I hate roadworks!  And crooks!

I hate roadworks! And crooks!

We have a huge problem in Australia.

In my area of Victoria there are more orange roadworks than roads right now. “So what?” you might think. “Isn’t the Victorian Government putting money into infrastructure much needed?” (Of course).

However the issue is not the roadworks as such, it is the over-the-top rules and regulations that mean the disruption and cost and time involved is drastically affecting our productivity and outcomes.

A section of road near me has been “worked” on for over a year now. It was totally re-designed (with similar chaos) a few years ago. I have to drive down this road to take my son to school. He is now doing Year 12, and whilst lamenting the time wasting (around an extra hour a day) I said “Why couldn’t they have waited until next year to do this when we don’t have to drive here anymore?” His response – “Oh, don’t worry, they will still be here next year!”. He is unfortunately right. There is no sign of it being finished.

The issue? Lanes blocked without need or thinking about the actual traffic flow. Many people standing around every day appearing to do nothing, time-wasting and disorder, stop-go sign holders without any real need to be there. Kilometres of roads blocked for metres of work. Sections finished sitting for weeks prior to being opened again. 40 kmh when it could be 60. No forward planning, blocking extra lanes during peak hour. And so on…..

A few years ago I travelled to the United Kingdom. Whilst travelling around England and Wales, it struck me that there were many things happening there that we don’t let happen here anymore. A lot of them related to things that we have assumed people can’t think about for themselves.

Like footpaths. Many places in England and Wales have no footpaths or tiny footpaths, or they are cracked or cobbled. It makes it a little difficult to walk around, you need to watch out for cars (or in Cambridge – bicycles), watch your step, and be a bit careful.

But you know what? People weren’t tripping over everywhere, or getting hit by cars or bikes every minute. They were being sensible, watching their step, and watching out for vehicles.

In Australia if there is a crack in the footpath, “witches hats” are placed around it. If there is no footpath, people aren’t allowed to walk there, or sometimes they expect cars to just stop for them – they don’t even look.

Here, they will block off half a road to work on a footpath. Or they will slow you 40 kilometres an hour for 3 kilometres for 3 weeks to work on 20 metres of road off to the side for 2 days. In England they just blocked off the immediate area and slowed you down slightly if they were on the road, say a reduction of 10 miles per hour. And I didn’t see cars ploughing into the road workers. I even saw some road workers looking for cars before they stepped onto the road! It was almost as though they were expected to take some responsibility for themselves.

A similar thing is happening in financial services in Australia. Many people are so used to everything being controlled and legislated that they don’t take responsibility for themselves. However Financial Literacy Education has been incredibly lax.

  • We hear stories of rip-offs by con-men who are unlicensed and unregistered. Shouldn’t consumers have been taught the basics of avoiding cons in high school?
  • Being offered no-risk and high returns and people assume that is ok? Shouldn’t they have been given basic knowledge that some things being too good to be true?
  • People assuming that if their Adviser works for a large company they will automatically be high quality. Shouldn’t they be taught to check out their Adviser like they do their Doctor or Mechanic?
  • If something is advertised on the television it is taken as automatically true. Surely “someone” wouldn’t let that happen if it weren’t true, right?
  • And if the government says 9.5% of super contributions is compulsory then that will be enough. They don’t want to think about things like living comfortably 20 years in the future.

People are forgetting they are responsible for their own money and future. The education has not been provided to give the basics of financial literacy. Our Government is trying to legislate Ethics into existence, instead of acknowledging that people need to know more to protect themselves, and instead of catching the crooks that are out there.

The Government thinks that by giving everyone in financial services dozens more layers of legislation and boxes to tick, they are protecting people. The consumer is even more confused than ever, has no idea who to trust, and has not been educated on the basics to keep track of, or how to find someone to translate all that money stuff for them effectively.

The costs of legislation are actually reducing the availability of advice for the people who need it most, with no viable financial literacy program to fill the gaps. No-one is telling the clients how to find good advice; they are removing their options for advice at all. And then our Government decided to take away Personal Insurance for thousands of Australians, without telling them how to check it out first or how to find someone to help them check it out.

We have many huge problems in Australia.

People are forgetting to do their due diligence, trust their instincts and use common sense. They will spend more time researching a one-off purchase (like a new smart-phone) than they will checking how they are going to be able to afford to retire one day. They will trust the screen selling insurance products at the petrol station but won’t research the differences between general and personal insurance.

Whilst it would be nice to think that everything is so well controlled in Australia that you can trust the TV, the Government, a bank, or your default options to provide for you in the best possible way, this is not and never will be the case.

How do we make people take responsibility for themselves again?
How do we help them see the difference between junk, lies, rubbish and quality advice?

How do we help people with their responsibility for walking on that cracked footpath, watch out for people working on our roads, or take control of their own finances and future themselves without causing total and absolute chaos ?

#InsiderOut #FinancialRelaxation

Melinda Houghton
Adv. Dip FS (FP), AFA, FPA
Insider Out – Understand and Trust your Advice
www.insider-out.com.au
melinda@insider-out.com.au
0400 533 865

This information may be regarded as general. That is, your personal objectives, needs or financial situations were not taken into account when preparing this information. Accordingly, you should consider the appropriateness of any information we have given you, having regard to your own objectives, financial situation and needs before acting on it.

I am no longer authorised to provide financial advice. If you wish to receive financial advice you must contact an authorised provider.

https://www.moneysmart.gov.au/investing/financial-advice/financial-advisers-register

Estate planning is just for old people, right?

Estate planning is just for old people, right?

This is a very easy question to answer – NO, Estate Planning is for everyone. 

A good Estate Plan requires the involvement of skilled Legal, Accounting and Financial specialists, to ensure that your hard-earned assets end up in the right hands at the right time.

Estate Planning does not just mean you have to have a valid Will, although that is a very important aspect.  Estate Planning should cover all of the following areas:

  • Wills and Powers of Attorney
  • Superannuation and Life Insurance Beneficiary Nominations and Types
  • Ownership structure of Assets
  • Taxation Planning
  • Consideration of Trusts including Testamentary Trusts
  • Life Insurance

Did you know?

  • That assets held in joint names automatically pass to the other owner upon death without passing through your Estate? (e.g. your house and joint bank accounts) So there may be no point in putting them into your Will.
  • That superannuation benefits with valid binding nominations to a dependent can also bypass your Estate? (Which means there may also be no point in putting them into your Will)
  • That a non-binding superannuation nomination may be able to be challenged by people who think that they are entitled to your super benefits? (After you are gone and not able to give the real story)
  • That Life Insurance proceeds in Superannuation may have tax payable of 30% (plus Medicare levy) if received by a non-dependent beneficiary (such as an adult child) but are paid tax free to dependents?
  • That a Testamentary Trust may assist in preventing assets from going to that son or daughter-in-law that you don’t like?
  • That leaving two properties worth the same amount to two different children may have vastly different values when sold once Capital Gains Tax is applied?
  • That if you do not have a Will your Estate is usually much harder to manage by your loved ones you have left behind?
  • That if you become disabled and do not have a Power of Attorney then the courts who don’t know you may decide who is in charge of you and your Assets?
  • That many people do not have enough Life Insurance to support their families in the event of their premature death?

 

It’s not hard to do Estate Planning

  • A solicitor can assist you to set up Wills (with a Testamentary Trust if required) and Powers of Attorney as well as general Estate Planning advice.
  • An Accountant can assist you with tax planning, trusts and asset ownership to ensure your beneficiaries maximise any benefits they are entitled to.
  • A Financial Adviser can assist you to ensure your Superannuation, Beneficiary Nominations, Life Insurance and Ownership structures are appropriate. They can assist you to set your finances up correctly, and ensure that everything is structured in accordance with your Will.  They can also work with your Accountant and Solicitor to assist you to get it right and to make changes if your circumstances change in the future.

 

Frequent Objections 

It won’t happen to me!

Maybe not, but is maybe good enough for your spouse and children?

My wife/husband will get everything anyway.

Probably. But it will take longer to sort out and could cost more. So is probably really good enough?

If I make a Will I will die.

Definitely at some stage, but no sooner than without a Will.  If you don’t make a Will you will still die sometime, and your family will have to sort out your Estate without the benefit of your forward planning.

I don’t want to think about it.

Of course you don’t, but neither does your family when you are not around, and they will have to think much harder and longer about it (while they are grieving) if you don’t have a valid Will. 

I can’t afford it.

You can’t afford not to.  And it probably doesn’t cost as much as you think.  It may cost much more to manage your Estate without Estate Planning, and proper planning will often save tax and legal fees.

 I made a Will 20 years ago.

Did you? Well done!  Time to check with your Solicitor that it is still valid, current and that you don’t need to change anything.  Did you establish Powers of Attorney, complete beneficiary nominations, and do tax planning then as well?

I have seen many examples of Estate Planning strategies where people think they have it right, however without advice ensuring it is correct, their wishes may not actually be met.  Once you are gone, it is too late to change it.  Check your overall position now, and seek advice to get it right!

Melinda Houghton

Adv Dip FS (FP)

Insider Out – Understand and Trust your Advice

0400 533 865

www.insider-out./com.au

www.facebook.com/InsiderOutMel

 

This information may be regarded as general.  That is, your personal objectives, needs or financial situations were not taken into account when preparing this information.  Accordingly, you should consider the appropriateness of any information we have given you, having regard to your own objectives, financial situation and needs before acting on it.

 

I am no longer authorised to provide financial advice.  If you wish to receive financial advice you must contact an authorised provider.

 

https://www.moneysmart.gov.au/investing/financial-advice/financial-advisers-register

 

 

Discrimination of the WORST kind?

Discrimination of the WORST kind?

Discrimination is everywhere, and many people are currently fighting it.  And so they should be.

“Discrimination happens when a person, or a group of people, is treated less favourably than another person or group because of their background or certain personal characteristics.”

Some of the unfortunately common ones that are facing major battles right now are racial discrimination, LGBTIQ discrimination, and religious discrimination (amongst way too many others).  All types of discrimination are vile, disgusting, and difficult to fix for many challenging reasons.

However, another type of discrimination is flying under the mainstream radar whilst actually being legislated into existence right now!  A group of people are fighting it – but struggling to gain traction against the challenges of those promoting it.  The promoters are saying it is “for the best”, “necessary”, “more efficient”, and even “protecting” the victims.

This discrimination is against the underdogs, the ones who most need help, the ones who are not even aware of this discrimination and won’t know until they are in the direst of circumstances and have no options.  Is this then one of the worst kinds?

“Protecting your Super” (PYS by the Federal Government), “Automatic Rollovers” (promoted by ISA), Media hype against fees and advice, are examples of this discrimination being enacted right now.

So, who are the victims?

  • Low income workers with low super balances
  • New entrants to Australia with low super balances
  • English as a Second Language members of super funds
  • Young people who have multiple casual jobs
  • Women (and men) taking a break from the workforce to raise children or care for aging parents
  • People who move a lot and miss updating their addresses everywhere
  • People with low literacy, minimal education, or low financial literacy
  • People who don’t have time to read 50 page Product Disclosure Statements
  • People who are sick or injured already

What is the issue?

Insurance in Superannuation is complicated, misunderstood, and considered by our regulator (ASIC) to be paid via a fee that reduces balances, not via a premium that provides protection.  It is the unpopular, smelly, disadvantaged kid in the schoolyard.  We know they are there, but we pretty much ignore them, and if someone makes them go away quietly, and we don’t have to deal with them anymore, it seems like a good thing.

But like the good teachers and children with empathy find out when they give these kids a chance, and work to understand them, they can turn out to be one of the best things that ever happened to someone’s life.

Every financial adviser knows that the unpopular, smelly, disadvantaged insurance in superannuation which is lesser quality and hard to claim on can be gold to someone who doesn’t have any other options.  There are thousands of stories of the person with no other insurance, or who had the pre-existing medical condition and couldn’t get the “golden, privileged

child” of products, that they helped claim on their automatic cover and saved their financial situation, their family from poverty, and their sanity.  Not to mention saving significant welfare costs to everyone in the tax-paying community.

Many of these stories include claims on multiple products, in multiple super funds and for people who didn’t even know they had cover for various reasons, or who certainly didn’t understand it.

However now PYS, Automatic rollovers, and TV commercials telling people to consolidate their super funds into one are taking these options away from these disadvantaged people.

Should everyone just keep multiple super funds and get a new fund every-time they get a new job?  Of course not. 

But everyone should be told they need to check what they have before it is just taken away from them, and not on page 8 of a long, confusing letter in 6 font italics down the bottom.

And everyone should be told who the experts are who can help them with this if they don’t know how or don’t have time to do it themselves.  Financial advisers are experts at this.  Who is telling people that?

And who is going to take care of the people being discriminated against with these new strategies when the worst happens and they become seriously ill, injured or die prematurely?

The Centrelink Disability Support pension is difficult to apply for, has strict criteria surrounding eligibility, and pays a grand sum of $843.60 per fortnight (single).

If we told people with low bank balances their car insurance or home insurance was being cancelled automatically there would be a major out-cry.  Why is this new type of discrimination actually being legislated and nobody seems to care?

 

Melinda Houghton

Adv Dip FS (FP)

Insider Out – Understand and Trust your Advice

0400 533 865

www.insider-out./com.au

www.facebook.com/InsiderOutMel

 

This information may be regarded as general.  That is, your personal objectives, needs or financial situations were not taken into account when preparing this information.  Accordingly, you should consider the appropriateness of any information we have given you, having regard to your own objectives, financial situation and needs before acting on it.

 

I am no longer authorised to provide financial advice.  If you wish to receive financial advice you must contact an authorised provider.

 

https://www.moneysmart.gov.au/investing/financial-advice/financial-advisers-register

What do financial planners actually do?

What do financial planners actually do?

I worked as a Financial Planner (or Adviser) from 2005 – 2019.  When people asked me what I did, and I told them “I am a Financial Planner” there were a few common responses.  Most commonly – “Oh, I need one of those”.  Second most commonly – “What do you actually do?”

There is a perception that financial planners only help rich people get richer, which always intrigues me.  If people are already rich, are they the ones who really need advice?

Financial Planners take on many roles including Research, Advice, Strategy, Guidance, Encouragement, Goal Setting, and assisting people to achieve Peace of Mind or what I like to call “Financial Relaxation”.

The areas they work in include:

Superannuation, Investment, Personal Insurance, Retirement Planning, Pre-retirement planning, Estate Planning, Budgeting, Savings Plans, Centrelink Maximisation, and Taxation Minimisation.  Most importantly, they work with people, and to summarise here is what they should do:

Minimise financial risks, and maximise financial opportunities

One of my former clients asked me to tell her story, in order to communicate some of the things that we do better than any financial planner is able to.  Many thanks to Amanda for sharing:

“We weren’t wealthy, we didn’t have savings or investments. My husband’s company was taken over and they said they were going to put off a lot of workers. He had been working there for 12 years. We had teenagers, a mortgage, renovations, all the usual expenses that families have. Our wages didn’t cover our costs and we were hoping we would breathe again when the kids finished school.

We saw Melinda and she organised our finances and affairs so that we were protected if the worst happened. My husband was one of the lucky ones and kept his job although he took a substantial pay cut. 50% of his fellow employees were made redundant.

We thought we were over the worst of our financial difficulties, our youngest son finished school and we were finally in a position where we could pay off our credit cards, landscape the garden and plan our first family holiday in years.

Then my husband was diagnosed with cancer. One visit to the doctor, a CT scan, he was in and out of hospital, more tests, trips to specialists. The cost of treatments and special medications was unbelievable, one cancer tablet cost $4,000 per month! He couldn’t drive because of the medications he was on and I had to give up work to care for him, around the clock.

We had insurance. Melinda had put all that in place. We were able to go on knowing that the cost of treatments, therapies and loss of wages was covered. After a few weeks my husband was given a terminal diagnosis and with the support of our local palliative care I was able to care for him at home until he died.

I still had a mortgage and debts, no regular income for nearly a year, was unemployed and grieving and the renovation on our house was incomplete. The whole way through our experience Melinda handled the paperwork and helped us in any way she could.

After the estate was settled Melinda organised everything again so that I could return to study with a regular income from investing my husband’s superannuation and Life Insurance proceeds. I have been able to pay out the mortgage, engage a builder to finish the renovation and help the kids along with their Uni studies. All the way through, because of the best financial advice, I have been able to make choices based on what was the best possible for our family.

You can’t predict what will happen in life. You can’t see into the future and you never think the worst could happen. But you can organise your affairs with the help of a good financial planner so that if things go wrong you have choices and options. I’m still not wealthy. But I’m so glad we take Melinda’s advice.”

Amanda

Everyone has opportunities to minimise financial risks and maximise financial opportunities.  With constant changes to legislation, financial markets, world events, and your own personal situation it is essential to refer to a financial specialist who is experienced and up-to-date.  I no longer provide advice myself, however I still want to help people get good advice.

Melinda Houghton

Adv Dip FS (FP)

Insider Out – Understand and Trust your Advice

 This information may be regarded as general.  That is, your personal objectives, needs or financial situations were not taken into account when preparing this information.  Accordingly, you should consider the appropriateness of any information we have given you, having regard to your own objectives, financial situation and needs before acting on it.

I am no longer authorised to provide financial advice.  If you wish to receive financial advice you must contact an authorised provider.

https://www.moneysmart.gov.au/investing/financial-advice/financial-advisers-register

 

All financial planners drive mercedes

All financial planners drive mercedes

There are a lot of myths and fallacies surrounding Financial Planners.  However the profession has changed.  A lot.  And it is essential that consumers know what is true now.

Here is some of what you may hear:

All financial planners drive Mercedes.

There are always hidden kickbacks and costs.

My aunt/uncle/brother/friend/taxi-driver saw a financial planner and got ripped off.

But I don’t have enough money to see a financial adviser.

Whilst every profession has their issues, and financial planning has certainly had theirs, if you do your due diligence (check them out) you should be able to find a planner who is willing and able to offer you a quality service, where you pay a fee for your advice, and achieve an outcome that is both in your best interests, and will help you achieve your goals.

There is still a lasting legacy of thinking that if you want to work with a financial planner, you need to be rich first.  Kind of like cleaning up your house before the house-cleaner comes.  Good Financial Planning is changing these perceptions and opening up life-changing financial opportunities for thousands of Australians.

So how do you find a good financial planner?  Consider these things:

  1. Authorised to provide Financial Advice in Australia (so not a Mortgage Broker, Accountant, Real Estate salesperson, Banker or someone at a BBQ).
  2. Qualified and experienced.
  3. Not linked to a large financial institution (unless you want to buy that institution’s products).
  4. Member of a professional association with a strong code of ethics, e.g. FPA, AFA
  5. A provider of strategic, holistic or relevant advice that cares about your goals and objectives, and they are focused on you and not themselves.
  6. They are good listeners, you like them and you think you should be able to work together.
  7. They know what they are talking about, and have empathy and understanding of your situation.
  8. They are used to working with clients in your situation (whatever that situation is).
  9. They are recommended by someone you know (who has used their services).
  10. They clearly explain what services they provide, what you will get out of it, and what fees are payable.
  • I’ve worked with dozens of financial planners, some did drive Mercedes, and one drove a Ferrari. (He was very young, and naïve and borrowed a LOT of money to buy it).  The local Real Estate agent has a Lamborghini though, and it is red, shiny and expensive.
  • Legislative changes mean that there should no longer be any hidden costs or kickbacks in advice, which is great.
  • Someone else’s experience is not your experience, and I can find you dozens of testimonials from people who have had great experiences with their financial planner.
  • But do take note, if someone is advertising on the television frequently, they must be backed by someone who makes large profits, and wants you to be another person to help them make more.

There are somewhere around 18,000 practising Financial Planners in Australia (the numbers quoted vary from 15,000 – 25,000.  If they each have an average of 200 clients, and those clients are still with them, then there are around 3,600,000 Australians who know there is something good about financial planning.  What are you missing out on and why?

Melinda Houghton

Adv. Dip FS (FP)

Insider Out – Understand and Trust your Advice

This information may be regarded as general.  That is, your personal objectives, needs or financial situations were not taken into account when preparing this information.  Accordingly, you should consider the appropriateness of any information we have given you, having regard to your own objectives, financial situation and needs before acting on it.

I am no longer authorised to provide financial advice.  If you wish to receive financial advice you must contact an authorised provider.

https://www.moneysmart.gov.au/investing/financial-advice/financial-advisers-register