长期财富增长计划课件.ppt

,Click to edit Master title style,Click to edit Master text styles,Second level,Third level,Fourth level,Fifth level,*,Click to edit Master title style,Click to edit Master text styles,Second level,Third level,Fourth level,Fifth level,*,Click to edit Master title style,Click to edit Master text styles,Second level,Third level,Fourth level,Fifth level,*,Click to edit Master title style,Click to edit Master text styles,Second level,Third level,Fourth level,Fifth level,*,Click to edit Master title style,Click to edit Master text styles,Second level,Third level,Fourth level,Fifth level,*,Click to edit Master title style,Click to edit Master text styles,Second level,Third level,Fourth level,Fifth level,*,Click to edit Master title style,Click to edit Master text styles,Second level,Third level,Fourth level,Fifth level,*,Click to edit Master title style,Click to edit Master text styles,Second level,Third level,Fourth level,Fifth level,*,Lecture 1,INTRODUCTION&WEALTH CREATION,The Ageing Population,Retirement Planning,Regulation,Documentation,Role&Obligations of advisers,Financial Advice,The Financial Services Workplace,Measuring Wealth,2009,12.7%over 65,3.2%over 80,Median Age 35.9,2051,26.1%over 65,9.4%over 80,Median Age 46,Now(2011),4 in every 20 over 65,In 2031,7 in every 20 over 65,Learning Years,Working Life,Retirement,18 Years,47 Years,7 Years,0,20,65,Learning Years,Working Life,Retirement,22 Years,41 Years,22 Years,0,21,63 85,Governments have been forced to act,Encourage people to save for their own retirement,Super attempts to address the issues,Education,Financial Advisers play an important role,Main aim of retirement incomes policy is to promote financial self reliance during retirement.,Changes are occurring in Australian age profile.,pensions,and associated benefits.,Increased health and aged care costs,Assistance with personal investment decisions,Increase clients retirement funding,Changes in Systems and Legislation,Economic&Business Cycles,Three pillars of Australian,retirement incomes policy,:,An age or service pension,Mandatory superannuation contributions,Voluntary superannuation contributions and other investments,LOW COMMITMENTS,Career Start,Planning Ahead,Retirement Planning,Set Foundation,DECREASING COMMITMENTS,Career Peak,Family Independent,Retirement Planning,INCREASING COMMITMENTS,Home,Family,School Fees,Retirement Planning,RETIREMENT,No Mortgage,No Dependants,NO SALARY,WORKING LIFE,RETIREMENT,EXPENSES,EXPENSES,EXPENSES,EXPENSES,SAVINGS,SAVINGS,SOCIAL SECURITY BENEFITS,PRIVATE&COMPANY,SUPERANNUATION,INCOME,PRODUCING ASSETS,Accumulation,Erosion,A,C,D,B,Wealth,$,Time,Retirement age,Working life,Life expectancy at C,Average rate of wealth creation,is determined by two major factors:,Level and timing of savings,for investment,Annual,real rate of return on investments,after debt,inflation,fees and charges and taxes,Issues in the paid workforce:,Desire to consume income vs.need to save,Lack of understanding about the nature and adequacy of insurance cover,Unwillingness to contemplate the retirement funding target,Changes in working environment,Issues for those reaching the retirement phase:,Whether to change size and location of home,Different types of retirement income streams,Appropriate investment strategy,Budgeting for retirement expenditure,Capital amounts needed,Many different views on how much is needed to fund retirement,Preferred approach,involves clients preparing budgets,Estimate their annual expenditure requirements plus capital reserves for contingencies.,An income stream is a series of payments or receipts of money.,Three ways to create an income stream,Live off capital through regular withdrawals,Invest capital and withdraw just the earnings,Invest the capital and withdraw a combination of earnings and part of the capital,Common retirement funding goals are to:,Accumulate sufficient wealth to generate a lifetime income stream during retirement.,Provide additional funds above the assets required for a lifetime income stream.,Accumulate additional wealth above the level required for a lifetime income stream.,Three important messages,Life expectancy is the average lifetime for a group of people at the specified age,Longevity risk the risk that individuals will outlive their capital,As life expectancy increases,the retirement funding goal for the client also increases.,“A process of taking you from where you are today financially to where you want to be in the future”,“Design,package and recommend financial products and services”,Client focus,Implementation of Plans,Ongoing review/relationship,Growth Industry,Specialist Skills,Advisors and clients do not operate in isolation,Advisor must be aware of the impact of the economic environment,both micro and macro,eg.interest rates,inflation,unemployment,global tensions,terrorism,overseas economies,Economic environment is cyclic in nature,Recession high unemployment,low economic growth,Recovery unemployment begins to fall and economic growth begins to rise,Boom expansion,high employment and economic growth,increase in inflationary conditions,Contraction economic growth starts to slow,level of unemployment begins to rise,falling retail sales,A number of market Players exist:,Life Insurance Companies,Banks,Stockbrokers,Accountants,Solicitors,Real Estate Agents,Financial Planners,Start early,Keep saving,Be realistic about retirement funding needs,Hedge risks,Use debt wisely,Manage within client risk tolerance levels,Main Regulatory Authorities include:,Reserve Bank of Australia(RBA),-Stability of financial institutions and integrity of industry,-Implements Monetary policy,Australian Prudential Regulatory Authority (APRA),-Supervision of deposit taking entities,-General/life insurance and super,Australian Securities&Investment Commission(ASIC),Consumer protection,Companies,listed and unlisted securities industry,licensing of advisers,dealers and brokers,Superannuation complaints tribunal,Legislation&Investigation,Corporations Act 2001,Licensing Regime,Financial Services Reform,ASIC Supervision,Australian Financial Services Licensee,www.asic.gov.au,Client Expectations,Competent and honest service,Unbiased advice,Professionalism,Obligation of Licensees,comply with laws,Have adequate resources and risk management,Maintain competencies,Provide adequate training to representatives,Representatives of Licensees,Written agreement,Authorized representatives appointed by Licensee,Key Documents,Financial services guide,Statement of advice,Product Disclosure Documents(PDS),Data collection forms,research information,Plan implementation and progress reports,ASIC Requirements,RG146(Minimum training standards),Clear business documentation(cards,letterheads,promotions),Record Keeping(research,strategy,warnings,file notes),Full Advice,Provide all relevant information,Develop full plan aimed at financial goals,Monitor and review,Limited Advice,Specific Need,Specific Product,Include Warnings,No Advice or“Execution Only”,No adviser responsibility,Warnings,Reasonable basis for advice,Identify needs and objectives,Investigate Options,Warnings&Disclaimers,Lack of information,Limited to certain areas,Understood by clients,Legal Obligations,Disclosure Document,Financial Services guide(FSG),Product Disclosure documents(PDS),Statement of advice(SOA),Taking Instructions,Express,Implied,Ethics&Disclosure,Honesty,integrity,fairness&Clients best interest,Codes of Conduct,Upfront Commissions,Transaction based,Paid upon completion,Main remuneration for insurance,Trail Commissions,Soft Dollar Incentives,Fee for Service,Disclosure,Working in a team,Commitment,Focus,Resolve conflicts,Common goals,Teamwork and the Financial Adviser,Paraplanners,Administration,Compliance managers,Practice/Business Development,Health&Safety,Information Systems,Transaction process,execution and trail,Management Supervision,Processing,Electronic authorization,Market Information Services,Paper-Based information,Online real-time information,Online research,Financial Planning Software,Wealth is a persons net worth.,ie.Net value of assets at a point in time.,Wealth creation,over time,is the increase in the value of assets after deduction of inflation,fees and taxes.,Consider the following:,Peter lends Mark$100 for one year from 1 July 2008 and charges Mark 8%interest.The headline inflation rate for 2008/09 measured by CPI is 4%.At the end of the year,Peter receives$108.Has Peter generated income?Has he generated wealth for himself?,Yes,Peter has generated income for himself($108-$100=$8).,Not really,Peter has not created any wealth for himself.He had to receive$108 just to preserve the money value of the original$100 from the effect of inflation.,Peter still has to pay tax on the$8 income.,Two powerful messages emerge from the table:,The sooner the client starts saving,the better the long-term result.,It is better to invest in a diversified portfolio with a higher long term average expected net return than the conservative capital stable portfolio.,The term,risk,means different things in different contexts.,First definition:probability of a loss or injury occurring.,Second definition:variability in or volatility of expected outcomes.,Third definition:possibility of not achieving the persons financial or investment goal.,A clients ability to tolerate risks affects his/her attitude to the rate of wealth accumulation and wealth protection.,Direct Property,Direct Shares,Managed Funds,ADVANTAGES,Bricks and mortar,Less volatile,Regular income,Can apply local knowledge,Not complicated,Capital growth prospects,DISADVANTAGES,Large capital outlay to enter the market,Income can be unreliable,Costs of buying and selling,Long term trends,Supply in some areas,Access to funds,ADVANTAGES,Potential for capital growth,Can get exposure with relatively small capital outlay,Lower transaction costs,Franking credits(excess credits to be returned),Can sell small parcels,Liquid market,Information available,DISADVANTAGES,Greater risk,volatility of prices,engaged in ventures that can lose money,companies are themselves geared,Income tends to be lumpy,Not a physical asset,Information overload,Need to get advice,ADVANTAGES,Potential for capital growth,Can get exposure with relatively small capital outlay,Reinvest distributions,Portfolio managed by professional,Greater diversification,Funds available within 10-30 working days,DISADVANTAGES,Greater volatility than property,Not a physical asset,Entry fees(compares to stamp duty on property),Management fees,Distribution of capital gains can make taxation planning challenging,Crashes,recessions,tech wrecks and wars all cause sharemarket volatility,Over time,sharemarket has always gone on to reach new highs,Remember what history tells us,2008 investment reports worst in 20 years,The Last 5 and 10 year periods all delivered positive returns,Whilst 19.5%of investors may lose money in any 12 month period 0%havelost money in any 5 or 10 year period,The sharemarket is a long-term investment,“Maybe the markets just arent for me.”,Optimism,Relief,Hope,Denial,Capitulation,Fear,Despondency,Panic,Depression,Desperation,Anxiety,Euphoria,Thrill,Excitement,Optimism,“Wow,I feel great about this investment.”,“Temporary setback.Im a long term investor.”,Source:Westcore Funds/Denver Investment Advisors,Point of maximumfinancial opportunity,Optimism,Relief,Hope,Denial,Capitulation,Fear,Despondency,Panic,Depression,Desperation,Anxiety,Euphoria,Thrill,Excitement,Optimism,Point of maximumfinancial risk,“Wow,I feel great about this investment.”,Feeling great about investing,Need to focus on investing for the long term,Is the share market for me?,Source:Westcore Funds/Denver Investment Advisors,Here you purchased the lowest number of shares for the highest price,Here you purchased the highest number of shares for the lowest price,