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INSIGHTS WITH EVALESCO

What we are doing to support you during COVID-19?
by Kate Ferraro | 27 March 2020

TOPICS DISCUSSED

Investment strategy
Lending and advice support
Evalesco and COVID-19

Well, what a few weeks we have had! We trust you are doing all that you can from a health and wellbeing viewpoint. 

We are in the midst of what can only be described as a rapidly evolving situation, with the possible impact on society changing it seems on a week to week basis. The good news is that over the last week governments have realised the severity of this situation and we have seen real action by way of decisions in the areas of health, travel and border security with a view to flatten the transmission curve. From a government and central bank viewpoint, stimulus has been injected into our domestic and global economies with a view to creating confidence, liquidity and avoiding or reducing the impact of a recession. Rates fell again last week, and we also would not be surprised to see rates at zero across the developed world by the end of the financial year. That is all macro, but what is really important is that you do what you can to focus on your personal economy (and your health) at this time. 

So in terms of what we are doing as advisers, as you would expect, we have been busy (but in constructive ways). 

Advice: We have been checking in with clients to ensure they have the cash set aside to get through what will be a challenging period. For our retirees, this means having at least two years of spending in cash and term deposits, and for accumulators that means at least three months of spending in cash and strong consideration to increasing regular wealth plan contributions whilst the sales are on. 

Lending: We have been pushing back on lenders to ensure our clients are getting the best home loan rate possible and supporting some of our small business clients with what for many is very confronting. Where you can, please support small businesses in your community as many are doing it tough. Clients who are financially impacted by the coronavirus should also be aware that they can apply to their bank to defer home loan repayments for up to six months if needed. For the duration of the support period no repayments are required. However, during this time interest and charges will add to the loan balance. At the end of the support period, your required repayment amount will increase so you repay the total balance over the remaining loan term. 

Investment strategy: We continue to research and review each of the assets within the models that our clients are invested in, including some tactical shifts as a result of the volatility. At this time the Investment Committee has opted for changes that we know could provide us with a certain outcome. In the quarterly rebalance in a little over one week, we will make some changes to the ETF’s we use to track the Australian and global share markets that will see the fees paid for the same strategy reduced by over 40%. We have reviewed our corporate credit exposure, and remain comfortable that the businesses are sound. With the recent flight to safety and fall in the value of the AUD, we are also giving consideration to having a larger portion of your international portfolio hedged. Within the portfolios themselves, over the course of the last few days, some of the managers have made decisions to sell investments in the likes of Treasury Wines, Tabcorp, ANZ and Amcor, and have purchased or topped up positions in Nick Scali, BHP, and AUB. 

In terms of our investment portfolios, through careful manager selection we have sought to reduce risk, and each quarter we have rebalanced the asset allocation and investments (where available). This has meant that our portfolios have not fallen as sharply as the overall investment markets, which can mean you recover more quickly. When the recovery does come. 

There has been a range of government announcements of economic stimulus and relief packages for both individuals and businesses. There are seemingly more announcements by the day. We are co-ordinating the information into what is relevant for various segments and we will get back to you later in the week with guidance on what may be relevant for you and how to go about accessing any benefits. 

Evalesco and COVID19: 

From this week we will have a reduced presence in the office, however, We are always available for chat via phone, ZOOM or Skype. Our office phone number will continue to be in operation. 

Our role as your financial adviser is to help you keep your head when others about you may be losing theirs and to provide some clarity to see the bigger picture. 

Your longer term goals (financial or otherwise) shouldn’t be shaped by some (likely) short term turbulence in the share market along the way and it’s important to keep that in mind. 

If you have any questions please don’t hesitate to ask, that’s why we’re here. 

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“How will I measure the value or success of receiving financial advice?”

We believe the true value of financial advice isn’t found in dollars and cents (although this is important too!) but in the peace of mind a financial plan can provide. It’s knowing where you want to go and how to get there, with a dedicated team behind you every step of the way.

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“How do I know Evalesco is the right fit for me?”

We know the impact of good holistic financial advice can make and we have the life experience, technical capability and quality support team that can make that difference for you. We’ve empowered over 1000 families through the delivery of great financial advice, to be healthy, wealthy and happy.

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“How do I know how much money I will need to retire?”

The amount of super you’ll need when you retire depends on your big costs in retirement and the lifestyle you want. The Associate of Superannuation Funds of Australia (ASFA) estimates for a single $44,224 a year and for couples $62,562 a year is how much you may need. This is only an indicator and our advisers assess everyone’s individual circumstances.

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“Why should I pay for financial advice?”

The fees we charge for financial advice is only a fraction of the value we derive for our clients, meaning our clients are always better off after seeing us. Rarely do we encounter a new client invested appropriately for their needs, with adequate risk protection, structuring and estate planning provisions in place. Even small tweaks to a financial plan over a long period of time can result in drastically better outcomes for our clients which eclipses the fees of the financial advice. Additionally, you can opt-out of an ongoing fee arrangement at any time.

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“How do you charge for your services?”

In our discovery meeting with you our advisers discuss the initial advice fee and the ongoing fees associated with our services.

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“What is the process for getting our own personal financial plan?”

After our initial phone call to discuss why you are seeking a financial adviser, we arrange a discovery meeting that outlines what is important to you, your current position, our areas of advice, our approach. We then present a Statement of Advice (SoA) to discuss your goals and our recommendations and go through the steps of how to proceed to the implementation stage. After signing the SoA, we discuss your questions, get you to sign the authority to proceed and complete any application forms before implementing the recommendations detailed in the SoA.

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“Should I pay more off my mortgage or put more money into super?”

One thing to consider is the interest rate on your home loan in comparison to the rate of return on your super fund. Before making a decision, it’s also important to weigh up your stage in life, particularly your age and your appetite for risk. Whatever strategy you choose you’ll need to regularly review your options if you’re making regular voluntary super contributions or extra mortgage repayments. As bank interest rates move and markets fluctuate, the strategy you choose today may be different from the one that is right for you in the future

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Evalesco Financial Services Level 17, 20 Bond Street Sydney NSW 2000
Phone: (02) 9232 6800

The information provided on and made available through this website does not constitute financial product advice. The information is of a general nature only and does not take into account your individual objectives, financial situation or needs. It should not be used, relied upon, or treated as a substitute for specific professional advice. We recommend that you obtain your own independent professional advice before making any decision in relation to your particular requirements or circumstances. Evalesco Financial Services do not warrant the accuracy, completeness or currency of the information provided on and made available through this website. Past performance of any product discussed on this website is not indicative of future performance. Copyright © 2019 Evalesco Financial Services. All rights reserved

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