Author: Adam_Admin

Why You Need To Consider Your Options When It Comes To Financial Advisers

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A financial adviser can assist you with making financial decisions and planning for your future. Advice from a financial adviser may include advising on budgeting, investing, super, retirement planning, estate planning, insurance and taxation.

Finding and choosing a financial adviser to suit you is made simpler by keeping these essential tips in mind.

Decide What You Want From Financial Advice

It’s crucial to know precisely what you’re looking to get out of a financial advisor if you want financial advice. Depending on your stage of life, how much money you have available and what you’re trying to achieve, your needs must be accommodated appropriately to ensure that you’re receiving the right kind of advice. Think carefully about what you are aiming to get out financial advice.

Choose The Right Financial Advice For You

A financial adviser can give two types of advice. Financial advisers can provide general financial advice that doesn’t consider personal situations or goals or how you may be affected personally. Essentially, it’s not advice that may take into account your best interests.

However, personal advice must be based on a careful review of your financial situation and goals and align with your best interests. It can include:

  • Simple, single-issue advice – Assistance with one financial issue (e.g. how much should you contribute to your super)
  • Comprehensive financial advice – Assistance in developing a financial plan to reach your financial goals
  • Ongoing advice – Regular monitoring and review of your financial plan and affairs

Find A Financial Adviser

Once you have a clear financial goal in mind, it’s time to look into finding someone who can help you achieve it. You can find a licensed financial adviser through:

  • A financial advice professional association
  • Your super fund
  • Your lender or financial institution
  • Recommendations from people you know
  • Speaking with us.

A good adviser will get to know you, keep you informed, and help you achieve your goals. They’ll also discuss how much risk you’re comfortable with. Going on this journey with your financial adviser can assist you in setting up your financial future comfortably. Begin a conversation with us to see if we can assist you on this journey.

Removing Superannuation’s Minimum Income Threshold Limit

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From 1 July 2022 employees will no longer need to meet the monthly minimum income threshold of $450 to receive superannuation guarantee payments from their employers due to the Federal Budget’s recently announced changes to superannuation.

Previously, employers did not need to pay employees superannuation guarantee payments if they did not earn $450 per month. Employees who worked for multiple employers but did not earn the same amount from a single employer were not eligible for superannuation guarantee payments.

Close to $125 million of contributions was not being made due to employees not satisfying the minimum income threshold of $450. An estimated 300,000 Australians were reported to have been missing out on those contributions each year.

For employees who worked in lower-income jobs or in part-time or casual employment that may not reach that minimum income threshold, this meant that they were missing out on critical payments to their super. With women making up a more significant proportion of these workers, it also caused the gender gap in superannuation already present to widen further.

The removal of the minimum income threshold means now that these employees will be able to accrue super through the payments made by their employer and help address a long-term equity issue that had been in place in superannuation for years.

These changes should come into effect by July 2022 and, though they may not necessarily improve the retirement outcomes of individuals, the savings resulting from these payments into super will be boosted and all workers will as a result be provided with superannuation coverage, regardless of whether or not they earn more than $450.

Supposing that you are an employer who will now have to pay superannuation guarantee payments to your employees and did not have to do so before. In that case, you can speak with us to ensure that you are meeting your compliance requirements with super for your employees.

Stamp Duty Tax – The Invisible Cost To Purchases

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When you’re buying a property, there’s a high likelihood that you’re going to need to pay a tax known as stamp duty on top of the price originally agreed on for that property. Stamp duty is a tax levied by all Australian states and territories on property purchases. It is considered one of the most expensive costs you will encounter when buying a property in Australia. It may also be incurred for motor vehicle registrations, insurance policies, leases and mortgages, hire purchase agreements and transfers of property.

The amount that a buyer pays for stamp duty when it comes to a property, for example, is based on the property purchase price, location and loan purpose and can vary in rate depending on which state the property is purchased in.

As a rule of thumb, the more expensive the property is when buying, the higher the amount of stamp duty to be paid.  What you pay for stamp duty may vary depending on the state, as it depends on factors such as first home buyer benefits and concessions that some states may not currently have in place.

A property that is worth $500,000 for example may incur an estimated stamp duty tax of over $11,000 in the ACT. Still, in South Australia, a property priced the same may have to pay an estimated $25,000 in stamp duty tax instead.

The revenue from the stamp duty tax is added to the state government’s budget, and then redirected to other government sectors to finance further improvements.

Under certain circumstances, concessions or exemptions from paying stamp duty may be available to you.

In NSW for example, there is a stamp duty concession for first home buyers where they are exempt from paying stamp duty on new and existing homes valued up to $650,000.

Buyers of first homes that were used as a residential property and which are worth between $650,000 and $800,000 could be eligible for stamp duty discounts of several thousand dollars.

These rules vary depending on the state or territory, so it’s crucial to find out what applies to you to save you money. We may assist you with finding out whether or not you may be eligible for concessions or exemptions, so come speak with us.

Preparing For Your Employee’s Performance Review

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The performance review process is an integral part of a business that ensures that all staff (old and new) know their roles and responsibilities and perform them satisfactorily. It allows employers to directly give feedback to their employees in a formal setting that employees can then direct back into and shape how they perform their role.

Performance reviews may include praise about performance, suggestions for improvement or raise professional concerns, or assist in their career development and growth by planning for a future with clear strategic goals.

To be sure that the performance reviews conducted benefit you and your employees, It is essential to make sure that you are fully prepared and able to articulate your feedback. It’s important to have a plan, and a well-organised agenda of how you want the meeting to go can be a valuable tool to employ.

Make a note of any critical issues or points that you wish to discuss with your employee, as having the physical prompt should assist you in keeping the meeting on track and examine all of the relevant points that you want to pursue with the employee.

Essentially, you should cover in the performance review:

  • Each employee’s goals or KPIs, and how well those goals are being met/achieved
  • Areas where they have excelled
  • Places where they may need more improvement

You can also ask your employees to assess their performance and see what they may identify differently from what you have highlighted. You can do this by simply having them conduct a self-analysis on how their performance has been in reaching (or not reaching) their goals

If you are after a more formal approach to a self-analysis, you can ask employees to complete a more formal SWOT analysis, which identifies their strengths and weaknesses, opportunities they’ve taken advantage of to enhance their performance and any threats that may have impacted or may impact their performance.

Performance reviews can also identify and highlight areas for improvement in the business that may have otherwise gone unnoticed.

Typical Things To Address In A Performance Review

  • The employee’s quality of work and ability to meet particular metrics
  • Dependability and punctuality
  • Leadership, communication and team skills
  • Progress made towards personal career goals
  • Innovation and problem-solving skills

Performance reviews should be conducted periodically and methodically to ensure that you get the most benefit from them. It will also keep you informed about progress and issues within the business. It is recommended that you conduct performance reviews every three or four months, but half-yearly reviews are also perfectly suitable.

What Does The Non-Concessional Cap Increase Mean For You?

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The Federal Budget dropped on Tuesday, 11 May, with many announced amendments and changes that affected the superannuation and SMSF sectors. Non-concessional contributions increased maximum limits were announced and would come into effect as of 1 July 2021, increasing the cap from $110,000, up from the previous cap of $100,000.

Personal Contributions made into an SMSF from after-tax income on which no tax deduction is claimed, known as Non-Concessional Contributions. Non Concessional Contributions are personal contributions made into your SMSF from your own personal Bank Account and not contributions to your super made by your Employer.

You will be able to put non-concessional contributions into super (including using the bring-forward rule) up until age 74, without there being a need for you to work.

The bring-forward rule is a provision that allows Members of a superannuation fund to make non-concessional contributions that amounted to more than the contributions cap of $100,000 in one year by utilising the cap for the next two years. It has been amended to reflect the Budget’s rulings and come into effect on 1 July 2021.

You will still need to meet the work test if you wish to make tax-deductible contributions. Still, this outcome may provide some excellent planning opportunities for you regarding removing taxes from the death benefits that your adult children will pay on any benefits paid out to them from your superannuation.

As an example, with the increase to the age limits, there are many ways that you can take advantage of this to boost your super. Let’s say that you have extra cash that you would like put into the superannuation system that you weren’t previously able to, such as $100,000 that you wanted to put in when you turned 67 but were unable to because the age limit for non-concessional contributions had been reached.

With the increase, you will be able to put non-concessional contributions into your super up until you reach 74, which could amount to a hefty sum if you contribute the maximum cap limit amount each year.

We can offer you advice on how best to utilise this new non-concessional contributions cap to your advantage and our knowledge of strategies that we can use for non-concessional contributions to potentially save your children tens of thousands of dollars in death benefits taxes (currently taxed at 15%) if you wish to leave any of your super to your adult children.

Speak with us to find out more about the other ways that you can benefit from the newly released Federal Budget’s outcomes and announcements involving superannuation.

Buy Now Pay Later – Is This Service Right For You?

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If you’re someone who often finds it difficult to make large lump sum payments for goods or services, you may want to consider looking into “Buy Now Pay Later” services.

Buy now pay later essentially means that, rather than paying in a full lump sum payment for a product or services rendered, there may be an option to pay through instalments of a certain amount over a set period to make the sum of the full amount in total. This method should allow you to pay in full for the product or service without overly straining your finances – you pay back what you can, as agreed upon when you begin the buy now pay later service.

Some popular buy now pay later services include Afterpay, Zip Pay, Brightepay, and some credit card networks such as  Mastercard and Visa, can offer buy now pay later arrangements.

Though it can be a convenient, immediate solution, it may be challenging to juggle the necessary repayments with other financial commitments. It’s not always the most appropriate method for people, and you should bear in mind your situation and ability in paying back the amounts.

Before you sign up, keep in mind:

  • It becomes easier to overspend with buy now pay later services, so know your limits on what you can and can’t afford.
  • You will be charged fees and costs to use the service, which can add up to a princely sum in and of itself.
  • Keeping track of your payments can be tricky if you’ve signed up for multiple services.
  • It could affect your loan applications for a car or mortgage as lenders consider buy now pay later spending just as much as your credit score.
  • Late repayments can appear on your credit report, which affects your ability to borrow money in the future.
  • Layby can be a cheaper alternative to buy now pay later, with no account-keeping or late fees to consider

If you are someone who could make use of BNPL services, you may wish to:

  • Ensure that when using the BNPL service, you stick to a set limit on what you spend so that you can comfortably pay it back later.
  • Aim only to have one BNPL account at a time to manage payments through, rather than confuse yourself with multiple payments across different providers.
  • Always budget for bills, loan payments and BNPL payments, and
  • Rather than use your credit card for payments to your BNPL account, consider linking to your debit account instead.

If you would like assistance in planning your financial future, help in managing your budget or some friendly advice, see us for a chat about what we can do for you.

Using Feedback As A Tool For Your Business’s Growth

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Feedback is an essential element within the business sphere. It can be used to improve your business as a whole or help identify where you may make further improvements. It can be internally or externally driven and may not always be positive. Essentially, feedback is a driving force behind a business’ growth and should be sought out and given by you to create a direct line of communication that the feedback is being received and put back into the business.

It is crucial to consider the following when you ask for feedback:

  • Who you are requesting feedback from and why
  • How to use the feedback effectively after receiving it
  • How your business can improve as a result of the feedback
  • What is/isn’t working for your business, and how you can address it

You can request feedback from:

  • Those who report to you (you can go down a few levels)
  • Those above you (you can go up a few levels)
  • Colleges in the same team/group
  • Colleges in other teams/groups
  • Vendors, suppliers and external contractors
  • Customers

As a business owner, it is crucial that you receive honest and constructive feedback while also providing it to your employees. To do so, one needs to ensure that the feedback is:

  • As specific and as close as possible to an event
  • Given and received in a safe place in an appropriate setting and time
  • Not judgemental or personal
  • Constructive and actionable

When receiving feedback, try to listen, reflect and respond.

Listen

Listen to the feedback provided to you, even if it makes you want to react immediately to it. Delay defending yourself, and listen closely to what exactly is being said. Internalise the feedback, and ask questions to clarify what they are saying to give yourself a concrete understanding.

Reflect

After receiving feedback, reflect on what was said with an open mind and understand the context in which the feedback has come from. Is it helpful feedback that you can use to improve or change accordingly? Rather than think “that wasn’t my intention” about the feedback, consider how it could have been perceived differently from the other’s view.

Respond

Giving feedback, particularly when it is negative, can be a daunting task. Respond with a thank you to the feedback, as it promotes a positive response irrespective of the nature of the feedback.

The Federal Budget 2021-22: Low & Middle Income Tax Asset Rebate Extension Announced

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The Low and Middle Income Tax Offset has been extended for another 12 months, meaning that taxpayers whose wage earnings situate them within a certain income bracket will again be able to receive a little extra cash back into their pockets again this year.

Tax offsets are also known as rebates and directly reduce the amount of tax payable on your taxable income. Sometimes, this can lead to the payable amount lowering to zero, but these rebates cannot be used on their own to get a refund.

You are only able to receive this amount after you have filed your tax return at the end of the financial year and in a lump sum amount that is in accordance with which wage bracket you are in and the amount you will receive.

You don’t need to complete anything in your tax return for your low or low and middle-income tax offset to be worked out for you. Instead, the amount of tax offset you will receive is worked out for you once your tax return is lodged.

If you earn under $37,000 this financial year, you will receive an offset of $225. For those who earn between $37,001 and $48,000, you will receive $255, with an additional 7.5 cents to every dollar above $37,000 up to a max of $1,080.

Those who earn between $48,000 and $90,000 a year are set to get the best deal, with up to $1,080 on the cards.

If you have any tax-related questions that the Federal Budget announcements have brought to your attention, speak with us for assistance.

Gender Inequality in Superannuation

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Gender gaps can affect superannuation accounts as much as they can affect salary rates. With barriers to entering into fields, lower hourly rates of pay, less hours worked and more unpaid labour affecting the amount of super Australian women are retiring with, as compared to men.

Currently, the median superannuation balance for men aged between 60-64 stands at $204,107 whereas the superannuation balance for women of the same age has a median total of $146,900. It’s a gender superannuation gap of 28%.

This gender gap in superannuation balances can be impacted even more by women using maternity leave. With women taking their time off from work and losing out on super contributions during this period of paid parental leave, it can affect their super in the long run as it exacerbates the income and superannuation gaps that were already in effect during their employment.

It can also be exacerbated by existing salary gaps across the workforce. Despite traditionally male-dominated fields experiencing high percentages of female graduates entering into the workforce, the positions that they fill are not always high-ranked, irrespective of experience.

There are threeproposed measures with regard to how the superannuation gap could be addressed at a macro level. These include:

  • Including superannuation guarantee contributions in the Commonwealth Paid Parental Leave scheme, as a majority of recipients are women and it is a leading cause of the gap exacerbation.
  • allowing unused concessional contributions to be made for recipients of Commonwealth Paid Parental Leave without time limits is having a negative impact on women’s superannuation outcomes, so the policy needs to be changed accordingly.
  • Amending the Sex Discrimination Act to ensure employers are able to make higher superannuation payments for their female employees if they wish to do so without contravening the existing legislation.

Here are some examples of ways in which women can increase their super balances to make up for any losses that may have been incurred:

  • Contribution splitting – by having their spouse transfer some of their superannuation contributions over to their account, their account can be increased.
  • Salary-sacrificing contributions into their super to make up for the shortfall from not working in previous year.

If you are concerned about your superannuation, or would like further advice, please speak with us.

Using Market Research To Boost Your Business

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Market research is an effective tool that can be used to boost your business in terms of sales, customer engagement and how your competitors may be performing. It allows you to make well-informed decisions that can potentially add value to your business.

When conducting market research, ensure that you are covering all of the potential areas that may affect how your business has been performing. This may include:

  • Customers
  • Competitors
  • Products or services
  • Suppliers
  • Business location and local area
  • Industry

Products & Services

Researching what your customer is looking for when it comes to your business’ products, services and interactions with them can be a simple way to get ahead of your competition. It can also provide you with an understanding of where you fit into the market for your customers, and how you differentiate from what your competitors are offering.

Market research can also assist in figuring out where you are positioned in the market in terms of your products or services being considered as high-end, competitive or a low-cost alternative to what your competition is offering. It can also aid in determining the anticipated demand of products by customers, so that you can adjust accordingly.

Suppliers

Conducting market research on suppliers can assist you in working out pricing of your products, whether or not you are getting the right price from your suppliers with regard to your orders and the overall quality of what suppliers deliver.

Customers

Collecting customer data through feedback, be it online (such as email, surveys) or analog (talking with customers, feedback forms), can be an invaluable insight into what your customers want from you. This style of direct customer research can assist in learning about what their needs are, what they’re willing to pay and the anticipated demand for your products. It can also assist in giving more information that you can use to better target your marketing efforts.

Competitors

Investigating your competitors in business can assist you in understanding your position in the marketplace in comparison to them. This can assist in developing your marketing plan by understanding your strengths and weaknesses, opportunities and threats and planning for how you can better use them. You can obtain this data through observation of your competitors marketing practices, networking with your competitors and through researching their presence on the internet (via websites, blogs or other social media).

Market research, when used effectively, can be a turning point in a business’s marketing plans, and assist them in planning their business’s future direction.