29 November 2016

Moving Goal Posts. By Tina Zawila.

As financial advisors we are always encouraging clients to plan for the future, and we give that advice based on what we know today.  Clearly our challenge in providing this advice, is the chance that the “goal posts will be moved” during, or after strategies are implemented.  
Just last week, the Federal Government passed changes to the superannuation system claiming it will save nearly $3 billion and future proof it for decades to come. 
So what are the changes and how will they affect you?
Concessional Contributions into Superannuation
Generally speaking, these are the contributions your employer makes for you under the Superannuation Guarantee scheme plus any contributions you choose to ‘salary sacrifice’, that is, that you contribute from your “before tax” pay.   Right now, those of us aged under 50 can contribute up to $30,000, and the over 50’s, $35,000 in concessional contributions.  However, from 1 July 2017 (just over 7 months away), this limit will fall to $25,000 for everyone.
Non-Concessional Contributions to Superannuation
This is where you contribute to super from your own “after tax money”.  For example, where you make extra contributions from your net pay, or where you may sell an asset and choose to put the cash into super to save for your retirement.  Right now, you can contribute up to $180,000 per year (or bring forward 3 years into one year $540,000), however from 1 July 2017, this limit will fall to $100,000 ($300,000 using the 3 year bring forward rule).  This will significantly reduce your ability to put money into the tax effective investment vehicle we know as superannuation, and also offers an urgent opportunity for anyone wishing to contribute over $100,000 this year, or $300,000 under the bring forward rule, to act before 30 June 2016.
Tax on Superannuation
Most of us pay 15% tax on our superannuation, however, at present if you earn over $300,000 per annum you effectively pay 30% tax on your superannuation investment.  From 1 July 2017 this income level will drop to $250,000. 
Superannuation and financial investing is a complex area, and you should seek professional advice before taking action.  Please call us at Sothertons Gladstone on 4972 1300 if you need assistance planning for your financial future.

22 November 2016

The Value of Good Advice by Steve Marsten

We received a new client recently who was advised by their previous accountant when requested to undertake some urgent work that it would take six – eight weeks to complete. The client was also warned by a friend before coming to our firm to “be careful they seem expensive…”
Within a week they were complaining about two accounting fees they had received! Both invoices were from their previous accountant. The fees weren’t huge (total $350) but they were for consultations whereby the accountant advised they “could not help them”. Our fees turned out to be more then this however we turned the job around quickly and our client advised us that it was the best money she had spent in a while due to the valuable advice she had received.
Good advice from a financial professional can have a profound positive impact on your own, and your families, financial future. It can save you a considerable cost especially when buying and selling businesses or strategising over the best way to organise transactions or simply to consider other ways of managing your business or investments.
When you meet with your advisor, you are likely looking for answers or solutions to your financial questions and needs. And there are many trusted advisors who have the knowledge, competence, and desire to keep your best interests in mind so that you can maintain your sense of financial well-being.
When looking for an advisor, it’s OK to ask them questions to help you get comfortable in working with them—in fact, it’s encouraged. The more confident you are that you are working with an expert you trust, the easier it is to have those difficult conversations and make decisions. Don’t be afraid to ask your advisor these questions:
1.       How will you assess my financial security needs?
A good advisor will ask you questions about your life, goals, expectations, income, current assets and liabilities, and your time horizons. This process helps them properly assess your needs and work with you to develop a sound plan. If they don’t ask you a lot of questions, then they may make assumptions that could result in plans that won’t take you to where you want to be.
2.       How do you protect my privacy?
The information an advisor collects from you is personal and possibly sensitive. A good advisor will be aware of their privacy obligations.
3.       How does your business operate and how do you get paid?
Advisors should be able to articulate the way they conduct business.
When you work with an advisor you trust, it’s more likely they will add value to you and your business and provide you with peace of mind and confidence about your future. Speak to your advisor often.

At Sothertons, building trust and value is the key to our service. Call us today on 4972 1300.

15 November 2016

Global Trends Decreasing Your Pension. By Tina Zawila.

If you are an aged pensioner I'm sure you have heard that there will be changes to the asset test limits next year which may impact on your entitlement to the aged pension.  Even if you are not currently receiving a pension, but intend to apply next year, you should seek professional advice in the next few weeks.  If you are receiving a pension before 1st January 2017, but as a result of the asset test changes will lose your pension next year, you will be able to retain your Seniors Health Care Card for life, even if you never receive a pension in the future.  So it might be worthwhile to apply for a pension (or part pension) before the new year rolls around. 
So why is the Government tweaking with aged pensions?  Quite simply, it's because of demographics.  We are an aging population with life expectancies increasing and falling birth rates.  This increasing proportion of elderly people challenges the solvency of social welfare systems including pensions and healthcare.  This is not just a problem in Australia, the world's population of people older than 65 is expected to double to 1 billion by 2030.   
Our changing demographics represents one of the top "Global Trends" in the world today, and governments will need to implement bold policies to cope with these demographic changes.
However, there are other changes happening to our world population.  Seemingly on the other side of the coin, there is also a youth "explosion" happening in developing countries.  Nigeria's population is expected to exceed America's by 2045 and Africa's population will double by 2050.  These young people will need jobs and so these regions will face the challenge of integrating their youth into saturated labour markets.  
Add to this the way technology is changing the way that people work, and the increasing levels of education available in emerging markets, the face of our global workforce will change significantly with physical borders almost becoming irrelevant.
There is an underlying theme that connects all of the demographic trends we're seeing - the world is becoming a more diverse place.  
If you need help interpreting how future global trends will impact on your business or your financial investments, call our professional team at Sothertons Gladstone on 4972 1300.

08 November 2016

Can your data be held to ransom?

By Steve Marsten

It was recently brought to my attention of a case whereby a businessman arrived at work and logged onto his system to start the day only to find that he had received an email (and a Text message) letting him know that his data was taken hostage and for a price it would be released. Now its one thing for your business data to be temporarily offline, yet its quite another for it to be criminally corrupted.
The cost associated with data breaches and damage to customer and client confidence may have the most severe consequences for an organisation which can lead to a significant loss of business and negative publicity.
Cybercrime is the fastest growing cause of data service interruptions. In 2014 the Australian Governments cybercrime division CERT dealt with 11,073 cyber security incidents affecting Australian businesses. Its fair to say that the real figure maybe twice that many given that many businesses are reluctant to notify bodies or prefer to deal with it in house.
So what is Cybercrime exactly? Cybercrime involves viruses, hackers, malware, distributed denial-of-service attacks (which are intended to take websites offline) and of course ransomware which was the issue with the case above.
Cryptolocker, which is a form of ransomware, and is spread via seemingly innocuous emails that appear to come from trusted sources such as postal services and government agencies impacted more then 1 million organisations globally last year. In respect of Australia’s numbers, the figure for Cryptoware is 60% of all local cybercrime.
I know we have received about 20-30 dodgy emails a week that are picked up in our security software. In The US they estimate the cost of Cryptolocker alone is more than $100million US dollars! The costs in terms of lost business however would drive that figure up considerably.
To properly protect your data there are a few things to consider:
  1. Never assume your business is not big enough to be attacked. Hackers don’t differentiate between business sizes;
  2. Back the system up daily – without fail;
  3. Consider a disaster recovery plan before the disaster. What’s the plan if your entire IT environment was offline?
  4. Copy your data to a site that’s designed for optimal security and shielded from hardware failures.
  5. At Sothertons we are always discussing risk with clients to ensure that they have the necessary protection in place. Call us on 4972 1300.