Is your industry super so super?

On behalf of Ann* who we placed in an  industry fund some years ago we needed to provide her with current balances & cover & to update her details including a binding nomination. It is a piece in her financial gigsaw.

It now appears an adviser can’t find such details for his client  online as we can for all our other clients with many institutions. So we rang to ask for them. Now we could have been the client & if so what would Ann as the client thought after listening to a recycled message for 17 Minutes on how good the fund before it was answered.

Yes as you do, that is ridiculous. 

Is this service? 

What will they be like when you really need service & advice?

Lets recall Ann has come to us for advice for 10 years. We have converted over time her entire mortgage into a taxx deduction & Ann hasn’t used a rental property.

She just wants & needs strategic advice from someone who knows her position very well & she trusts so she achieves her ‘5 year plan’.

She doesn’t get her medical advice via a phone from the GP as another fund in a letter to its clients‘’a fee of $295 may be charged, and deducted from your Super* account with your approval," for advice’  is offering. What is that hourly Rate??

In the same letter to members, Super* also announced changes to the definition of total and permanent disability (TPD) in its group insurance policy.

The new definitions appear to make it more difficult to claim TPD. Where previously professionals would qualify if they could demonstrate they were unable to continue working in their own profession, in the new definition you must be "incapable of even engaging in any occupation for which you are, or may become, reasonably suited by education, training or experience." 

It also changed the threshold of 'unemployed' from 12 months of no work, to six months.

We understand that this particular fund has 1 adviser for 155,000 customers.

 Isn’t that reassuring for you?

Then we had Glen* who decided three years ago to find saner pastures abroad. He wrote ‘For the SCI I think that it would not be honoured if I needed to claim it as official tax records show only a very small salary, with the rest in loan repayments, loans, Director fees, dividends etc - so group certificate equivalent for companies in HK, Taiwan and Samoa would show a very low combined income.  Will take your advice though.

What is the max death benefit I could go with, without having to go for medicals etc. in Aus?

We discover the downsides to his group cover  as advice means please do the research for me & that can’t be googled.

Dear John 

Thank you for contacting Adviser Services* with your enquiry. 

The client is covered abroad. However if the client lives overseas for a continuous period of 3 years, the cover will end and he will not be able to make claim.

  Please refer to the Insurance PDS, on page 7.

 

Also, if the client is applying for additional cover, they will need to apply for this within Australia not overseas

 Glen just doesn’t have cover when he needs & wants it. He has a mortgage & family & yes we would recommend a serious sum of cover but will he be healthy enough to obtain it?  

Yes hidden in the fine print is what you need to know.

Group policies although cheaper & not out of your cashflow  have a price to pay & downsides & you may be affected.

And this in an article on the costs of your group insurance

‘The inclusion of lawyers in the process increases costs for the trustee and also reduces the benefits paid to members due to the legal fees being deducted,” said the report.

“Anecdotal evidence suggests these fees can be as high as 40 per cent of the insured benefit.”

Jayne had here birthday today & she did mention to us that she was considering increasing her cover. As Jane was born in 1929 then No chance of life cover.

Dominic who also has individual cover through us had been approached to obtain group cover via his employer. He did apply & was declined under his group cover. Fortunately he kept our cover whilst he was elsewhere applying.

Today we have another call from Melbourne who has some group cover with his employer. We note during underwriting he had mental questionnaires to complete. He is now covered for that but we wonder what exceptions are on the group cover. He also has individual life cover to Age 100 which certainly is Not on his group cover. 

Will it have an inflation hedge if he is disabled for some years?

Will it pay a claim maybe up to age 65?

Why is it that when a rental property is purchased then an income protection plan which could pay out millions must be dropped. Remember a rental property by definition is negatively geared & has negative cashflow which must come from his income and from his spouse’s lifestyle. We watch with interest from afar.

Nothing changes & yes you do get what you pay for. Frequently when you want protection later you are unable to obtain it or you pay a loading maybe 100% for it.

Also today another investment fund manager explained that they offered protection for your investment funds in the event of a market correction. The market is due for a correction sometime & wouldn’t it be great that your funds have protection from market downturns? 

Another fund manager this afternoon has funds globally for India, China & many other countries that your industry fund does not have. Just suppose for the moment that those countries do better than the lucky country for the next decade. Where will make your retirement the most money?

If you would like the opportunity at our expense for lunch here for an initial meeting then as  others do you are welcome to call us on 07 3848 1088 or email us or visit our websites.

‘we believe that we can generate significant financial certainty for you throughout our relationship & importantly add substantial value to ensuring you achieve all that is important & valuable to you as you have articulated to us.’

If we were to sit down in three years time & looked back what do we need to do today so that you are financially & personally better off & happier.

John McAuliffe

This adviser’s education last week

There has been plenty of noise recently from the press e.g. Anthony & everyone else who has a perceived interest in saying so. 

So we contribute what we & our contempories did last  week & continuously for 30 years to keep abreast with the evolution in financial services.

This is last week’s studies & we attempt to service our clients & feed mouths as well in the spare moment we have.

Tuesday our Dealer group’s professional day all day.

RIAA	RIAA Update
AIOFP	The Value of Independence
AIA	Business Succession
	ADDITIONAL DOCUMENTS   Key Person Insurance   Income Protection for Business Owners   Ownership Protection / Buy Sell agreement   Business Expenses   Business Insurance   Tax Fact Sheet
ARIA	SMSF Solutions
Choice Home Loans	Finance Solutions
RIAA	Compliance Workshop

 We could expand each of these many & varied topics all out but you can gather that each topic took 1 ½ to 2 hours & compliance certainly did.

We did not stay for the networking after as we have a business to run & mouths to feed.

On the Thursday we had two other seminars that we attended & we might add we actually do very little business with either. 

However what is not said  or known by all the mouths is that there is plenty of giving of knowledge within all sections of the industry. It is about learning which is one reason my father also a maths Master said for attending uni.

We had Statement of attendance

1.       2014 Colonial First State Investment Briefing

 John McAuliffe

4 September 2014

 Accredited by the Financial Planning Association of Australia.

Accreditation number 006857 for 1.75 points of continuing professional development.

Professional Dimensions: Capability (1 point), Critical Thinking (0.75 points)

ASIC competencies: Financial Planning (0.25 points), Managed Investment (0.25 points), Generic Knowledge (0.5 points), Superannuation (0.75 points)

2           2.  And from the other

Dear JOHN ,
Thank you for registering to attend 55,000 Reasons to consider Account Based Pensions.

A reminder of the details...
Date: 4 Sep 2014 Time: 9.00am - 11.00am	Venue: AMP Office Level 4, 104 Melbourne Street. South Brisbane. (entrance on Cordelia St)

The certificate  of attendance has yet to arrive but it will.

So from HOCT we have

Hi John.

Further to my email below, please find attached a copy of your Kaplan training register.

It is showing a total of 44 Completed training (structure hours). There is still approximately 8 hours to be added for RIAA PD days and the 2 certificates I have requested below.

This should give you the required hours.

Any questions, please give me a call.

Regards

And this piece of  feedback.

If you are using these to substantiate FPA membership I would suggest you rectify by accepting my marked up changes.

Should they audit your register and find any anomalies, they may impose sanctions against you.

Does this mean we can go to the beaches of the world  earlier?

Anthony it is more than just collecting RG 146. Just like collecting a 3^rd rate journalism degree from a 3^rd rate uni in maybe a 3^rd rate country doesn’t mean that you can write an article which deserves to be published.

And all these calls from the egos at top of the food chain i.e.  the banks  CEO  & Industry funds is just to divert attention from themselves who impose their conditions on their employees.

What it does mean is that fewer Australians know where to turn after they & their bank & maybe their wives or egos get into a financial mess.

Yes Anthony we do have a degree in Maths & Statistics & found teaching maths elsewhere  better than he was allocated classes of “feral” students who were “impossible to teach”.

When we meet our local MP sometime ago we did comment that we should have stuck to maths teaching as the rules don’t change daily.

Yes Anthony our degree is not in law & accounting and a 2nd degree  is one paper short in economics. When we started there was only the AFA offering courses & yes we do have their certificates from 1985 & 6 which we just observe included an honours pass. You could not find a book in the library on shares when we first bought them in 1979.

We were with the FPA from inception but left them two years ago when they got flees & agreed with industry funds. Stuff their sanctions. 

And whilst we are on the subject of self defence we do have classmates who include a professor at Oxford, an ambassador &; two high court judges &; a journalist on Four Corners. And himself.



We do have Dip.Fp from Deakin University & the FPA in 2002 when there were few alternatives.

What is the point of a CFP if it is non transferable?  

What is the point of further learning from an academic if the rules continually change & he has never sat at a kitchen table?


In 30 years in this business of saving people from themselves & the solicitors & big brother we observe that it is the client who has selective memories. This is shown by the average fraud rate in insurance  of 15%. We are also  to blame for their over spending.

In our case we don’t want to lose our name as that is all we have.
 
We discussed today with Elizabeth today that it takes 20,000 hours to master a trade.

As we said to Richard ‘we believe that we can generate significant financial certainty for you throughout our relationship & importantly add substantial value to ensuring you achieve all that is important& valuable to you as you have articulated to us.’

As  others do you are welcome to call us on 07 3848 1088 or email us or visit our websites

If we were to sit down in three years time & looked back what do we need to do today so that you are financially & personally better off & happier.

John McAuliffe

He is unhappy because he paid 52,000 in Tax.

Yes were talking to our client Ann* & asked about her daughter & family.

 He Richard* the son in law is unhappy because he paid 52,000 in taxx.

Yes we do have his very recent taxx return where his accountant has completed Richard’s taxx return for $187. No advice on what to do about it & charging 187 for filling in some numbers which his book keeper would actually do.

Richard has known of us for a year & he has certainly had other issues such as a new house & a new dot of a daughter in the last 6 weeks.

Ah the House! We recall Ann saying that ‘it was the biggest mistake she has made’.

 I.e. Ann bought it as an ‘investment property’ so that her daughter could have a place to rent. Of course that is what parents do. i.e. help their daughters. 

However when Dad loses his job then the credit card runs up to service & subsidise the loan. Very sad & bad & unfortunately true. Dad was the very first we have heard in 30 years to state honestly & realistically  that he would have to work forever as he still has his own mortgage & debts.

Richard has been working earning these good wages for some years & has nothing to show for it. As they had little savings Richard  had to waste 15,000 in mortgage insurance so that they could buy the house from Ann. They still have very little equity & in fact want to move  to a bigger home in 4-5 years.

So what is Richard to do. 

Well as it is apparently financial literacy week then the regulator has suggested places for free advice. Yep there is probably a billion such sites but is Richard going to actually solve his problem doing that. Very unlikely.

 How is he going so far?

Well he has called us as he has 52,000 reasons to do so & also wants a bigger house & more holidays &  said ‘ don’t have any education on either investment property or shares’.

He wants some guidance & we have said  ‘We have high expectations of your completion of monthly cashflow homework & attendance at regular meetings.’

But he must ‘pay to play’ & the costs have all gone up & we are strangled by Krap.

As Macca* said today when we were discussing billycart races ‘he wouldn’t  be allowed to today’.

Nor is it our problem. But we do have a solution & it is advice.

Unfortunately we heard of a very sad case in New Zealand this week. A man who had been working as a miner in WA shot 2 social security staff. He could NOT rent a home from Social Security & was homeless. He was homeless perhaps because he had not saved anything whilst over here. 

It would not be uncommon for such as Richard or this man & many others we know of who have spent everything on brand new utes, tripped to Bali or elsewhere or  separated  & have nothing to show for it.

We hear of another case very close to us.

 The daughter has bought a house with her boyfriend who had to borrow money from his parents to fund the deposit. That’s bad enough but then we hear that he is still paying rent of 550 p.w. on his previous rented house as the lease doesn’t expire until February 2015. They won’t get ahead that way. In fact they will very probably separate within 10 years as they won’t get ahead & then children if any will also suffer. She does have a 1^st class honours degree but it certainly isn’t in financial literacy.

How common is that?

We just heard of another client’s son moving from flying helicopters in Darwin to doing same in Canada. His father agrees his son hasn’t saved a penny either.

We SHOULD & could teach them all the ‘cashflow for kids’ game. Ask us TODAY when our next lesson is on? An essential lesson from Grade Early on.

What happens when interest rates go up as Glenn discusses today.

It will be someone else’s fault. Of course. It’s want or ‘want’.

To quote from Dan today ‘You can’t make people care about their financial future. It’s something they have to care about themselves. The more responsibility they take for their own affairs, the more likely they are to make responsible decisions about saving for the future.’ 

As an ex maths teacher we do enjoy solving problems but the problem is easier earlier rather than later. Just ask the orthodontist. Every problem is different & not answered on a website.

As we said to Richard ‘we believe that we can generate significant financial certainty for you throughout our relationship & importantly add substantial value to ensuring you achieve all that is important& valuable to you as you have articulated to us.’

As Richard & others do you are welcome to call us on 07 3848 1088 or email us or visit our websites

John McAuliffe