Noel Whittaker AM the year of living dangerously!

Transcription

1 Noel Whittaker AM the year of living dangerously! 1

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3 What has not changed Complacency about the coming crisis 3

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6 1946 6

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8 2014 8

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12 Trends around Australia More dependents on government More pressure on health and welfare Challenge on unemployment as people stay at work longer More calls for government to ACT! Mistrust of politicians 12

13 On a personal level? Reduced age pensions Baby boomers waiting longer for their inheritance Pressure to preserve super so people can t spent it Increased age to access pension & super Division between have and have nots A TAX SYSTEM IN TROUBLE! 13

14 Who pays tax!? Who pays tax!? Source: Philo Capital Advisers with data from the ATO Taxation Statistics 14

15 The Killer Compound Interest! 15

16 Compound interest Time & rate Two years 4% = $25,000 8% = $26,000 16

17 Thirty five years 4% = $914,000 8% = $2.4 million Start age 25 At age 65 6% = $2,000,000 10% = $6,300,000 17

18 Start age 45 At age 65 6% = $462,000 10% = $760,000 Potential pension changes Compounding & your age pension 18

19 10 years on the age pension 2.5% = 4% = $49,000/year 20 years on the age pension 2.5% = 4% = $73,000/year 19

20 30 years on the age pension 2.5% = 4% = $109,000/year How long will my money last? Age 65 $1,000,000 in super $60,000 a year drawings Indexed at 3% per annum 8% till 99 6% till 87 5% till 84 20

21 Major Mistake Don t diversify The Investment Menu Cash Bonds Local and International Shares Local and International Property Residential and Non Residential 21

22 Cash Rate 2.5% now Trend steady?? Source: finder.com.au Reserve Bank Survey 22

23 Australian Share Market 6% for year to October 31 19% for year ended December % per annum for last 10 years 9% per annum for last 20 years BRISBANE SYDNEY PERTH Year AWOTE House prices Times earnings House prices Times earnings House prices Times earnings ,410 31, , , ,608 62, , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

24 Sentinel Property Group Property Trust investing in Retail, Commercial & Industrial property in Australia Average Monthly Return of 12.5% per annum (paid monthly) All distributions paid from rental income (not capital) Capital gain paid to investors upon sale of the asset Sentinel have established a strong investment track record both in terms of realised returns for our investors and consistency of investment offers through: Strategic asset purchase Hands on administration of those assets Identification of value-uplift potential/capture and the rationalization via strategic exit Sentinel consistently tops the PCA/IPD (Property Council of Australia/Investment Property Databank) index of the country s best performing unlisted retail property funds based on total return performance. Sentinel have consecutively claimed the No.1 position 30 out of the 35 months in the latest index to 31 August

25 BLUE SKY ALTERNATIVE INVESTMENT RETURNS. 25% 20% 19.5% BLUESKY BENCHMARK 1 15% 16.3% 14.8% 10% 9.7% 9.7% 9.2% 5% 5.1% 6.0% 3.9% 5.3% 0% PRIVATE EQUITY PRIVATE REAL ESTATE REAL ASSETS HEDGE FUNDS TOTAL 1. Benchmarks are measured over the same time period as the returns for each division and are sourced from Chant West s January 2014 media release. Hedge Fund Chant West Hedge Fund performance over 7 years. Real Assets Chant West Unlisted Infrastructure performance over 1 year. Private Equity Chant West Private Equity performance over 7 years. Private Real Estate Chant West Australian Unlisted Property performance over 7 years. Overall ASX200 accumulation index since July Note that total returns are equity weighted returns since inception through to 30 June All returns are net of fees. Past performance is not a reliable indicator of future performance. 49 International Funds 3 years after fees Magellan (Global Fund) 23.5% pa ` Platinum (International Fund) 16.4% pa 25

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27 February

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29 Quality Assets (in theory) Quality Assets (in practice) 29

30 Quality Assets (in practice) 30

31 F o F A Future of financial advice Or Failure of financial advice 31

32 The way it was Know your client Know your product Present an appropriate strategy 32

33 Under FoFA Provide appropriate advice Warn client if advice based on incomplete information Prioritise client s interest Act in best interest of client Best Interest Safe Harbour Adviser must 1. Identify objectives, financial situation and needs 2. Identify subject matter of advice sought 3. Identify objectives, financial situation, and needs reasonably relevant 4. Assess if they have the expertise to act 5. Conduct reasonable investigation into suitable products 6. Base all judgements on client s relevant circumstances 7. Act in best interest of client 33

34 Scaled Advice Another compromise! 2015 More obstruction in Canberra No increase in productivity More changes to super More tightening of welfare New products Situation normal!!! 34