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August 2017


Office News

Team Update

It has been a big month for Pursuit Advisers, as you will see below we have a few new members joining the team, as well as a few role changes within the business.  

We are also pleased to announce the renovations to the office have been completed, which has primarily improved the layout of our interview rooms

 

Staff Promotion - Darren Adams - Director

On 1 July, Darren Adams was promoted to the position of director of the business. 

Darren has been with the Business & Tax team since May 2013, starting as an accountant – and more recently working in the team management role of the organisation. 

Darren has been a key driver behind our improvement in the use of  technology to improve the services we offer.

 

Role Change - Micaela Thompson

From 1 August, you will no longer see Micaela at reception – as she will now be working with our Superannuation and Financial Planning teams as a client relations executive. 

Micaela started with the business as a trainee receptionist, and during that time – has assisted every service line in the business whilst also undertaking the marketing role of our organisation.

 

Role Change - Danielle Bridger

Having worked in an internal bookkeeping capacity for the last 2 years, (in addition to working in a team administration role) – the natural change for Danielle was to focus her duties 100% in bookkeeping.  

We are pleased to advise that Danielle now offers bookkeeping services to our Pursuit Advisers client base. 

More information on the Pursuit Bookkeeping offer can be seen in the Business & Tax Update .     

 

New Staff - Anthony Terlich

In July, we welcomed Anthony Terlich to the team.     

Anthony is a CPA with over 12 years of experience in public practice. 

Anthony joins the Business & Tax team in the role of senior accountant, and while he is originally from NSW – he assures us he is a fan of Aussie rules football.

 

New Staff - Maneisha Rogers-Trickey

We also welcomed Maneisha Rogers-Trickey to the Pursuit Advisers family.  

Maneisha come's on board as our new trainee receptionist, replacing Micaela Thompson in the role.  

Maneisha is excited to take on our "front of house" position, and will continue the friendly and professional approach you have come to expect when dealing with our firm.

 

New Staff - Megan Stoll

Last, but not least – we welcome Megan Stoll to the business.  

Megan joins the Business & Tax team as a team administrator replacing Danielle Bridger in the role. 

Megan will bring some great experience to the team, having recently finished working with the Australian Securities and Investment Commission while at the same time completing her Bachelor of Business at Federation University.

 


Left to right: Maneisha, Anthony and Megan


Departing Staff Member's 

We also announce the departures of Edward Watt and Jessica White from the business.

 

 

Business & Tax

The Price MUST be Right.

One of the best lessons us advisers can remember from our Uni days was the lecture on pricing and how there is no correlation between how much business you do and how much money you make.  

Let me share this lesson with you now and hopefully it will change the way you think about pricing your products and services and how you think about using your time.

 

Consider 2 cinemas each with a 40 seat capacity and an average attendance of 25 people per night at a charge $10 per ticket.   

Cinema 1 thinks that if they can sell out the theater every night then they will make more money than Cinema 2 and therefore put them out of business. So they decrease their ticket prices to $4 per ticket.

 

This strategy does in fact bring in more business, their average attendance increases to 35 people per night and decreasing the average attendance at Cinema 2 to 15 people per night.

Now lets assume that extra income from food and drink sales are offset by extra wage and maintenance costs and focus on the earnings from ticket sales.

 

Cinema 1

Ticket Sales    35 per night
Price               $4
Earnings         $140
Per Annum     $51,100

                                                                                                                        


 

                        

Cinema 2:

Ticket Sales    15 per night
Price               $10
Earnings         $150
Per Annum     $54,750

                                                                                                                                        

 
                                                                                                                                                                                                                                           

The eventual fate of Cinema 1 is that it will fail. Despite having more than double the attendance of its competitor it is making less money.

Don't let your business suffer the same fate as Cinema 1.

 

Some simple rules on pricing that can be learnt from this example:

1.  Make your money
Ensure that your profit is taken into account when calculating your pricing. That is why you are in business!

2.  Take increased costs to account
In this example, Cinema 1 will have increased staff costs to serve the patrons as well as increased maintenance costs and other overheads. If you find yourself only looking at increased income with no increased expenses, think again.

3.  Economies of scale
Very important to remember. The reason why businesses like Bunnings, KMart and McDonalds can sell products so cheap is because they are so big that they can afford to purchase goods in such high quantities that they can negotiate lower prices and this is the reason why they can sell at low prices and still cover the overheads and make profits.

If you are quoting a job, or pricing goods that you sell, try and take as many cost and profit variables into account to ensure you maintain profitability. If it means that you lose the work, so be it.  It is better to not work and make no money than to do work at a loss.

Feel free to give one our advisers a call to discuss how this relates to your business and how we can work with you in building a more sustainable plan for the future.

 

 

Financial Planning-Insurance

Why You Need Income Protection

You can't underestimate the importance of peace of mind. It's easy to think your income is going to be a permanent fixture in your life – if you've got a stable job, why should you worry about losing your income, right?

Unfortunately, you can't predict the future. While we all feel invincible, accidents and illnesses can and will happen. 

Below is a simple list of why it's important to have Income Protection insurance.

1. Income Protection guarantees ongoing quality of life

There's nothing better than having the assurance that your finances will be covered, no matter what happens to you. Income Protection gives you this guarantee: if you suffer a serious illness or injury, you will have financial protection that will keep you afloat until you can get back to work.

2. It provides peace of mind for you and your family

It's never easy to raise a family. If you find yourself incapacitated and unable to work, a loss of income can substantially impact on your family's finances. Thanks to Income Protection, you won't have to worry, your family can rest easy that you will all be cared for, regardless of the situation.

3. It allows you to keep up with repayments

When you're seriously ill or injured, the last thing you need is to worry about debts. It can be stressful to think about how you'll cover daily expenses, let alone pay off a mortgage, a car loan or credit cards.

5. Income Protection allows you to focus on recovery and recuperation

Many people at some point in their lives will find themselves needing some rest and recuperation from a serious illness or injury. But without the right protection, they may find themselves unable to put all their effort into getting better. Having to worry about funds is always stressful, not to mention your additional concerns about when you'll be able to return to work and begin earning money again.

6. It could happen to you!

For many, the biggest hope of their lives is to be able to have the consistent income to provide for themselves and their family well into old age. Unfortunately, not all of us will be able to see that dream come true.

Every year, around 55,000 Australians suffer a heart attack and an estimated 128,000 new cases of cancer are expected to be diagnosed, with that figure rising to 150,000 by 2020.
Do you really want to be caught out?

Guarantee your children, your partner, and yourself peace of mind and get a quote with us today.

 

 

Financial Planning

After the strong overall investment returns seen over last year, some slowing is likely in the year ahead. 

Share markets are no longer universally cheap and the crowd is not as negative as a year ago. 

However, putting short-term worries and uncertainties aside, with reasonable economic and profit growth, continuing relatively easy monetary policy and some asset classes still benefiting from a chase for yield, returns from a 

well-diversified portfolio are likely to be reasonable this financial year – but more like 7% as opposed to 10%. Looking at the major asset classes:

• Cash and term deposit returns are likely to remain poor at around 2%. 

Investors are still under pressure to decide what they really want: if it's complete capital stability then stick with cash or if it's a decent stable income flow then consider the alternatives with Australian shares and real assets such as unlisted commercial property likely to continue to offer more attractive yields than bank deposits.

 

• Still ultra-low sovereign bond yields and a likely gradual rising trend in yields, which will result in capital losses, are likely to result in another year of poor returns from bonds. 

 

• Corporate debt should provide okay returns. A drift higher in sovereign bond yields is a mild drag but with continued modest global growth the risk of default should remain low. 

 

• Unlisted commercial property and infrastructure are likely to benefit from the ongoing "search for yield" (although this may slow a bit) and solid economic growth.

 

• Residential property returns are likely to be mixed with Sydney and Melbourne slowing, Perth and Darwin bottoming and other cities providing modest gains. Very low rental yields are not good, particularly in oversupplied units. 

 

• Expect a potential share market correction in the seasonally weak period out to October, but the rising trend in shares is likely to continue as shares are okay value, monetary conditions are likely to remain relatively easy 

(albeit becoming less so) and continuing reasonable economic growth should help profits. We continue to favour global shares (particularly outside the US) over Australian shares.

 

• Finally, while the $A has proved far more resilient than I expected and may push up into the low $US0.80s in the short term, the downtrend in the $A is likely to resume at some point in the next 12 months enhancing the case for unhedged global shares.

 

 

Super

Superannuation checklist: What rules apply for the 2017/2018 year?

Although the Coalition government has made significant amendments to Australia's superannuation rules, many of the super policies did not change from July 2017.

For your convenience, we have split the 2017/2018 year superannuation checklist into 2 categories of super rules. 

The first category is the super policies that remain unchanged from the previous financial year (that is, the super rules also applied for the 2016/2017 year and continue to apply in the future). 

The second category is the substantial changes that took effect from 1 July 2017.

What major super rules have not changed, and continue to apply for the 2017/2018 year?

The key elements of the superannuation system that remain the same for the 2017/2018 financial year, include:

· Superannuation Guarantee (SG) rate at 9.5%

· Super fund investment earnings taxed at 15%

· Super benefits for over-60s remain tax-free

· Super benefits for under-60s still receive concessional tax treatment

· Work test for over-65s remains in place

· Low Income Superannuation Tax Offset (formerly LISC) continues

· Co-contribution scheme remains in place

· Tax treatment of death benefits is similar, in most cases (apart from the $1.6 million transfer balance pension cap and the removal of the anti-detriment payment option)

 

Significant July 2017 changes to the super rules (applicable from 2017/2018 year)

The significant super changes that took effect from 1 July 2017 are:

· Annual concessional (before-tax) contributions cap reduced to $25,000

· Annual non-concessional (after-tax) contributions cap reduced to $100,000

· A $1.6 million total superannuation balance cap restricting non-concessional contributions, co-contributions and spouse contributions

· Increase in income threshold for spouse superannuation contributions tax offset to $37,000 (and $40,000)

· Low Income Superannuation Tax Offset replaces LISC

· Introduction of a $1.6 million transfer balance cap

· Removal of tax exemption for transition-to-retirement pensions (TRIPs)

· Tax hike for more Australians: 30% tax on concessional (before-tax) super contributions

· Preservation age now at least 57 years

· Age Pension increases to at least 65.5 years

· SMSF trustees face bigger penalties from 2017/2018 year

· Introduction of First Home Super Saver Scheme

· Removal of option to treat a pension payment as a lump sum payment, for tax purposes

 


 

 

"seen as a very important part of our organisations future. The level of service is well above what would be considered the norm"

Dale Sumner - General Manager of Lakes Entrance Fishermens Co-op & Leftrade Limited

"From the front desk to the director is outstanding, I have replies to my emails within the same day to answer any question. My Wife and I have been able to take our business to the next level"

Ben and Julie Whiteley

"Both my wife and I have great confidence in Cameron whose integrity and clear thinking about our financial affairs we greatly respect and I would whole heartedly recommend him and Pursuit Advisers to anyone seeking similar financial advice"

Malcolm & Lorraine Baxter

"They provide us with well-researched financial and business advice, take care of all our tax responsibilities and financial needs, and even check in from time to time to see how we’re going"

Jessie Ballantyne- Director of The Grants Hub

"Business has grown immensely which is a testament to his effectiveness, guidance and good common sense approach"

Robert Radford- R. Radford & Sons Pty Ltd

"They have taken the time to get to know us as a business, and go above and beyond in helping us grow."

Jessie Ballantyne - The Grants Hub

"The high standard of professional accounting services by Pursuit Advisers has been crucial in the establishment of a robust financial organisation to meet future opportunities and challenges in our business."

Bill Baker – Lyrebird Villages