adjusted taxable incomes above $250,000 from 1 July, 2017 (currently the threshold is $300,000).

Commencing 1 July, 2018 individuals with total superannuation balances less than $500,000 will be able to make additional catch up concessional contributions where they have not reached their concessional contribution caps in previous years.

Unused cap amounts will be carried forward on a 5 year rolling basis.

From 1 July, 2017 there will be a limit of $1.6 million on the amount an individual can transfer from their accumulation account into their pension account (where the income is tax exempt). Individuals with pension balances that are in excess of $1.6 million will be required to roll back (commute) the excess to an accumulation account (where the income is taxed at 15%) by 1 July, 2017 or withdraw the excess. These additional amounts over $1.6 million per member can be retained in their accumulation account with no requirement to withdraw them

The secret to success is to know something nobody else knows

from the superannuation fund. These provisions also contain transitional CGT arrangements and in some cases funds will need to obtain valuations at 30 June, 2017. Broadly commensurate measures will apply to defined benefit funds. These reforms will also affect death benefit pensions (reversionary and nonreversionary) so please review your estate planning.

• The tax exemption on earnings supporting transition to retirement income streams (TRIS) will be removed from 1 July, 2017 (earnings will be taxed at 15% instead of 0%). You will no longer be able to elect for a payment from a TRIS to be treated as a lump sum in order to access the tax free low rate cap. However, there will still be instances where a TRIS will be beneficial.

• From 1 July, 2017 the anti-detriment deduction will be removed.

For now the existing rules apply for concessional and non-concessional contributions up until 30 June, 2017. Clients who would like to make large contributions or have balances over $1.6 million and would like to make non-concessional contributions should seek advice whilst the existing contribution rules still apply.

These are the most significant changes to superannuation in many years and contain several concepts that are new to the superannuation system.

The changes are complex and will require a review of all prevailing superannuation strategies taking into consideration each individuals circumstances. These changes do not only impact those with super balances close to or over $1.6 million, they will also impact those that are planning to make large contributions, high income earners and people with a TRIS in place.

Also, some of these changes now take into account a member’s total super balance in all funds so please ensure that your Client Director has the relevant information on all of your super balances, including any defined benefit pensions for eg CSS or other govt. pensions.

If you would like some assistance please contact your Kelly+Partners Client Director.

Kim Meredith BCom, CPA, JP, SSA™ Senior Client Director – SMSF Specialist Advisor™ E: kim.meredith@ kellypartners.com.au

ARISTOTLE ONASSIS

The information contained in this newsletter is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

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PAGE 24

THE KELLY+PARTNERS POST

UPDATE ON TAXATION The information contained in this article is current as at 22 March, 2017.

Article by Tony Nunes

THE ATO’S FOCUS ON PRIVATELY OWNED AND WEALTHY GROUPS CONTINUES

Privately owned and wealthy groups play an important role in driving the Australian economy as well as its tax and super systems. As a result, the Australian Taxation Office (ATO) places significant emphasis on ensuring private individuals and groups are compliant with their taxation obligations, taking a strong stance towards active engagement with taxpayers and their representatives.

The ATO segments privately owned and wealthy groups into three distinct populations: • Private groups – economic groups with an annual turnover greater than $2 million (which are not public groups or foreign owned). There are an estimated 233,302 private groups nationally.

• Wealthy Australians – Australian resident individuals who control an estimated net worth between 5 and 30 million. There are approximately 128,005 wealthy Australians; and • High Wealth Individuals (HWIs) – Australian resident individuals who control an estimated net worth greater than $30 million. A total HWI population of 4,586 is estimated by the ATO. Based on the latest publicly released figures on taxation revenue, this population accounted for over $40b in net income tax, with an additional $41.86b as Pay As You Go Withholding. Including all entity types (such as trusts, companies and partnerships), there are a total of 1,253,407 entities within this population.

HOW THE ATO IDENTIFIES WEALTHY INDIVIDUALS

The ATO utilises sophisticated data matching and analytic models on tax returns to identify wealthy individuals and link them to associated businesses.

Referrals are also provided from other government agencies or within the community to assist in identifying relevant individuals and detecting potential risks.

By compiling information for the various sources available to them, the ATO applies a risk differentiation framework to rank privately owned and wealthy groups and individuals according to the risk they believe they pose. In effect, each taxpayer is assigned a risk profile rating (ranging from low to high) indicating both the likelihood of producing a tax outcome the ATO does not agree with, and the potential level of impact of non-

compliance. This is the first step in the risk assessment process conducted by the ATO, and higher risk ratings are likely to lead to further engagement with the taxpayer.

BEHAVIOURS AND CHARACTERISTICS

The following types of behaviours and characteristics of a taxpayer attract the ATO’s attention and alert them of a need for further review: • The tax or economic performance of the taxpayer is not comparable to similar businesses; • There is low transparency of their tax affairs; • Presence of large, one-off or unusual transactions, including transfer or shifting of wealth; • A history of aggressive tax planning; • Tax outcomes inconsistent with the intent of tax law; • Choosing not to comply or regularly taking controversial interpretations of the law; • Lifestyle not supported by after-tax income;

Behold the turtle, he makes progress only when he sticks his neck out

The information contained in this newsletter is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

• Treating private assets as business assets; • Accessing business assets for tax-free private use; and • Existence of poor governance and risk-management systems.

While the ATO will continually monitor taxpayers which they determine are at higher risk profiles, taxpayers that exhibit behaviours in line with the above will find themselves put onto the ATO’s radar.

“TOP 320” PRIVATE GROUPS TAX PERFORMANCE PROGRAM

While the ATO will assess risk based on the information available to them, they also take an active approach in engaging with wealthy Australians and HWIs. The ATO has begun reaching out to taxpayers who they believe have an estimated effective control of $30 million or more in net wealth in order to validate their net wealth. Such engagement by the ATO may include providing their view of the taxpayer’s existing group

BRUCE LEVIN

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THE KELLY+PARTNERS POST structure, providing an opportunity for the taxpayer to provide any up to date information as required.

This allows the taxpayer to simply confirm or correct the ATO’s information, instead of having to provide all the information to them. This engagement process is designed to increase transparency in the ATO’s actions and make their engagement with taxpayers more interactive while removing the frustrations of receiving a surprise ATO audit.

Private groups, wealthy Australians and HWIs remain a top priority to the ATO in enforcing its compliance programs throughout the country. In an address to the Taxation Institute of Australia on 16 March 2017, the Commissioner of Taxation, Chris Jordan AO, noted that work on private groups, wealthy Australians and HWIs was continuing with over 260 audits currently in progress. Work performed on this population has already raised almost $550 million in direct liabilities to date with almost $290 million in cash collections in the current financial year.

In addition to the general engagement process, the ATO also has a “Top 320” Private Groups Tax Performance Program in place with the aim of engaging one on one with the highest impact groups in the country and reviewing the affairs of such taxpayers.

In his address to the Tax Institute, the Commissioner noted that the ATO’s “Top 320” Private Groups Tax Performance Program is progressing strongly with 156 one-to-one intensive engagements either underway or complete. He also advised that the ATO is seeking to finalise its review of all 320 private groups by the end of June 2017. Taxpayers should expect the ATO to remain active within the private group and HWIs space with over $860 million of tax having been assessed to date via this program.

Taxpayers must ensure they understand their own risks and the risk of their businesses to ensure they are compliant across all their tax affairs, if they wish to meet the high standards of tax compliance expected of them by the ATO.

TAX RISK MANAGEMENT

T

he decisions, activities, operations and transactions undertaken by an organisation give rise to business risks. Some of these business risks will include tax risks. These tax risks may be in relation to the application of tax law and practice to particular facts, it may be uncertainty over the facts themselves or it may be uncertainty as to how well systems operate to arrive at the tax results of the business activities and operations. Managing tax risk is about managing these uncertainties. Due to the very nature of these uncertainties, there is often no one right answer. Tax risk management is about understanding where these risks arise and making judgement calls as to how they are dealt with.

Tax risk management forms part of good corporate governance practices. It requires directors to consider the tax risk profile that the corporation will adopt and to put in place systems and procedures that ensure the level of tax risk complies with corporate policy.

Increasingly, the ATO expects boards to take an active role in the tax affairs of the company and is insisting that boards ensure that tax risk management frameworks are

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in place. Previously these issues were considered only relevant for listed entities, but the ATO has made it clear that it expects private groups to also have a documented tax risk management policy. This means the group should have a strategic tax policy governing the overall organisational appetite to tax risk and a framework for managing such risks. Secondly, operational controls should be in place to govern the group’s tax affairs. This should all be formally documented in the groups tax risk management policy and communicated to those responsible for the implementation of the policy and to other interested stakeholders (which includes the ATO).

Whilst each organisation determines its own list of potential tax risks, common ones include: • transactions outside the ordinary course of business; • transactions where the overall outcome can be materially affected by the tax treatment; • transactions involving complex commercial issues; • transactions where a significant financial or reputational risk may arise; and • transactions where it is likely that the ATO may take a different view as to the application of the law.

In respect of major transactions and arrangements it is not sufficient for corporations to rely on their monthly or annual tax compliance functions. They should focus beyond tax outcomes to questions of probability, level of aggressiveness, likely tax office response and the implications of alternative outcomes. This approach has been crystallised by the ATO in their guide for private businesses that sets out the key steps and processes private businesses should take to ensure an effective level of tax governance exists in the business.

The ATO’s categorises tax governance for private businesses into seven broad categories: • Understand your obligations • Sound decision-making processes to address tax risks • Proper advice • Systems and controls to maintain integrity in reporting • Records and documentation • Timelines for tax lodgments • Tax liabilities and cashflow In implementing these governance procedures private business owners should be reviewing their affairs and asking the following 10 questions in respect of key transactions in their organisation: 1. What commercial objectives are being sought by the proposed strategy or the ownership and financial structure being proposed for a major transaction?

2. Is there a genuine and material financial benefit for the group apart from any effect on the group’s tax position? Are the tax results at odds with the commercial results?

3. If the structure and financing for the group’s business or a major transaction is complicated, is this because the business issues are complex? Is it more complex than necessary to achieve the commercial objectives?

4. What level of confidence do you have in the correctness of the advice you have received on the transaction? How likely is it that the ATO will take a different view of the application of the law and assess

PAGE 25 the company accordingly?

5. If there is a dispute with the ATO, what is the likelihood of the ATO being prepared to settle the dispute and, if so, on what terms?

6. How likely is it that the ATO will identify the tax issues arising from the proposed course of action?

Allied with that, to what extent will embarking on the proposed court of action increase the tax risk profile of the company and the possibility of audit scrutiny?

7. Depending on the potential risk, and your need for certainty, would it be desirable to approach the ATO for guidance in the form of a private binding ruling?

How likely is it that a positive private ruling could be secured? If it is unlikely, why? If there are time pressures is it possible to arrange with the ATO for a ruling to address the issue within the applicable time constraint?

8. Where a position has been taken on a tax issue, would it be desirable to be upfront with the ATO in identifying the issues before or when lodging the tax return or business activity statement and endeavouring to constructively handle any disagreements that may ensue? (The advantage of this approach is that the culpability penalty and interest charge may be avoided if the Tax Office view prevails.)

9. Is the tax advice based on the actual transaction or on an expectation of how the transaction will be implemented? (Tax liabilities will arise from the actual transaction implemented and not any proposed or intended transaction on which taxation advice may have been sought at an earlier point).

10. The factual basis of a transaction or strategy critically influences the tax consequence. Does the factual basis stated in the advice for the transaction accord with the business’ understanding of the matter? If the advice is based on any assumptions, are they reasonable and what would happen if they did not eventuate.

Tax risks are no different to other business risks facing an organisation and thus private business owners should have a framework to asses where they wish to position their businesses in respect of tax risks, what risks they are prepared to take and how any particular type of tax risk is to be managed. Where potential tax risks are identified, the business’ tax governance framework should allow the risk to be analysed and a decision taken whether to escalate the risk, how to assess it and ultimately determine how to address the tax risk. Thus for any type of tax risk, you not only need to understand what it is but you also need to decide how much tax risk you are willing and prepared to take.

Tony Nunes BCom LLB LLM MTax CTA Registered Tax Agent Senior Client Director, Tax Consulting E: tony.nunes@kellypartners.com.au

The only thing that hurts more than paying an income tax $$$$$$$$$$$$$$ is not having to pay an income tax.

The information contained in this newsletter is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

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THE KELLY+PARTNERS POST

THE GREATEST SALES DECK I’VE EVER SEEN Article by Andy Raskin – Article sourced from www.linkedin.com/pulse

IT’S ZUORA’S AND IT’S BRILLIANT. HERE’S WHY.

#1 NAME A BIG, RELEVANT CHANGE IN THE WORLD

few months ago, my friend Tim took a new sales job at a Series C tech company that had raised over $60 million from A-list investors.

He’s one of the best salespeople I know, but soon after starting, he emailed me to say he was struggling. “I’ve landed a few small accounts,” Tim said. “But my pitch falls flat at big enterprises.”

As I’ve written before, one of my favorite things is helping teams craft the high-level strategic story that powers sales, marketing, fundraising – everything. So Tim and I met for lunch at the Amber India restaurant off San Francisco’s Market Street to review his deck.

After loading up on the all-you-can-eat buffet, I asked Tim at what point prospects tuned out.

“Usually a few slides in,” he said.

Intent on maximizing dining ROI, Tim went back to the buffet for seconds. When he returned, I pulled out my laptop and launched into a Powerpoint presentation.

“What’s this?” Tim asked. “This,” I said, “is the greatest sales deck I have ever seen.”

Don’t kick off a sales presentation by talking about your product, your headquarters locations, investors, clients, or anything about yourself.

Instead, name the undeniable shift in the world that creates both (a) big stakes and (b) huge urgency for your prospect.

The first slide of virtually every Zuora deck – sales or otherwise – is some version of this:

A

THE FIVE ELEMENTS OF A BRILLIANT SALES NARRATIVE

The sales deck I showed Tim came from Zuora, the IPO-bound Silicon Valley company that sells a SaaS platform for subscription billing. If you pay for anything on a recurring basis (eg enterprise software), there’s a good chance that Zuora facilitates those transactions.

I had received the deck from an ex-Zuora salesperson, who said it helped him close the biggest deals of his career. (I have no connection to Zuora, and no relationship with anyone who currently works there.

Some current Zuora employees have connected with me after reading this.)

Abandoning his naan in a puddle of curried goat, Tim grabbed pen and paper and took notes as we ran through what made the Zuora deck so effective.

Specifically, we noted how brilliantly the deck led prospects through the following five elements, in precisely this order: (The ex-Zuora salesperson asked that I not share the Zuora deck publicly, and I will honour that request. However, I found slides on Zuora’s website and SlideShare channel that exhibit nearly the same narrative flow; all of the images below come from those public sources.)

Zuora came up with the phrase ‘subscription economy’ to name the trend in which buyers increasingly choose recurring service payments over outright purchases. Zuora usually follows that with a slide laying out the history of the change.

see opportunities. Most importantly, you grab their attention. As Hollywood screenwriting guru Robert McKee says: …what attracts human attention is change… if the temperature around you changes, if the phone rings , that gets your attention. The way in which a story begins is a starting event that creates a moment of change.

#2 SHOW THERE’LL BE WINNERS AND LOSERS

All prospects suffer from what economists call ‘loss aversion.’ That is, they tend to avoid a possible loss by sticking to the status quo, rather than risk a possible gain by opting for change.

To combat loss aversion, you must demonstrate how the change you cited above will create big winners and big losers. In other words, you have to show both of the following: that adapting to the change you cited will likely result in a highly positive future for the prospect; and that not doing so will likely result in an unacceptably negative future for the prospect.

Zuora neatly accomplishes this by documenting a ‘mass extinction’ among Fortune 500 companies…

…and then showing how the ‘winners’ have shifted from product ownership to subscription services.

Those include upstarts…

Note the subtle but important difference from what most pitch advice tells you, which is to start with ‘the problem.’ When you assert that your prospects have a problem, you put them on the defensive. They may be unaware of the problem, or uncomfortable admitting that they suffer from it.

But when you highlight a shift in the world, you get prospects to open up about how that shift affects them, how it scares them, and where they

An investment in knowledge pays the best interest BENJAMIN FRANKLIN

The information contained in this newsletter is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

THE KELLY+PARTNERS POST

…as well as rejuvenated incumbents:

To bring the point home, Zuora asks the following:

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innovative platform for ____.” Nope: the promised land is not having your technology, but what life is like thanks to having your technology.)

Your promised land is also crucial for helping prospects pitch your solution to colleagues after your sales meeting ends. In your absence, those colleagues will ask, “What do those guys do again?”

Armed with a compelling promised land, your prospects are more likely to supply an answer that gets others on board.

#4 INTRODUCE FEATURES AS ‘MAGIC GIFTS’

If it’s not clear by now, successful sales decks follow the same narrative structure as epic films and fairy tales.

Your prospect is Luke, and you’re Obi Wan, furnishing a lightsaber to help him defeat the Empire. Your prospect is Frodo, and you’re Gandalf, wielding wizardry to help him destroy the ring.

Your prospect is Cinderella, and you’re the fairy godmother, casting spells to get her to the ball. When you introduce your product or service, do so by positioning its capabilities like the lightsaber, wizardry and spells – as ‘magic gifts’ for helping your main character (prospect) reach that much-desired promised land.

Of course, by this point the common thread is already well established in prospects’ minds – winners adopt the subscription service models that Zuora supports.

Note that the Promised Land is a new future state, not your product or service.

(Over lunch, I asked my friend Tim to articulate his promised land, and he said, “You’ll have the most

I also like this one, from an exec at NCR (a Zuora customer), which speaks more explicitly to Zuora’s stated promised land:

What if you don’t yet have a huge number of successful customers? Product demos are the next most effective evidence, but again, features should always be presented in the context of how they help a prospect reach the promised land.

A SALES NARRATIVE WORKS BEST WHEN EVERYONE TELLS IT

#3 TEASE THE PROMISED LAND It’s tempting at this point to jump into the details of your product or service. Resist that urge. If you introduce product/service details too soon, prospects won’t yet have enough context for why those details are important, and they’ll tune out.

Instead, first present a ‘teaser’ vision of the happily-ever-after that your product/service will help the prospect achieve – what I call the ‘Promised Land.’ Your promised land should be both desirable (obviously) and difficult for the prospect to achieve without outside help. Otherwise, why does your company exist?

After demonstrating that the subscription economy will result in winners and losers, Zuora presents this promised land slide, which offers concrete criteria for what it means to win in the subscription economy:

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For example, above is the slide where Zuora talks about the structure of its customer record. Out of context, this detail would likely bore even the most technical prospect.

Positioned in the context of transitioning from an ‘old world’ to a ‘new world,’ however, it’s the foundation for an engaging conversation with prospects – technical and otherwise – about why it’s so hard to reach the promised land with traditional solutions.

Of course, successful sales rarely happen solely as the result of a great deck. For salespeople to be successful, the entire organisation must align around the narrative about the change, promised land and magic gifts.

There’s no better example of that than Zuora. If you ever see a Zuora executive speak, including CEO Tien Tzuo, you’ll almost certainly hear about the subscription economy and the winners and losers it’s creating. In fact, that’s the theme of virtually all the company’s marketing communications and campaigns, as well as its public vision statement:

#5 PROVE YOU CAN MAKE THE STORY COME TRUE

In telling the sales narrative this way, you’re making a commitment to prospects: if they go with you, you’ll get them to the promised land. But the road to the promised land is, by definition, littered with obstacles, so prospects are rightly sceptical of your ability to deliver. The last piece of the pitch, then, is the best evidence you can offer that you can your story come true.

By far the most effective type of evidence is a success story about how you’ve already helped someone else (who is similar to the prospect) reach the promised land. Zuora has a set of customer success stories that sales reps draw on, and while they’re more elaborate in the actual deck, this testimonial captures the essence:

About Andy Raskin I help leaders align around a strategic story – to power sales, marketing, fundraising, product, and recruiting. My clients include teams backed by Andreessen Horowitz, First Round Capital, GV, and other top venture firms. I’ve also led strategic story training at Uber, Yelp, General Assembly, HourlyNerd, Neustar and Stanford. To learn more or get in touch visit http://andyraskin.com. Or follow me on Twitter: @ araskin. Article sourced from https://www.linkedin.com/ pulse/greatest-sales-deck-ive-ever-seen-andy-raskin

The information contained in this newsletter is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

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PAGE 28

THE KELLY+PARTNERS POST

THE 15-MINUTE RETIREMENT PLAN

the same purchasing power. Similarly, if you placed $1 million under your mattress today, in 30 years that money would only be worth about $400,000 in todays money.

HOW DO YOU ESTABLISH A PRIMARY INVESTMENT OBJECTIVE?

How to avoid running out of money when you need it most Article by Trent Doughty

O

ne of the biggest risks an investor faces is running out of money in retirement. This can be a personal tragedy. People may work their whole lives to accumulate enough wealth for a comfortable retirement only to find they have come up short. To help minimise this risk, Kelly+Partners recommends you consider the following when planning your retirement: • How long will your portfolio need to provide for you?

• How can cash distributions and inflation impact your portfolio?

• How do you establish a primary investment objective?

• What are important trade offs you may need to make?

HOW LONG WILL YOUR PORTFOLIO NEED TO PROVIDE FOR YOU? The table below shows total life expectancy for Australians, based on current age. You could argue the estimates are low given ongoing medical advances, and don’t forget these are projections of average life expectancy – planning for the average is not sufficient since about half of the people in each bracket are expected to live longer due to current health and heredity factors. The bottom line? Your time horizon may be much longer than you realise. Prepare to live long and healthy and make sure you have enough money to maintain your lifestyle.

Average life expectancy* Age 51 52 53 54 55 56 57 58 59 60

Life Exp

Age

81 81 81 82 82 82 82 82 82 83

61 62 63 64 65 66 67 68 69 70

Life Exp

Age

83 83 83 83 84 84 84 84 85 85

71 72 73 74 75 76 77 78 79 80

Life Exp

Age

85 86 86 86 87 87 88 88 88 89

81 82 83 84 85 86 87 88 89 90

Life Exp 90 90 90 91 92 92 93 93 94 95

HOW CAN CASH DISTRIBUTIONS AND INFLATION IMPACT YOUR PORTFOLIO? As you anticipate your investment time horizon, it’s also critical to understand how withdrawals will impact your portfolio. Like many investors, you may have unrealistic expectations of how much money you’ll be able to safely withdraw each year during retirement.

A common but incorrect assumption is that since Australian equities have historically delivered about 8.4% annualised average returns over the long term (Source: ASX) , it must be safe to withdraw 8.6% a year without drawing down on the principal. Nothing could be further from the truth. Though Australia equity markets may realise about 8.6% over time, returns vary greatly from year to year. Miscalculating withdrawals during market downturns can substantially decrease the probability of maintaining your principal.

For example, if your portfolio is down 10% and you take a 10% distribution, you will need a 20% gain just to get back to the initial value.

Another important factor to consider is inflation.

It decreases purchasing power over time and erodes real savings and investment returns. Many investors fail to realise how much impact inflation can have. Since 1951, the Inflation Rate in Australia has averaged 5.12% and around 3% during the 2000’s (Source: ABS). If that average inflation rate continues into the future, a person who currently requires $50,000 to cover annual living expenses would need approximately $90,000 in 20 years and $120,000 in 30 years just to maintain Maintaining Purchasing Power*** $140,000 $120,000

$120,638

$100,000 $89,946

$80,000 $60,000 $40,000

$50,000

$57,906

$67,062

$104,167

Like many investors, you may plan to draw from your portfolio during retirement. The level of cash flow you require, combined with your mortal value objective, may require some trade-offs to minimise the risk of running out of money. For example, you may need to increase your exposure to investments with higher returns and be willing to tolerate the greater volatility associated with them.

Understanding the trade-offs of different strategies is crucial. The following scenarios show the impact of four different rates of withdrawal on a $1 million portfolio in Australia under different asset allocations, plus one showing no withdrawals. The four withdrawal rates are: • 10% or $100,000 per year • 7% or $70,000 per year • 5% or $50,000 per year • 3% or $30,000 per year These simulations are run using a financial model with all withdrawal amounts adjusted for inflation to maintain original purchasing power.

Trent Doughty MBA (Finance), SA Fin, Dip.FP Senior Client Director E: trent.doughty@ kellypartnerswealth.com.au

$0 2017

WHAT ARE IMPORTANT TRADEOFFS YOU NEED TO MAKE?

$77,665

$20,000

2012

Time horizon, cash flow needs and inflation are all key factors to consider in your retirement planning.

Another cornerstone is establishing a primary objective for your portfolio. A precise way to determine your portfolio’s objective is to define your ‘mortal value objective’ – the amount of money you plan to have at the end of your portfolio’s time horizon. Possible mortal value objectives include: • Maximising mortal value: you want to increase the purchasing power of your assets as much as possible across your time horizon • Maintaining the value of the portfolio in real terms: you aim to maintain your present purchasing power at the end of your time horizon • Depleting assets: you have no desire to leave any assets behind • Targeting a specific ending value: you desire a specific ending value, perhaps for making a donation to a charity or foundation.

2022

2027

2032

2037

2042

Don’t play games that you don’t understand, even if you see lots of other people making money from them TONY HSIEH

The information contained in this newsletter is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

WEALTHY

THE KELLY+PARTNERS POST

Scenario #1 In this scenario we simulate the results of investors taking annual withdrawals of $100,000 (10%) from a $1 million portfolio (starting value) over a hypothetical 30-year investment time horizon. $1,000,000 starting value over 30-year time horizon Probability of ending balance > $0 Probability of ending balance > $1,000,000 Minimum years to portfolio depletion Median terminal value

Scenario #5 In this scenario we simulate the results of investors making no annual withdrawals.

50% Stocks/ 70% Stocks/ 100% Stocks 50% Bonds 30% Bonds 9.9% 5.5%

20.4% 15.6%

7.9 $0

7.3 $0

6.3 $0

Scenario #2 In this scenario we simulate the results of investors taking annual withdrawals of $70,000 (7%) from a $1 million portfolio (starting value) over a hypothetical 30-year investment time horizon. $1,000,000 starting value over 30-year time horizon Probability of ending balance > $0 Probability of ending balance > $1,000,000 Minimum years to portfolio depletion Median terminal value

50% Stocks/ 70% Stocks/ 100% Stocks 50% Bonds 30% Bonds 44.80% 28.60%

51.90% 38.00%

11.8 $0

10.4 $0

8.7 $106,954

$1,000,000 starting value over 30-year time horizon Probability of ending balance > $0 Probability of ending balance > $1,000,000 Minimum years to portfolio depletion Median terminal value

5% Cash Flow 50% Stocks/ 70% Stocks/ 100% Stocks 50% Bonds 30% Bonds 78.50% 44.70%

79.30% 53.50%

74.90% 59.30%

17.1 $812,642

14.8 $1,184,493

11.4 $1,742,935

Scenario #4 In this scenario we simulate the results of investors taking annual withdrawals of $30,000 (3%) from a $1 million portfolio (starting value) over a hypothetical 30-year investment time horizon. $1,000,000 starting value over 30-year time horizon Probability of ending balance > $0 Probability of ending balance > $1,000,000 Minimum years to portfolio depletion Median terminal value

3% Cash Flow 50% Stocks/ 70% Stocks/ 100% Stocks 50% Bonds 30% Bonds 99.9%+ 82.90%

99.60% 83.80%

95.30% 79.10%

30 $2,148,193

27.3 $2,918,597

18.4 $3,531,734

99.9%+ 99.9%+

99.9%+ 99.3%+

99.9%+ 97.10%

30 $4,253,282

30 $5,321,377

30 $6,531,160

Which scenario and asset allocation makes you most comfortable?

There is no one right answer, only the answer that’s right for you.

However, if you want to maintain purchasing power with less volatility, then a 70% equities and 30% bonds allocation may be more appropriate. Determining your primary objective can help you decide which asset allocation is best for your needs.

Stocks

Cash

reserves for stable value and interest income.

Scenario #3 In this scenario we simulate the results of investors taking annual withdrawals of $50,000 (5%) from a $1 million portfolio (starting value) over a hypothetical 30-year investment time horizon.

50% Stocks/ 70% Stocks/ 100% Stocks 50% Bonds 30% Bonds

Probability of ending balance > $0 Probability of ending balance > $1,000,000 Minimum years to portfolio depletion Median terminal value

7% Cash Flow

32.30% 13.40%

0% Cash Flow

$1,000,000 starting value over 30-year time horizon

10% Cash Flow

1.3% 0%

PAGE 29

for the highest long-term potential returns from capital gains and dividends, but with substantial short-term risks.

Facts about Kelly+Partners to compare with your current advisor

Bonds

for higher interest income than cash reserves, but with added risks.

Kelly+ Your Partners Advisor

Your portfolio is constructed according to your specific needs, taking into account your investment objectives, time horizon for the assets, cash flow needs and other specific factors



?

You get proactive service from your investment advisor who will keep you up to date on your portfolio and conduct formal reviews



?

Your portfolio is managed by a team with 70 years of combined industry experience



?

Your firm’s CEO has written for magazines and three books on investing and wealth creation



?

You get a disciplined approach to your investment strategy that goes beyond just picking stocks



?

You can take advantage of global investing opportunities and alternatives with experienced advice



?

You won’t be limited to a single style of investing (like ‘growth’ or ‘value’ or ‘conservative’) as we shift our strategy based on our forward-looking view of market conditions.

If we forecast an upcoming bear market, we may adjust your portfolio allocation to be market neutral with less stocks and more bonds, cash or long short funds



?

You’ll have a competitive, transparent fee that aligns our interests with yours. If your portfolio improves we are both better off.



?

Disclaimer: The information contained in this document is for general information purposes only, and should not be used as a substitute for consultation with professional advisors. The information contained is not intended to address the circumstances of any particular individual or entity and is not to be relied upon by individuals or any other entity in making financial or investment decisions. Individuals and other entities should seek appropriate professional advice tailored to their circumstances in making financial decisions. Although Kelly Partners has taken care in creating this document, no guarantee is given as to its accuracy, currency or correctness. Kelly Partners is under no obligation to update any information included in this document. To the extent permissible by law, Kelly + Partners and its associated entities shall not be held liable for any for any errors, omissions, defects or misrepresentations in the information contained in this document, or any loss or damage, however caused, suffered or incurred by persons who rely on information in this document for any purpose. Investing in securities involves the risk of loss. Past performance is no guarantee of future returns

The information contained in this newsletter is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

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PAGE 30

THE KELLY+PARTNERS POST

A BUSINESS WOMAN TO LOOK UP TO

IMELDA ROCHE

ENTREPRENEUR (RETIRED) – ROCHE GROUP This interview is an edited extract from Business Owners’ Wisdom by Brett Kelly

I

melda Roche is widely recognised and honoured as an inspiring businesswoman. She was named one of the fifty leading Women Entrepreneurs of the World. An exceptional woman in her own right, she was appointed by Prime Minister Paul Keating as Australia’s representative to the Business Forum of the Asia–Pacific Economic Co-operation (APEC), and subsequently by Prime Minister John Howard as a representative to the successor organisation, the Business Advisory Council to APEC. She is the recipient of two honorary doctorates and the Australian Centenary Medal.

With exceptional passion and enterprise, Imelda and her husband, Bill, grew the iconic Nutri‑Metics business in Australia to become the most profitable division of the American company’s multi-million dollar international business. The Roche family acquired the entire Nutri-Metics Organisation in 1992 before selling it to the Sara Lee Corporation six years later. While the Roche Group is now largely a property and tourism

venture, Imelda’s story shines a light on one woman’s amazing ability to succeed in business while not losing sight of the important things in life.

Brett Kelly: What do you think are the most critical issues facing Australian businesses?

IMEDA ROCHE: Notwithstanding the present decline in employment overall, there are skill shortages in many geographic areas and specific sectors of the Australian economy which will take decades to overcome without more focus on specialised training and skills-based immigration. The high Australian dollar is having a very uneven effect across the economy, the obvious problems being the impacts on inbound tourism and exports, especially for our manufacturing and rural industries.

BK: What are your views on immigration?

IR: In my view, immigration is vital to Australia’s future. While recognising the obvious difficulties,

The information contained in this newsletter is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

ideally our intake should be through managed sources and as large as we can afford to integrate into our diverse communities in any given year. We are a small nation occupying a very large land area. To secure and progress our nation and to keep us economically competitive in the years ahead, we need to significantly expand our population. To do this we need massive investment in new infrastructure, the most critical of which would be in the capture, storage and distribution of water.

Over the years we have heard many times that Australia, being the driest continent, cannot support more than twenty-five million people. It is my view that this assertion is, and has been, largely based on the judgement that without a substantial increase in our national income, we will not, in the foreseeable future, have the financial capacity to make the necessary infrastructure investment for major water capture, storage and distribution projects.

THE KELLY+PARTNERS POST

Though much of Australia is subject to cyclical weather patterns, in most years we do have a high enough rainfall on much of the east coast and across northern Australia to irrigate large areas of the continent, if the necessary infrastructure was in place.

Our national ability to invest in or to attract investment for essential infrastructure is constrained by the size of our population. It is rather like the conundrum of the chicken and the egg. Which comes first?

BK: What impact did the GFC (global financial crisis) have on your business?

IR: It depends on which aspect of our business we focus on. We are now largely a property group, however, our portfolio includes three Irish pubs, the Hunter Valley Gardens and two cattle breeding stations.

The GFC had minimal impact on our hotels, the Gardens or the cattle stations, however, it continues to have a major impact on our property business.

Compared to the financial sector, the property sector is heavily taxed. There is no stamp duty on share transfers while transactional taxes and stamp duty are levied on the property sector and are significant.

We pay annual land tax on our properties and stamp duty for any property we purchase. We believe that there should be a more even playing field between the different sectors.

BK: What are your views on debt in your business and life?

IR: Conservative in both business and private life, we are continuously assessing our debt, however, we are very mindful of progressing our diverse business entities and the lives of all who work within our business. In my private life I remain financially conservative and have never had a difficulty in recognising the difference between needs and wants.

BK: What is your view on tax and how has it affected you?

IR: Dealing with the philosophical first, paying tax in any aspect of our lives does not usually represent fun.

There are, however, moral issues imbedded in our attitude to tax.

There are, and always will be, critics of any tax system and of any changes to it. There are inevitably winners and losers. However, the reality is that no modern society can effectively provide all the services needed and expected, and meet its financial responsibilities without the majority of the population and all business entities paying their fair share of tax – Greece is a prominent example of a nation with an ambivalent attitude to tax. There will always be competing sectional interests and conflicting views as to what is fair and reasonable.

How much do we need to be taxed for? Amongst other things: • Providing adequate health services for the entire community • Caring for those in the community unable to care for themselves • Providing education for young people and skills training for the unemployed • Maintaining and improving our national competitiveness • Maintaining and improving our essential services and public infrastructure

WISE

“In any successful business the leadership must maintain a strong work ethic, generate high energy and maintain a constant focus on productivity goals while never forgetting to recognise the contribution of all who work within the business.”

• Maintaining an adequate defense force and effectively playing our part in maintaining stability in our region, etc.

BK: Is there one thing that you think that anybody who wants to succeed in business should definitely not forget?.

IR: Yes. That it takes work and commitment and usually involves some sacrifice. It helps to have a passion for what you do and to be able to think outside the box.

There are of course a few basics. First and foremost is the importance of the example you set.

In any successful business the leadership must maintain a strong work ethic, generate high energy and maintain a constant focus on productivity goals while never forgetting to recognise the contribution of all who work within the business. A successful business must also be well-researched and have realistic, short, medium and long-term flexible action plans.

BK: Is there anyone that you have looked at, who has really inspired you?

IR: The person who stands out to me most in recent history is Nelson Mandela. Here is a man who had a great deal to be bitter about, however, he emerged from his twenty-seven years of imprisonment with his focus on the advancement and wellbeing of his countrymen. It was about his country, his people and his community – with forgiveness in his heart – not about himself.

BK: Imelda, tell us about the business that you started, where it developed and how it was eventually sold.

IR: My husband Bill and I met in Canberra in early 1957. We were both representing our companies at the opening of Canberra’s first self-service food department. Bill was with the Kellogg Company and I was with the National Cash Register Company. I was there to train staff in the operation of the store’s newstyle cash registers.

Within a few months of that meeting, both Bill and I decided we had found our life partner. However, we needed to find a way to earn more than our salaries provided before we could even think about marriage.

We started to brainstorm ways to earn substantially more money. (I was already working a second job three nights a week, and had a third working weekends, babysitting.)

As it happened, Australian television had made its first broadcast just a few months earlier in September 1956. It is funny to think about it now, but soon after

PAGE 31

TV was introduced, there was a popular theory circulating in the community that if you did not have a soft light on the set while you were viewing TV, it could injure your eyes. Everyone seemed to believe it, including us.

Bill came up with the idea that we could make television lamps and that he could take orders from country furniture stores for them to include lamps in the sale of their television sets. He secured orders with his first few calls, so we set to work creating miniworkshops in both of our mothers’ living rooms and co-opted all the female relatives we could persuade into helping us. I laugh when I think about it now; they were awful – coloured raffia or plastic ribbon wound around wire frames.

We continued selling them into country stores until Bill’s oldest brother, who had some direct selling experience, asked, ‘Why don’t you sell them direct to the home?’ He offered to organise a small sales team.

We decided we would sell them with a deposit of five shillings, then two and sixpence a week until paid off.

Bill’s other brother, who was a very handsome young man, volunteered to do the collection rounds on Saturday mornings.

I think the ladies quite liked him and did not mind handing over their two and sixpences. He reported to us that while doing his rounds he was repeatedly asked, ‘What else do you sell?’ That really set us a challenge.

What else could we sell? We tried manchester, unsuccessfully, as we could not compete on price with the department stores.

Soon after, we decided to try fashion and with inspiration from The Australian Women’s Weekly and Vogue, Butterick and Simplicity pattern books, I became an instant fashion designer. We found several small companies who made garments for the trade and they agreed to manufacture for us and advised how many garments we should order, in each size. I selected the fabrics and put the range together with the manufacturers. Not high fashion, just timeless basic designs. We employed several teams of saleswomen to sell Roche Fashions direct to the home and from a modest start Roche Fashions was in business for over ten years.

As we expanded from Sydney to Newcastle and Melbourne, we needed additional finance and entered into an arrangement with Waltons Department Store to sell our newly opened accounts to them.

This provided us with working capital, and enabled Waltons to expand its direct-to-the-home business.

This worked well for a time, however, as Waltons salesmen took over collecting on the modest debts we had established, they substantially increased the indebtedness of many customers by further selling carpets, lounge suites, refrigerators and washing machines, etc, on time payment.

We had no control over how these accounts were credit rated, increased or managed and when customers defaulted on their weekly repayments, Waltons deducted the full amount of the original debt from the payment currently due to us from new accounts. This made our arrangement with Waltons unworkable, so it was back to the drawing board for us.

By now it was 1968 and I started researching who else was selling direct to the home and how they operated. This was the beginning of phase two of our independent business lives. As I researched the fledgling industry I found there were several small Australian direct selling companies operating in Sydney

The information contained in this newsletter is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

PAGE 32

and two international majors, Avon and Tupperware, both reasonably new to Australia. Whereas Roche Fashions had salaried sales teams who worked for extra commission on sales, all these companies worked on commission alone, which helped control overheads.

Those old enough to remember will recall that in 1968 there were still two afternoon newspapers in Sydney, The Sun and The Daily Mirror. Coincidently, during my research, The Sun ran an advertisement seeking management for a California- based direct selling company planning to expand to Australia. I responded and, hearing nothing back, had almost forgotten about it, until early one morning, months later, I answered the phone to the most captivating voice I had ever heard. Any mother of small children will know it is hard to be captivated at 7.30 in the morning with two toddlers and a baby in a high chair demanding breakfast.

The voice belonged to Lee Trent, who I later discovered was the original radio voice of the Lone Ranger in the 1930s and early forties. He introduced himself, said that he was staying at the Wentworth Hotel and asked if I would come to the hotel that day for a meeting. I went and was absolutely fascinated. He stood about six feet five inches tall, was pencil slim and had a shock of silver hair.

He told me that he was in Sydney to establish ConStan Industries, a company which marketed nutritional products, skin care and cosmetics in the United States and Canada, and that he was in Australia on behalf of the President and owner of the company, a man by the name of Mulford Nobbs. He explained that a deal had been concluded with a Sydney businessman to establish Con-Stan in Australia and that products had been shipped from California. However, when he and the products arrived the Sydney, the man did not provide, as had been agreed, the finance needed to release the products from Customs, nor his agreed share of the start-up costs. I immediately recognised that this could possibly provide us with the opportunity to take on the challenge of this start-up.

I was intrigued by both the concept of the business plan and the products. The business plan gave women who were principally homemakers a wonderful opportunity to set their own flexible work timetable and to contribute to the financial wellbeing of their families. However, it was the product itself that truly captured me. The concept of a totally natural range of skincare products (a first for Australia) was exciting. I was convinced it had the necessary elements to make it a success. The product was unique, the timing perfect, and both subsequently worked very well for us.

BK: So it was very similar to your own situation.

You had already been direct selling for ten years at that point?

IR: Yes, and I was anxious to tell Bill about it.

BK: I was going to ask – what did he say when you said you were going to sell skincare?

IR: He took some convincing that this could be a winner in an already crowded skincare market, however, I convinced him it was worth investigating as this product was unique. Bill met Lee the following day and they hit it off immediately. They both had a very relaxed and ironic sense of humour and enjoyed one another’s company enormously.

They worked together closely over many years until Lee passed away, a very sad event for us. The decision

WISE

to take on the start-up of Con-Stan in Australia (NutriMetics as the worldwide company was to be renamed in 1983) was made right there at that meeting. We decided then and there to provide the funds to retrieve the product from Customs and to hand over the running of Roche Fashions to Bill’s two brothers.

Under Lee Trent’s guidance we started from scratch to develop a field force for Con-Stan in Australia. In the first week we attracted five people who came from the business of the man who had originally intended to partner with Con-Stan. From the beginning we divided the responsibilities. My focus was sales and marketing and front-of-house activities, primarily attracting and training the field force.

Bill took on the responsibility for overall management. Within a year or two, we had set up local manufacturing both in Australia and New Zealand and Bill added new component and packaging design and product development to his overall responsibilities. He was always very creative and loved the opportunity to be involved in design.

As we expanded the Australian and New Zealand businesses he personally supervised the design and building of two training and product distribution offices and warehouses in Auckland and Christchurch and in each of our six State capitals, where possible in a garden setting. As you know, he has gone on to develop Hunter Valley Gardens (with the help of experienced professionals), however, it was his vision, his concept and his creation.

Back to the beginning … In the first few months, three sales trainers came in rotation from the United States to assist and to train me. From the original five people in Sydney, we rapidly expanded throughout Australia, and by 1972 we were operating in New Zealand and Singapore. During the next decade we also expanded to Japan, Malaysia, Brunei, Thailand, Indonesia, China and Hong Kong and later dispatched Australians to manage start-ups in several countries in Europe.

BK: You had the rights to take Nutri-Metics anywhere apart from the US and Canada.

IR: We didn’t have any specific or designated rights, however, as opportunities presented, we went ahead and expanded the business. Of course Mulford Nobbs was delighted with the fact that we forged ahead on literally just a promise and a handshake. It was not until 1984 that we formally achieved any percentage ownership of the business. Up to that time, we worked solely on an agreed percentage of sales revenue.

BK: Of the US business too?

IR: No, nothing from the US, just from the businesses we created.

BK: So, you had been in the business since 1968.

Around 1991 you went to the owner of the business in the US, who was then in his mideighties, and said, ‘We are prepared to buy the worldwide group.’ He agreed a price, a price that wasn’t necessarily a function of financial mathematics but more, as is often the case, the number that the owner wanted. You guys struggled to raise the money but eventually found a willing banker. How confident were you in the business? How nervous were you about the transaction? Because you are not twenty-one at this point; you guys are in your late-fifties …

The information contained in this newsletter is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

THE KELLY+PARTNERS POST

IR: We were taking on a huge commitment, a business operating in sixteen countries. However, we were confident because we knew what the Australian business was capable of and we knew what the international businesses we had established and developed around the world could be capable of and we were already directly managing most of them. And yes, we knew there was considerable risk in taking on a huge debt burden, however, we believed we could handle it and we did.

BK: You then decided that your main focus would be in the markets that you had established and not in the US. Was that because of the level of competition there?

IR: No, not necessarily. There was a great deal more strength in several of the other markets, so we initially focused on building on strength.

BK: What happened then? You sold the business in 1997 …

IR: Yes, we acquired it in 1991 and sold it in 1997.

BK: Was the plan always to buy it and sell it?

IR: In 1991 the plan was to continue it as a familyowned company. It had been a family-owned American business and we intended to continue it as a family-owned Australian business. We made what some would regard as a not-too-bright decision. We immediately headquartered the business in Sydney. This involved us in a very substantial tax bill which, had we maintained the overseas corporation, would have been handled differently. However, we had decided that we wanted Nutri-Metics to become an Australian-owned corporation that would be kept in the family. Over the next six years we continued to build the business both in Australia and internationally and during that time, in

THE KELLY+PARTNERS POST

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Nutri-Metics consultants at our annual seminars that he married an older woman – to which I would respond, ‘He needed the wisdom.’

BK: So, you are sixty-three at the time, approaching an age where people do think about these things. There is an opportunity. What happens then?

IR: The decision to sell did not go down well initially, or create total harmony within the family, because for our children, it was completely unexpected. So there were challenges.

BK: How did you handle that? Did you sit everyone down and have a discussion? Did you say, ‘It’s our business and we’ll do as we like.’?

IR: We would never say to our children, ‘It is our business and we will do as we like with it.’ That was never part of our thinking. Our major difficulty was that absolutely no premature hint of a possible sale could be revealed to anyone in case the discussions amounted to nothing. That would have been very destabilising.

1993, I became Chairman of the World Federation of Direct Selling Organisations. It was the first time for an Australian and the first for a woman.

It was then that we came to the attention of several of the major direct selling companies, and one in particular, the Sara Lee Corporation. Representatives of Sara Lee made contact with us at a World Federation Congress in Berlin and suggested it might be interested in buying Nutri-Metics. We told them we were not interested in selling. However, they continued to make contact regularly over the next three years and on several occasions broached the subject of a possible joint venture into India.

They were particularly interested in the businesses we had developed in Asia as they had very little presence in that region. They were also intrigued by the fact that we had a reasonably strong business in France, which is regarded by many as the home of quality skincare, fragrance and cosmetics. We also had modest businesses in the United Kingdom and Ireland and a strong business developing in Greece managed

by Greek Australians. From the United Kingdom we were sending product to several European countries including The Netherlands where we had a strong sales team led by an Australian, and from Greece we were sending product into Cyprus.

In addition to the overtures from Sara Lee, it was becoming apparent that not all of our children saw a career for themselves in Nutri-Metics. Two were already thinking about other things and this in itself could have introduced complications down the track.

We began to think that maybe the best thing we could do to assist our children, or young adults as they were by then, would be to provide financial support for each of them to develop their own career paths, and not necessarily tie them to something that Bill and I had created.

A direct selling business is very different in character and style to many other businesses. It is more than usually personality-driven and dependent on very committed, dedicated leadership. In direct sales leadership, you become more than usually involved in the lives of the people working with you, as you endeavour to help them set their business goals and priorities.

I would know much of what was going on in the family lives of many of our senior field leaders because it was necessary to understand their challenges to know how to assist them to set and reach their goals, which of course were a vital part of the overall corporate goals. While always recognising they were not employees, rather independent associates running their own businesses. We needed to motivate, encourage and inspire our field force to want to do what was needed to grow their businesses and enjoy all of the benefits that Nutri-Metics had to offer them.

You can give direct instructions to salaried people and expect them to do as you ask them to do. You cannot give instruction in the same way to people who are self-employed. Motivation and encouragement are the key and this requires an enormous commitment of time from the leadership. Recognising those industry distinctions, gave us pause for thought. Bill and I had lived the business, sometimes at the expense of our family life, and we did this, not only because of our passion for the business, but also to create a better life and for our children, as they grew older, the freedom to make their own individual choices about their future work/life balance.

BK: Is Bill the same age as you?

IR: He is a year younger and I have never been allowed to make a secret of it, even if I had wanted too.

Bill regularly enjoyed making a joke of telling the

BK: So the possible sale was a secret from everybody.

IR: Yes, everybody. We could not take the risk of anything leaking until a deal was concluded. So there was no discussion with any members of the family until after the contracts were signed, and that caused some heartache. The thought that we would sell the business without consulting them was hard for them to come to terms with and the decision was both difficult and, in its own way, painful for Bill and for me.

Within that same week we brought together our senior corporate management from around the world, together with the most senior and influential leaders of our field force and made the announcement to everyone at the same time. It was all done very quickly once agreement was reached.

As the shock of it all settled down, we worked to make sure there was a good level of confidence, security and understanding with all of our corporate people and senior field leaders.

As Bill wanted to move on to other horizons, I agreed to stay on for three years as Chairman of the company, primarily to help with the transition from being a still comparatively small multi-national family company, to being part of a very large multi-national.

My role was to assist a smooth transition and to ensure that we would maintain everybody Sara Lee saw as valuable going forward, as obviously there were bound to be changes in the way the business would be conducted. There were of course some people who were not happy with the change and decided to move on. Fortunately, we did keep the most important players at the senior corporate level and all of our senior field leaders, as I knew would be the case, as all had so much invested in their own independent organisations. Many are still with the company today.

BK: They had invested a lot of time and energy in their own organisations?

IR: Yes and that concerned us. We really needed to ensure that the transition to Sara Lee management was as comfortable as possible for everyone and that both our corporate staff and field leaders saw a positive future for themselves going forward.

Working effectively with Sara Lee personnel, it all went smoothly.

The information contained in this newsletter is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

PAGE 34

BK: So, you get through that. Obviously going from the challenge of a situation where you and Bill couldn’t get married because you didn’t have sufficient money, to forty years later selling a very successful business and cashing a large cheque, that’s a very different scenario entirely. What did you do then? Did you have a clear plan?

IR: We had over the years acquired several substantial landholdings that we never had the time or the money to start developing. They had remained just landholdings for many years. In addition, a few months after we sold the business we acquired a property at Pokolbin, that eventually was to become Hunter Valley Gardens. Bill was inspired from the time we first visited the Butchart Gardens in Canada some thirty-five years earlier to create something similar. He had said to me during that visit, ‘One day I want to do something like this.’ That thought was reaffirmed for him each time we visited the Butchart Gardens in subsequent years.

It was on a drive back from Broke, where we had for some years attended Opera in the Vines, that we passed a ‘For Sale’ sign on a vineyard in Pokolbin. We saw that the property had a wonderful 360º view of the valley and the Brokenback Range. It was planted with very old Shiraz vines and we thought we should buy it to have as an out-of-town retreat for the family.

Within weeks of acquiring the vineyard, the property next door, which is now Hunter Valley Gardens, came up for sale so we added that too.

Then Bill discovered from an old map of the district that there had been a slice of the original property cut out on Broke Road, which housed the only pub in Pokolbin, and suggested we should also acquire the pub, as it was built on part of the original land grant, and this would enable us to put the original property back together again.

He gutted what was a very ‘ordinary’ hotel and converted it to a family- friendly Irish pub. We have since gone on to build two more Harrigan’s Irish Pubs in two of our residential community developments – one on the mid-north coast of New South Wales and one in south-east Queensland. So there are now three Harrigan’s Irish Pubs. They are all family-friendly; absolutely a pleasure to be in.

BK: One of the challenges I regularly see that people have is how to live together and work together. How did you guys do it?

IR: Well Brett, my first response to that would have to be, ‘With difficulty!’ You would know, it’s challenging enough to stay married for over fifty years and raise four children without, at the same time, being in business together for most of those years. I would have to say that you manage through compromise and by separating responsibilities, and by trying not to secondguess one another.

Bill’s approach to many situations is very different to mine so we needed to give one another space. If the issue was important enough we would talk it through until we agreed or agreed to disagree. If it involved his area of responsibility the ultimate decision would be his and vice versa. We each understood enough about the overall business that if Bill was overseas and a decision needed to be made in his area of responsibility, I could handle it and he could do the same with sales and marketing. In most instances we avoided secondguessing one another and discouraged staff and the field force from going from one to the other if they didn’t get the answer they wanted.

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BK: How did you manage the domestic end?

IR: In the very early days my mother filled in for me whenever I needed her, especially when I was away from Sydney, and I always supported her with as much domestic help as we could afford. What I really needed from her was for her just to be there with the children when I was away. She would see them off to school, cook dinner at night and tuck them into bed.

I had a number of people help with the house cleaning, the washing, the ironing, the gardening, the window cleaning, whatever! My mother was not a young woman at that stage and she had raised six children of her own and worked hard all of her life. She made it possible for me to work and to travel while retaining peace of mind, knowing our children were well cared for. I was deeply indebted to her.

My advice to the women who worked with me, and to any I spoke to who wanted to succeed in business, was to employ as much help as they could afford. It is not possible to maintain being a wonder woman indefinitely. You can’t be all things to all people all of the time and you cannot meet all of the expectations of family life while continuing to do everything in the home yourself. It is just not possible. You must prioritise what is important to you and your family.

It is good to remember that your husband really doesn’t care who irons his shirts unless they are not done to his satisfaction; your children don’t care who

The information contained in this newsletter is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

cleans the oven and scrubs the floors as long as you don’t ask them to do it. So really, it is a matter of proper organisation and delegation. ‘A happy wife is a happy life’. It is OK to provide paid work for someone else, to do the jobs around the house you do not have the time or the energy to do – it all helps to spread the wealth.

BK: Did you have live-in help after your mother could no longer do it?

IR: Yes, from time to time I did, mostly when my children were young. As they grew older, they all went to boarding school for a period of time, which they mostly enjoyed..

BK: So, you were the public face of Nutri-Metics, Bill was working in the business with you – what was the domestic scenario? Who was the boss?

IR: Bill usually made the major investment decisions both in the business and for the family. I tended not to become too involved because it was not necessary. He has made good decisions over the years.

Brett, there were times when I wouldn’t have known exactly what the business was earning. That wasn’t my focus. My focus was marketing and sales, recruiting, training and expanding our consultant base – developing and working closely with our field leadership, travelling constantly to consultant reward

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and recognition meetings and arranging local and international sales conferences. Cars and travel were a very important part of the Nutri-Metics achievement reward program.

Bill made all the investment decisions as he saw appropriate. Of course he did consult me from time to time! One of the happy aspects of our married life is that we have never had an argument or even a disagreement over money, even when we had very little. There have of course been a number of other issues we could find to disagree about, but never money. As long as we had what we needed to educate our children, live in a comfortable home and pay the bills, I was happy. We have never been particularly extravagant BK: No private jets or fast cars?

What about boats?

IR: Well, boats are quite a different story. Bill has been known from time to time to be a small fleet owner, which is something of a family in-joke. There is the large family catamaran which he bought as just a hull over twenty-five years ago then designed and had built. He still loves that boat. Over the years he has acquired other smaller boats and has spent next to no time in or on them. However, he has always loved boats, they are his main recreational interest.

BK: But other than that, not a lot of trinkets?

IR: No, not really. The family still has the car Bill bought for me in 1979 which I am reluctant to ever sell (one of my daughters-in-law currently drives it). The car I now drive most of the time has been in the family for twelve years.

BK: Would you describe yourself as frugal?

IR: On some levels I suppose it could be said that I am.

One of my sons once described me to his mates as having a Depression-era mentality. They were watching me flatten out brown paper bags, as I had seen my mother so often do, to use again for school lunches. I saw her re-use everything. She rarely threw anything out.

The lessons you learn and the things you observe in your early life are hard to shake off – and in truth, I really don’t want to shake them off. I would say, though, that overall I think I am more financially conservative than frugal, and I tried to raise my children to have those same values.

BK: You have four children and they are all welladjusted and happy. You were committed to raising your children and you built a business – those two things are not normally as compatible as they have been here. What are the values you have tried to give your children?

IR: In a nutshell, to lead wholesome lives.

BK: What does that word mean for you?

IR: It means being a person of integrity, being trustworthy and truthful, with a goodness of heart and a purity of mind and spirit. A healthy self respect with good moral standards and values; nothing contrived or superficial.

BK: How do you guard against a sense of entitlement in children, where there is financial capacity around or there’s success right in front of them?

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The lessons you learn and the things you observe in your early life are hard to shake off – and in truth, I really don’t want to shake them off. I would say, though, that overall I think I am more financially conservative than frugal, and I tried to raise my children to have those same values.”

IR: Setting an example is more important than anything else. Expressed in another piece of homespun wisdom I value, ‘Your actions speak so loudly I cannot hear what you say.’

BK: Do you give your kids things, or do you let them go and earn it themselves?

IR: I have to admit that none of our children had to earn a dollar for themselves until they had left school or finished studying at university. I sometimes reflect on this, as Bill collected bottles at the local oval as a kid to earn a few pennies and we both left school and started working at fifteen.

However, our four children have all turned out to be really good citizens, wonderful parents and have all chosen excellent partners in life. We have four very stable young families and much to be thankful for. I would think that my best advice to parents would be to really safeguard against an automatic or unrealistic sense of entitlement. For most people, something unearned is rarely valued. Something produced with your own hands or earned through your own effort creates a healthy sense of achievement and a legitimate sense of entitlement.

Somebody said to me when I was a very young woman, ‘Remember this: “If it is to be, it is up to me.”

Keep that in your mind. You are not entitled to handouts, what you want and need, you need to go earn.’

That thought has influenced my attitude to life. I have also learned along the way that if you are prepared to give more than you expect to receive, you will rarely if ever be disappointed.

BK: Your whole life?

IR: Well, for most of my adult life those two things have guided my attitude to life and business. I don’t believe I felt that way as a child or young adult. In fact, I am sure I didn’t. These attitudes and thoughts developed over time with experience and maturity.

BK: OK, how is the family business run now?

IR: After we sold the Nutri-Metics business (Sara Lee later stylised the corporate name to Nutrimetics), over time we had a number of family members involved in what became the Roche Group. We had a brother-in-law, two sons and two sons-in-law.

By that time the girls were all busy with babies or young children.

When Bill and I decided to retire, our sons were forty-ish and more than ready to take over. It was time for us to stand aside and not wait until our boys were well into middle age. It was not easy for Bill to decide to hand over the reins. Brett, I’m sure you’ve heard it said many times, that it is easier for a woman to stand aside than for most men.

BK: Yesterday’s man. It’s a difficult concept.

IR: Yes,it is difficult. Particularly if sons might say, ‘Dad, we’ve got it, we discussed that last week; don’t need to go over it again.’ During most of his business life, Bill worked with a personal assistant and never had the need to use a computer. Nor did I for that matter, although I have since learned to send emails. Bill was very used to spending time in regular face-to-face meetings with the people who worked directly with him. Personal computers have introduced to business a whole new world that we did not grow up with.

BK: Now you are happily retired and have thirteen grandchildren. Does Bill have a current work focus?

IR: He is focusing a lot of his time on the Hunter Valley Gardens. He loves it.

BK: He’s got a passion for it.

IR: A well-kept garden of any size is always a work in progress; that is especially true of a large tourist garden.

BK: It is never finished?

IR: Bill loves that garden and loves being involved in its continuing development.

BK: So your business and personal life have been an extraordinary journey; an example to many.

IR: Brett, in my life I have been fortunate to visit many countries, to see many amazing things and to meet and work with many interesting people. With a little personal discipline and some measure of sacrifice and hard work – and with a fair share of luck thrown in – we have managed to achieve a few things. Though it is interesting to note, like so any others, the harder we worked, the luckier we were.

BK: What’s next? I mean, you’re only seventy-eight!

IR: Thank you for remembering, Brett! Happily, there is a lot of ‘next’ to look forward to, on many fronts …

BK: So keep going?

IR: Yes certainly keep going, but learn from where you’ve been. As people and as a nation, we must embrace change and innovation, value productivity and maintain a positive work ethic and we must always remember to give recognition and value the work of others.

BK: Compassion, fair play, wholesomeness IR: Where we are all going together does matter. We all have responsibilities, we all have abilities and we all have opportunities in many different ways to make a contribution, to make a difference. And it is up to each one of us to make that difference. While little of lasting value is accomplished alone, we need to remember in leadership, ‘If it is to be, it is up to me.’

The information contained in this newsletter is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

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EQUAL PAY FOR MONKEYS What happens when two monkeys are paid unequally? Fairness, reciprocity, empathy, cooperation – caring about the well-being of others seems like a very human trait. But Frans de Waal shares some surprising behavioural tests, on primates and other mammals, that show how all of us share many of these moral traits.

A philosopher once wrote to Frans de Waal, explaining the flaw in the primatologist’s findings on what he calls ‘the emotional side of animal behaviour.’ It was impossible that monkeys have a sense of fairness, the philosopher said, ‘because the sense of fairness was discovered during the French Revolution.’

Frans’ de Waal, PhD Dutch primatologist and ethologist

In the end, only three things matter: how much you loved, how gently you lived, and how gracefully you let go of the things not meant for you The information contained in this newsletter is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

BUDDHA

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O

n Monday March 9 2015, in a lively campus appearance hosted by UC Berkeley’s Greater Good Science Center, de Waal offered compelling evidence that capuchin monkeys – namesakes, though presumably not co-religionists, of an order of Catholic friars – not only recognise inequity, but are quick to challenge it.

Before a packed house at Sibley Auditorium, de Waal played a video of an experiment he’d done with pairs of capuchin monkeys, housed side by side in glass cages. In return for handing a pebble to a researcher, one monkey receives a bland piece of cucumber, which she’s happy to get – until she sees that her partner’s reward for the very same task is a tasty grape.

She gives it another try, but instead of a grape gets cucumber again. This time she hurls the cuke back at the researcher, rattles her cage, pounds the floor in angry protest. It’s a tantrum similar, in fact – as another video showed – to that of a human toddler who sees her older brother get a cookie, only to get half herself.

During de Waal’s experiments, he said, monkeys rewarded equitably rejected the cucumber just 5 per cent of the time. If their partners received a grape, however, they refused their lower pay at a rate of 50 per cent. And when partners were given a grape ‘for free’, without even having to pick up a pebble, rejections soared.

Such behaviour, said the Dutch-born de Waal, now at Emory University, is further evidence that humans are not the only species to boast a moral code, and that morality is separate from God and religion. Instead, it’s related to what he calls the ‘prosocial tendencies’ of primates and other animals, a self-awareness – and awareness of others – that gives rise to emotional responses like reconciliation, empathy and consolation.

‘I’ve seen chimps kill each other,’ said de Waal, ‘so I’m very fully aware of their competitive side.’ After studying aggression in chimps as a student in the Netherlands, though, ‘It struck me that after fights they would come together, they kissed and embraced each other, and that was actually more interesting than the aggression itself’ And chimps aren’t the only non-human animals with a bent for reconciliation. ‘There’s only one mammal that has been tested where it has not been found, and that’s a mammal many of you have at home,’ de Waal said. ‘It’s a domestic cat. I’m a big cat lover,’ he added, ‘and I’m still waiting for the magical moment.’

The feline, he explained, is a ‘solitary hunter,’ and so has less need to work in tandem with partners, as primates and elephants have proved able to do in his and others’ experiments. But he rejects the distinction many people make between humans and other species, ‘that what animals do must be instinctive, and what we do is cultural.’ He described the difference between two kinds of macaques, rhesus monkeys and stumptails, and the cultural influence one can have on the other. Rhesus monkeys, he said, are ‘very hierarchical,’ prone to punishing subordinates and not keen on reconciliation. Stump-tailed monkeys, by contrast, are ‘very tolerant and engaging’.

Orangutan 48 chromosomes (24 pairs)

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Gorilla 48 chromosomes (24 pairs)

Chimpanzee 48 chromosomes (24 pairs)

Bonobo 48 chromosomes (24 pairs)

Human 46 chromosomes (23 pairs)

Extinct common ancestor of chimpanzee and bonobo

Present

3 million years ago

Extinct common ancestor of chimpanzees (including bonobo) and human

6 million years ago

8 million years ago

Extinct common ancestor of gorilla, chimpanzees and human

Extinct common ancestor of orangutan, gorilla, chimpanzees and human 13 million years ago

“Teachers in the US, as soon as there’s a fight among kids they step in and stop it,’ he said, while in Japan ‘they let them fight, and reconcile on their own.”

“I usually compare them as the New Yorkers and the Californians,” he said. In one experiment, juvenile stump-tailed and rhesus monkeys were housed together for five months – during which the stump-tails’ mellowness rubbed off on their more belligerent cousins. “What we’re showing here is how strongly reconciliation behaviour in rhesus monkeys can be affected by the social environment,” said de Waal, “which means that humans, of course, can also be affected by the social environment.”

He cited studies that reveal ‘big cultural differences’ between America and Japan, where children reconcile ‘much more’ than their US counterparts – likely due, according to researchers, to the way teachers in each country handle conflict in class and on the playground.

‘Teachers in the US, as soon as there’s a fight among kids they step in and stop it,’ he said, while in Japan ‘they let them fight, and reconcile on their own’.

During his hourlong talk, followed by questions from the audience, de Waal employed data, humour and videos to break down commonly held beliefs about the differences between human and non-human animals. There were chimps showing empathy by

unselfishly caring for their partners’ well-being, for example, and a pair of elephants figuring out how to haul in a tricky feeding apparatus by coordinating their efforts.

And while his listeners were rapt throughout, they witnessed plenty of evidence of ‘yawn contagion,’ which, like other manifestations of empathy, human and not, rises and falls in relation to others’ perceived ‘otherness’. De Waal, a prolific author whose most recent book is The Bonobo and the Atheist: In Search of Humanism Among the Primates, bristles at the notion that ‘humans are special’, a conceit, he said, prevalent in the literature of economics and anthropology: “I don’t believe a word of it.”

“The bonobo is an atheist, I think,” he said, “although maybe the bonobo would be diplomatic and say, ‘I am an agnostic. I’m interested in the evolution of morality,” he explained. “And each time I talk about the evolution of morality people say, well, it comes from God, or it comes from religion. And I’m sort of tired of that.

Because I think our current religions are just a couple of thousand years old, and I cannot imagine that 200,000 years ago our ancestors had no rules of right and wrong, or fairness, or whatever. So morality must be much older.”

At the least, he might have added, it predated the French Revolution.

The full video of TED talks with Frans De Waal can be viewed at https://www.ted.com/talks/ frans_de_waal_do_animals_have_morals Article sourced from http://news.berkeley.edu/ 2015/03/11/frans-de-waal-greater-good/

By Barry Bergman, Berkeley News | MARCH 11, 2015

To reach great height a person needs to have great depth ANONYMOUS

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THE KELLY+PARTNERS POST

EIGHT GREAT READS

TO GROW YOUR KNOWLEDGE ‘A reader lives a thousand lives before he dies’, said Jojen. ‘The man who never reads lives only one’

We know that if you want to have a culture that is unique and different, you must have your own language – concepts and ideas that can be quickly and powerfully understood by your team. At Kelly+Partners we have done this over the past decade by selecting a reading list and ensuring that our teams read the books, the same books, so we have commonality of some core strong ideas that can make a difference in our business. To ensure you and your business succeeds, it would be a benefit to read and live by the knowledge that these authors have provided. These books tell of evolution in business and teach the do’s and don’ts of a successful business.

FROM PREDATORS TO ICONS

COMMON STOCKS AND UNCOMMON PROFITS

Michel Villette Catherine Vuillermot

Philip A. Fisher

In From Predators to Icons, Michel Villette, a sociologist, and Catherine Vuillermot, a business historian, examine the careers of 32 of today’s wealthiest global executives – including Warren Buffett, Ingvar Kamprad, Bernard Arnault, Jim Clark, and Richard Branson – to challenge the conventional explanations for their extreme success and come to a better understanding of modern business practices.

Widely respected and admired, Philip Fisher is among the most influential investors of all time.

This updated paperback retains the investment wisdom of the original edition and includes the perspectives of the author’s son, Ken Fisher, an investment guru in his own right. In an expanded preface and introduction by Warren Buffett, he said, ‘I sought out Phil Fisher after reading his Common Stocks and Uncommon Profits A thorough understanding of the business, obtained by using Phil’s techniques enables one to make intelligent investment commitments.’

PATHS TO WEALTH THROUGH COMMON STOCKS

KING OF CAPITAL David Carey John E. Morris

Philip A. Fisher Filled with in-depth insights and expert

advice, Paths to Wealth through Common Stocks expands on the innovative ideas found in Fisher’s highly regarded Common Stocks and Uncommon Profits – summarising how worthwhile profits have been and will continue to be made through common stock ownership, and revealing why his method can increase profits while reducing risk. Many of the ideas found here may depart from conventional investment wisdom, but the impressive results produced by these concepts – which are still relevant in today’s market environment – will quickly remind you why Philip Fisher is considered one of the greatest investment minds of our time.

It’s not about ideas, it’s about making ideas happen SCOTT BELSKY

The information contained in this newsletter is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

This is the untold story of Steve

Schwarzman and Blackstone, the financier and his financial powerhouse that avoided the self-destructive tendencies of Wall Street. David Carey and John Morris show how Blackstone (and other private equity firms) transformed themselves from gamblers, hostile-takeover artists, and ‘barbarians at the gate’ into disciplined, risk-conscious investors. The story of a financial revolution – the greatest untold success story on Wall Street – shows how Blackstone and a small coterie of competitors wrested control of corporations around the globe and emerged as a major force on Wall Street, challenging the likes of Goldman Sachs and Morgan Stanley for dominance.

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THE KELLY+PARTNERS POST

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It takes a great deal of boldness and a great deal of caution to make a great fortune; and when you’ve got it, it requires 10 times as much to keep it NATHAN MAYER ROTHSCHILD

THE SNOWBALL AND THE BUSINESS OF LIFE

TITAN

SONS OF WICHITA

DREAM BIG

Ron Chernow

Daniel Schulman

Cristiane Correa

John D. Rockefeller’s story captures a pivotal moment in American history, documenting the dramatic post-Civil War shift from small business to the rise of giant corporations that irrevocably transformed the nation. With cameos

by Joseph Pulitzer, William Randolph Hearst, Jay Gould, William Vanderbilt, Ida Tarbell, Andrew Carnegie, Carl Jung, J. Pierpont Morgan, William James, Henry Clay Frick, Mark Twain and Will Rogers, Titan turns Rockefeller’s life into a vivid tapestry of American society in the late 19th and early 20th centuries. It is Ron Chernow’s signal triumph that he narrates this monumental saga with all the sweep, drama, and insight that this giant subject deserves.

Starting with their boyhood when fraternal disputes were sometimes settled in the boxing ring, Sons of Wichita takes you inside the highly private Koch family and traces the evolution of four distinct personalities, as well as their corporate, philosophical, social, and political ambitions. Influenced by the conservative, anti-communist sentiments of their father, a founding member of the John Birch Society, Charles and David devised an ambitious strategy to foist their ideological agenda upon the nation, quietly channeling millions of dollars into a web of free market think tanks, academic programs, advocacy groups, and more, while also building what amounts to a shadow Republican Party, replete with a donor network capable of raising as much in a single election cycle as the Republican National Committee.

In just 40 years the Brazilian trio behind 3G Capital built the biggest empire in the history of Brazilian capitalism and launched themselves onto the world stage in an unprecedented way. The management method they developed, which has been zealously followed by their employees, is based on meritocracy, simplicity and constant cost cutting. Their culture is as efficient as it is merciless and leaves no room for mediocre performance. On the other hand, those who bring in exceptional results have the chance to become company partners and make a fortune.

Warren Buffett Never before has Warren Buffett spent countless hours responding to writers’ questions, talking, giving complete access to his wife, children, friends, and business associates, opening his files, recalling his childhood. It was an act of courage, as The Snowball makes immensely clear.

Being human, his own life, like most lives, has been a mix of strengths and frailties.

Yet notable though his wealth may be, Buffett’s legacy will not be his ranking on the scorecard of wealth; it will be his principles and ideas that have enriched people’s lives. This book tells you why he is the most fascinating American success story of our time.

Don’t worry about failure; you only have to be right once

DREW HOUSTON

The information contained in this newsletter is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

CO NTENTS

CO NTENTS

cerrone.com.au The information contained in this newsletter is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

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13 INSTRUCTIONS FOR LIFE

THE GOLDEN RULES OF JACK COWIN

1.

2.

If you lose your health, nothing else matters.

If you lose your integrity, no amount of success will be meaningful, and all it will produce is a hollow feeling when you look in the mirror.

He is a member of the board of directors of Ten Network, a director of the Sydney Olympic Park Authority, a director of Chandler McLeod Recruitment and in July 2012 joined the board of directors of Fairfax Media. Jack is also an active member of the World Presidents Organization. He lives in Sydney with his wife, with whom he has four children.

3.

4.

5.

6.

Control your own destiny.

Be prepared to take some risks – life’s an adventure.

There is no shortage of good ideas – don’t wait until the dogs are barking to do something.

8.

Never give up if you think you’re right – big Companies work on the basis that the little guy will fold.

9.

Don’t get caught up in your own self-importance. Try to be humble even if you don’t believe it.

Laugh at yourself.

10.

Life is about dealing with people.

You can solve the biggest problems in life if you have a smile on your face.

11.

Try and surround yourself with smart people who complement your skill.

12.

Get some money out of the business – you’ll sleep better at night. Keep some powder dry.

Have an opportunity fund.

Focus – don’t get the new girl syndrome.

Be a rifle, not a shotgun.

7.

13.

Find a tolerant wife or husband who appreciates your search for success and fulfilment.

Be good to your kids – they’re the ones who check you into the nursing home.

Life is 10% what happens to you and 90% how you react to it

Understand the basics of business.

No one really understands the logic of why something is worth what it is.

CHARLES R. SWINDOLL

The information contained in this newsletter is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

PAGE 42

THE KELLY+PARTNERS POST

2015

PLAN TO WIN Article by Brett Kelly

G

ather nine prominent entrepreneurs in one room and the atmosphere is definitely a winning one. In 2015, Kelly+Partners hosted a one-day Plan to Win conference in Darling Harbour, bringing together some of the sharpest business minds in the country to share their wisdom to a sold-out crowd of 300 guests.

Most private business owners have a plan, goals, milestones, KPIs, targets. But how many actually have a plan to win? In an entrepreneurial world, failure can become glorified. We’ve all heard the ‘fail hard, fail fast’ mantra.

Failure builds character and resilience, new doors in place of one that closes. Yet winning builds confidence on the road to success. Ultimately, it’s about setting a clear plan and following your purpose with consistency.

Each speaker had their own story to tell of peaks and troughs on the journey.

Jack Cowin even shared his ‘13 Instructions for Life’, which had guests scribbling notes while furiously trying not to miss a word. The underlying themes of

2015’s conference were culture, values and purpose.

Collette Dinnigan, one of Australia’s most well-known fashion designers, shared the reasons behind her brave decision to stop production of the bridal line and shut down several boutiques.

For mother-of-two Dinnigan, living your purpose is about being in the moment – without guilt, whether you’re at work or home – rather than the myth of work-life balance. James Stevens and Tom Waterhouse shared interesting insights into the current digital age that allows us to be at work no matter where we are, from way back when moving a business online was seen as a risky move.

Andrew Simmons from Vision PT and I agreed that company culture and values also means having the right people in the right positions; building a solid, skilled team is crucial, but it’s also about knowing when to let go.

Dinnigan said one of her toughest challenges along the way has been holding onto the wrong people: “A lot of decisions need to be made on gut instinct,

You’ve never been hurt so dance like nobody’s watching

The information contained in this newsletter is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

rather than formula.” The rules certainly vary in entrepreneurship – who would’ve thought former Rabbitohs’ player Sean Garlick would end up teaming with his pastry chef brother to start a pie company?!

Angus Kennard of Kennards Hire opened the morning with a video showcasing the importance of fostering a strong company culture in building a trustworthy, recognisable brand and bring your values to life. “Every person, every leader, every dollar we spend has to serve that purpose,” Kennard said.

Bookending the day was husband-and-wife power team jewellers Nicola and Carmela Cerrone, who agreed on the value of company culture in building your brand, stating that “It’s about being unique, authentic and making people feel valued.”

Ultimately, the journey to winning is summed up by Cowin as “genuine and enduring entrepreneurship.”

The 2017 Plan to Win conference will be hosted by Kelly+Partners on 13 September at the Hilton Hotel, Sydney. Speakers are yet to be confirmed, but for now, ask yourself, ‘What’s my plan to win?’ and book early.

SATCHEL PAIGE

SAVE THE DATE

PLAN TO WIN 2017 13 SEPTEMBER 2017

Angus Kennard

Jack Cowin

Collette Dinnigan

Andrew Simmons

Brett Kelly

Tom Waterhouse

Sean Garlick

Nicola & Carmela Cerrone

James Stevens

PAGE 44

THE KELLY+PARTNERS POST

2016

PLAN TO WIN Article by Josh Thomas

P

lan to Win is building a reputation for bringing together some of Australia’s most successful entrepreneurs and private business owners to share rare insights into their prominent businesses.

In its second year, Plan to Win continued to deliver a premier event for Kelly+Partners’ clients and guests.

On Friday 9 September, Kelly+Partners hosted their one-day Plan to Win conference at the Hilton Hotel, Sydney, bringing together some of the country’s most prominent business minds, to share insights, ideas and methodologies to a sold-out crowd of 300.

Former NRL legend and prominent business leadership speaker Wayne Pearce opened the day, sharing his insights into exponential change within organisations and better understanding of team dynamics and ensuring organisational accountability for change. Wayne’s motivational and empowering approach to business leadership left many business owners in the room wanting to learn more.

The underlying themes of the 2016 conference were leadership, growth, financials and marketing concepts, that Imelda Roche AO, who followed Wayne, has long mastered. Along with her husband Bill Roche and their international multi billion-dollar company Nutrimetrics, Imelda shared an inspirational story about how she started her company and grew it to be one of the largest privately owned cosmetics companies in the world.

Scott Evans (Game Farm) and Louise Cordina (Cordina Group) are successful business owners in control of fourth-generation family businesses.

Interviewed by Brett Kelly, Scott and Louise talked about the growth of their businesses, challenges they have faced and how to best operate a family-owned business. When asked for their business mottos, Scott responded with ‘no regrets, I never want to die wondering’, while Louise added, ‘if you don’t have a need for being, then there is no future in what you are doing’.

Naomi Parry, PR genius and owner of the renowned BLACK Communications agency, is known for having developed promotional campaigns for some of the most amazing luxury brands in the world. Naomi shared her ‘10 lessons from the world of luxury’, principle that any business can learn from.

Lesson one – ‘don’t be the biggest, just the best’, Naomi said as she provided a refreshing perspective to business growth. Naomi ended by explaining that luxury brands teach us the value and power of a brand to make money.

Tom Hardwick is the CEO of Guardian Early Learning Group, one of Australia’s largest childcare businesses. Tom positioned his presentation simply, ‘How I built a half-billion dollar business in the last 12 years and what we are doing to make that a 2 billion-dollar business in the next five years’.

Tom provided interesting insights into the strategy he uses to grow his business at such a rapid rate and shared his businesses projections and growth potential for the next five years.

The conference was closed out by Australian cricket icon Steve Waugh AO, who was interviewed by his close friend and Kelly+Partners Culture Carrier Duncan Kerr. Duncan and Steve discussed life after cricket and Steve’s involvement in his charity, The Steve Waugh Foundation, a fantastic cause helping children living with rare diseases.

Plan to Win is proud to support The Steve Waugh Foundation and raised $10,000 on the day with a charity auction, with thanks to Auctioneer Jason Keene.

Plan to Win 2017 will again be held at the Hilton Hotel, Sydney. Stay tuned for more information in the coming months.

The game of life is the game of everlasting learning – at least it is if you want to win

The information contained in this newsletter is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

CHARLIE MUNGER

SAVE THE DATE

PLAN TO WIN 2017 13 SEPTEMBER 2017

Wayne Pearce

Imelda Roche AO

Naomi Parry

Brett Kelly

Steve Waugh AO

Lousie Cordina

Scott Evans

Tom Hardwick

PAGE 46

THE KELLY+PARTNERS POST

BMF AND KELLY+PARTNERS JOIN FORCES Two firms partner, one strong force emerges

F

ollowing 35 years of proud independence, CBDbased BMF Chartered Accounting and Business Services has announced a partnership with ‘risingstar’ award-winning accounting firm Kelly+Partners.

Established in 2006, Kelly+Partners now has a network of 12 offices across greater Sydney and throughout regional NSW and an office in Hong Kong, with a combined total team of 28 partners and 180 professionals.

“Barry Mendel, Barry Frank and I view the partnership between BMF and Kelly+Partners as a ‘win/win’ with the addition of new technologies and systems, plus the integration of additional staff. It will prove a positive result for clients of both our proud and independent companies”, founder Brett Kelly said.

Barry Mendel supports this view and echoed Brett’s positive outlook. “The new partnership is an essential part of the business going forward in meeting the changing needs of clients in a contemporary world.

The Kelly+Partners group has tremendous expertise and a proven history in meeting the diverse needs of accounting and wealth management clients in the modern era.”

Kelly+Partners has achieved extraordinary results in just 10 years. Founded on a desire to challenge the status-quo and deliver advice and service of the highest level, the firm now provides expertise of accounting, taxation, business advisory, audit and family office services.

After 35 years at the helm of BMF Group, Founder Barry Mendel is about to implement his own ‘succession plan’, handing over the reins to Brett Kelly as chairman of the new partnership.

“Over recent years I have been seeking the ideal and preferred way to make the transition of leadership in the business.

As one ages the reality dawns that our clients require new and challenging ideas and innovative approaches, beyond the leadership of my good friend and fellow director Barry Frank and myself, to the increasingly complex world we all live in.”

Q: Why have you chosen now and why Kelly+Partners as the partner for the future?

A: Well, as I have said to my staff and many of our valued clients, after 35 years in business, we made a decision to expand our base of directors and shareholders to improve and upgrade our systems, technology and operating efficiencies for the benefit of our many valued and long-standing clients.

This was a highly considered decision that will ensure that our business remains at the very cutting

Barry Mendel (left), Brett Kelly (centre) and Barry Frank edge in the marketplace. As to why Kelly+Partners?

The moment I first met Brett Kelly I realised that, while the two firms are of very different ages, there was a fundamental sharing of ‘client-first’ philosophy.

They are a dynamic, BRW Award-winning accountancy firm and their incremental and steady year on-year-growth has been phenomenal over the past 10 years.

Q: So Kelly+Partners must be doing a lot of things right?

A: My observations over time are that they are doing many things very well. They have a careful criteria as to selection of clients – so it’s not just about ‘growth for

growth’s sake’, they have a strict limit on the number and type of matters they undertake, they maintain a ratio of associates to client directors, well below industry average, which means clients have the benefit of more senior people working across their business.

Q: This investment in senior client directors must be good for all?

A: Well we were really impressed that every client director becomes an equity partner but more than that, once taking on equity in the firm there is a minimum 10-year commitment to stay with the firm, which translates to continuity of service of course, but directly ensures longevity of client knowledge and relationships, and I really admire that commitment.

Winners are not people who never fail, but people who never quit

The information contained in this newsletter is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

THE KELLY+PARTNERS POST

PAGE 47

TEAM KELLY+PARTNERS (SYDNEY) Brett Kelly

Barry Mendel

Barry Frank

FTIA, JP

CA, CPA

CA

Chairman

Deputy Chairman

Managing Director

Mark Prag

Vanessa Sirotic

Ming Lew

B.Bus, CA, M.Tax, DIP.FS,

CA, BBus (Acc), BSc BCOM, CA

Senior Client Director

Client Director, Business & Family Office Services

Jonathan Yeo

Suketu Majithia

Anne Darmann

BCOM, CA

MTAX, CA

Client Director

Client Director

BBCOM, CA

Client Director

MTAX, MACC, CPA

Q: You and your co-director, Barry Frank are synonymous with the firm. What will be your future roles in the new partnership?

A: Well, we could both stand accused of being ‘born-again’ accountants with a rejuvenated outlook on the future.

Both Barry and myself will remain involved in the day-to-day running of the business and servicing and meeting the needs of our clients, albeit with the addition of new systems and technology that will be introduced by Brett to enhance our capabilities.

We have both committed to stay with the new partnership for at least the next five years, so we will be around into the 2020s! I will be

Deputy Chairman with Barry Frank stepping up to Managing Director. We both look forward to assisting Brett in his role as Chairman of the new entity.

Q: So it’s very much business as usual, except not quite as usual?

A: That’s exactly as we both see it. Our clients will benefit from the infusion of fresh, dynamic thinking and attitude along with the introduction of enhanced technology and systems – systems and processes that will add value to both our clients and our business.

Processes such as Kelly+Partners’ highly developed and proven ‘succession planning and career development’ programmes are just two that come to

Senior Client Director, Specialist Tax Advisory

mind and will bring a new era of continuous customer value to our 36 years of heritage at BMF. Q: Barry, when you look back at your career and the growth of BMF over almost four decades, what do you reflect on and when you finally leave the firm what would you see as your legacy?

A: I would like to think that every client who I’ve dealt with personally – and every client who the firm has dealt with – has benefited from dealing with us.

To me, I think that is the ultimate accolade that one can recieve in one’s career – that your Clients are loyal to you, they are respectful of your advice and they and their families are better off than they were when you first met them.

Nobody counts the number of ads you run; they just remember the impression you make

The information contained in this newsletter is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

PAGE 48

THE KELLY+PARTNERS POST

INTRODUCING THE NEW SOUTHERN HIGHLANDS TEAM United by a vision

O

and additional services, I have been extremely impressed with the Kelly+Partners team’s ability to help us continue to improve the service to our clients and team’.

Gillespies Managing Partner Mr David Duff: ‘As the requirements of our growing client group continue to require further sophistication

Kelly+Partners founder Brett Kelly: ‘We are pleased to have such well-regarded and high quality professionals and clients in a key growth region choose to join our group’.

The existing smaller Kelly+Partners team at Mittagong has now merged with the larger Gillespies team located in Bowral.

The new combined office will be led by the existing partners of the former Gillespies firm, namely Mr David Duff, CA, and Mrs Elisha Hill, CA, together with Linda Chapman and Brett Kelly.

On the 15 August 2016, 60 clients and staff celebrated the new agreement with a cocktail party in the Bowral office.

DAVID DUFF

ELISHA HILL

LINDA CHAPMAN

Senior Client Director

Senior Client Director

Client Manager, Small Business

David has been a principal at Gillespies since 2003 and was a senior partner of taxation and accounting services at BDO, a top five accounting firm globally.

David is a registered company auditor and responsible for providing audit, taxation, accounting and business advisory services to private companies and not-for-profit entities.

David is married to Debby, has two children and enjoys travelling and spending time with family.

Elisha is a chartered accountant with 13 years experience in public practice. She specialises in personal taxation including non residents, family entities and small businesses.

She began her career at PricewaterhouseCoopers, has worked in the Southern Highlands since 2010 and has tutored in tax law at the University of Wollongong.

Elisha lives locally with her husband and their two children. Her interests include horse riding, reading and spending time with her family.

Linda has over 25 years experience in the accounting and taxation sectors. She lives in Mittagong where she is active in the local community.

Linda is married to Sean and they have three children – two daughters and a son. Her interests include football, water-skiing, camping and socialising with friends.

n 1 July 2016, Kelly+Partners welcomed Gillespies Chartered Accountants (founded in 1948), the oldest and largest firm in the NSW Southern Highlands region, who service a diverse range of private businesses and high net-worth clients.

We make a living by what we get, but we make a life by what we give

The information contained in this newsletter is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

THE KELLY+PARTNERS POST

PAGE 49

The way to get started is to quit talking and begin doing WALT DISNEY

The information contained in this newsletter is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

PAGE 50

THE KELLY+PARTNERS POST

KELLY+PARTNERS’

10-YEAR AWARDS GALA DINNER One incredible night recognising hard-working individuals for their service and contribution to Kelly+Partners Article by Josh Thomas

T

his year’s annual awards night gala dinner marked the 10-year anniversary of Kelly+Partners, a firm which started from humble beginnings in 2006 and now operates 12 New South Wales offices and services over 8,000 clients On Friday 14 October, a warm spring night in the beautiful Centennial Parklands, the awards night gala was a celebration of our great teams’ successes and the journey the firm has taken over the past 10 years.

With offices spread as far as Bathurst and Bowral, bringing the whole team together is always a challenge, but this did not deter more than 150 guests attending the awards night to celebrate the company’s success and find out the winners of the gold and silver calculator awards – presented to the team members who best displayed the Kelly+Partners values. The evening started with drinks in the garden under the

warm setting sun, with guests dressed in their black tie catching up from last year’s awards event.

Soon after, everyone headed inside to be seated and served entrées before Kelly+Partners founder Brett Kelly spoke about the journey the firm has taken over the past 10 years, crediting much of the success to its early partners and great team members.

After the main course was served, the awards ceremony began. The first award to be presented was the Silver Paperclip – awarded to an administration/ support team member who is most consistently representative of the Kelly+Partners values.

Denise Gumley from the Western Sydney office won this award.

The Silver Calculator awards followed – awarded to a client service team member from each office who most consistently represents Kelly+Partners’ values.

The winner for each award received a $250 Red Balloon gift voucher.

The final award of the night was the prestigious Golden Calculator award – awarded to the highest performing client service team member who most consistently represents our team values.

The winner received a trip for two to Disneyland, accommodation and entry to Disney’s Leadership in Excellence course. This year Eugene Wong from Tax Consulting was most deserving of the award.

Kelly+Partners also introduced a new award of Culture Carrier, which was awarded to Duncan Kerr.

The awards night gala dinner was a great success and wouldn’t have been possible without our great team members, clients and sponsors. Visit the Kelly+Partners Facebook page for more photos from the night.

You can’t buy Love, but you can buy handmade and that’s kind of the same thing

The information contained in this newsletter is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

THE KELLY+PARTNERS POST

PAGE 51

The information contained in this newsletter is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

PAGE 52

THE KELLY+PARTNERS POST

NORTHS RUGBY CLUB WE ARE THE CHAMPIONS Article by Josh Thomas

I

n January 2016, Kelly+Partners North Sydney was given the opportunity to become involved with the local rugby team, Northern Suburbs Rugby Club (Norths), whose home ground is just minutes away at North Sydney Oval. At the time, Norths were under performing in the competition and not expected to have a very strong season.

With roots that date back to the 1900s, the Norths organisation was a true champion in the local community with a century of heritage.

Kelly+Partners agreed to join the organisation as a platinum sponsor with a view of becoming the major sponsor for the 2017 season. The start of the season didn’t quite go to plan, losing their

If you aren’t going all the way, why go at all?

The information contained in this newsletter is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

opening games, but about mid-way through the season, they started to turn things around, winning the last 11 games of the season in a dominant fashion.

Heading into the finals in championship form, Norths stormed past league leaders and heavy favorites Sydney University 28-15 in a thrilling Grand Final at North Sydney Oval, winning the club’s first premiership in 41 years.

Now looking to the 2017 season, Kelly+Partners will become major gold sponsors, continuing their support for the Norths organisation.

If you are interested in attending any of the Norths games in 2017, please speak to your local client director.

JOE NAMATH

THE KELLY+PARTNERS POST

PAGE 53

SPOTTED A KELLY+PARTNERS MINI YET? Article by Josh Thomas

T

raditional business models, especially in the finance and accounting industry do not typically allow for abstract ideas, self-expression, creativity and brand identity.

Yet this is exactly why engaging these subjects has been integral to Kelly+Partners’ success. If innovative business leaders have taught us anything, it is that brand is everything.

Last year was a year of brand transformation for Kelly+Partners, undergoing a complete rebrand, including a new website, building sign, billboards, 2GB radio ads, company brochures, business cards, mobile app, newspaper and the addition of 15 Kelly+Partners branded Mini Coopers.

With the marketing goal of taking over Sydney, the addition of the Mini Coopers has drastically changed the reach of the Kelly+Partners brand across Sydney. Viewed as ‘moving billboards’, the Minis add an extra flare to the company’s branding and

Use hashtags

identity as the one of the fastest-growing accounting firms in Australia.

The Mini’s iconic and modern stylish look speaks to the values that epitomise the Kelly+Partners brand.

The brand’s classic design, British roots and sense of fun make people smile when they see them moving around Sydney promoting the firm.

The Mini is the ultimate urban vehicle – its compact size makes it easy to manoeuvre through Sydney’s heavy traffic. The very first Kelly+Partners Mini design pays tribute to the classic and much-loved original Italian Job Mini. The Mini is such a compact car with a genuine racing heritage that it aligns strongly with Kelly+Partner’s core proposition of being the best but not necessarily the biggest!

Keep an eye-out for the 15 Kelly+Partners Mini Coopers on Sydney’s roads and if you see one, make sure you snap a picture and tag @kellypartnersmini on Instagram.

#KellyPartnersMinis

#GoSomewhere

#BetterOff

The information contained in this newsletter is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

PAGE 54

THE KELLY+PARTNERS POST

STEVE WAUGH FOUNDATION

THE CAPTAIN’S RIDE Over six days – 920km from Sydney to Byron Bay Article by Josh Thomas

Today will never come again. Be a friend. Encourage someone to take time to care.

Let your words heal, and not wound.

The information contained in this newsletter is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

THE KELLY+PARTNERS POST

PAGE 55

We strive to improve the quality of life for children and families affected by rare diseases. The rare disease patient is the orphan of the health system, often without diagnosis, without treatment, without research and therefore, without reason to hope. The Foundation has already supported over 200 families through generous donations from our patrons, corporate partners and supporters. Over a million dollars has been used for medication, treatment, specialised equipment and financial support.

– Steve Waugh

I

n the first issue of the Kelly+Partners Post, we published an article on Duncan Kerr and his amazing effort in completing the 920km Captain’s Ride from Sydney to Byron Bay. The Captain’s Ride is an exclusive ‘by invitation’ six-day on-road cycle event inaugurated on the 10th anniversary of the Foundation in 2015.

Duncan was invited once again to take part in the 2016 Captain’s Ride, starting in Bowral on 29th October and finishing six days later at Crackenback, Mt. Kosciuszko.

This staggering journey saw the riders conquer 700km and climb over 10,000 vertical metres. Each day of the journey was dedicated to highlighting a different rare disease and the riders stopped at six locations along the way to raise awareness.

The goal of the Captain’s Ride is to raise significant funds for the Steve Waugh Foundation to champion the stories of, and provide life changing support to, children and young adults affected by rare diseases.

The inaugural ride raised over $900,000 and hosted 64 riders including Mick Doohan, Simon Gerrans, John Maclean, Rory Steyn, Steve Waugh and many more.

One of the ride’s key objectives was to foster a sense of camaraderie and teamwork amongst the riders, concepts Duncan is very familiar with through his time as the fitness and nutrition coach for the Australian Cricket team, Manly Rugby League team and his time as Michael Clarke’s personal trainer.

At the core of The Captain’s Ride is a leadership program for captains of industry, emerging leaders, and anyone who wants to be captain of their own life.

When asked about taking part in his second Captain’s Ride last year, Duncan replied: “I am excited about riding again and feel it will be even more challenging.

To have the likes of Anna Meares and Adam Goodes with us will be extra motivation to do well.

I greatly appreciate the support from Brett and the team at Kelly Partners with whom I could not have taken part.”

Kelly+Partners sponsored Duncan for $10,100 to complete the ride and encourages everyone to support this great cause into 2017 and beyond.

If you would like to contribute to the Steve Waugh Foundation you can submit your donation at: http://www.stevewaughfoundation.com.au

LESSONS LEARNED IN LIFE

In the blink of an eye, everything can change. So forgive often and love with all your heart.

You may never know when you may not have that chance again.

The information contained in this newsletter is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

PAGE 56

THE KELLY+PARTNERS POST

We have you covered Helping Private Business Owners, high net worth individuals and families maintain control of their financial universe and be #betteroff Hong

Central Coast Central Tablelands Western Sydney

Norwest

Sydney CBD Oran Park Southern Highlands

The information contained in this newsletter is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

Parramatta Northern Beaches North Sydney

South West Sydney Wollongong

THE KELLY+PARTNERS POST

PAGE 57

NORTH SYDNEY

NORTHERN BEACHES

CENTRAL COAST

NORWEST

WESTERN SYDNEY

Kelly+Partners Norwest opened in November 2011 and serves the private business owners in this growing business district.

The Western Sydney team has been a premier provider to business owners in the region for more than 20 years. The office is located in Penrith, a short distance from the train station and major roads.

CENTRAL TABLELANDS

ORAN PARK

SOUTH WEST SYDNEY

SOUTHERN HIGHLANDS

WOLLONGONG

PARRAMATTA

SYDNEY CBD Sydney CBD is the newest Kelly+Partners office located in the heart of the city (see the the story on page 6).

The first Kelly+Partners team started in Erina and the focused practice looks after the Central Coast’s growing businesses.

Kelly+Parters Central Tablelands, located in Bathurst, opened in March 2013 and is committed to looking after growing businesses in the region.

The team at Bowral in the Southern Highlands is the newest Kelly+Partners office (see the the story on page 44).

The North Sydney team consists of more than 40 professionals has served some clients for more than 10 years, representing more than three generations.

Kelly+Partners Oran Park joined the group in January 2015. Located in one of Australia’s fastest-growing areas, our Oran Park team is very excited to bring our unique approach to private businesses in the area.

The team at Wollongong Kelly+Partners opened the new office in October 2013 and are excited to be looking after the growing businesses in the region.

Kelly+Partners Northern Beaches is the 10th addition to the growing firm. The office, which opened in August 2015, is located in Brookvale in the heart of Sydney’s Northern Beaches.

For more than 32 years, the Campbelltown-based team has been the leading service provider to business owners in the Macarthur region.

Parramatta Kelly+Partners is the newest of all the offices. It’s located in the heart of Parramatta looking after growing businesses in the region.

The information contained in this newsletter is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

TAKE CONTROL OF YOUR FINANCIAL UNIVERSE • Income & tax calculators • Income tracker & logbook • Latest news & reports Use your smartphone’s ‘QR’ code scanner to download the ‘Kelly+Partners’ App. Or you can also download by visiting SCAN QR CODE

#BetterOff kellypartners.com.au

THE KELLY+PARTNERS POST

PAGE 59

SAVE THE DATE

GREAT EVENTS IN 2017 Giving, celebrating and learning in 2017

BETTY ZEREFOS MEMORIAL GOLF DAY 2017 Join Kelly+Partners on Thursday 30 March 2017 for the Betty Zerefos Memorial Golf Day, to be once again hosted at the world-classTerrey Hills Golf and Country Club.

Now in its second year, the Betty Zerefos Memorial Golf Day is a charity golf day with the mission to highlight Betty Zerefos, Brett Kelly’s PA, who tragically passed away from brain cancer.

Last year, the Betty Zerefos Memorial Golf Day raised $30,000, which was split equally between an education fund for Betty’s children and the Cure Brain Cancer Foundation. We were pleased to host the founder of Cure Brain Cancer Foundation, Professor Charlie Teo, who spoke about the foundation and the tremendous impact donations have in the search for a cure.

To book your tickets to this year’s golf day, please contact events@kellypartners.com.au.

Last year was sold out so be quick.

PLAN TO WIN 2017 The Kelly+Partners Private Business Owners conference Plan to Win will be held at the Hilton Hotel, Sydney late in 2017.

Plan to Win is building a reputation for bringing together some of the most interesting and successful private business owners in Australia. The sold-out 2016 conference saw Imelda Roche AO, Steve Waugh AO, Wayne Pearce, Naomi Parry, Scott Evans, Louise Cordina and Tom Hardwick share their insights for success and the 2017 event will have another stellar line-up.

Don’t be ashamed of having felt something so beautiful and real for someone else, even if they didn’t deserve it. Don’t be ashamed. It takes phenomenal strength for your heart to be that selfless. Honour that.

The information contained in this newsletter is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

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THE KELLY+PARTNERS POST

KELLY+PARTNERSâ&#x20AC;&#x2122;

GOOD NEIGHBOURS

The information contained in this newsletter is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

THE KELLY+PARTNERS POST

PAGE 61

TOTAL CONTRIBUTIONS

> $150,000

The information contained in this newsletter is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

PAGE 62

THE KELLY+PARTNERS POST

BETTY ZEREFOS

MEMORIAL GOLF DAY CURE BRAIN CANCER FOUNDATION

Kelly+Partners raised over $30,000 for Betty Zerefos and the foundation Article by Josh Thomas

O

n Thursday the 3rd of March, 2016 Kelly+Partners hosted the inaugural Betty Zerefos Memorial Golf Day at the Terrey Hills Golf and Country Club with the goal of raising $30,000 which would be split equally between an education fund for Betty’s children and to fund research for the Cure Brain Cancer Foundation.

Betty was an integral part of the Kelly+Partners family and acted as Brett Kelly’s PA from October 2008 to February 2015. Betty tragically passed away from brain cancer on the 30th of October 2015, aged 39, leaving her husband Vic, twins John and James, and Christian and Dean.

More than 60 golfers attended the memorial, playing 18 holes at the world-class Terrey Hills course and enjoying a gourmet lunch accompanies by a presentation from Professor Charlie Teo. Professor Teo discussed the tremendous impact brain cancer has on society and the foundation’s reliance on donations and on-going support.

“The disease is indiscriminatory to who it effects. I understand Betty was very fit, ate well, was very positive… and to be struck down with brain cancer is tragic and very, very unfair,” Professor Teo said.

Brain cancer kills more people under 40 in Australia than any other cancer, yet only receives a fraction of federal government cancer research funding.

Cure Brain Cancer was founded in 2001 by Professor Teo with the primary goal of increasing the five-year survival rate to 50% by 2023.

Following Professor Teo’s presentation, a fundraising auction was held for a number of donated items such as a weekday’s stay at Palazzo Versace, event voucher for Aria Restaurant, Garden Fireplace and a HD TV. Including donations, attendance on the Golf Day and money raised from the auction items, Kelly+Partners raised $36,439 which will be split equally between an education fund for Betty’s children and to further research for Cure Brain Cancer Foundation.

We are delighted with the response and the support we received for the Betty Zerefos Memorial Golf Day and look forward to hosting the event annually.

Brain cancer kills more people under 40 in Australia than any other cancer, yet only receives a fraction of federal government cancer research funding. Cure Brain Cancer was founded in 2001

by Professor Teo with the primary goal of increasing the five-year survival rate to 50% by 2023.

Betty Zerefos

Professor Charlie Teo

It’s not how much we give, but how much love we put into giving MOTHER TERESA

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GOLF DAY 2017 DONATE TO: GOFUNDME.COM/BETTYZEREFOS

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