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Wealth Management
Westlawn Financial Planners can offer you a friendly locally based service tailored to all your wealth management needs. Our financial advisers are specially qualified in all aspects of wealth management. Please make an appointment with one of our advisers to review your personal financial situation.
Westlawn Wealth Management nurtures you to improve and protect your financial lifestyle... Our family to your family.
Westlawn Wealth Management Pty Ltd ABN 32 124 861 409, Authorised Representatives of GWM Adviser Services Limited ABN 96 002 071 749, Australian Financial Services Licensee, 105 – 153 Miller Street North Sydney NSW 2060.
Please click on the following link to read the Terms and Conditions and General Advice Warning.
Investment Strategies
Figuring out which investments can best help you grow your wealth requires an understanding of:
· what your investment options are;
· how different types of investments tend to perform over long periods of time; and
· your financial goals, so you can pick an investment mix suited to your specific retirement investment objectives and risk tolerance.
Your primary investment choices can be broken into four general asset categories: Shares, Property, Fixed Interest and Cash.
Though each may play a role in your long-term strategy, investing directly in shares, property, fixed interest and cash is not always easy for the individual investor.
Creating the ideal investment mix involves identifying your personal objectives and risk tolerance and diversifying your investments accordingly. That is, choosing what's appropriate for you and acquiring the appropriate investments.
Monitoring and modifying your investment mix over a long period of time can also be a daunting task.
Keeping track of market trends, interest rates, emerging opportunities, and other unforeseeable variables requires an expert eye and large amounts of time and attention.
Your Westlawn Financial Planner will determine your needs and advise you of your options to achieve your goals.
Managed Funds
Defined simply, managed funds pool the money of individual investors who share common investment goals. Professional fund managers use the pool money to buy securities, such as shares, property, fixed interest and cash that are consistent with the fund's financial objective. Because they offer instant diversification and expert management, managed funds are an excellent way to help build wealth.
When you invest in a managed fund, you purchase units in that fund. Since your money is pooled with that of numerous investors, you're able to invest in more investments than you could buy on your own. Plus, you don't have to worry about time consuming research or figuring out when to buy or sell individual investments. Your managed fund managers do it all for you.
There are managed funds for virtually every investment objective. As a result, you can invest in those whose objectives are best suited to helping you work towards your financial goals.
Shares
Investing in a share buys you a piece of ownership of a company. Your share of ownership is also commonly known as your equity in that company. As a shareholder you can make money in two ways; by sharing in the company's profits (usually paid in the form of cash dividend), or by selling the share for more than you paid for it (called a capital gain). Shares don't carry guarantees; you can lose money if the company's share price goes down or if the company stops paying dividends. Selecting which shares are right for your investments is probably the single largest topic of research and analysis in the investment world.
There are different styles of share investment management: Growth, which seeks to identify companies whose earnings are growing at an above-average market rate, and buy them at reasonable prices; and Value, which seeks to identify undervalued or out-of-favour stocks that offer exceptional long-term potential. Either management style can be appropriate for a retirement investor.
Shares are classified in many ways. You can buy company shares within an industry sector (such as banking, mining or technology), within a region (such as international or domestic), by the size of their capitalisation (large and small), or by a number of other parameters.
One of the main reasons to invest in a managed fund is to benefit from the professional investment management the fund provides. So once you've established a type of share investment that meets your investment criteria, you can select a managed fund that matches your objectives without having to select the individual shares yourself.
Share funds are appropriate for the investor whose objectives are long-term and who has the diligence to stick to a plan with those long-term goals in mind. The increased risk of the stock market gets smaller and smaller with longer periods of time, enabling investors to aim for higher return potential when their investment timelines are five years or longer.
Even very conservative investors should evaluate the superior growth characteristics historically provided by managed share funds as an investment class.
Property
Property trusts allow you to pool your money in funds invested the property market, with the potential for both income and growth.
Property trusts are not capital guaranteed, so their value changes with market variations and can increase or decrease in value.
The security of a property trust investment depends on the type of trust, the properties it holds and its investment policy. Some property trusts borrow funds to invest. A high borrowing (or gearing) level increases the possible amount of capital gain or capital loss.
There are several types of property trusts. Listed property trusts are listed on the stock exchange and are bought and sold through a stockbroker. As with shares, their value is mainly determined by the market and can rise and fall.
Unlisted property trusts directly own and manage real estate and are not listed on the stock exchange. Property securities trusts are unlisted. Your money is pooled for investment in listed property-related securities, such as shares and trust units.
Fixed Interest
When you buy a bond, you are essentially making a loan. The organisation to which you lend your money - typically a company, government or government agency - promises to repay the full amount of your loan on a specific date. Until that time, it pays you a stated rate of interest on the use of your money. Because their income payments are fixed, bonds are also known as fixed-interest investments.
Bonds have different maturity dates - the date on which a bond issuer must repay the money borrowed. Maturity dates range anywhere from a few years to as many as thirty years.
Bonds tend to carry less risk (and offer lower returns) than shares. Bonds issued by corporations tend to be riskier - and therefore higher yielding - than those issued by governments simply because of the quality of the promise to repay the original loan.
Bond values go up or down as a result of changes in interest rates. When interest rates drop, bond prices tend to climb; when rates rise, bond prices often fall. Here's why: Say you purchase a $10,000 bond when rates are 7%. That bond would provide $700 annually. If rates rise to 8%, a new bond purchased at this rate would pay $800. Because your 7% bond provides $100 less income per year, it's now less valuable and its price tends to go down. The opposite would be true if interest rates declined.
Fixed Interest/Bond funds are appropriate for retirement investors who are uncomfortable investing solely in shares - since a retirement investment that includes both share funds and fixed interest/bond funds should fluctuate less than a portfolio of 100% shares.
Also, as investors near retirement they often shift a higher portion of their investment into fixed interest/bond funds because these funds tend to preserve principal better than share funds. This, in effect, lessens their portfolio's risk as they near retirement.
Cash
The objective of Cash securities - which include money market investments, term deposits, interest bearing deposits and bank bills - is to protect the money invested in them. As a result, their values do not fluctuate as widely as those of Shares, Fixed Interest/Bonds or Property. The low risk of these investments, however, comes at a price: lower long term rates of return than Shares, Fixed Interest/Bonds or Property. But that's also why Cash securities are considered a less volatile place to put emergency funds or to park money for the short term.
Cash investments seek to maintain a stable principal. Because they offer little growth potential, cash investments won't protect your assets against the biting effects of inflation and taxes. Consequently, they should not be used as the primary investments for building a nest egg.
Gearing Structures
Geared investments (or investments made with borrowed money) are generally designed to increase the potential for tax deductible expenses (such as interest costs). The ultimate goal of this strategy is for the assets purchased with borrowed money to increase and create a profit upon sale after repayment of borrowed funds plus expenses. The assets purchased would normally be direct property or Australian listed shares.
Employee Super
Whether you are an employer and require information about superannuation for your business or you are an employee and you want to look at your options regarding superannuation, Westlawn Wealth Management can help you. Super can be a complicated and confusing investment vehicle and it requires the time and knowledge of a qualified planner.
The "Choice of Fund" developments you may have heard about present some difficult decisions to both employers and employees alike. Don’t risk your financial independence in retirement or that of your employees, see a Westlawn Financial Planner for all your superannuation and retirement planning requirements.
Self Managed Superannuation Funds
Self Managed Superannuation Funds ("SMSFs") are a very popular superannuation structure being utilised by hundreds of thousands individuals, families and small businesses. These small superannuation funds are referred to by a variety of different names including "DIY" funds (do it yourself), "Family" funds, "Mum and Dad" funds and of course "SMSFs".
SMSFs perform the same role as other funds, by investing contributions and making them available to members on retirement. The main difference is that the members of a SMSF are also the trustees of the fund. They control the investment of their contributions and the payment of their own benefits.
As individuals’ superannuation assets have grown, many people have sought to gain greater control over the day-to-day management of their superannuation. Hence, the rise in popularity of the SMSF. A SMSF is a superannuation fund that has a number of unique characteristics. Some of these include:
· A SMSF can have no more than 4 members – hence their popularity with families;
· No member of the fund is an employee of another member of the fund, unless they are related;
· Each member of the fund must be a trustee of the fund, and each trustee must be a member. Where a company is appointed to act as the trustee of a SMSF, each member of the fund must be a director of the trustee company, and each director must be a member;
· No trustee of the fund receives any remuneration for their services as trustee;
· SMSFs are regulated by the Australian Taxation Office (ATO) whereas other types of superannuation funds are regulated by the Australian Prudential Regulatory Authority (APRA).
Whilst the trustees of a SMSF must act in accordance with the general laws governing all superannuation funds, a number of concessions apply including the ability of a SMSF to acquire certain assets (particularly listed securities and business real property) directly from members of the fund.
SMSFs offer some very real benefits to members but, at the same time, carry responsibilities and obligations. A SMSF accredited Westlawn Financial Planner can assist people interested in taking greater control over their superannuation in determining the suitability of a SMSF for their particular circumstances.
Life Insurance
With life insurance, you’re really insuring your family’s lifestyle. Life insurance pays out upon death. You won’t be around to enjoy any benefits. But your family will. And that’s why it’s important to have some cover. As the major breadwinner, who would look after the rest of your family in the event of your untimely death?
For professional advice on the correct amount of life insurance please phone one of our qualified advisers.
Income Protection Insurance
While life cover will maintain your family’s lifestyle in the event of your untimely death, what happens if you can’t work because of illness or an accident?
This is when you need the regular income provided by income protection insurance, otherwise known as disability insurance. It’s estimated that you will earn something like $4 million over your working life, so it’s important to protect your income. It is a fact of life that at the age of 35 you are 10 times more likely to be disabled then die.
Trauma Insurance
If you’re diagnosed with a critical illness or crisis, trauma insurance can relieve you of financial difficulties. Unlike income protection insurance, which is dependent on your inability to work, trauma cover is paid out on the diagnosis of a defined critical illness regardless of your working status.
Instead of receiving a monthly income stream, you are paid a lump sum that you can spend on whatever you like - medical bills, your mortgage, changes to your home to accommodate your disability even care for your children or some home help. The insurance company makes no demands on how you spend the money. Trauma insurance is often an adjunct to term life policies.
Total & Permanent Disability Insurance (TPD)
Similar to Trauma Cover, if you’re deemed to be Totally & Permanently Disabled, TPD insurance can relieve you of financial difficulties. Instead of receiving a monthly income stream, you are paid a lump sum that you can spend on whatever you like - medical bills, your mortgage, changes to your home to accommodate your disability even care for your children or some home help. The insurance company makes no demands on how you spend the money. TPD insurance is often also an adjunct to term life policies.
Estate Planning
Most people prefer not to think about what happens when they die and put off planning for this situation. It is a very important issue to think about early and is an essential part of the financial planning process. Estate planning is determining how your assets will be divided on your death to ensure they are distributed efficiently and according to your wishes. Proper estate planning can reduce worry for your spouse and/or beneficiaries. All sorts of problems can occur if you have not planned your affairs properly.
It does not matter how small your personal wealth is, you should still ensure you have a current Will and plan your affairs. Appropriate estate planning can allow you to pass on your assets to your beneficiaries in a tax effective way and can minimise the effect of capital gains tax. As part of the process you should also check your superannuation funds and life insurance policies to see who you have nominated as your beneficiary and seek to make changes if necessary and possible.
Property and investments which are held as "joint tenants" cannot be distributed through your Will. Ownership passes automatically to the surviving owner. If owned as "tenants in common" your share in the property is distributed through your Will. You can buy a do-it- yourself kit and prepare your own Will. This may be cheaper but care is essential to ensure your Will is legally enforceable. The executor is responsible for carrying out your wishes after you die according to the instructions. You should choose someone you trust, who is responsible and willing to accept the responsibility. This person must be named as executor in your Will. You may appoint more than one person.
