Ask a Guru – Superannuation Changes

This year saw major changes that affect the way member’s benefit from many of the major tax concessions of superannuation following the implementation of the federal government’s new superannuation regime. The starting point for many is that if your superannuation balances is well under $1.6 million and is unlikely to exceed this lev­el during your working lifetime, then the changes don’t affect you (apart from chang­es in ongoing annual contribution limits).

The next point is that you can have more than $1.6 million in super, the new $1.6 million cap is a cap on the amount that can be transferred across to a tax-free pension account on your retirement. The changes that came into effect from 1 July, were implemented on the basis that the sweeping reforms that made up the Simpler Super legislation changes to super­annuation in 2007 were too generous and required diluting. Over the last 18 months, there had been growing political and bud­get pressures to reduce the tax concessions, as many felt the concessions were not benefiting all Australians. Many viewed that superannuation was being used as a generous estate planning vehicle where assets were being accumulated to pass onto the kids in a tax-free environment.

The government has estimated the changes will provide an extra $540 million in tax over four years. The main crux of the changes re­volves around cutting back the annual limits on contributions (getting money into super­annuation) and placing a cap on the amount of funds that can be transferred into a tax-free pension account on retirement. The biggest issue for members who have been salary sacrificing up to the old limit of $35k (over age 50) is that you’ll need to review the level of your pre-tax contribu­tions ASAP. If you are still contributing at the same level you did in 2016/17 and you got close to $35k, if you don’t make adjust­ments, you’ll most likely exceed your cap and face penalties. Avoid the penalties at all cost. Remember these contributions cov­er all your 9.5% super guarantee contribu­tions and all salary sacrifice contributions.

If you have $1.6 million in your super ac­count already, you’ll be unable to make any further concessional (after-tax) con­tributions to super, the good news is that you can still continue to make annual non-concessional contributions at the cur­rent rate of $25k pa. This will help build up your super balance going forward along with investment returns on the capital. For those still receiving a transition to retire­ment pension, you should sit down and go through the maths as to whether the strate­gy remains a correct strategy. For those with large balances the tax rate of 15% on the fund’s earnings will mean for most the ben­efits of the strategy no longer are favourable and for some, they may end up with a worse superannuation balance at retirement.

For those entering retirement from 1 July, you can now only transfer a maximum of $1.6 million to a tax-free pension ac­count, any excess in your superannuation account must be retained in your accu­mulation account. For many, this won’t be a major problem as marginal tax rates of holding the excess outside of superan­nuation could be much higher than 15%.

How does the $1.6 million transfer balance cap work?

First off, the cap of $1.6 million will be in­dexed in $100k increments, based around the increases in the CPI (inflation rate). This will mean with a 2% CPI rate; the cap will increase to $1.7 million in just over three years (2020). If you had already commenced a pen­sion prior to 1 July 2017 and the bal­ance at this date was under $1.6 million, you can commence further pensions up to the current transfer balance cap. Once you have fully utilised your trans­fer balance cap, you will be unable to take advantage of the periodic indexed increases in the transfer balance cap. Movements in the balance of your pen­sion account due to market returns and pension withdrawals are not countered towards your transfer balance cap, this means should we have another GFC type fall in markets, members will be unable to use this as an opportunity to add further funds to their tax-free pension account. If you take lump sum payments or roll your pension back to accumulation (commute all or part of your pension), your transfer balance cap will be reduced accordingly.

 I receive my pension via a defined pension scheme:

If you receive your pension via a defined benefit fund, you will also be caught up with the transfer balance cap. To calcu­late this, you simply multiply your an­nual defined benefit pension income by 16 to work out the capital value as­signed against your transfer balance cap. The tax rates that apply are determined by whether the defined benefit fund is an un­funded (untaxed) or a funded (taxed) ben­efit scheme. In all cases, if you are close to your transfer balance cap and nearing re­tirement, you will need professional assis­tance in modelling the different outcomes and determining what actions are needed. The ATO in October came out and advised they have seen an increase in a strategy of using reserve accounts in SMSF’s as a way to circumvent the $1.6 million transfer bal­ance cap. They have advised they will mon­itor the use of reserves in SMSFs going for­ward. If your accountant comes to you with a strategy to use such a reserve, you should be cautious and seek a second opinion. Members should at all costs, avoid being put in a position of please explain to the ATO.

One advantage of the rule changes for those with high balances.

There is one advantage of the new rules, particularly to members who held pension account balances as at 1 July 2017 above $1.6 million. The minimum pension drawdown is calculated based on your pension bal­ance each year. For those who had balanc­es well above this figure, they would have been required to move any excess above $1.6 million back to accumulation. This transfer would also see a reduction in their annual minimum pension drawdown. Let’s look use an example of a member who was over 65, held $3,500,000 in super as at 1 Jul 2017. Based on the above, the member has been able to retain $95,000 annually in superan­nuation, whilst still retaining the ability to make withdrawals from the accumulation account if needed.

Mickey Mouse becomes Mega Mouse

When Bob Iger, Walt Disney’s Chairman and CEO announced that the company would be making a significant strategic shift in August this year, few might have imagined that this shift would include making the world’s premier premium content company even bigger, but that is exactly what has happened. Embedded in Disney’s decision to launch its own Disney and ESPN branded SVOD services was a message to all other premium media content operators: Get Big or Get Out, because scale and breadth of content are set to become important comparative advantages in a world where some of the biggest corporations on the planet including Apple, Amazon and Alphabet are leveraging their global reach to enter the premium video content development market.

Iger’s announcement meant that Rupert Murdoch and 21st Century Fox were suddenly under pressure to develop their own global online content distribution strategy. Previously it might have been possible for Hulu, a joint venture between established media players, Fox, Disney, NBC and Time Warner to become the natural SVOD alternative to Netflix, given the vast amount of premium content that these companies have at their disposal. But Iger’s strategic shift called this into question, not only was Disney going it alone, but they also retained a strategic stake in Hulu, which might prevent Fox from using Hulu as their content delivery vehicle and in any event Hulu is US focussed and a competitor with global reach to take on Netflix was required. After examining their options, the Murdoch’s recognised that rather than building their own direct to consumer content delivery service, they would be better off combining their premium content with Disney to create a content company with significant scale and even better global reach.

Disney and Fox have announced that the two companies will effectively merge (excluding select assets including Fox Broadcasting, Fox News, Fox Business Network, Fox Television stations, FS1, FS2 and Big Ten Network which will be spun out into a new company) in an all scrip deal, whereby 21st Century Fox shareholders will receive 0.2745 Disney shares for each 21st Century Fox share that they own and Disney will also take on US$13.7bn of Fox Net Debt. Fox shareholders will thereby become shareholders in Disney and account for roughly 25% of Disney’s expanded shareholder base. In exchange for the issue of new shares, Disney will add 21st Century Fox’s video production businesses, including Twentieth Century Fox, Fox Searchlight and Fox 2000 which are the homes of Avatar, X-Men, Fantastic Four, The Simpsons and Modern Family as well as US cable networks including FX Networks, National Geographic and Fox Sports Regional Networks. Disney will also extend its global reach via the addition of Fox Networks Group International, Star India and Sky Plc.

The additional content from Fox’s studio’s will support Disney’s SVOD launch and the addition of Sky and Star India will complement Disney’s ESPN sports content, providing access to the key sports content in the UK (English Premier League Soccer), Germany (Bundesliga soccer) and India (Indian Premier league cricket). Disney has already signalled via the impending launch of the ESPN SVOD service that it intends to manage any transition from subscription television based sports content delivery to the online environment in a measured fashion and we would expect the addition of compelling global sports content would enhance the ESPN SVOD service over time.

In essence the deal brings two leading content creation companies together in a complementary fashion to facilitate the rollout of a global direct to consumer video offering capable of overtaking Netflix and competing with Amazon and Apple. We should expect further corporate activity as NBC, Time Warner, Discovery and even Sony and CBS will be reviewing their options for global content distribution.

By Samuel Stobart | Head of Distribution | Arnhem Investment Management 

Level 13, 56 Pitt St, Sydney NSW 2000

A Super Platform

The news of Netwealth Investment shares (NWL) surging 40% upon floating this week, they now trade on a multiple of 46 times forward earnings, highlighted the growth opportunity in a burgeoning market; that being investment and superannuation platforms. NWL holds just 1.7% of the $750bn platform market, yet investors are willing to back the company for future growth; in order to understand why you need to understand what’s happening in the industry.

What’s a platform?

Most simply, a wrap account is a means of consolidating and managing your investment or superannuation portfolio. It is a service that takes care of all the reporting, taxation, legislative and administration responsibilities associated with owning a diverse range of assets. So rather than having to complete application forms for new investments, file your dividend statements throughout the year and prepare your quarterly tax lodgments, a platform does this for you for a fee.

A chequered past….

As with most financial products or service, the platform industry has attracted negative sentiment due to policies of the major banks. Each of the major financial institutions has operated their own platform, be it MLC (NAB), AMP (North), Colonial First State (CBA), One Path (ANZ), BT (Westpac) for the last decade. However, rather than using the technology to offer the best possible service to their clients, they have used it to do the exact opposite. The large institutions saw the platform as another way to extract fees from customers whilst restricting the investments on each platform to those issued by their own funds management companies; a well publicised conflict of interest. Fortunately, however, the sector is starting to change.
Firstly, the industry is already seeing an increasing number of advisers leaving vertically integrated institutions and moving to independently owned advisory groups. These advisers are leaving because they want to be able to recommend what’s in the best interest of their clients, not what their employer allows them to recommend. As a result, the likes of BT, MLC and One Path are losing market share to the non-aligned, independent platforms like Net Wealth and Hub 24, that offer a much more diverse selection of investments and ancillary services.
Secondly, the sheer size and scale of the major platforms has been the major roadblock to improving their service and technology. You see, these platforms are used by a diverse range of financial advisers across Australia, around 18,000 who work in 750 different businesses. Therefore, even the slightest change to a platform must first be canvassed with every member of their network who will have their own objections and who use the platform in a different way. This is the reason it can take the major banks anywhere from five years to a decade to make even the smallest changes to their platforms.

Finally, fund managers and investors are tiring of the banks being the ‘gate keepers’ to their success. Many investors are probably unaware, but it can take several years for a fund manager to be admitted to one of the major platforms, as they view it as a business decision, rather than a way to improve the service to their customers.
In many cases, the costs can run into the $100,000 just to get approved for a major platform.

The Future

Thankfully for investors and advisers alike, the sector is beginning to be disrupted. We all know the strength behind Amazon and eBay has been to provide customers with the best possible service at all costs; well now the likes of Hub 24 and Netwealth are doing this in the platform market. These two companies have been around for between 5 and 10 years and whilst they only manage a small portion of the total market today, they are attracting a markedly higher proportion of platform inflows and rollovers from the majors.
The disruption is occurring for two key reasons, firstly, they are offering a much more user-friendly technology experience as well as constantly improving their delivery. And secondly, their lack of overheads and focus on technology rather than people and manual processes allows them to charge markedly lower costs than their competitors.

So why use a platform?

Platforms are the future of the financial advice and investment industry. They offer both investors and advisers substantial benefits over the status quo of physical record keeping, paper applications and day-to-day banking.

Today’s platforms are extremely flexible, they offer a broad range of benefits:

  • Single application: The bane of investors and financial advisers alike has been the time-consuming application and identification process required to open a trading account or invest in a managed fund. The use of a platform removes this burden as you only ever need to sign a single application form to open your account. Once the account is open, the provider takes care of the identification requirements for any new investments or accounts you wish to add to your portfolio. No more visiting the post office to identify yourself, or lining up in a bank branch to rollover your term deposit.
  • Greater selection of investments: In our view, one of the biggest drawbacks of being a ‘retail investor’ is that you are typically the last to know about the best investment opportunities. They are typically offered first to institutions, secondly to family office and finally to the broader market. Historically, the issue has been the lack of interest or bureaucratic processes of the major platforms in undertaking the due diligence involved to introduce these investments. We understand that the great managers tend to achieve their best performance in the early years when they are investing their own capital, yet the major platforms will simply not make them available to investors. The new platforms have reduced this lag and focus on delivering the investments that their investors demand, rather than the other way around.
  • Lower costs: As mentioned above, the likes of Hub 24 are offering markedly lower fees than their behemoth competitors and cap fees on certain balances. Further, the use of a Wrap Platform can actually decrease the cost of your tax return, particularly if you run your own SMSF. This is because all your investment transactions will be consolidated into a single, audited report, and provided to your account via an encrypted data feed. Therefore, there is no need for your accountant to then rekey this data and charge you their hourly rates to do so.
  • Outsource administration: This applies to both investors and advisers. Anyone who has owned a portfolio of direct shares and managed funds understands that the flow of dividends, tax statements, distributions, interest and the like is relentless. There is likely to be something in the mailbox every day and we’ve all heard stories of SMSF trustees going on holidays only to receive several boxes full of mail upon their return. The use of a platform outsources these administration tasks and allows you to focus on what you enjoy, or for your adviser, on finding investment opportunities and improving your overall strategy.
  • Outsource tax: For individual investors, your tax responsibilities are completely outsourced and for SMSF trustees, you are provided with a simple report to complete your PAYG or other tax requirements every year.
  • Immediate implementation: This is likely one of the greatest benefits for advisers and their clients. By adopting a platform, like Hub 24, you are able to drastically reduce the time between the provision of a recommendation and its implementation. This is because the platform technology removes the need to sign and return an application form. There is no longer the delay associated with providing the recommendation and sending application forms in the mail, then waiting for them to be reviewed and returned. Rather, the recommendations can be delivered electronically and returned via email as soon as they have been considered and approved. There is no longer any need to prepare various application or redemptions forms, request cheques or electronic payments, every transaction can occur on the same day via a platform. The result is more efficient implement, less time out of market and hopefully higher returns as a result.
  • No physical paperwork: For anyone worried about the environment, or sick of receiving either physical reports and applications, platforms are putting an end to this. As should have been the case at least five years ago, the entire investment implementation process can be delivered electronically and securely. There is no longer the risk of your portfolio reports being left in the mailbox for weeks whilst you are travelling overseas.
  • Transparency: Many financial advisers make it difficult to view your entire portfolio in one place and prefer to send annual review reports to keep their clients informed. The platforms of today offer full transparency into both on and off platform investment assets and do so in a user-friendly way; something that cannot be said for the incumbents. You can login at any time of the delay, download an easy to understand portfolio report and be confident that you are on the right track.
  • Accessible on all devices: If there is one area where the incumbents have really fallen behind, it is in the delivery of their information. Their applications are typically clunky and outdated, or incredibly difficult to navigate. This has all changes with the likes of Netwealth and Hub 24 making it easier than ever to locate any information you require

As you can see, newer platforms offer both advisers and investors substantial benefits. The primary drawback is their costs; however, these continue to be improved. In fact, the trend overseas and in the fin-tech industry is for these costs to move towards zero over time. We think this is the way of the future and that independent platforms represent the future of our industry and the key to providing tailored and proactive advice to investors rather than on spending time on administration and time-consuming paperwork.

Blockchain for Finance

Introduction to Blockchain

Blockchain is a digital technology that is part of a digital transformation of entire industries. Also known as distributed ledger technology, blockchain is posed to radically transform the way that financial institutions work with register payments. While blockchain technology is pretty technical in nature, its basic foundation offers a new world of digital trust and more efficient processes for financial institutions in the coming years.

Its growth in the coming years will be staggering: according to research firm IDC, a quarter of the companies on the Global 2000 intend to use blockchain technologies by 2021 to manage its digital trust at scale.

What is Blockchain Technology?

Blockchain, as its names implies, is a chain of information blocks that were originally used to timestamp original documents, to avoid any tampering or backdating to the documents. It’s better known today as a distributed ledger technology that records and stores transactions in a database that’s encoded and distributed. Essentially, blockchain serves as a digital ledger, managing transaction on a highly democratized field.

Blockchain became better known in 2009, when Bitcoin was created. Now, blockchain is best known as the technology powering the massive rise of cryptocurrencies Bitcoin, Ethereum, Litecoin and others. Many industries today are testing blockchains to examine digital trust and exchanges. The growth of blockchains in industries will likely surpass its current use in cryptocurrencies. Over time, it will likely become the transaction keeper of our decentralized digital age.

How does Blockchain technology work?

Blockchain technology can process a large number of transactions at low cost. This blockchain distributed ledger is used to efficiently and safely record transactions on a permanent basis. Proponents of blockchain point to its speed in capturing stock transfers, for example. Blockchain makes these transfers happen in mere seconds, compared to the week or so that stock transfers used to take to become finalized.

Because the use of blockchain doesn’t have a single entity over it, its decentralized systems distribute the entire payment history of the collective group (shared ledger) across the entire network, and it maintains itself as a whole. And that’s the incentive for the network, to maintain its transactions safely and securely.

Advantages of Blockchain in the Financial Industry

For banks and other financial institutions, this means looking at blockchain to find new efficiencies and cost savings, among other advantages:

  • Increased competition: Startups in financial circles have adopted blockchain technology like international payments and remittances much swifter than the banks. This competition is cutting into growth areas for bankers. As a result, banks are now playing catch-up to these new financial upstarts.
  • New efficiencies/cost savings: Banks have an opportunity to save money and gain new efficiencies using blockchain technology. Today’s banking industry struggles with the costs of infrastructure maintenance, government regulations and growing financial instability. Financial solutions using blockchain technology could help banks save millions of dollars, annually, per recent financial technology research.
  • Opportunity for new business models: Banks can use blockchain technologies to skirt around regulatory central banking bodies, and also to create new business models for the future.

Just as the Internet helped disrupt industries in the past 25 years, blockchain too has the capability for banks and other financial institutions to move faster, with greater efficiency for its global customers.

The Future of Blockchain

Blockchain technology will continue to grow in usage and stature across industries and businesses. Partnerships will form, and companies will collaborate. Noted Research Director Bill Fearnley of IDC’s Worldwide Blockchain Strategies recently wrote:

“Firms across all industries continue to invest in blockchain, distributed ledgers, and smart contracts to drive new revenue streams, increase efficiency, and improve financial liquidity. IDC recommends firms collaborate with customers and suppliers, actively consult with regulators, and evaluate blockchain-as-a-service options too. Firms should be actively involved in distributed ledger and smart contract pilots and proof-of-concept (PoC) projects to gain competitive advantage.” — Bill Fearnley, research director, IDC’s Worldwide Blockchain Strategies

The launch of the Internet of information was our first digital revolution in the early 1990s. Many of us grew up with this life-changing technology. Now, blockchain brings to our world the 2nd major digital revolution, what the Blockchain Research Institute calls the “Internet of Value”. Over time, we will see if it lives up to its promise to act as a decentralized platform to help create value in digital relationships, and transform the old ways for the better.

Seeing Through the Acronyms

As financial advisers, one of our most important roles is to filter through the vast amounts of investment information and attempt to make prudent recommendations for our clients. This role seemingly gets more difficult by the day. We have seen an explosion in the amount of content available from stock brokers, fund managers and investment advisers, not to mention the investment conferences and luncheons (yes there is such thing as a free lunch). Unfortunately, there hasn’t been a requisite explosion in the quality of the information made available to investors; hence why we believe the Unconventional Wisdom Journal can play a role in the financial markets in Australia.

As part of the daily filtering through solicited and unsolicited investment emails, I’ve noticed an emerging trend in Australia; that is the huge growth in Listed Investment Companies, or LICs. It seems there is a new LIC, or something similar, being made available to investors on a weekly basis. A single google search confirmed my suspicions, with independent research house Morningstar indicating that the number of LICS had grown from 68 in 2014 to 98 today; that’s 58% in just three years. Whilst this growth is a long way off the adoption of exchange traded funds (which we covered in issue X) in recent years, we thought it warranted further analysis.

In this article, we seek to provide some insight into how LICs differ from similar alternatives like Listed Investment Trusts (LIT’s) and managed funds, and why they have grown so strongly in the last few years. Finally, we identify a few LIC’s that we believe could fit well into an Australian equity focused SMSF portfolio.

What is an LIC?

An LIC is exactly as the name suggests; a listed investment company. An LIC is the same as BHP Billiton Ltd, it’s shares are listed on the ASX and can be bought and sold through any share trading account. The key difference between an LIC and BHP Billiton is that an LIC invests solely into shares in other companies, whereas BHP typically buys mines, exploration permits or property. An LIC does this by ‘employing’ a fund manager like Platinum or Magellan, to manage the underlying portfolio of assets.

The structure of an LIC means that investors are issued or own shares which entitle them to a share of future profits of the company, in the form of dividends. As a company, all income and capital gains realised on the underlying investments are taxed at the company tax rate of 30% and the company receives franking credits in return. This is an important difference between LIC’s and LIT’s, with the latter operating under a unit or family trust-type structure, meaning that all income must distributed directly to shareholders at the end of each financial year.
LIC’s and LIT’s have one important trait in common, that being both structures are closed end funds. This means that the LIC or LIT does not issue new shares or units in order to welcome new investors, like a managed or exchange trade fund would. Rather, the number of shares on issue are finite, as is the amount of capital invested, and shares must be obtained from another holder rather via an application form.

What are the benefits of LICs?

The closed end nature of an LIC is incredibly useful for fund managers for several reasons. Firstly, it provides the fund manager with captive capital and allows them to focus on what they do best; investing. This is because they no longer need to be concerned about having enough cash to pay out redemptions, or investing the proceeds from new applications into their existing portfolio. The market assumes this role, as if an investor requires cash, they simply sell a portion of their shares on the ASX, which has no impact on the underlying assets themselves. This avoids the situation where the underlying assets must to be sold to fund redemptions, which typically occurs at the most inopportune times; i.e. once the market has already fallen. Why is this beneficial? The best active investment managers tend to outperform the index in falling or more volatile markets. Typically, the exact same time that investors want to sell out. These benefits make LIC’s well suited to investing into more volatile or less liquid investments, like smaller companies. The second reason for the increasing popularity of LICs, is because of their lower cost structure. As an LIC, the fund manager does not need to concern itself with managing the unit register, identifying investors or netting off new units against redemptions. These tasks are outsourced to the major share registry companies, like Computershare or Link Market Service, saving substantial employment costs.

Another major benefit of the LIC structure, is the ability to retain earnings and smooth dividends over a period of time. Because an LIC is a taxable entity in of itself, it is able to set its own dividend payout ratio and even retain previous year’s profits for distribution in future years. This allows management to spread their dividend payments over a number of years, rather than simply paying everything out every 12 months, and provide a more sustainable dividend stream. In fact, this benefit means a non-yielding investment like gold bullion could be turned into a yield play if held via an LIC; as small portions could be realised each year to fund a dividend.

What are the drawbacks?

It isn’t all positives for the LIC structure. As it is its own tax entity, all income and gains will be taxed at 30% each year, rather than at your own marginal tax rate which could be 0% if you are in the pension phase. The listed nature of an LIC means it’s share price can differ greatly from the underlying value of the assets it owns as can any other ASX listed company. The difference with LIC’s being that investors can actually see the value of the underlying portfolio and compare it to the share price on a daily basis. This means that LICs can trade at both a premium and a discount to the value of their underlying assets. A premium means the investor is paying more than the value of the underlying assets and hopes strong performances continue and a discount means the company would be worth more if the entire portfolio was sold and capital returned to shareholders. One important factor to watch out for, which is the same for managed funds, is that many LIC’s tend to be index huggers. That means the fund managers charge actively managed fees to provide a passively managed portfolio.
There is a common misconception that the largest LIC’s on the market provide investors with substantial diversification and are a suitable set-and-forget strategy for anyone; we aren’t so sure. Australian Foundation (AFI) for instance, holds close to 40% of its portfolio in the Australian banking sector and its tax position is such that it has substantial difficult in ever reducing its holding to access more attractive opportunities.

Three Unconventional Opportunities

We understand that most Australian investors have portfolios that are heavily biased towards Australian equities, in particular the 50 largest companies on the market. For this reason, we take the opportunity to identify three unconventional LIC’s that can provide some diversification to your portfolio:

  1. Acorn Capital Investment Fund (ACQ): ACQ is an LIC that invests in a diverse range of Emerging Australian companies (outside the top 250). The managers can invest in both listed and unlisted businesses which provides the potential for substantial long-term growth. ACQ provides diversification away from the banking and resources heavy large cap sector and an exposure to the more innovate and growth oriented businesses seeking capital. It currently trades at a 10% discount to its underlying assets and investment platform provider Hub 24 and unlisted car part manufacturer among its largest holdings.

2. Antipodes Global Investment Company (APL): Antipodes was voted fund manager of the year in 2017 after producing generating 21.6% in its flagship global fund over the last 12 months. APL follows the same investment strategy which is focused on identifying undervalued companies exposed to emerging themes occurring all over the world. APL provides excellent global diversification, with around 42% invested across Asia, 22% in Europe and just 1% in Australia. APL trades at a slight premium to its underlying assets, reflecting the strong track record of the manager and the portfolio includes names like Chinese giant Baidu, Hyundai and Microsoft.

3. Bluesky Alternatives Access Fund (BAF): BAF provides a diversified exposure to unlisted, non-correlated and so-called ‘alternative’ assets. For investors seeking alternatives outside of listed markets or wanting to replicate the successful approach of the Future Fund, BAF is the only listed option. BAF’s portfolio is spread across private equity, water rights, student and aged accommodation properties, venture capital and agricultural assets, providing exposure to returns not generally available to SMSF investors. BAF currently trades at a 10% premium to its NTA.

5 Apps to Simplify Retirement

We understand that readers don’t always have time to keep up with the latest mobile apps, so we have taken the opportunity to identify a few that retirees may find useful in navigating their way through retirement. These span everything from cooking to saving and most importantly your health.

ASICS’s Money Smart

ASIC has a comprehensive website for financial literature, including the provision of some mobile applications. Track my Goals is one that stood out, it is flexible and can be used by family members and friends ur personal goals on the go in an easy to use manner. More specifically it allows you to set, plan, track and manage multiple savings goals and visualise your progress towards achieving those goals. The science behind it is creating good habits, which it promotes by allowing one to create multiple and realistic savings goals. The app encourages prioritising one’s goals to ensure they can be achieved and provides positive encouragement by tracking your progress. Some examples of its use include tracking your saving for a holiday, wedding, car, house, renovation, school fees or anything else which you have on the horizon. Retirement can be a difficult time as we switch from saving our entire lives to then relying on an accumulated pot of capital to fund every expense. Setting goals and discussing your savings habits can be key to making this transition easier. We think the app ties in well with financial and non-financial aspirations, available for free download via the Apple App Store and Android Google Store.

Australian Tax Office (ATO)

The ATO has bolstered their roll out of technology as they recognise the challenges and needs for individuals managing their tax affairs. They have recognised you no longer need a computer to manage your affairs and more people prefer to do this on the go. The ATO app makes it easy to manage your tax and super. Also, it has some expense recording capability which can come in handy for sole traders. You also have the ability for the app to personalise your deductions to ensure it works for you. You can even do tasks like locate an ABN.
For retirees it allows them to keep up to date with the latest news regarding superannuation and tax requirements in Australia whilst making it easier to conduct tax and super affairs on the go. The app is free and compatible with iPhone, iPad, iPod touch and Android devices.


It can be a challenge keeping track of medicines at the best of times, what to take and when to take it. Thankfully there is an app which acts as a tool to assist with managing medications. The app is simple to use and visually constructed, which simplifies the whole process. It breaks up your medicines into periods of the day, so you know what to take and in what order. Once the app knows your requirements, it allows you to set reminders, so you don’t forget to take that essential medicine. Even better, when you visit your doctor or medical professional, you can create a status report for them which they can easily view and file if necessary. No more pill boxes, Medisafe allows you to stick to your medication regimen easily. This app is a free download from Apple iTunes store for iPhone/iPad and Google Play for Android.


Gone are the days of having to get out a note pad and pen to manually record what you spent for the month. Technology has caught up, in the form of an app called Pocketbook, an Australian app created for the Aussie market. It makes personal finance simple. No more spreadsheets or manually tracking spending. This app will take a feed from your credit card and bank account, automatically categorising every transaction. Any it is unsure of, it will ask you the first time and then it is automatic thereafter. The app also reminds you when bills are due or upcoming, with alerts on your device. The benefits of having an app like this, are it allows you to understand what cashflow and expenses you are incurring and thereby means you can ensure the right amount of cash is available. It means you can maximise the amount which is invested, such as retaining money in super given its tax efficiency. It also allows you to manage your investment portfolio, by allocating the right amount to liquid assets and allowing you to avoid those sleepless nights. The app is a free download on Apple iTunes store for iPhone/iPad and Google Play for Android.

Cook – The World’s Cook Book

Whilst the younger generation are spending their income on smashed avocado at the local café, we can’t all splurge on eating out. We thought we’d highlight one of Australia’s top cooking app’s, available for free download only on Apple iTunes for iPad. The app has been downloaded nearly a million times since launch in 2013 and a top-rated app around the world. So, what is it? It’s not always easy to store a multitude of cook book’s when you are winding down in retirement and out and about on the go. Cook is essentially scrapbook for you to store and use all the tasty cooking recipes you can fund. Cook doesn’t just let you store the recipes like other offerings, it lets you share and compare them with friends, creating a more engaging experience. You can now brag to your family and friends that you have the best butter chicken recipe of the lot. Or maybe a special take on the infamous avocado on toast, to lure in your grandchildren and let them put their hard-earned dollars to savings for the house they could own. Your family recipes won’t get lost, remaining in the family for generations to come.