The Australian Prudential Regulation Authority (APRA) is imposing some significant changes to new income protection policies in Australia commencing 31 March 2020 to ensure the ongoing viability of this insurance sector.

Some of the key changes that will directly affect new policy holders include –

• Removal of agreed value benefits based cover, instead all new contracts will based on annual earnings at the time of claim. This could be a problem if you are self-employed or run your own business.
• Initial contracts cannot exceed five-year terms. Policy owners can renew contracts without a medical review, but on the terms set by the insurer.

There are other proposed changes required of insurers which may result in changes to new policies.

It should be noted that if your policy is guaranteed renewable, these changes will not apply to your current policy.

Income protection insurance can provide a valuable safety net in the event of injury or illness. In most cases our income represents our most important asset and in many cases serves to maintaining other valuable assets ie home loans. It is recommended that you seek professional assistance in the establishment and review of your personal income protection insurance cover.

If you would like advice on income protection insurance please give us a call.

Please contact Integrity One if we can assist you with this or any other financial matter.

Phone: (03) 9723 0522

Suite 2, 1 Railway Crescent
Croydon, Victoria 3136

Email: integrityone@iplan.com.au

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This information is of a general nature and does not take into consideration anyone’s individual circumstances or objectives. Financial Planning activities only are provided by Integrity One Planning Services Pty Ltd as a Corporate Authorised Representative No. 315000 of Integrity Financial Planners Pty Ltd ABN 71 069 537 855 AFSL 225051. Integrity One Planning Services Pty Ltd and Integrity One Accounting and Business Advisory Services Pty Ltd are not liable for any financial loss resulting from decisions made based on this information. Please consult your adviser, finance specialist, broker, and/or accountant before making decisions using this information.

One of the primary ‘weapons’ banks utilise, is to take advantage of lazy borrowers. 

Our interest rates have headed down over the last few months and the banks have passed on some but not all of the savings to you, much to the government’s ire. A decrease in the cash rate of 0.25% does not mean the banks’ costs reduce by the same amount.  So, it is not realistic to expect the full decrease in the cash rate to be passed on.

There is a big ‘but’ coming…

Different lenders have different cost bases.  That means some ‘non-major’ bank lenders have a massive cost advantage in this environment and therefore have an ability to offer you significantly lower rates.  Just because your current lender didn’t pass on the full rate doesn’t mean other lenders don’t have a better deal.

This is why you can’t afford to be another ‘lazy borrower’ and play into their hands.

Every time the RBA changes interest rates it resets the market for the best deal on a mortgage. When you ‘set and forget’ your home loan, the bank pockets those extra profits.

The fact is ‘New-to-bank’ customers are offered rates significantly lower than existing customers.  If your loan is 5 years old you are paying too much (no matter who your lender is).

If you want to find the best deal for yourself in the current market you basically need to go to every lender find out what their best deal for you is and then pick the best one. Unfortunately not all lenders deal directly with the public, not all loan officers are equally knowledgeable about the products their institution offers.  So for all that work you might still miss out on the best deal.

Your best bet for getting the best possible loan is to get in touch on 03 9723 0522, and ask for Nic or Tom to arrange a no-cost, no-obligation mortgage review. As a result of one current review in progress a new-to-Integrity client will save over $8,000 per year in interest!

Click here to learn more & meet Nic & Tom, our finace and mortgage specialists, or  just give them a call on (03) 9723 0522

Suite 2, 1 Railway Crescent
Croydon, Victoria 3136

Email: integrityone@iplan.com.au

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Nicholas Berry Credit Representative Number 472439 and Thomas Bailey Credit Representative Number 472440 are Credit Representatives of Integrity Finance (Aust) Pty Ltd – Australian Credit Licence 392184.

This information is of a general nature and does not take into consideration anyone’s individual circumstances or objectives. Financial Planning activities only are provided by Integrity One Planning Services Pty Ltd as a Corporate Authorised Representative No. 315000 of Integrity Financial Planners Pty Ltd ABN 71 069 537 855 AFSL 225051. Integrity One Planning Services Pty Ltd and Integrity One Accounting and Business Advisory Services Pty Ltd are not liable for any financial loss resulting from decisions made based on this information. These articles are not owned by Integrity One Planning Services. Please consult your adviser, finance specialist, broker, and/or accountant before making decisions using this information.

There’s plenty to consider when trying to secure your financial future. Should I pay off the mortgage or put money into super…. but what about renovations? When can I stop work? How do I afford the children’s education?

Good financial advice answers these questions by mapping out your goals and putting in place the strategy to achieve them. The traditional measures of financial advice success have focused on achieving your tangible goals, such as retiring earlier, relative investment returns, or simply spending less.

While these financial benefits of advice have long been established, can financial advice positively affect the more intangible aspects of our lives? What is the true value of advice?

The intangible value of advice
A survey of 312 financial advice clients about the intangible benefits of financial advice and the results were compelling. Our survey revealed people who receive ongoing financial planning advice experience:

• 13 per cent greater levels of overall personal happiness
• 21 per cent overall increase in peace of mind
• 20 per cent increased feelings of security regarding their day to day finances
• 19 per cent less likelihood to have arguments with loved ones.

While those that don’t receive financial advice were:

• 22 per cent more likely to have their sleep disrupted due to money concerns
• 15 per cent more likely to feel stress and anxiety.
• 11 per cent more likely to feel concerned about their finances

What’s more, 83 per cent of clients surveyed endorsed the value of financial advice by saying it’s also important for their loved ones to have good financial advice!

Even if you have your financial house in order, a financial adviser provides the comfort and peace of mind of a well thought out plan, a plan that leaves you better prepared for the future. What’s more, advice extends beyond measurable financial gains, to improved physical health, stronger relationships and personal happiness. That’s the true value of advice.

Please contact Integrity One if we can assist you with this or any other financial matter.

Phone: (03) 9723 0522

Suite 2, 1 Railway Crescent
Croydon, Victoria 3136

Email: integrityone@iplan.com.au

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This information is of a general nature and does not take into consideration anyone’s individual circumstances or objectives. Financial Planning activities only are provided by Integrity One Planning Services Pty Ltd as a Corporate Authorised Representative No. 315000 of Integrity Financial Planners Pty Ltd ABN 71 069 537 855 AFSL 225051. Integrity One Planning Services Pty Ltd and Integrity One Accounting and Business Advisory Services Pty Ltd are not liable for any financial loss resulting from decisions made based on this information. Please consult your adviser, finance specialist, broker, and/or accountant before making decisions using this information.

It can be difficult to plan, both financially or emotionally, for the move into an aged care facility. When choosing the best care as a part of your retirement – or for loved ones – many practical issues arise and decisions need to be made. It’s important to know what’s involved and have the confidence to face the challenges of aged care. Here are some tips to get you started:

Accommodation
Determine the best option for care, eligibility for different aged care facilities, and what level of care may be needed. This is established via assessment by an aged care assessment team.

Costs
Aged care fees can be high. Find out the fees applicable to various aged care facilities and whether extra services can be purchased. Generally, for a permanent resident, the types of fees that can be charged include:
• a basic daily fee
• a means tested care fee
• an accommodation payment
• extra services fees.

The family home
The decision to sell the family home can be one of the most emotional decisions faced when entering aged care. For many it may be the only option however for others, it may be possible to retain the family home and rent it out.

If retaining and renting out the former family home, it is important to consider the income tax impact as the rental income is assessable for tax purposes. Consider the capital gains implications and whether renovations are required.

Cash-flow and Centrelink payments
It is important to understand how your assets and income will affect Centrelink entitlements, including age pension entitlements. Remember there may be costs that are easily overlooked such as paying for the ongoing maintenance of the former family home.

Avoid taking actions that could result in a loss of age pension and increased aged care costs, for example gifting assets outside Centrelink gifting rules.

Review estate plans
It is important to review estate plans and important legal documents, such as an enduring power of attorney when entering into aged care.

Seeking financial advice when considering aged care can ensure the decisions you and your family make will be the right ones. Talk to us to ensure your aged care plans are a part of your overall retirement plan.

Click here to learn more & meet Catherine, Jenny & Matt, our aged care specialists, or  just give them a call on (03) 9723 0522

Phone: (03) 9723 0522

Suite 2, 1 Railway Crescent
Croydon, Victoria 3136

Email: integrityone@iplan.com.au

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This information is of a general nature and does not take into consideration anyone’s individual circumstances or objectives. Financial Planning activities only are provided by Integrity One Planning Services Pty Ltd as a Corporate Authorised Representative No. 315000 of Integrity Financial Planners Pty Ltd ABN 71 069 537 855 AFSL 225051. Integrity One Planning Services Pty Ltd and Integrity One Accounting and Business Advisory Services Pty Ltd are not liable for any financial loss resulting from decisions made based on this information. Please consult your adviser before making decisions using this information.

Interest rates are very important for many Australians, and rightly so – after all, whether it’s the returns on savings accounts or mortgage repayments, the rate of the day can have a significant impact on the household budget for millions of Australians. So what influences interest rates, and why are they changed?

Who’s navigating?
One of the many responsibilities and functions of the Reserve Bank of Australia (RBA) is to control domestic official interest rates in order to fulfil their charter, contained in the Reserve Bank Act 1959, which is to best contribute to the:

• stability of the currency of Australia
• maintenance of full employment in Australia
• economic prosperity and welfare of the people of Australia.

As a result of this charter, the RBA has determined that an inflation rate of between two and three per cent per annum is the best way to meet these objectives.

Why do they change?
The RBA lowers official interest rates to make borrowing cheaper, increasing spending (and therefore demand), which in turn increases inflation to the desired range. Increasing rates, on the other hand, discourages borrowing – and spending – easing inflationary pressures.

While fulfilling their charter may be the goal of the RBA, the same may not be said for central banks around the world. Low interest rates are usually associated with a lower dollar as they often mean less foreign investment as global investors look elsewhere for the highest returns for their money. In what sometimes looks like a race to the bottom between nations, a lower dollar makes manufactured goods cheaper for foreign buyers, boosting exports and increasing tourism.

Why is my loan interest higher than the cash rate?
The RBA’s cash rate provides a level of interest rates that affects the rates paid in the wholesale market by the banks. While credit is available to banks in the wholesale market at a rate of, say the current 1.5 per cent, they will add a premium before applying the rate to retail loans and mortgages. The concept is the same as a supermarket buying produce in bulk at a lower price than offered to shoppers. Simply, this margin is how banks make their money.

Winners and losers from lower interest rates

Winners 

• Borrowers: mortgage holders and property investors benefit from lower repayments on loans.
• Investors in overseas markets: international earnings benefit from a lower Aussie dollar.
• Investors in the share market: due to low returns on fixed-interest investments, investors put more money into the share market.

Losers

• First home buyers: lower interest rates contribute to the rise in house prices, meaning buying a first home just got harder.
• Insurance companies: as insurance companies invest your premiums long-term, they are now facing lower returns which can put pressure on premiums.
• Savers: reducing interest rates means lower returns on savings, affecting those who rely on interest for their income.

For the best investment strategy in the current low interest rate environment, talk to us today.

Please contact Integrity One if we can assist you with this or any other financial matter.

Phone: (03) 9723 0522

Suite 2, 1 Railway Crescent
Croydon, Victoria 3136

Email: integrityone@iplan.com.au

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This information is of a general nature and does not take into consideration anyone’s individual circumstances or objectives. Financial Planning activities only are provided by Integrity One Planning Services Pty Ltd as a Corporate Authorised Representative No. 315000 of Integrity Financial Planners Pty Ltd ABN 71 069 537 855 AFSL 225051. Integrity One Planning Services Pty Ltd and Integrity One Accounting and Business Advisory Services Pty Ltd are not liable for any financial loss resulting from decisions made based on this information. Please consult your adviser, finance specialist, broker, and/or accountant before making decisions using this information.

Yes it can, but only in certain situations. While most people try hard to strike a fair balance when
they write their Will, sometimes there may be people who are unhappy with how the estate has been divided and decide to challenge it.

There are two main types of ‘challenges’ in relation to a Will: challenging the validity of the Will itself and claiming for ‘family provision’. A claim for family provision occurs when a challenger believes they should have received money or assets to provide for their ongoing welfare. They can claim at court that a provision should have been made for them. This is the most common type of challenge.

Challenging the validity of a Will
This can occur when:

• the strict legal requirements for the creation of a valid Will have not been followed
• the Will-maker did not have ‘testamentary capacity’, meaning they didn’t have the mental capacity to understand the effect of making a Will, the extent of their assets and an appreciation of who could be possible beneficiaries
• the Will-maker was subject to ‘undue influence’, but this is very hard to prove.

Challenging the lack of family provision
Separate legislation in each State and Territory allows certain family members or eligible persons to make a claim for provision out of your estate.

Can you prevent challenges to your Will?
Not entirely. However, you can certainly take steps to minimise the likelihood of claims being made but to do this you need to use a qualified legal professional.

Some of the ways to reduce the likelihood of your Will being challenged are to:

• ensure your Will complies with the formal requirements of the law, including the correct signing of the Will
• ensure any suggested lack of testamentary capacity is dealt with when the Will is made so there is evidence available, if necessary, that supports your ‘capacity’
• ensure you are freely making your Will, without any undue influence
• consider any possible claim under the family provision legislation and minimise not only the chances of a claim being made, but also the chances of a claim being successful.

We are happy to help with your estate planning matters – just give us a call.

Please contact Integrity One if we can assist you with this or any other financial matter.

Phone: (03) 9723 0522

Suite 2, 1 Railway Crescent
Croydon, Victoria 3136

Email: integrityone@iplan.com.au

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This information is of a general nature and does not take into consideration anyone’s individual circumstances or objectives. Financial Planning activities only are provided by Integrity One Planning Services Pty Ltd as a Corporate Authorised Representative No. 315000 of Integrity Financial Planners Pty Ltd ABN 71 069 537 855 AFSL 225051. Integrity One Planning Services Pty Ltd and Integrity One Accounting and Business Advisory Services Pty Ltd are not liable for any financial loss resulting from decisions made based on this information. Please consult your adviser, finance specialist, broker, and/or accountant before making decisions using this information.