STRATEGIQ WEALTH

The countdown is on! Only 10 to go until Independent Financial Advice Week kicks off. Don't miss your chance to gain valuable insights and guidance from our trusted advisers.

https://pifa.org.au/ifaweek/

Happy 21st! This morning was the 21st time I’d donated some of the red stuff. Thoroughly recommended if you are eligible and don’t get squeamish at big needles! And if you don’t mind a bit of cake afterwards…

Earlier today I really enjoyed being a guest contributor at the Profession of Independent Financial Advisers annual symposium.
It is awesome being part of a community of advisers that are committed to having no conflicts of interest, don’t accept commissions, and do not charge asset based fees.

Great chat with Craig Strategiq Wealth and Chris Allied Wealth with their insights about going indie

Very pleased to be part of this submission to the Quality of Advice Review put forward by 13 "truly independent financial advisers". We don't support any proposals that will increase the potential for conflicts of interest in financial advice. We need the opposite...proposals that aim to eliminate conflicts of interest!
Special thanks to Phil Harvey as the driver of this submission.

Advisers warn adopting QAR recommendations will stall progress A group of independent financial advisers has argued that adopting many of the QAR recommendations would set the industry back to pre FOFA levels of conflicts of interest. A submission to the advice

I have recently developed a guide that outlines the advice framework I have used for years with my clients, and one that I continue to use.

I’ve called the framework The Retire Well Blueprint.

The short guide is for individuals and couples over 50 who want to make smart financial decisions so they can achieve and live the ‘good life’ in retirement.

It documents the 3 core pillars and 9 retirement accelerators used to give clients clarity, confidence, and certainty that they’ll ultimately live well in retirement.

You can download a copy by clicking on the link below.

https://bit.ly/theretirewellblueprint

I hope you get some value out of it.

Great news for those of us that are truly independent.

It is now illegal to remain silent about your independence - PIFA For over twenty years it has been illegal for financial planners to use the terms ‘independent’, ‘impartial’ or ‘unbiased’ to describe their services without meeting stringent requirements under the law. These laws were intended to prevent advisers misleading the public about retaining c...

CRAIG'S THREE THINGS ON THURSDAY
Covid-19 permitting, my fiancée Ursula and I are set to get married in January. While life with Ursula is going wonderfully well and we have not had a single argument so far, we have started attending a marriage course being run by our friends’ church. Naturally, this gave me the idea for today’s topic.

Unfortunately, money is often a major source of conflict in a relationship. So, what can be done to minimise conflicts around money? Yep, I’ll outline 3 of them.

NEVER JUDGE YOUR PARTNER
(Full disclosure…I’m a little guilty of this one)
Everyone has different priorities, and part of operating within a partnership is to respect your partner’s choices. That includes keeping an open mind, for example, if your spouse’s spending habits differ from your own.
If you truly think your partner has a spending (or thrift) problem, then it’s time to have an honest and loving conversation with them. If you’re just annoyed that they spent money on something that you would never spend money on, give your partner the benefit of the doubt.
And pick your battles. A small purchase that doesn’t impact on your financial goals and plans is nothing to get annoyed about.

HAVING JOINT AND INDIVIDUAL BANK ACCOUNTS
For couples that prefer to have a joint account but find themselves clashing over different personal spending, I love the idea of also having individual bank accounts as well.
The idea behind this method is that all income goes into a joint account or accounts, and all savings, debt, and retirement are managed jointly. In addition, each person has an individual account into which a set amount is transferred each month. This “personal fund” can be spent on any wants or needs they have that aren’t a joint expense—or on gifts for their spouse. This way your spouse can never judge you for buying $400 shoes or top-of-the-line headphones, as long as you pay for them out of your own account.
Having individual accounts also enables gifts to be kept a secret!

SET GOALS TOGETHER
Successful couples come up with goals together and check in frequently to make sure they’re on the same page.
Do you want to purchase a home together? Are you saving up for kids? Do you want to add extra superannuation? Or plan a big trip to France?

Importantly, these goals should be S.M.A.R.T Goals.

SMART goals are:
Specific: Well defined, clear, and unambiguous
Measurable: With specific criteria that measure your progress toward the accomplishment of the goal
Achievable: Attainable and not impossible to achieve
Realistic: Within reach, realistic, and relevant to your life purpose
Timely: With a clearly defined timeline, including a starting date and a target date.

Or course, couples should be regularly reviewing their goals together and examining their spending plan to ensure it aligns to those goals.

CRAIG'S THREE THINGS ON THURSDAY

So what does the evidence tell us about the best away to approach investing?

TRYING TO PREDICT THE FUTURE DOES NOT WORK
The investing world is full of people trying to convince us that they can invest your money better than the next person. They also try to convince you that they can pick shares in such a way that they exceed the average return of the stock market.

That might be their aim, but the evidence tells us that they will most likely fail.

Let us look at professional investment managers that invest in Australian shares and try to beat the performance of the ASX200. (The ASX200 is an index that measures the combined performance of the largest 200 companies on the Australian Stock Exchange)

What we know is that 80.79% of professional investment managers underperformed the ASX200 over the last 5 years (data to 31 Dec 2019). Yes, over 80% of investment managers would have done better if they simply made no choices at all and just bought the 200 largest companies. In short, people are paying some investment managers big dollars in fees with an 80% chance they will make poor decisions and leave themselves worse-off. That is crazy!

To see the evidence, go to www.spindices.com. You will also discover that investment manager underperformance is consistent across the world.

THE COST OF INVESTING MATTERS
What the above statistics tell you in that the higher the fee you pay for your super fund or investment, the more likely you are to get a worse result. If the fee is higher, the investment managers has to perform even better to outperform the general stock market.

The lesson is this; if you see high fees being changed by an investment manager or super fund, they have just given you a great indicator that their likelihood of underperformance is high.

YOUR INVESTMENT PHILOSOPHY SHOULD BE SUPPORTED BY REAL EVIDENCE
The good news is that you can invest in a way that is backed by academic research and driven by real evidence. Not surprisingly, you will find this philosophy consistently across all the investment advice I give my clients. After all, chasing higher returns based on a 80% chance of underperformance would be crazy!

CRAIG'S THREE THINGS ON THURSDAY - 10 SEPTEMBER 2020

So what are the best options for holding money at close to no risk for the short term?

HIGH INTEREST SAVINGS ACCOUNTS
I realise that with interest rates as they are today it hardly seems right to call them ‘high interest’ accounts. Probably ‘Higher Interest’ is a better description as they offer higher interest than regular accounts.
A good place to compare options is via the Canstar website. See link below:

https://www.canstar.com.au/compare/savings-accounts/?profile=Bonus+Saver&amount=50000&state=SA

Canstar research indicates that the highest rate available is via Rabobank. They are offering 2%pa for the first 4 months but then the rate unfortunately drops to 0.55%pa. Not great for the longer term.
If don’t want to have to switch banks after 4 months, a good option is UBank, who is owned by NAB. They are paying 1.60%pa as long as you add $200 per month. The good news is that you can make as many withdrawals as you like.
It is important to note that banks often put a limit on the maximum amount that will receive their best rate and base interest rates can change.

TERM DEPOSITS
Term Deposits aren’t paying as much as some high interest savings accounts. Canstar research says the best rate available for $50,000 for a 12 months term is 1.38% .
While you are locking up your money for the length of the term deposit, you have the certainty of a fixed interest rate.

PAYING DOWN DEBT
If you have debt, placing savings off your loan or into a loan-linked offset bank account will most likely give you a better outcome than placing it in a bank account or term deposit. That’s because the rate is typically much higher. If you are reducing debt, make sure you have a redraw facility if you want to access the money in the future.

Compare 140+ High Interest Savings Accounts | CANSTAR Compare high interest saving accounts using 5 star ratings. Find the best saving account for you by looking at bonus rates, junior savers and more.