One of the biggest upsets of the recent World Cup was Germany’s 7 goal to 1 trouncing of Brazil in the World Cup semi-final. The post-match analysis showed that Brazil had not kept pace with modern football developments and had slipped from being a coaching benchmark and technical development leader to adopting tactics that were highly dependent on individual brilliance.

The same lesson can be applied to financial year plans. You need to keep abreast of economic and political events and regularly review your financial plan and investment strategy to ensure you don’t drop the ball – like the Brazilian World Cup team.

The latest investment market performance results from MLC Investment Management show how well investment markets have performed over the past 12 months. Global shares (hedged) returned an increase of 23.9%, global shares (unhedged) 19.9% and Australian shares 17.4%. This followed on from the previously impressive results for the year ended 30 June 2013. Source: 2014 Financial Year in ReviewJuly 4, 2014
The start of the new financial year is the perfect time to complete a review of your financial affairs.

You have approximately 6 months before the summer break and nearly a full 12 months to implement any changes that you may wish to make. Here are some of the key areas we recommend you review at this time of the year:

  1. Taxation Planning and Strategies
    Traditionally it is not until the end of the financial year before you obtain advice on how best to structure your affairs to minimise the impact of taxation. This is often too late and the strategies that flow from these last minute meetings are tax driven without due regard to your overall wealth creation, asset protection and estate planning goals. Having these discussions earlier in the financial year allows you greater time to plan and restructure your affairs to integrate with your overall financial plan.In some instances, for example the Small Business Capital Gains Tax Concessions, you only have a small window of opportunity to take advantage of the current taxation legislation before you become ineligible.You need to plan well ahead to be in position to act when the opportunity arises.
  2. Employer Superannuation Contributions
    Mandated employer contributions have increased from 1 July 2014. The concessional contribution has also increased. If you wish to increase the amount you contribute to superannuation in a tax effective way, now is the time to review your superannuation and retirement plan to make the most of the next financial year.
  3. Personal Superannuation Contributions
    It is now possible to increase after tax contributions to superannuation. Making an after tax contribution to your superannuation fund, rather than upgrading your home or paying off your existing home loan, may accelerate your retirement plans. It is important to weigh up the pros and cons of each strategy in view of your retirement plans.
  4. Investment Strategy
    Whilst it is important to invest for the long term, we recommend you review your investments at least on annual basis to make sure that the fundamental reasons
    you invested remain. For example, with investments at or near record high levels, it may be an appropriate time to rebalance your investments to asset classes and investments.
    This recommendation applies to all your investments, including share and property investments. If your investments are overvalued, you should consider reducing your exposure and reallocating to investments with less risk, that still enable you to achieve the outcomes you need. Consider the taxation consequences of any disposal of investments, and plan accordingly for these outcomes.Your ongoing review, should also apply to any long term investments you have in a single asset, such as property or substantial shareholdings in a single company. The impact of a fall in value in large single investments can a have a large impact on retirement plans. If you are not in a position to sell these assets, you should at least have a strategy in place to reduce the impact of any sudden and unexpected fall in value on your retirement plans.
  5. Financial Plan
    The start of the financial year is also a good time to review your financial plan. A review of your financial plan should be completed at least on an annual basis and include:

    • How you are tracking towards achieving your goals?
    • The success of your investment gains and
    • How the legislative changes impact the strategies you are using.

    We recommend that you use the start of the new 2014 financial year to review your financial plans so that you don’t kick an own goal this year.

    If you would like assistance to ensure you are in good shape for the next financial year, please contact us on 0499976058.

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Disclaimers & Disclosures

Geoff Ivanac is a Sub-Authorised Representative (No. 000309751) of Barsden Private Wealth Pty Ltd ATF The BPW Trust (ABN 41 153 930 799) trading as Barsden Private Wealth. Barsden Private Wealth is a Corporate Authorised Representative No.416315 of BPW Licensee Services Pty Ltd (AFSL 484 198).

The information provided on this website has been provided as general advice only. We have not taken into account any particular person's objectives, financial situation or needs. You should, before acting on this information, consider the appropriateness of this information having regard to your personal objectives, financial situation or needs. We recommend you obtain financial advice specific to your situation before making any financial investment or insurance decision.

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Geoff Ivanac is a Sub-Authorised Representative (No. 000309751) of Barsden Private Wealth Pty Ltd ATF The BPW Trust (ABN 41 153 930 799) trading as Barsden Private Wealth.

Barsden Private Wealth is a Corporate Authorised Representative No.416315 of BPW Licensee Services Pty Ltd (AFSL 484 198).