WINTER JUNE 2013
FOFA: ” THE FUTURE OF FINANCIAL ADVICE ”
change as I am still working on new upgraded client packages which benefit you. You will provide our clients. We believe that the need to authorise these new ToA’s for your ex“relationship” we hold with you is by far the isting service as part of our new legislative remost important factor in helping you to achieve quirements. your financial objectives. Knowing how to apply Thirdly a new Ongoing Service Agreement the right strategy through the use of different (OSA) which will have to be authorised by you, techniques and various strategically is also very important. As a result of recent changes to allowing Money Works Financial Planning to legislation the technical/administrative compo- provide continuous service. This is all new “Future of Financial Advice” and every Finannent of our business has increased ten fold. cial Planner and Advisor has to make sure they Our unique value proposition to you has alhave these new procedures in place or we will ways been “It’s all about you- our client” somehave large fines imposed. times through certain powers beyond our conWe will continue to provide you the services trol along comes changes which increase the amount of administra- you have used in the past, with the probability Inside This Issue: of a New Service Package being implemented tion (back office -practical applica- in the future, but for now please bare with us. Word from Chris tion tasks) we have to do in order to 1 provide you the service you desire or expect. One such change that has Are you prepared 2 for the Financial resulted in an evolution in the way we Year? do business is FOFA meaning in the new financial year you will receive SMSF (Selfthe following. 3
We have always been proud of the service we
Managed Super Dollar Cost Averaging
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Luke Corporate Speakes
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Events Coming up this Month
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Firstly a new Financial Service Guide (FSG) will be given to you, we will go through this document carefully but there are no real changes at this stage. Secondly a new Terms of Agreement (ToA) will be given to be signed for our files outlining our scope of advice and the level of service offered to you. Once again there is no real
Should you have any questions- Your call is most welcome. Always and Your Service Chris Harris
Financial Planning Pty Ltd
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ARE YOU PREPARED FOR THE FINANCIAL YEAR? Self Employed people can make a contribution of up to $25,000 to claim a full tax deduction up to the age of 74 – Self Employed can also make non-concessional contributions and still eligible for a Government Co- Contribution payment. For any further information – please contact us on 08 8304 8088. We would love to hear your thoughts and comments.
Why is it that we all tend to leave our end of year Superannuation contribution (concessional) to the last or close to the last moment? I feel the main reason is because we tell ourselves that we don’t know how much we wish to contribute to gain a tax Deduction, however this is also – I believe not true – especially if you know how your business is running, looking at your P+L’s regularly. Now I am hearing some business professionals saying they don’t know, they don’t look at the running loses of their business regularly. If that’s you then a little hint here, you need to at least look at the P+L’s every month. That is so you know how much comes in for the month and how much goes out, before tax. This is often a good idea as you can make adjustments before its too late and so you will know how much money to put away especially if its Superannuation. A few points to consider are: 1. Do not put more than $25,000 P/P in as a tax deduction – as the government has caped your concessional rate – including all employer SGC contributions to $25,000 for the 2012/2013 FYR– after that you may pay additional tax at 31.5% plus 15% contribution tax – or if it’s your first excess contribution you will get the excess refunded.
DOLLAR COST AVERAGING Investment Tip in a Falling Market, Consider Dollar Cost Averaging: As investors we are always looking for new strategies to help reduce the risk inherent in the financial market, more specifically the risk associated with a falling market. We want strategies that can assist us over time and build wealth to ensure our financial futures attainable. One time-tested strategy that is both simple and extremely effective is the concept of dollar-cost averaging. What is Dollar Cost Averaging? When it comes to investing in the share market, or any market for that matter, timing when to buy in and sell out of an investment becomes an important decision. One way of lessening the impact of these decisions is to invest regularly. This is because by sticking to a regular savings plan, you will actually be using the ups and downs of the market to your advantage. This phenomena is known as 'Dollar Cost Averaging (DCA)'.
How Does Dollar Cost Averaging Work? Dollar cost averaging involves buying assets at different prices by making regular deposits. As a result, you pur2. You are certain you will make extra contributions – chase more units when prices are low and fewer when but will leave it until the very end of June – well it is your prices are high, but the cost of investing averages out money and by “changing pockets” sooner rather than over time. later will make sure your contribution is in your fund, has In turn, it becomes less important for you to choose the been invested in accordance with your Risk Profile and right time to make your investments. This is because by Investment Strategy also frees up your valuable time at consistently depositing small amounts of money, you will the end of the Financial Year so you are not “stressed” reduce your vulnerability to unit price fluctuations and because of last minute decisions. free yourself of the worry of trying to guess the best time to invest. This strategy is used the world over and while it 3. If you earn less than $37,000 Per Annum – the gov- isn’t a fool proof system it can if implemented appropriernment will chip in $500 to your super – this financial ately help to sustain your investment and add growth year. By getting your contributions in early – your money over the long term. is working for you – even if it’s a month early, this can have a significant result in earning over the long term. For any further information – please 4. Salary Sacrifice – if you are an employee, and your employer agrees, you can make additional contributions, before tax and this will help reduce your tax liability while helping to boost your Super balance.
contact us on 08 8304 8088. We would love to hear your thoughts and comments.
Money Works Financial Planning Pty Ltd
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CHANGES TO SMSF RULES, FROM JULY 2013 OR EARLIER
As the new financial year approaches (2013/2014) so does a turning point for SMSF Trustees with heavy changes set to be introduced on the 1st of July 2013. SMSF trustees will also need to be aware that a number of changes had previously taken effect as of the 1st of July 2012. Current SMSF trustees will need to ensure that your super fund is up to date and compliant with these new rules. Below outlines a list of change to SMSF Rules: SMSF Supervisory Levy Increase change in the SMSF supervisory levy paid to ATO from the 2013/2013 year, taking the levy to $259. Trustees will also expect further increases in the levy and are able to pay this earlier in the year as which was later payments in previous years. For more information search “SuperGuide” article, (Another SMSF statement. ATO levy jumps to $259) Related Party Transactions From the 1st of July 2013, SMSF trustees that have assets purchased or disposed of related parties of SMSF must be preceded through an underlying market for the specific asset type. If a non-existent underlying market, then the transaction must be supported by an independent evaluation. For more information search “SuperGuide” article (Its official – SMSF off-market share transfer ban deferred to July 1st 2013). SMSF Auditors must be registered On the 1st July 2013, SMSF trustees need to confirm that the
SMSF auditor appointed to audit the SMSF is registered with ASIC. SMSF trustees can confirm registration status by ensuring the auditor has a SMSF auditor number (SAN), and checking the ASIC register using ASIC’s online service ASIC Connect. The SAN will need to be included in SMSF annual returns from 1 July 2013.
Collectibles : 1ST of July 2011, the investments in new collectibles have a stricter rule, in regards to storage and insurance. Previous collectibles must comply with new rules by 1st of July 2016. For more information search “SuperGuide” article, (SMSF investment: Stricter rules in place for artwork and other collectibles.)
Note that SMSF auditors must be registered with ASIC by 30 June 2013, to be able to conduct SMSF audits from 1 July 2013. At the very least, any prospective SMSF auditors must have applied to ASIC by 30 June 2013, to be eligible for any transitional arrangements.
Pension earning remain taxexempt on death of fund member: Pension earnings still remain tax free after death of the pension receiver, but there can be no revisionary beneficiary. This statement concerns an ATO draft ruling which was released in July New administrative penalties 2011. For more information From the 1st of July 2013, the ATO search “SuperGuide” article, can have the power to impose a (Good News! Pension earnings new list of administrative remain tax-free after death.) penalties. For any further information –
Power to force rectification. please contact us on From the 1st of July 2013, the ATO 08 8304 8088. We would love to can have the power to force a hear your thoughts and trustee to rectify specific contraventions. comments.
Mandatory trustee education. From the 1st of July 2013, if you’re a disloyal SMSF trustee in the eyes of the ATO, you can be forced to attend mandatory trustee education. Illegal access of super money. From the 1st of July 2013, amounts illegally accessed from a SMSF will be taxed the superannuation non-complying tax rate (45%). Criminal and civil sanctions. From the 1st of July 2013, the ATO can impose criminal and civil sanctions on promoters of illegal early access super schemes.
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The information provided in this newsletter is of a general nature only and does not constitute financial advice or a recommendation. You should obtain and consider a Product Disclosure Statement (PDS) before making any decision to acquire a product. Please seek expert advice from a qualified and experienced Financial Planner or accountant or other professional, prior to making a decision on your financial situation. Detailed information on our services and fees is provided in our Financial Services Guide, which is provided prior
UP COMING EVENTS 135 FULLARTON ROAD ROSE PARK SA 5067 PO BOX 241 KENT TOWN SA 5071 PH: 08 8304 8088 FAX: 08 8431 8211 EMAIL:- admin@moneyworkspl.com.au
UBA DAY 10/JULY/2013
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Money Works Financial Planning Pty Ltd is a Corporate Authorised Representative of Millennium3 Financial Services Pty Ltd
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