On Tuesday 9 May, the Federal Government handed down its Budget for the 2017–18 financial year.
According to Federal Treasurer Scott Morrison, this year’s Budget is founded on the principles of fairness, security and opportunity. Mr Morrison claims that the government’s proposed measures will raise almost $21 billion in revenue over the next four years, returning Australia’s budget to surplus by 2021.

Here are some of the key Budget announcements. Note that each of these proposals will only become law if it is passed by Parliament.

Additional non-concessional cap for retiree downsizers

From 1 July 2018, people aged 65+ will be able to contribute up to $300,000 into super from the sale of their principal home, if they’ve owned their home for at least 10 years. The existing restrictions for contributions over age 65 won’t apply for these non-concessional contributions.

What this could mean for you

You may be able to contribute an additional $300,000 to super (or $600,000 for couples), over and above your existing concessional and non-concessional caps. However, if you or your partner receives the age pension, this could cause your entitlements to be reduced.

Super savings scheme for first home buyers

From 1 July 2017, individuals will be able to make extra voluntary super contributions of up to $15,000 a year beyond their employer’s Super Guarantee payments, up to a total of $30,000. These contributions will be taxed at 15% and can be withdrawn to go towards the deposit on a first home. Withdrawals will be allowed from 1 July 2018.

What this could mean for you

When you withdraw your extra contributions to pay for a deposit, they’ll be taxed at your marginal tax rate minus a 30% tax offset. While the tax concessions for these contributions may allow you to save a larger deposit, you won’t be able to access your money until retirement if you decide not to buy a home.

A 0.5% Medicare levy increase from 2019

From 1 July 2019, the Medicare levy will increase by half a percentage point from 2% to 2.5% of an individual’s taxable income. The Medicare levy low-income thresholds for singles, families, seniors and pensioners will increase from the 2016–17 financial year.

What this could mean for you

The increased levy may also result in increases to many tax rates linked to the top personal tax rate, including fringe benefits tax and excess non-concessional contributions tax. Certain lump sum super payments that attract the levy may also be impacted, such as disability benefits paid to people under preservation age.

Extension of the deductibility threshold for small businesses

The government will extend the existing accelerated depreciation allowance for small businesses by 12 months to 30 June 2018.

What this could mean for you

If your small business has aggregated annual turnover below $10 million, you’ll be able to immediately deduct the purchase of eligible assets costing less than $20,000 where they are first used or installed ready for use by 30 June 2018. After that date, the immediate deductibility threshold will revert back to $1,000.

New levy for major banks

A major bank levy will be introduced for authorised deposit-taking institutions (ADIs) with licensed entity liabilities of at least $100 billion (indexed to Gross Domestic Product (GDP)). The levy will equate to an annualised rate of 0.06% – for example, the levy on a bank deposit of $500,000 will be approximately $300 pa.  Superannuation funds and insurance companies won’t be subject to the levy.

What this could mean for you

It’s unclear at this stage how the levy will be implemented, and what the impacts might be on clients/customers and shareholders.

Incentives for investment in affordable housing

From 1 January 2018, resident individuals who invest in qualifying affordable housing will be eligible for an increase in the capital gains tax (CGT) discount from 50% to 60%. This increased discount will also apply to eligible Managed Investment Trusts (MITs) as of 1 July 2017.

What this could mean for you

To qualify for the higher discount, your residential property must be rented to low-to-moderate income tenants at a discounted rate and be managed through a registered community housing provider. You also need to hold the investment for at least 3 years. If you invest in an MIT, you’ll be eligible for the 60% discount if the trust invests in affordable housing that is available to be rented for at least 10 years, and you hold the investment for at least 3 years.

Restrictions on deductions for residential property investments

From 1 July 2017, depreciation deductions for residential plant and equipment (e.g. dishwashers and ceiling fans) will be limited to investors who actually incur the outlay – not subsequent owners. Also from that date, investors will be unable to deduct travel expenses related to inspecting, maintaining or collecting rent for a residential rental property.

What this could mean for you

If you’re a subsequent investor in a property, the acquisition of existing plant and equipment will be reflected in the cost base for CGT purposes. Grandfathering applies to plant and equipment that forms part of a residential investment property as at 9 May 2017 and will continue to give rise to depreciation deductions under current rules. The new rule around travel expense deductions applies to all property investors, including SMSFs, family trusts and companies.

Tax changes for foreign tax residents and property owners

Foreign or temporary tax residents will no longer have access to the CGT main residence exemption on properties acquired after 7.30pm AEST on Budget night (9 May 2017). Also from Budget night, foreign owners of residential property that is not occupied or genuinely available on the rental market for at least six months per year will be subject to an annual levy of at least $5,000.

What this could mean for you

If you’re a foreign of temporary tax resident and you held an existing property before Budget night, the property will be grandfathered and you’ll be able to continue claiming the CGT main residence exemption until 30 June 2019. However, from 1 July 2017, the CGT withholding rate that applies to foreign tax residents will increase from 10% to 12.5%.

New thresholds for HELP debt repayments

From 1 July 2018, income thresholds for the repayment of HELP debts will be revised, along with repayment rates and the indexation of repayment thresholds.

What this could mean for you

A new minimum threshold of $42,000 will apply, with a 1% repayment rate. A maximum threshold of $119,882 will apply, with a 10% repayment rate. Currently, the maximum repayment threshold for the 2017–18 financial year is $103,766 with a repayment rate of 8%.

Reinstatement of Pensioner Concession Card entitlements

Pensioners who lost their Pensioner Concession Card entitlement due to the assets test changes on 1 January 2017 will have their card reinstated. Those who lost their entitlement were instead issued with both a Health Care Card and a Commonwealth Seniors Health Card. However these cards provided access to fewer concessions than the Pensioner Concession Card.

What this could mean for you

If your Pensioner Concession Card entitlement is reinstated, you’ll have access to a wider range of concessions than those available with the Health Care Card, such as subsidised hearing services.  Your Pensioner Concession Card will be automatically reissued over time with an ongoing income and assets test exemption. You’ll also retain the Commonwealth Seniors Health Card, ensuring you continue to receive the Energy Supplement.

Increased pension residence requirements

An individual currently needs to have at least 10 years’ residence in Australia (at least 5 of which are continuous) to qualify for the age pension or disability support pension. From 1 July 2018, they’ll need to have at least 15 years’ residence in Australia or either a) 10 years’ continuous residence including 5 years during their working life, or b) 10 years’ continuous residence and not in receipt of an activity-tested income support payment for a cumulative period greater than 5 years.

What this could mean for you

This measure may impact you if you have less than 15 years’ residence in Australia or less than 5 years’ residence between age 16 and age pension age. However, existing exemptions will be maintained for humanitarian reasons or if you became unable to work while you were an Australian resident.

Other proposals

• A new Jobseeker Payment will replace 7 existing working age payments from 20 March 2020
• Job seekers and parents who receive working age income support will have increased activity test requirements from 20 September 2018
• The maximum length of the Liquid Assets Waiting Period will increase from 13 weeks to 26 weeks from 20 September 2018
• A one-off Energy Assistance Payment of $75 for single recipients and $125 for couples will be paid for those who qualify on 20 June 2017
• Family Tax Benefit rates will not be indexed for 2 years from 1 July 2017
• A new upper income threshold of $350,000 pa will apply to the child care subsidy from 1 July 2018.

Depending on your circumstances, the Budget proposals could have an impact on your financial situation and your financial plans for the future. If you have any concerns, or would like to discuss your financial strategy, contact us today at Cotter Financial Services Ph: 3333 2601

Fortnum Private Wealth Pty Ltd trading as Fortnum Financial Advisers Principal Practices and their advisers are Authorised Representatives of Fortnum Private Wealth Pty Ltd which trades as Fortnum Financial Advisers. All financial services are provided under the Australian Financial Services Licence of Fortnum Private Wealth Pty Ltd ABN 54 139 889 535 AFSL 357306.

Fortnum Private Wealth Pty Ltd (trading as Fortnum Financial Advisers) is a separate entity with its own Australian Financial Services Licence. It is not related to Colonial First State or any other member of the Commonwealth Bank Group and none of these entities endorse, guarantee or otherwise stand behind any services or information provided by Fortnum Financial Advisers or its Authorised Representatives.

The information provided is general in nature and does not take into account your particular investment objectives, financial situation or insurance needs; we therefore recommend you seek advice tailored to your individual circumstances before making any specific decisions.  Cotter Financial Services and its advisers are Authorised Representatives of Fortnum Private Wealth Pty Ltd ABN 54 139 889 535 AFSL 357306 Australia Credit Licence No 357306 trading as Fortnum Financial Advisers.

One of the best ways we can teach our kids about money and money management is through pocket money. Introducing kids to a healthy savings plan from their pocket money can make a real difference to their future and give them saving skills that can last a lifetime. 

Compound interest – have you heard of it?  

​‘Compound interest is like double chocolate topping for your savings. You earn interest on the money you deposit, and on the interest you have already earned – so you earn interest on interest’.*

Imagine the head start your child could have upon leaving school!  From as little as $2.85 per day you can turn a deposit of $20 per week in to a healthy $25,000 savings account by the time your child turns 18.    By understanding the power of compound interest you can grow what change you have in to a happy head start for your family.

For more information regarding compound interest, head to Money Smart or to Money Saver who have five great tips on how to teach kids about money.

If you want to find out how to start saving today – contact Cotter Financial Services today on 07 3333 2610

The information provided is general in nature and does not take into account your particular investment objectives, financial situation or insurance needs; we therefore recommend you seek advice tailored to your individual circumstances before making any specific decisions.  Cotter Financial Services and its advisers are Authorised Representatives of Fortnum Private Wealth Pty Ltd ABN 54 139 889 535 AFSL 357306 Australia Credit Licence No 357306 trading as Fortnum Financial Advisers.

• * Money Smart
• ** (based on the average interest rate February 2017)

On 27 September 2016, the Government released another round of draft legislation to implement changes to superannuation it first announced in the 2016 Federal Budget. With many of these changes due to take effect from 1 July 2017, it is important to revise your financial position now and consider how the changes may affect you.

 What are the major changes?

• The before-tax (concessional) contributions cap will decrease from $30,000 (or $35,000 if you're turning 50 years of age or older this financial year) to $25,000 per year for everyone, irrespective of age.
• An annual after-tax (non-concessional) contributions cap of $100,000 will be put in place, replacing the current cap of $180,000. Those under age 65 will still have the ability to bring forward three years’ worth of after-tax super contributions, with a maximum of $300,000 under the bring-forward rules (currently $540,000).
• If you’re converting your super into a pension to derive an income in retirement, you’ll be restricted to a limit of $1.6 million in your tax-free pension account, not including subsequent earnings. If you already have a balance above that, the excess will need to be placed back into the super accumulation phase, where earnings will be taxed at the concessional rate of 15%, or taken out of super completely.

Important Note: If you already have segregated pension account balances totaling over $1.6 million, it is imperative that you seek financial advice in relation to reducing this balance by 30 June 2017.  This is firstly, in order to avoid penalties for exceeding the maximum limit after that date.  In addition, your investments supporting that pension need to be reviewed to determine which remain and which are to be moved to your accumulation balance - future capital gains tax advantages may be obtained by doing so. ​

• Lowering of the income threshold from $300,000 to $250,000 for the purposes of the additional 15% Division 293 tax applied to concessional contributions.
• Allow “catch up” concessional contributions where limits have not been fully utilised and where superannuation balances are less than $500,000. This will commence from 1 July 2018 Super balances.
• No concessional contributions will be allowed where member’s balances exceed $1.6 million.
• The spouse contribution tax offset has been extended to take in spouses earning “income” (as defined) up to around $40,000.
• Any individual eligible to make voluntary super contributions will also be eligible from July 2017 to make personal concessional (tax-deductible) contributions even if they are fully employed (formerly needed to satisfy a 10% maximum employment income test).
• The removal of the tax exemption on pension fund earnings within transition-to-retirement pensions.

There are also possible tax elections that need to considered if your pension balance is greater than the allowed $1.6 million.  We do need to determine whether or not you should make these elections as they are not mandatory.  This can discussed further with Rosanne when a strategy is being determined. 

To deal with these changes you may need to adjust your investment, contribution, pension and estate planning strategies. Additionally, it may be necessary to update your Fund's current trust deed to ensure that you have all of the available options as listed in the above listing of major changes when they come into effect.
 
How Can We Help?

We understand that your superannuation is a key to your future financial security. So if you’re concerned about how these changes will affect you, don’t hesitate to get in touch with us. We’ll arrange a time to discuss your particular circumstances and needs in more detail, and help minimise any negative effect these superannuation changes will have on your nest egg.
 
Call us now on 3333 2610 to arrange a meeting to discuss.

The information provided is general in nature and does not take into account your particular investment objectives, financial situation or insurance needs; we therefore recommend you seek advice tailored to your individual circumstances before making any specific decisions.  Cotter Financial Services and its advisers are Authorised Representatives of Fortnum Private Wealth Pty Ltd ABN 54 139 889 535 AFSL 357306 Australia Credit Licence No 357306 trading as Fortnum Financial Advisers.
 

With so many new rules, the risk of non-compliance is higher. So here are three tips to keep in mind to ensure your fund stays inside the rules next year and beyond.

Significant changes to the superannuation system are coming into force in 2017. These rules will reduce the funds self-managed super fund (SMSF) investors can contribute and maintain in the superannuation environment.

These regulations could have knock on effects, for instance to salary sacrifice arrangements. SMSF investors need to take into account these changes as we head toward the start of the new regime in just six months.

1. Maximise eligible contributions

From 1 July SMSF investors will only be able to contribute $25,000 a year to their super fund on a pre-tax basis. Another change is the introduction of a transfer balance cap that means investors will only be able to keep assets to the value of $1.6 million in the pension phase in their fund.

Additionally, the bring-forward provisions that currently allow investors to contribute $540,000 over three-years will change. Instead, investors will be able to contribute $100,000 a year, or $300,000 over three years, on a non-concessional basis.

But until 1 July, for couples, assuming both parties have the full bring-forward provisions available to them, each partner will be able to contribute $540,000 to a super fund in the three years prior. So even if their assets are subsequently valued at more than $1.6 million, as long as the funds arrive in the SMSF before 30 June 2017 the fund will still be compliant. This is because current rules don’t include the transfer cap balance limitation that will apply from 1 July 2017.

“For the small number of people who already have close to or more than $1.6 million in their super account, this is their last opportunity to get that extra bit of money in before the rules change,” says Peter Hogan, the Self-Managed Super Fund Association’s head of technical.

2. Re-assess salary sacrifice arrangements

Salary sacrificing arrangements are another important factor for SMSF investors who are still working to consider. At the moment anyone 49 and older can contribute up to $35,000 to super each year on a before-tax basis. People younger than 49 are able to contribute up to $30,000 a year before tax until 1 July next year. But that amount will fall to $25,000 after that date.

“Every time the government has, in the past, reduced the concessional contribution caps a large number of people have contributed too much to their fund in the next year. So start having conversations with your employer or payroll after Christmas and make adjustments to the amount that’s deducted each week, fortnight or month to ensure you stay inside the rules,” says Hogan.

3. Ensure your pension payments comply

SMSFs that are in the pension phase must meet a number of rules each year to enjoy a favourable tax status. For instance, pensions must usually be account-based and the pension payment must be made at least once a year. Another rule is that it’s not possible to make additional payments to the member’s pension account once it has started paying a pension.

“So check your minimum pension payments for the year now. It is a housekeeping matter, but it is something people often get wrong,” Hogan explains.

“You do hear stories of people who, rather than make a pension payment on a monthly or quarterly basis, only make an annual distribution and forget to make the distribution one year,” he adds.

The risk is that not making the payment will mean the fund is effectively in accumulation phase. This could mean that the fund is in breach of various regulations in this situation and be required to pay tax at 15% . To avoid this, SMSF trustees should make payments at least quarterly.

Hogan’s other advice is to use this time of the year as an opportunity to review the fund’s strategy and investment performance.

Have a look at the performance of your investments and make some adjustments if you think the strategy may require changing,” he suggests.

To find out more about reviewing your SMSF contact Cotter Financial Services on PH: 07 333 2610

The information provided is general in nature and does not take into account your particular investment objectives, financial situation or insurance needs; we therefore recommend you seek advice tailored to your individual circumstances before making any specific decisions.  Cotter Financial Services and its advisers are Authorised Representatives of Fortnum Private Wealth Pty Ltd ABN 54 139 889 535 AFSL 357306 Australia Credit Licence No 357306 trading as Fortnum Financial Advisers.


This article has been reproduced with permission from AMP.  Article date 06 Jan 2017.  For original source, disclaimers, author information and credits:- http://www.ampcapital.com.au/smsf-suite/articles/2017/january/three-top-smsf-compliance-tips-for-2017?utm_medium=email&utm_source=ampc&utm_campaign=smsf-news&utm_content=article3-headline

Setting aside time to regularly review your finances is one of the easiest ways to keep your plans on track and work towards achieving your financial goals. Let’s see how you can take a look at your finances and make any necessary changes before the start of 2017.

Review your super…

Looking at how your super is invested regularly can make a big difference to the final amount you have when you retire.

Does your super’s asset allocation still fit with your risk profile?

This is particularly important if your financial circumstances have changed as it could mean you are taking on too much risk.

On the flip side, you may also be in a situation where you are not taking enough risk, which may mean your retirement nest egg ends up being a lot lower than it could be.

A financial adviser can help you review your super’s investment strategy and make any necessary changes, which will help you build towards the retirement lifestyle you want.

As part of this, a financial adviser can also look at how much you are contributing to super and, where it is appropriate, suggest you ‘top-up’ your super through a salary sacrifice arrangement or ‘after-tax’ contributions.

Even a small increase in super contributions can have a big impact on the lifestyle you will enjoy in retirement, so get some advice on making your super work harder for you.

Check your life insurance…

There are two reasons you should regularly review your life insurance cover – to rest assured you are not paying too much, and to avoid putting you and your family at risk with too little.

Most life insurance policies need to change after each major life event, whether that is buying a first home, starting a business, having children or preparing for retirement.

A financial adviser can check to see if your current level of insurance is appropriate for your needs, and if not, help you to make any changes to your existing cover or recommend new policies to cover the gap.

While you might find your existing insurance cover does not need to change, at least you will know for sure and it will give you the opportunity to explore different options for paying your premiums.

What else could you consider?

Health insurance

At this time of the year you could consider taking an even broader view of your financial situation and look at whether your health insurance is appropriate for you or if it needs updating.

Perhaps you want to speak to your financial adviser about making funds available in your cash flow to increase your premiums so you can get more comprehensive cover as you prepare for a new year?

Your mortgage

​Seeing how your home loan compares to other loans could potentially help you to save thousands of dollars in interest and pay off your loan sooner.

Home loans with new features and better interest rates are launched all the time with the aim of attracting new home loan customers.

So why not use this to your advantage and speak with your existing lender about getting a better deal?

And just don’t focus on the interest rate, you should also look at the fees that are attached to your loan and see if they apply to similar loans from other companies.

We can point you in the direction of a mortgage specialist if you are interested in getting advice around what you are paying and if there is anything you could be doing differently.

We can work with your mortgage specialist to see if there are opportunities to re-structure your cash flow and divert additional funds in to your mortgage to pay it off sooner.

To find out more about reviewing your finances, whatever your age or financial situation, contact Cotter Financial Services on PH: 07 333 2610

The information provided is general in nature and does not take into account your particular investment objectives, financial situation or insurance needs; we therefore recommend you seek advice tailored to your individual circumstances before making any specific decisions.  Cotter Financial Services and its advisers are Authorised Representatives of Fortnum Private Wealth Pty Ltd ABN 54 139 889 535 AFSL 357306 Australia Credit Licence No 357306 trading as Fortnum Financial Advisers.

A recent report by Australian Securities & Investments Commission has found “significant shortcomings” with how claims are addressed in relation to life insurance.  A report in The Australian reveals the claims and success rates across insurance claims to be staggering.

“A claim on life insurance that was sold “directly” through an insurance website had a 71 per cent higher chance of being denied compared with a policy sold through an adviser. Group insurance claims, sold through superannuation, were 14 per cent more likely to be denied than a claim on an advised policy.”   The Australian

For more information regarding Business or Personal Insurance or for any financial planning advice, contact Cotter Financial Services on ph: 07 3333 2610.

For more on the report – head to the original article dated 24/11/2016 in The Australian HERE. 

The information provided is general in nature and does not take into account your particular investment objectives, financial situation or insurance needs; we therefore recommend you seek advice tailored to your individual circumstances before making any specific decisions.  

Cotter Financial Services and its advisers are Authorised Representatives of Fortnum Private Wealth Pty Ltd ABN 54 139 889 535 AFSL 357306 Australia Credit Licence No 357306 trading as Fortnum Financial Advisers.

Credit Source Original article:  http://www.theaustralian.com.au/business/financial-services/life-insurance-reforms-cause-stir-in-industry/news-story/d02a0cf1f3281e32754cb2d09d165592

Key points

• The smoothest outcome for investors from next Tuesday’s US election would be a Clinton victory but with the Republicans continuing to control the House of Representatives, ie, “more of the same”.
• However, news of the FBI’s renewed examination of Clinton’s emails means the election outcome is back to being close. While some of Trump’s economic policies could provide a fiscal and supply side stimulus to the US economy, a Trump victory is likely to be initially negative for shares and favour safe havens like bonds and the US dollar as investors would fear his policies on trade in particular. This would be negative for Australian and Asian shares and for the growth sensitive $A

Introduction

Perhaps the best that can be said of the US election is that it will soon be over. While polls had been moving in favour of a Clinton victory, the FBI's announcement that it is examining new emails in relation to her use of a private email server while Secretary of State has taken it back to being a close race. The attached note provides a brief summary of the key issues.

Populism (Trump) v the establishment (Clinton)The combination of rising inequality, stagnant middle incomes and the disenchantment of white non-college educated males have led to a backlash against the establishment and this is driving support for Trump. As is often the case in such circumstances people offering simplistic solutions - such as protectionism and blaming foreigners and immigrants can easily garner popular support. The problem is that building walls and going back to the protectionism of the past is not the solution (and will only harm the people such policies claimed to help as the protectionism of the 1930s showed). That said, rising inequality will have to be dealt with.

But first some US election mechanics

The US president is not chosen directly by the people but via the Electoral College. Voters choose their preferred candidate but actually vote for electors (who are chosen by the candidates’ party) to represent their state. Each state has Electoral College votes equal to its number of House of Representatives seats plus their two senators, resulting in a total of 538 so the winning candidate needs 270 to win. Since all states except Nebraska and Maine are winner takes all, this turns the Electoral College process into a battle to win key swing states. This means states like California which is certain to be Democrat are largely irrelevant. For 2016 there are about 12 key battleground states including Florida and Ohio.

In addition to Trump and Clinton there are other candidates in the presidential race but combined they have been polling less than 10%, but could garner more if voters don’t like either Trump or Clinton. This in turn would increase the risk that neither gets the magic 270 votes in the College, in which case the House of Reps will decide and since Republicans will likely retain control of the House this would mean a win for Trump.

In addition to the vote for the president Americans will vote for all 435 seats in the House, 34 of the 100 Senate seats, some state governors and officials and various local officials and some referendums. And we thought it was complicated in the polling booth in Australia!

Of these, the Senate and House are most important. To gain a majority of the Senate the Democrats need to win 5 seats which is possible but difficult and they are unlikely to gain a filibuster proof level of 60 seats. In the House it is very hard to see the Democrats gaining the 30 seats necessary for control.

The key policy differences

Taxation: Trump promises significant personal tax cuts including a cut in the top marginal tax rate to 33% from 39%, a cut in the corporate tax rate to 15% from as high as 39% and removal of estate tax. Clinton promises higher tax rates for very high income earners, a cap on deductions, increased estate and gift taxes and a tax on high frequency trading.

Infrastructure: Both want to increase infrastructure spending.

Government spending: Trump wants to reduce non-defence discretionary spending by 1% a year, but increase spending on defence and veterans. Clinton wants to increase non-defence discretionary spending.

Budget deficit: Trump’s policies are more likely to blow out the budget deficit and public debt than Clinton’s.

Trade: Trump proposes protectionist policies, eg, a 45% tariff on Chinese goods, 35% on Mexican goods. Clinton largely supports free trade as long as America isn't harmed.

Regulation: Trump generally wants to reduce industry regulation, which would be good for financials and energy. Clinton wants tougher industry regulation.

Immigration: Trump wants to build a wall with Mexico, deport 11 million illegal immigrants, put a ban on Muslims entering the US and require firms to hire Americans first. Clinton tends to favour expanding immigration.

Healthcare: Trump wants to repeal Obamacare and allow the importation of foreign drugs. Clinton has promised to defend Obamacare, expand access to healthcare and limit drug prices.

Foreign policy: Trump wants to reposition alliances to put "America first" and get allies to pay more, would confront China over the South China Sea and would bomb oil fields under IS control. Clinton wants to strengthen alliances and would continue the US "pivot" to Asia (being one of its architects).

Economic impact

Trump: many of his economic policies could provide a boost to the US economy. The combination of big tax cuts & increased defence and infrastructure spending will provide an initial fiscal stimulus and, with reduced regulation, a bit of a supply side boost. Longer term though the budget deficit will likely blow out and protectionist tariff hikes would likely set off a trade war along with much higher consumer prices and immigration cut backs would boost costs. All of which could ultimately mean higher inflation, bond yields and interest rates and a hit to growth. There may also be negative geopolitical and social consequences (tensions with US allies, reduced inflows into US treasuries in return, a more divided America) if Trump follows through with policies on these fronts. Australia being more dependent on trade than the US would be particularly adversely affected if Trump were to set off a global trade war.

Clinton: her policies would also provide a short term stimulus (albeit smaller) but higher top tax rates and more regulation may offset the short term boost. At least there is no risk of a trade war or increased social unrest (unless Trump’s refusal to accept the election outcome if he loses sets off the latter).

But politicians are well known for dropping more extreme aspects of their policies once they attain power as economic and political realities set in. Just look at Syriza in Greece! In the case of Trump it’s partly a case of whether we end up with Trump the pragmatist (who backs down on some of his extreme measures such as those around protectionism) or Trump the populist (who sticks to his policies once president) and whether Congress limits him or not.

Election scenarios and prospectsPutting aside the low risk of no candidate getting a 270 vote majority in the Electoral College (which would probably see Trump voted as president by the House of Reps) there are three scenarios worth considering (with probabilities):

A. Trump president, Republicans retain the House and Senate (45%).
B. Clinton president, Republicans retain the House and probably the Senate (50%).
C. Clinton president, Democrat majorities in the House & Senate (5%).

Following the debates and the revelation of misogynist Trump comments from 2005, Clinton’s average poll lead widened to over 5%, but has narrowed after Friday’s FBI announcement. I suspect that racist, misogynistic and narcissistic comments don’t go down well with independent voters who will decide the outcome and that this combined with the Democrat’s superior “get out to vote” effort favours Clinton but the latest news regarding her emails has returned it to being a very close call. In any case there is no sign of a wave of support building in favour of the Democrats that will see them win control of the House and Senate (Scenario C). Yes the Democrats had a clean sweep in 2008 with Obama but then they built on stronger starting positions in the House and Senate helped by a backlash against Republicans due to the GFC.

So a Clinton presidency would most likely see a continued divided government. This would mean that her more left wing policies (more regulation, tax hikes) would not be passed and it would just be “more of the same” (which was good under Obama and Bill Clinton).

By contrast a Trump presidency will likely see Republican majorities retained in both the House and Senate. This could provide an opportunity for significant tax reform and reduced regulation, but conservative Congressional Republicans would have to be relied upon to prevent a budget deficit blow out and aggressive protectionism.

Likely market reaction
​
The last few weeks – with US shares tending to sell off when developments favoured Trump (such as when Clinton got pneumonia and after Friday’s FBI news) and rally when developments favoured Clinton (such as after the 2005 tape revelation and debates) and get the jitters again (when there is talk of a Democrat clean sweep) - suggest investors favour a Clinton victory as long as it’s not a clean sweep

Given this:

• A Trump victory would likely trigger an initial bout of “risk off” with shares down by 5-10% or so (both in the US and globally) and safe havens like bonds and the $US rallying as investors fret particularly about his protectionist trade policies triggering a global trade war. Australian shares would be particularly vulnerable to this given our high trade exposure. While the Fed would be less likely to hike in December if Trump wins the $A would likely still suffer from the threat to trade and the initial “risk-off” environment. A Trump victory to the extent that it leads to falls in investment markets and worries about a global trade war may also increase the chance of another RBA rate cut in Australia.
  Beyond the initial reaction, share markets could then settle down and get a boost with bond yields and the $US rising to the extent that his stimulatory economic policies look like being supported by Congress and lead to a higher US budget deficit and tighter monetary policy, but much would ultimately depend on whether we get Trump the pragmatist or Trump the populist. Congress along with economic and political reality can probably be relied on to take some of the edge of Trump’s policies, but this would take time.
• A Clinton/Democrat clean sweep of the Presidency and Congress would likely also trigger a bout of nervousness in US shares as it would be easier for Clinton to implement less business friendly tax and regulatory policies that would weigh on US health, energy and financial stocks. This would likely be more focussed on US shares though with less of an impact on global/Australian shares.
• The best outcome for shares would be a Clinton victory but with Republicans retaining control of at least the House as this would be seen as “more of the same”. Since 1927 US total share returns have been strongest at an average 16.7% pa when there has been a Democrat president and Republican control of the House, the Senate or both. By contrast the return has only averaged 8.9% pa when the Republicans controlled the presidency and Congress.

Source: Bloomberg, AMP Capital

Finally a note of caution: Around the Brexit vote there was much concern a Yes vote would be a disaster for shares and the global economy. In the event there was an initial knee jerk sell off but after a few days global markets moved on to focus on other things. So there is a danger in making too much of the US election.

The information (including taxation) contained within this document does not consider your personal circumstances and is of a general nature only – unless otherwise stated. Cotter Financial Services strongly suggests that you should not act on it without first obtaining professional advice specific to your circumstances.
​
This article has been reproduced with permission from AMP.  For original source, disclaimers, author information and credits:- http://www.ampcapital.com.au/article-detail?alias=/olivers-insights/november-2016/the-us-election-2

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Having an appropriate financial plan in place covers more than just investments and insurance. The same goes for a financial adviser – there are some you will just click with.
Here we provide some ideas on finding one that you feel comfortable with, who can help you improve your financial future.

Keep on track…Over the long term, investment markets will always fluctuate. This can be difficult for some people, as they worry about whether they will have enough money for travel, renovating the family home or retirement.

A concern may be whether they need to make adjustments to their lifestyle.

Having an experienced financial adviser to help you structure your investment portfolio, based on your individual age and risk tolerance, will help you ride out any ups and downs.

Working with a financial adviser you feel comfortable with and regularly checking in with them means they can make ongoing recommendations and changes to your plan.

Of course, if you do get worried about something, having an adviser to remind you about your long term financial goals will help you see that short-term volatility is just part of your long term financial journey.

Stay protected…While you may already have some form of insurance in place, either through your employer or super fund, do you really know how much you have and what it covers? Is it sufficient? What would be the financial impact if you were unable to work for extended period due to illness or injury?

Reviewing insurance is one of those things that many people simply don’t have time for, and so the risks get larger and larger, the longer they leave it.

An experienced financial adviser will not only be able to explain exactly what you are covered for, they will also be able to identify any gaps and recommend any changes, so you and your family’s future is protected and you can rest easy.

Realise your potential…Managing your finances is about more than just investments and insurance.

To help you reach your full financial potential, an experienced financial adviser can discuss a wide range of financial topics – even if it is just for your own interest!

While there’s no doubt that investments and insurance are important when building your wealth, so too is managing your cash flow, budgeting, tax planning, transitioning to retirement, aged care and estate planning.
Getting some advice on your whole financial situation can go a long way to helping you make the most of what you have, whatever your age or income.

You are in safe hands…Taking the time to find an experienced financial adviser who makes you feel comfortable, one that you can work with over the long term, can provide you with peace of mind when it comes to your financial future.

Research shows that people who received financial advice were up to $100,000 better off at retirement (depending on their age)1, so it makes good financial sense to invest in a good adviser.

To find out more about the benefits seeing a financial adviser, contact Cotter Financial Services on P: (07) 3333 2610

The information provided is general in nature and does not take into account your particular investment objectives, financial situation or insurance needs; we therefore recommend you seek advice tailored to your individual circumstances before making any specific decisions.

Cotter Financial Services and its advisers are Authorised Representatives of Fortnum Private Wealth Pty Ltd ABN 54 139 889 535 AFSL 357306 Australia Credit Licence No 357306 trading as Fortnum Financial Advisers.

​The major amendments to the Government's super reforms, announced on 15 September 2016, are summarised by SuperConcepts' technical team.

Feature

Replace the proposed $500,000 lifetime cap on non-concessional contributions with lower annual caps for non-concessional contributions – and only allow members with superannuation balances less than $1.6m to make non-concessional contributions.

How will it work?

• From 1 July 2017, the Government will lower the annual non-concessional contributions cap to $100,000, which is four times the annual concessional contribution cap. The three year bring forward amount will be reduced to $300,000 (three times the annual non-concessional cap) for individuals under 65.
• The $1.6 million eligibility threshold will be based on an individual’s balance as at 30 June the previous year. If the member’s balance at the start of the financial year (the contribution year) is more than $1.6 million, they will not be able to make any further non concessional contributions.
• Individuals with balances close to $1.6 million will only be able to bring-forward the annual cap amount for the number of years that would take their balance to $1.6m.
• Where an individual has not fully used their non concessional bring-forward before 1 July 2017, the remaining bring-forward amount will be reassessed on 1 July 2017 to reflect the new annual caps.

Feature

Defer commencement of carry-forward arrangements for concessional contributions.

How will it work?

• The proposed start date for this measure has now been pushed back 12 months to 1 July 2018.
• From 1 July 2018, the Government will help people ‘catch up’ their superannuation contributions by allowing individuals with account balances of $500,000 or less to rollover their unused concessional caps (for up to 5 years) to use if they have the capacity and choose to do so.

Feature

Retain the work test for members aged 65 to 74.

How will it work?

To view the article in full and read SuperConcepts' opinions on the changes, click here.

• As per the current rules, individuals aged between 65 and 74 will only be eligible to make personal super contributions if they meet the work test (that is, they work 40 hours within a 30 consecutive day period in the financial year the contribution is made).
• As per the current rules, spouse contributions will only be permitted if the spouse receiving the contribution is under age 70, and if aged between 65 to 69 they and meet the work test.
• No changes have been announced to the other superannuation reforms announced as part of the 2016 Federal Budget. These reforms, including the proposed introduction of a $1.6m transfer balance cap and removing the tax exempt status of income from assets supporting a transition to retirement income stream, remain as originally announced.

The information provided is general in nature and does not take into account your particular investment objectives, financial situation or insurance needs; we therefore recommend you seek advice tailored to your individual circumstances before making any specific decisions.  If you would like further information on these updates contact Cotter Financial Services on P: 07 3333 2610

Cotter Financial Services and its advisers are Authorised Representatives of Fortnum Private Wealth Pty Ltd ABN 54 139 889 535 AFSL 357306 Australia Credit Licence No 357306 trading as Fortnum Financial Advisers.

The information (including taxation) contained within this document does not consider your personal circumstances and is of a general nature only – unless otherwise stated. Dobbrick Financial Services strongly suggests that you should not act on it without first obtaining professional advice specific to your circumstances.

This article has been reproduced with permission from AMP.  For original source, disclaimers, author information and credits:- http://www.ampcapital.com.au/smsf-suite/articles/2016/september/summary-of-september-super-announements?utm_medium=email&utm_source=ampc&utm_campaign=smsf-news&utm_content=article3-headline​

With life being so busy it can be very easy to ignore your long-term financial plans, but we can’t stress enough, planning conversations today should be done early to create room for your future dreams.

So how can you make the most out of your personal or business situation?

‘Dare to dream’ and plan for the future – here are a few things to consider.

Women

Australian women are currently retiring with an average superannuation balance less than half of men’s. It’s often only the issue of inequality of pay between men and women that is in the spotlight, but the long-term effects of a pay divide translate into lower savings when it comes time for women to retire, and the results can be devastating.

We should pledge for parity and focus squarely on closing the gap between men and women, and consider our retirement and superannuation savings to be a priority. A low superannuation balance and reliance on the aged pension could see many older women in Australia living in poverty and we would like to see a change with women taking control of their finances.

Seeking expert financial advice now to plan on boosting your funds could make an enormous difference to the lives of many Australian women.

Lower Interest Rates

With interest rates expected to stay low for some time, having an appropriate plan in place as early as possible is a good idea for all pre-retirees.

This allows you to concentrate on the things you can control – such as increasing your contributions to super, paying off your mortgage or reducing your spending – all of which can help make a big difference to your income and expenses in retirement.

You may also need to adjust how you view risk, through increasing your allocation to growth assets, in order to give yourself a chance to generate enough income for a comfortable retirement. As always though, it must fit within your comfort zone.

Taking Care of Business

When you consider the pressures and demands of running a successful small business today, it’s no surprise that many become overwhelmed when they spend what little spare time they have looking at the financial planning side of their business.

Looking down the barrel of 2017, it really is an excellent time to consider working with a financial adviser to review your business’ financial plan. Here are two important areas to get you started:

‘Key Person Insurance’- many businesses have an owner or key employee on whom the ongoing success of the business strongly depends. Key person insurance is similar to personal life insurance, the only difference being that it is the business that takes out the policy and pays the premiums, not the individual.
If those within your business are covered by this policy and one dies or becomes disabled unexpectedly, your business will receive a lump sum payment that it can use as working capital, to help find a replacement or pay down any debts.

‘Business expense insurance’ This helps to protect your business by ensuring it receives an ongoing benefit for the period that you, or your key employees, may not be working, giving them time to focus on getting better and returning to work when they are ready.
The money received from business expenses insurance can be used to cover the ongoing people costs associated with running your business, like salaries and overtime. It can also be used to pay for regular operating expenses like rent, utilities, and your business lease agreement.

For financial planning assistance contact Cotter Financial Services on P: (07) 3333 2610

The information provided is general in nature and does not take into account your particular investment objectives, financial situation or insurance needs; we therefore recommend you seek advice tailored to your individual circumstances before making any specific decisions.

Cotter Financial Services and its advisers are Authorised Representatives of Fortnum Private Wealth Pty Ltd ABN 54 139 889 535 AFSL 357306 Australia Credit Licence No 357306 trading as Fortnum Financial Advisers.​