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Archives for September 2017

Business Consulting: What Is It And Why Do You Need It?

As with every aspect of our business, there is no greater importance than the opportunity to strengthen our relationships with clients by helping them navigate towards their financial goals.  Quite a number of our clients are business owners and it has been an exciting year for our business consulting team, which provides business advisory services for all sorts of challenges faced by owners and managers.   Current projects have drawn us into the agriculture, digital media sharing, solar power, consulting, and construction industries.

Late last year we were approached to establish and raise capital for a start-up engineering firm in Brisbane.  The first few months of the project involved us working with the Managing Director conducting a thorough analysis of expected future costs and revenue.  We analysed the industry’s dependence on broader macroeconomic factors such as commodity prices and Government expenditure. Once we had a clear picture of the expected performance of the firm, we prepared an Information Memorandum ready to present to potential investors.  We are now assisting the client in finding investors.

Some time ago, we were engaged to facilitate the sale of an extremely successful building materials manufacturer.  The business’s directors have spent over a decade growing the business in a rapidly growing market and are ready to reap the rewards of their hard work.  We built a financial model for the business and prepared an accompanying Information Memorandum ready for presentation to potential purchasers.  We also prepared a contingency plan, in case we could not find a buyer willing to commit to suitable terms.  In that case, we will look to recapitalising the business and installing new management.  The processes take time – you have to be tenacious to see it through, and not panic when faced with various setbacks.  Our personal and professional experience is completely aligned with these requirements and we are confident of achieving an excellent outcome for all involved.

A successful grain and oilseed farming enterprise required our assistance after separating from the previous ownership structure.  Our responsibilities broadened as the enterprise began to encounter financing restrictions and flooding of their crops.  Luckily, we had already built a detailed financial model that facilitated the preparation of contingency plans including seeking additional financing.  Our consulting team also investigated and completed an application to receive “cheap” funding from the NSW Rural Assistance Authority Farm Innovation Fund to build a much-needed machinery shed.  Now, eight months into their new cropping season, our clients’ business is completely stand-alone and this year’s crops are looking very promising.

As with our financial planning work, our help for businesses is hands-on.  We do our homework properly, and we get involved.  We are a professional resource, a trusted advisor and a friend to lean on.  We do not give up and our team is always available.

The above are just some examples of what The Investment Collective can do for you and your business. It has not taken into consideration your business or your business’ needs. Contact us today for a consultation where your personal financial circumstances and business goals will be discussed in more detail and advice will be customised to your current situation.

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When Was The Last Time You Reviewed Your Mortgage?

Your home loan is most likely your largest financial commitment over the period of your working life. Given the ever-increasing variety and complexity of products, it makes sense to review your mortgage every couple of years. Considering the suitability your mortgage regularly will ensure that your home loan keeps up to date with your changing needs and priorities.

Examining your home loan regularly is a sensible practice which could potentially save you a significant amount of money through reduced interest rates and loan fees, or by obtaining an improved loan product which offers the benefits of offset accounts and greater flexibility.

Refinancing your home loan to consolidate personal loans and credit card debt, may also free up your cash flow by accessing a lower interest rate. If you are looking to renovate your home, or borrowing to invest, you could also consider unlocking some of the equity in your home by refinancing.

If your existing home loan has not been reviewed for some time, your current interest rate may be much higher than the competitive rates offered by other providers. If your loan was previously at a fixed rate, it may have defaulted to a much higher variable rate on the expiry of the fixed rate period.

In the event that your financial situation has improved, or if your credit score has increased since you had applied for your home loan, you may be eligible for more favourable terms, or improved features with another loan.

Alternatively, you may have signed for your loan on an ‘introductory’ or ‘honeymoon’ rate. These reduced rates typically revert to a higher rate at the end of the discount period, and may include termination fees, should you decide to switch lenders.
As we have been in a record low-interest rate environment for some time, rates are more likely to increase over the longer term. We have noticed in recent months that some banks are increasing interest rates outside of the Reserve Bank of Australia’s cycles. If you are concerned about interest rate increases, you may wish to ‘lock in’ a fixed rate on all, or part of your home loan.

In addition to offset accounts, which will reduce your interest payments, many providers also offer the ability to make additional payments without any penalties. A handy feature to consider on your loan is the ability to be able to withdraw extra payments that you have made. A redraw facility may be beneficial if you need to access funds for one of life’s many surprises. Having a home loan with flexibility should your circumstances change, can provide the ability to access funds as required, or repay your loan much faster.

Before deciding on refinancing, consider the following:
• Are there any penalties or break costs when refinancing your home loan?
• What are the legal and administrative fees to discharge your current loan?
• What are the establishment fees and ongoing costs with a new loan?
• Should I apply for a variable rate, or fix all, or part of my loan?

At The Investment Collective, our mortgage broking team is able to compare home loan providers and determine the costs and benefits of reviewing your home loan. If you, or someone you know, would like to discuss lending needs, or review their current home loan, please do not hesitate to contact one of our lending specialists for a free, no obligation consultation.

Please note that the above information has been prepared as general advice only. It has not taken into account your personal financial situation or financing needs. In order to get tailored advice, specific to your circumstances and financial needs, please contact either office to set up an appointment.

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Spring Into A New Financial Year!

Happy New Financial Year! To celebrate the new financial year, here’s a tip: Tax planning doesn’t start in June. If you want to increase the likelihood of a ‘good tax year’ this year, tax planning starts, well…now.

Here’s a few things to keep in mind:
1. Contribute as much as you can to your retirement nest-egg. In addition to the 9.5% your employer puts into superannuation, think about adding to this (up to a total of $25,000). Starting now, you probably won’t miss the money, and you could save tax.
2. Have a place to store your tax deductible receipts. There’s nothing that wastes your time more than hunting down all your receipts for the financial year in June!
3. Buy tax deductible assets earlier in the financial year. This is because the amount you can claim for these assets depends on how long you’ve held the assets. Buying a new computer on 29 June doesn’t give you much of a tax deduction.
4. Don’t buy or invest in anything just for the tax deduction. It’s the wrong reason.
5. Get a good accountant, and, of course, a good financial advisor (you know where to find a good one!)

Good luck!

Please note this advice is prepared as general advice only. It has not taken into account your personal financial objectives, current situation or future financial needs. If you would like more tips or specialised advice, or to hear about how the above advice could apply to you, please contact one of our skilled and friendly financial advisers today.


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Spring Clean Your Life (Insurance)!

By now, we should all know the importance of life insurance and how it plays a vital part in our family’s lives. But what you may not know, is that it is not just a set and forget type of deal. Your need for insurance will drastically change throughout the course of your life.

The following events are ‘trigger events’ which will reveal the need to review different levels of personal cover:

  • New (or pending) dependants, including children, aged parents or disabled children;
  • Recently married, divorced or separated;
  • Partner not working (responsible for children);
  • New job, occupation or business situation, e.g. establishing a partnership or shareholding in a business;
  • Redundancy or salary increase;
  • Inheritance of a bequest;
  • New, or increased debt e.g. purchase of an investment property or obtaining a business loan;
  • Positive changes in your health, e.g. you may have quit smoking, lost weight or had a medical issue level out.

While it is vital to review the levels of cover, it is just as critical to review the product itself. Insurance companies often review and/or upgrade the benefits in their policies to provide superior products to their customers.  Some of these improvements may be attributed to advances in the medical field, for example, there may be changes in the way doctors diagnose a patient’s heart attack. Or the insurance companies added benefits to the policy, for example, 20 years ago, a typical trauma policy only insured for up to four major health events. Today, some contracts can provide benefits for upwards of 40-50 events, depending on the insurer.

You also want to ensure your policy is still competitively priced. Every year when the renewal letter shows up from the insurance company, no doubt we all wince at the increase in price. Sometimes we just bite the bullet and pay, other times we start to doubt the need of insurance and decide to cancel. Insurance companies know the strain of increasing premiums can have on families so they are starting to implement incentives which enable you to receive discounts. Some of these may be in the form of multi-policy discounts (for example, a husband and wife apply at the same time), multi-cover discounts (holding life, TPD, trauma and income protection), and health and wellness programs.

At The Investment Collective, we try to schedule annual reviews with our clients to ensure their risk protection strategy continues to meet their goals and objectives. If it’s been some time since your last review, or since your cover was put in place, please contact one of our specialised Risk Advisers.

The above advice has been provided as general advice only. It has not taken into account your personal insurance needs or current coverage. It has not considered your personal information in any regard. If you would like to learn more about how the above advice can be customised to your personal situation, please contact one of our experienced and knowledgeable insurance advisers today.

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