financial planner

According to research, there is a strong correlation between this anxiety and low levels of financial literacy.

Improving financial literacy is a long-term societal goal by the government and the financial services industry. The question is – while we work on long-term plans to address this, what can we do in the short term?

 Self-managed superannuation

Brett Himbury, chief executive of the $35 billion Industry Funds Management (IFM) group, has expressed concern that recent criticism of the federal government's budget changes could weaken confidence in superannuation. "The industry leaders who are making comments about tinkering with the system need to assess whether their own commentary could affect confidence” Mr. Himbury said. Himbury also reinstated his opinion that "Superannuation remains a highly effective investment for all Australians, regardless of their income" .

The legislated and proposed taxation and superannuation changes from 1 July 2012 will cause financial planners to review existing strategies for low income clients. John Perri explains some of the implications.

From 1 July 2012, there are a number of legislated taxation changes, as well as proposed superannuation changes, which may impact the attractiveness of superannuation relative to other investment alternatives for low income earners (ie, those earning less than $37,000 per annum).

Despite the frequent legislative changes made to superannuation, it remains the retirement savings vehicle of choice for the majority of Australians, with a number of effective strategies that advisers can recommend to clients who are seeking to maximise their retirement savings. However, advisers need to be aware of the ongoing viability and appropriateness of these superannuation strategies and also question whether other avenues of investment for retirement savings would be more suitable for their clients’ individual circumstances and financial objectives. 

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