“Over the past 15 years, education costs have risen by 119 per cent compared to just 48 per cent for headline inflation figures,” he said.

“The result is a continued erosion of education affordability.  Year after year, the cost to families of educating their children has outpaced not only overall inflation but wages growth as well.”

Mr Walsh said the latest Consumer Price Index (CPI) figures mask the fact that education costs in the last year alone have risen by 6 per cent (tertiary education 4.7 per cent; secondary education 7.7 per cent; and preschool and primary education 5.5 per cent).

“We hear a lot about the rise in prices for electricity and water, or household groceries, for example, but the long-term impact of education affordability – which has risen at a far greater rate than these other costs – often slips under the radar.

“While the Federal government appears to recognise that Australian families need assistance in meeting the costs associated with their children’s education, parents cannot assume that any government assistance will make up the shortfall between what they can afford and what education really costs.

“The Schoolkids Bonus announced in the Federal Budget is a help, but is unlikely to go very far in offsetting the steadily increasing cost of education for most families.

“Consequently, parents must plan to have funds available to contribute to their children’s education for some years to come.

“The last thing any parent would want to do is pull their children out of a school because they can no longer afford to pay the fees, but increasingly it is a situation that many parents who have children in the private system are facing.

“Anecdotally, we know the number of schools seeking the services of debt collectors is increasing,” he said.

Mr Walsh added that when the Gonski Report recommendations are eventually adopted, private school fees are likely to rise even faster than the present trends.

“Even parents with children in the public school system can’t afford to be complacent about their child’s education. Government assistance will help slightly, but not enough to meet rising costs.

“Many parents are simply unprepared for the financial magnitude of the education they want for their children.

“We need to start looking at the example set by the US, where families now save for college and tuition fees from the moment their child is born.

“Any plans to help children with a deposit for their first home or a car are nice in theory, but the reality is that a good education is far more valuable in the long-term, as research shows that those with a good education are likely to earn more in their career.

“With asset prices low, every Australian family should consider its own education savings plan.

“A small upfront investment can go a long way over the long term,” Mr Walsh said.

Lifeplan Funds Management is a specialist business of Australian Unity Investments, with total funds under management of $1.9 billion (as at 30 April 2012).  It is a market leader in investment and funeral bonds, and a leading provider of education investment funds. 

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For more information please contact:

Mr Matt Walsh – Phone: 08 8236 4706

*Gonski Report – Review of Funding for Schooling (Final Report) December 2011

11 May 2012

“Over the last few years, a number of people have been caught out by the superannuation rules and ended up either losing benefits, or paying significant amounts of tax – the concessional contributions cap is a prime example of this.

“In most cases, these breaches are accidental, so it’s worth taking the time now to check the status of superannuation, to make sure there are no potential problems lurking,” Mr Hutton said.

Key points to consider include:

Check contributions made this financial year

Super fund members have found themselves in difficulties with the ATO for having contributed too much to their super and breaching the contribution caps, often inadvertently.

To make sure such problems are avoided this year, Mr Hutton says to check how much has already been paid into superannuation on your behalf, and ensure that any contributions late in the financial year won’t cause the cap to be exceeded.

The maximum concessional (tax deductible) contributions that can be made for those over age 50 are $50,000 per annum, and for those under age 50 the limit is $25,000 per annum

“This check should include when bonuses or other lump sums are paid.  Did last year’s bonus count in last year’s super contributions, or this year’s?  When will the next bonus be paid?  If it is this year, check the impact, together with any extra contributions made, on the total superannuation position,” says Mr Hutton.

“Can the bonus be held over to the next financial year, or can the employer hold off on an automatic super contribution?

“However, be aware that the concessional contribution limit from 1 July 2012 is only $25,000.”

Is it time to start drawing down a pension?

People who have turned 60, or who will do so before the end of the financial year, could consider “turning on” a tax-free pension from their superannuation fund.  This is permissible regardless of their work situation.

“The benefit in doing this is that the portion of the superannuation fund that is providing the pension becomes tax-free, as does the pension itself.  Such pensions can commence from age 55, but the pension payments are taxable to the recipient until age 60,” says Mr Hutton.

Check pension payments amount

For those already receiving pensions from their superannuation funds, Mr Hutton says to think about the level of pension payments being made.

“People in a fairly healthy personal cash position could consider reducing any pension payment due this financial year to protect their capital, as long as they still satisfy the minimum pension requirement for the year,” he says.

Not paying the minimum compulsory payment from an SMSF means a fund is in breach of its obligations and will not qualify as a pension paying fund or retain its tax-free status.

Does the ‘work test’ apply?

Those who turned 65 during the financial year need to satisfy a work test after reaching age 65 if they wish to make a concessional contribution.  The work test requires people to do paid work for 40 hours over a 30 day period at some point during the financial year.

For SMSF trustees, consider pension timing

Many self-managed superannuation fund trustees pay pensions to themselves as a single payment late in the financial year.  If they forget to do this, or aim to do it but find the fund is short of cash, they can end up with a problem.

Is the investment strategy still on track?

Any time is a good time to reflect on, and review, the investment strategy of a self-managed superannuation fund.  The end of the financial year can be a particularly good time to focus on this.  Think about the long term objectives of the fund and whether the portfolio is invested in the most appropriate manner.

HLB Mann Judd Sydney is a firm of accountants and business and financial advisers, and a member of the HLB Mann Judd Australasian Association.

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For more information please contact:

Michael Hutton – Phone: 02 9020 4193

10 May 2012

In addition, the NextGen bond offers a new and strengthened menu of investment options for advisers and their clients.

It now has 38 investment options from leading Australian and international fund managers across all asset classes. Of these 38 options, 15 are new to the product. The LEIF product has also been updated, and now offers a changed menu of 16 investment options for clients to choose from.

Mr Matt Walsh, head of Lifeplan, said the business saw the changing regulatory environment as an opportunity to review and enhance the product including its investment option menus.

“Although FOFA has been delayed, we want to give advisers time to adjust and help them transition to fee for service before it comes into effect on 1 July 2013.

“Feedback from advisers shows that they are already moving to introduce client strategies that are intended to comply with FOFA regulations.

“Our review and upgrade of NextGen and LEIF will ensure that they remain up-to-date with current adviser expectations as well as client needs, providing additional complementary approaches to basic investment strategies.

“For example, new generation investment bonds are flexible investment vehicles that offer tax benefits and a wide range of investment choices to suit clients’ individual needs.

“Through our products, investors can also choose to invest in growth options in our investment range of equity fund offerings, as well as a more conservative approach through fixed interest investments,” Mr Walsh said.

The new NextGen and Lifeplan Education Investment Fund PDSs are now available on the Australian Unity Investments website.

Lifeplan Funds Management is a specialist business of Australian Unity Investments (AUI), with total funds under management and administration of $2 billion (as at 31 March 2012). It is the market leader in investment and funeral bonds, and a leading provider of education investment funds.

For more information please contact:

Mr Matt Walsh – Phone: 08 8236 4706
1 May 2012

A study by Tyndall shows that in the last decade bonds have outperformed term deposits, as well as being negatively correlated with equities except for a brief period in 2004-2005.

“Investors seem to misunderstand the relationship between term deposits and equities,” Mr Bridges said.

“A common misconception about term deposits is that they are similar to fixed interest in providing good diversification in a portfolio, vis a vis equities.

“However, term deposits have mostly been positively correlated with equities and even when they were negatively correlated, this tends not to be as strong as for bonds.

“In other words, bonds provide better diversification than term deposits in a portfolio at times of equity market volatility,” he said.

Mr Bridges said that investors with term deposits that are currently reaching maturity will find returns on any new term deposits are much less attractive than they have been in the last five years.

“The question for such investors is how to best position their portfolios in an environment where interest rates are flat, or even, as we are now seeing, falling.

“This reinvestment risk is a key reason why we believe the outlook is now less favourable for term deposits than the past few years have been,” he said.

Mr Bridges said that a key factor in why fixed interest securities should now outperform term deposits is because term deposits don’t “mark to market”.

“That is, they aren’t continually re-priced whereas bonds are,” he said.

“This means that investors in term deposits won’t benefit from the capital appreciation that bond investors gain in markets where fixed income investments are performing strongly.

“Bonds also tend to have higher returns than term deposits, particularly when interest rates are falling,” Mr Bridges said.

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Tyndall AM offers Australian and global fixed interest funds and Australian and international equities to retail and institutional investors in Australia.  It has over A$22 billion in funds under management (as at 31 December  2011).  It is a wholly owned subsidiary of Nikko Asset Management Co., Ltd., the largest regional asset manager headquartered in Asia with approximately A$151 billion in funds under management (as at 31 December 2012).

The contents of this release are general by nature, and should not be construed as investment advice.  Individuals should take the advice of a financial planning professional or undertake their own research to allow decisions based on their own needs and circumstances.

For further information please contact:

Roger Bridges – Phone:  02 8072 6350

30 April 2012

Ross Higgins, managing director of Austock Life, said that Equity Trustees appointment as the mandated manager for the Imputation Bond’s Australian mortgages menu option is a timely and complimentary addition to the Bond’ cash, fixed interest and term deposits suite, which has experienced significant inflows over recent times.”

“It is very important to many of our investors – especially those using the Imputation Bond’s estate planning and aged care strategies – to have stability and reliability of the underlying investments. The ability of Equity Trustees’ mortgage fund to generate regular income, combined with its excellent track record of risk management and zero capital loss, makes it an attractive addition to the Imputation Bond menu.”

“The fact that the fund was established over 40 years ago, and has never been closed to redemptions or experienced a decline in capital value during that time, is also very appealing,” Mr Higgins said.

The EQT Mortgage Income Fund seeks to produce income for investors by providing loans to selected borrowers which are secured by registered first mortgages.   It has returned 6.27 per cent over three years and 6.38 per cent over five years.

John Terlikar, portfolio manager – mortgages, at EQT, said that the Mortgage Income Fund has continued to perform better than most alternative income investments throughout the ongoing global economic volatility.

“Furthermore, at a time when term deposit rates vary due to the banks increase in cost of funds, mortgage funds can make a useful diversification to investment portfolios.

“Our Mortgage Income Fund also provides stability, without the downside of being ‘locked in’ for a period of time,” Mr Terlikar said.

Austock Life is one of the leading specialist issuer of insurance bonds. Its core Imputation Bond product has rapidly grown to over $250 million and offers investors an expansive investment menu and strategy-based avenues for incorporating “tax-paid” lump sums into financial plans to meet life-event objectives. These include education funding, home ownership and estate planning as an accessible alternative to superannuation.

Austock Life operates as a registered life insurance company under the Life Insurance Act 1995 and also holds an Australian Financial Services Licence under the Corporations Act. As an emerging financial products provider, the company’s business strategy is to use its life office structure to design, manufacture and distribute creative tax effective investment and income stream products.

Equity Trustees is a publicly listed company that provides a range of financial services to corporate and private clients. Its businesses include private client wealth management, funds management, responsible entity appointments, and corporate and personal superannuation.

The company manages over $4 billion in its funds management, private client and superannuation businesses and has more than $19 billion under responsible entity administration. Equity Trustees employs over 180 people in its Melbourne, Sydney and Brisbane offices.

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The information contained in this release is of a general nature only and is not intended as individual advice.  Investors should always seek professional advice to take into account their own objectives and circumstances.

For more information please contact:

Ross Higgins (Austock Life) – Phone: 03 8601 2056

John Terlikar (Equity Trustees) – Phone: 03 8623 5313

24 April 2012

The second phase was limited to $28.9 million and the funds are being used for the expansion of three of the 22 properties owned by HPT – The Valley Private Hospital, Peninsula Private Hospital and Beleura Private Hospital.

Mr Mark Pratt, AUI’s general manager – property, mortgages & capital markets, said a key part of AUI’s ongoing strategy for HPT is to expand, develop and enhance existing properties to add further value for investors.

“The capital raised will be used to expand and make improvements to the three hospitals to satisfy increasing community needs for health services, that in turn is reflected in strong demand from quality tenants for space.

“The expansions will include an additional 76 beds and five new operating theatres across the three hospitals, a new intensive care unit at Peninsula Private Hospital, a new chemotherapy unit at Beleura Private Hospital and a new endoscopy room at The Valley Private Hospital,” he said.

Mr Pratt added that the fundamentals of the healthcare property sector are very strong.

“The public healthcare system is already struggling to cope with demand, intensified by Australia’s ageing population, and as a result the private healthcare system will continue its continued growth as private operators help manage the increasing need for medical care.

“In addition, there is increasing demand because of Australia’s demographics, with an ageing but more active population seeking additional healthcare services.

“As a result of the healthcare sector expansion, demand for healthcare properties has increased and the trend for rental growth for healthcare properties has continued,” Mr Pratt said.

Mr Cameron Dickman, AUI’s general manager – retail, added that investors recognise the current and potential value in the healthcare property sector.

“The fact that this raising was oversubscribed shows the attractions of the healthcare property sector are increasingly being recognised, particularly properties that are actively managed.

“It is also further evidence that interest in unlisted property funds within investors’ portfolios is increasing, and is recognition of Australian Unity’s growing property capabilities.

“We believe that the sector provides an attractive way to access income and counter inflation through investment cycles.

“HPT’s characteristics of low gearing, consistent yield and the potential for capital growth, as well as its excellent track record, clearly strike a chord with advisers and investors,” Mr Dickman said.

HPT has over $435 million in gross assets and owns 22 healthcare-related properties in New South Wales, Victoria, Queensland and South Australia.

The Wholesale Units of HPT have returned 5.57% over one year, 6.64% pa over two years, 7.60% pa over five years and 12.09% pa since inception from 28 February 2002 (to 31 March 2012)*.

Australian Unity Investments is the funds management arm of financial services, health and retirement living services provider Australian Unity. It has $12.3 billion in funds under management (as at 31 March 2012).

The property funds management business has over $1.7 billion in funds under management (as at 31 March 2012). Australian Unity Investments’ unlisted property funds and syndicates own more than 60 properties in the healthcare, retail, industrial and office sectors, in Victoria, New South Wales, Queensland, ACT, Western Australia and South Australia.

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For more information please contact:

Mr Mark Pratt – Phone: 03 8682 4448
Mr Cameron Dickman – Phone: 03 8682 4407

18 April 2012

“Other international markets have done much better than the ASX in recent years – for example the Dow Jones is almost at pre-2007 levels – but in Australia, despite having what is recognised internationally as a healthy domestic economy, the equity market has missed out on such growth levels and has mostly continued to struggle since 2007.

“There is more to the lack of international investors’ interest in Australian investment products than a strong, volatile Australian dollar, and to think otherwise is deceiving ourselves.

“For example, investing through Australian funds is not attractive to overseas investors because our investment funds do not comply with what is generally regarded as the required standards internationally.

“This means that Australian investment vehicles are off the radar for investors from other countries.”

Mr Kalman said that it is imperative that Australia comes into line with the Collective Investment Vehicles (CIVs) approach now being used internationally, in particular Europe.

“For example, we should consider adopting similar standards to those of the Undertakings for Collective Investment in Transferable Securities (UCITS) developed by the European Commission.

“By doing so we could take advantage of the decades of work already put into their development, significantly reducing the work and lead time needed here to develop a vehicle international investors would instantly recognise.

“UCITS have now been adopted by all members of the European community as the preferred CIV structure.  They have already made significant inroads internationally and are well regarded by the global investment community.

“The key to their success is that they can produce a new share class in the CIV, which may have a different base currency, or be hedged or unhedged for currency.  This quarantines the effects of the different currencies to that share class.

“So, for example, depending on where an international investor is based or what their own preferences are, they could invest in an Australian bond fund in either an Australian dollar share class, Euro share class, or Hong Kong dollar share class and receive performance in their base currency.

“Investors in other share classes would not wear the effects of currency movements that are unrelated to their own investments.

“This makes such Australian funds as easy to use by overseas investors as a European CIV structure.

“It also means that less Asian investment money will go to Europe and more will be invested into the region’s funds, thus creating greater economies of scale in these funds, which can be passed onto investors,” he said.

Mr Kalman added that for many years Australia was seen as a market leader in the funds management industry but it is now slipping from this leadership role.

“Currently Australian financial services development and regulatory improvements are mostly focused on advice and superannuation, with less attention given to developing better investment fund models to maintain our leadership position, meet international standards, and attract more investors.

“It takes time to bring around the kinds of changes needed, so if we don’t make a move now we will miss out, particularly on the Asian savings boom.

“Just waiting for the currency exchange rates to make our investments look more attractive is not an acceptable strategy.

“We need to adapt our investment vehicles so that they align with what is considered international best practice or even introduce “me too” structures that will support Australia’s leadership role in financial services in the Asian region and create jobs here,” he said.

About Equity Trustees:  Equity Trustees is a publicly listed company that provides a range of financial services to corporate and private clients. Its businesses include private client wealth management, funds management, responsible entity appointments, and corporate and personal superannuation. The company manages over $4 billion in its funds management, private client and superannuation businesses and has more than $19 billion under responsible entity administration. Equity Trustees employs over 180 people in its Melbourne, Sydney and Brisbane offices.

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For more information please contact:

Harvey Kalman – Phone: 03 8623 5301

17 April 2012

Nearly three-quarters of golf clubs surveyed failed to report a surplus during the last year, which is obviously unsustainable, the compiler of the survey, Simon James, said.

Mr James is a corporate advisory partner of accountants and advisers HLB Mann Judd Sydney.

“In addition to an overall average decrease in playing members of four per cent, there is also a decrease in non-playing members of 12 per cent.

“This decline in membership is putting financial pressure on clubs, their committees and management.

“However clubs that have introduced sensible strategies have shown that the overall trend can be reversed by looking at new membership and other approaches to increase use of the course and club facilities.

“For example, clubs that offered a 50 per cent discount for juniors had on average twice as many junior members as other clubs.

“Of the clubs that decreased joining fees during the year, 25 per cent saw an increase in playing males and 50 per cent saw an increase in playing females.

“Indeed, targeting both youth and female markets are strategies that are working well for those clubs using them.

“Memberships in the under-25 years age group have grown by 10 per cent and, while female member numbers have been stable overall during the year, this compares with an overall decline in members of four per cent,” Mr James said.

He added that clubs with attractive corporate day packages and low one-off green fees also attract new members.

“Indeed, there are only four main strategies clubs can adopt to increase revenue: increase membership; increase clubhouse use; increase corporate days; and increase income from green fees.

“Over the next few years, more clubs will be forced to consider merging to reduce costs and increase revenue unless they adopt successful strategies in these main areas or have assets, such as surplus land, that they can sell,” Mr James said.

HLB Mann Judd Sydney is a firm of accountants and business and financial advisers, and part of the HLB Mann Judd Australasian Association.

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For more information please contact:

Simon James – Phone: 02 9020 4212

12 April 2012

“The likelihood of care and its associated cost needs to be recognised at the beginning of retirement, not when care looms as an unwelcome necessity,” Mr Galagher said.

“Retirement plans therefore need to both provide income for the type of active retirement sought, as well as the potential need for a capital sum if aged care accommodation is needed in later years.

“As retirees grow older, their need for income to support an active lifestyle recedes, and when in care the need for income falls further.  However the need for capital, to make a lump sum payment for aged care, is likely.

“Typically, a bond for aged care is in the hundreds of thousands of dollars and will be needed for those who have a preferred care accommodation in mind,” he said.

Mr Galagher added that the Minister for Ageing, Mark Butler, said this week that the aged care system is struggling to meet the needs of older Australians and may not be capable of meeting future needs as demand dramatically increases.

“The Gillard government is also likely to respond to the Productivity Commission report on aged care reform shortly, and this could well include a number of changes to the financial arrangements underpinning aged care in Australia,” he said.

“Increased calls for those who can afford it to contribute more towards the cost of their aged care; the reduced ability of governments to provide publicly funded care; and a huge increase in the incidence of diseases such as dementia affecting the elderly, are all issues that retirees must consider if they are to manage their own future.”

Mr Galagher said that retirees need to think about, and discuss with their family and adviser, what their preferred option might be if faced with this situation, and the time to do this is when they retire so that it can be taken into account in their planning.

“Apart from anything else, searching for the right aged care home can be overwhelming and thinking about it over time is much the better approach.

“It makes a big difference to both retirement and estate planning.

“Retirees may not be able to pass on their family home to their children, may need to set up a reverse mortgage, or not be able to set up the trust they had planned for their grandchildren’s education.

“In addition to a Will with a trusted executor, retirees should have an enduring power of attorney so that decisions can be made on their behalf if they become mentally incapable,” Mr Galagher said

About Equity Trustees:  Equity Trustees is a publicly listed company that provides a range of financial services to corporate and private clients. Its businesses include private client wealth management, funds management, responsible entity appointments, and corporate and personal superannuation. 

It owns two advisory businesses specialising in aged care advice and assistance, Lifetime Planning and Tender Living Care, which form part of the EQT wealth management business. Services include sourcing suitable aged care accommodation for clients and providing financial advice on paying for care.

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 For more information please contact:

Phil Galagher – Phone: 03 8623 5221

12 April 2012 

Ms Hacker, who holds an honours degree in law, joins EQT from Moores Legal Ltd where her role included providing legal advice to accountants, financial planners and clients about estate planning.  This involved drafting wills incorporating testamentary trusts, special disability and protective trusts; creating powers of attorney; and advising on superannuation, family trusts and life interests.

She is a member of the Law Institute of Victoria, the Business Professional Women’s Association (where she was also secretary between 2008 and 2010) and the Probus Women’s Housing Committee Board.

Mr Wraith said that the position was created to enhance the estate planning services at EQT at a time when there is an increasing demand from clients of financial advisers for sophisticated and tailored plans.

“As babyboomers reach retirement age, there is an increasing number of people recognising the need to start planning for how their estate will be distributed on their death.

“Many have complicated financial situations including superannuation, investment portfolios, as well as holding a significant asset in their family home.  In addition, there is often the added complication of the family situation, perhaps through divorce and remarriage.

“As a result, we are increasingly hearing from financial planners who are seeking a comprehensive estate planning solution for their clients.  Anna’s appointment ensures EQT can continue to provide the right support for advisers in the ongoing management of their client portfolios throughout the implementation of a sophisticated estate plan,” Mr Wraith said.

About Equity Trustees:  Equity Trustees is a publicly listed company that provides a range of financial services to corporate and private clients. Its businesses include private client wealth management, funds management, responsible entity appointments, and corporate and personal superannuation.

The company manages over $4 billion in its funds management, private client and superannuation businesses and has more than $19 billion under responsible entity administration. Equity Trustees employs over 180 people in its Melbourne, Sydney and Brisbane offices.

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For more information please contact:

Lachlan Wraith - Phone: 03 8623 5225

10 April 2012