Making the most of record-low interest rates

On 1 July, the RBA announced a record low cash rate of 1%, which brings mortgage rates to their lowest level in over half a century. The low rate also means your deposits in the bank will be earning less interest. Trying to secure a new term deposit over 2% is almost impossible.

Currently, the investment markets are predicting an 80% chance that the 1% rate will be cut to 0.75% at the next RBA meeting in October.

So, what do low interest rates mean for you and your financial goals?Continue reading

The Banking Royal Commission Report – How does this affect you?

Failings of organisational culture, governance arrangements and remunerations systems, lie at the heart of much of the misconduct examined in the Commission.” – Commissioner Hayne

On February 1, 2019 the Honourable Justice Kenneth Madison Hayne AC QC, the sole commissioner of the Banking Royal Commission (also known as the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry), handed his final report to the Governor-General.Continue reading

Wesfarmers-Coles demerger: Are the sum of the parts greater than the whole?

More than a decade after Wesfarmers bought Coles, they are once again separate. In mid-November 2018, Coles split from Wesfarmers, and both began trading as separate entities.

Shareholders received a Coles share for every Wesfarmers share they held.

By the end of the first day’s trading, Wesfarmers’ shares had fallen by $12.26 to $31.96.Continue reading

The new-look Pension Loan Scheme

One of the interesting things coming out of the Budget was the extension to the Pension Loan Scheme (PLS).

Fortunately, my clients have significant superannuation and private savings and do not require or have the inclination to utilise the new pension loan scheme which would involve them accessing the equity in their home to increase their income.

However, for a lot of retirees the balance in the superannuation or private savings may not be large and most of their wealth is tied up in the family home.

At this point the Government will typically provide a means tested age pension.Continue reading