From across the desk

Melbourne Cup was a lucky day for many Australians (whether you had a win at the races or not) when the Reserve Bank cut interest rates for the first time in more than 2 ½ years, bringing relief to Australian households and corporate borrowers. Many of the big banks have announced they will pass on the cuts which will trim mortgage repayments on a typical 25-year $300,000 home loan by $46 a month, which is great news for families across Australia.

As mentioned in my last update, the Future of Financial Advice (FOFA) legislation continues to move through the legislative process.  Since my last update the Federal Government has released two further tranches of the draft legislation, introducing some new concepts. These include the ‘best interest duty’ and the requirements that clients opt-in to ongoing fees for advice on a two yearly basis. Another element relates to the banning of what is called ‘conflicted remuneration’ (e.g. trail commissions), and is aimed at ensuring clients are made aware of the true cost of financial advice. The proposals generated considerable response from the financial services industry. 

As I have previously mentioned, if the FOFA legislation is passed, clients of Q Invest will notice very little change in the way we conduct business. We have long been advocates for greater transparency and operate on a fee-for-service basis. Our Advisers are paid a salary and do not receive any personal payments or commissions for the recommendation or sale of any financial products.

The debate on the FOFA legislation has been referred to the Parliamentary Joint Committee and is likely to be resumed early next year.

On another positive note the first step towards boosting superannuation savings has been taken with the introduction of a Bill to increase the Superannuation Guarantee from 9% to 12%. 

This Bill recognises people are living longer, which is something that we’ve been focused on recently at Q Invest, making sure that as our clients live longer they are able to fund a comfortable lifestyle in retirement. With increasing longevity, there is a real risk of people outliving their financial resources and being forced to substantially reduce their living standards at advanced ages while increasingly more of their retirement savings are likely to be used to cover health costs.  As with other changes, the legislative process still needs to take its course, although the Opposition has indicated that it would not overturn the change.

The Superannuation Guarantee Charge scheme began on 1 July 1992 with employers contributing either 5% or 6% depending on the size of their payroll. Contributions were increased to 9% from 2002 onwards and if the legislation is successful, the contributions will progressively rise to 12% between 2013 and 2020.

If you’d like to make an appointment speak to an Adviser to discuss any issues regarding your superannuation, or your financial situation in general, contact us on 1800 643 893.
 
On another note, the Voluntary Separation Program continues to be rolled out in the Queensland public sector. Q Invest has undertaken a number of initiatives to support our clients and public sector employees.  Our Business Relationships team continues to visit workplaces and deliver seminars to answer general financial questions employees have. 

We have also established a dedicated VSP advice team to deliver specific advice to those who need help considering whether or not to accept an offer and how to make the most of any benefits they might receive. 

The VSP team aims to provide timely advice to assist people so we have established a dedicated number for you to call - 1800 997 683. 
  

Bill Danaher
General Manager, Q Invest