Latest News

Choosing your investment strategy

Investors are faced with a significant and growing challenge. Stretched government balance sheets and an ageing population will likely place a growing emphasis on retirees to “self-fund” their retirement. 

         

 

At the same time, the expectations for market returns have fallen in line with record low interest rates in Australia and elsewhere.

Official term deposit rates published by the RBA remind us that the traditional safe haven of term deposits, popular following the financial crisis given more attractive cash rates, are now offering on average just 1.5%, which may not even keep pace with inflation.

So for most of us, the requirement to take on some investment risk will be essential to achieve our long term savings goals. This is where the options can get a little complicated, so let's break it down.

There are many ways to take more risk, but let's focus on the two key actions that can easily be implemented within your portfolio – changes to asset allocation, and/or – investment strategy selection.

Changes to Asset Allocation

In its simplest form, varying your equity / bond mix can be an effective way to match your required return to your investment goals, but keep in mind that the potential for extra return does not come without taking on added risk.

Too much risk and you may not be able to stay the course through the inevitable market downturns on the journey to achieving your goal. Behavioural mistakes made along the way can cost years of investment returns, so best to match the risk of the strategy to your own tolerance, as best you can.

Strategy Selection

Within each asset class, another way to seek a higher return is through the strategies that you select for your investment portfolio.

An active investment strategy generally seeks to take positions that differ from broad cap weighted market indices, to deliver a higher return. Unlike changes to your equity / bond mix, which can increase the total risk of your portfolio, selecting an active strategy introduces what is referred to as “active risk”.

To borrow a driving analogy, if the most direct route to your destination, which may be a main arterial or freeway, is akin to a cap-weighted index, then using your local knowledge of back-roads and traffic conditions to arrive at your destination ahead of time, could be considered the active strategy equivalent.

Traditional active managers employing skill and experience to outperform is not the only way however.

Over the last few decades, other strategies have emerged which can be used to pursue outperformance. Just like more traditional forms of active management, these strategies – commonly either quantitative strategies employing sophisticated modelling techniques, or factor based strategies, seeking to harvest identified risk premia – endeavour to deliver a positive “active return” against a benchmark.

To extend the driving analogy, systematic strategies could be likened to the rise of driving algorithms, such as Google Maps, which help to get us to our destinations faster by analysing data sets of past and present driving conditions. Whether you prefer to test your own driving skill, utilise google maps or simply take the direct route, understanding the likelihood for success, and the risk you are taking if your choice doesn't work out, is critical to making an informed decision.

Active risk

When selecting an investment strategy, the promise of greater rewards will likely come with higher risk. This is referred to as “active risk”.

Active risk is typically measured in terms of the expected difference between the returns of the strategy and the returns of the underlying benchmark, which more often than not will refer to a comparable cap weighted market index. You can look for active risk indicators from the fund manager which may be disclosed as “tracking error” or “active share”.

Other indicators of active risk which can be useful when comparing across a range of different product choices include the number of securities held by the portfolio, the maximum position size in any one security, the rules listed for deviations of sector or country weights in the case of a global strategy, and past results.

The spectrum of risk

At the lower end of the spectrum, market cap index funds can be characterised by low cost, low to no active risk, and high transparency owing to the rules-based nature of market cap indices.

Systematic strategies such as factor funds can span a broad spectrum when it comes to active risk, however, most follow a set of rules which drive the weighting of securities in the portfolio, providing transparency of approach, assuming the rules are disclosed, and are typically lower cost than more traditional active strategies.

Traditional active strategies, come in many forms, from highly diversified, low active risk approaches, to very concentrated, high active risk strategies. The cost you are willing to pay should be scaled according to the level of outperformance you expect and the perceived skill of the manager.

Where you end up with your choice is highly personal, as a successful strategy is one that is structured to deliver on your investment goals. Recognise that your asset allocation choice, where you land on the growth / defensive spectrum, will be the main driver of your overall return.

Patience is critical to success, and remains an accessible edge for those who possess it, whether you are a professional investor responsible for the goals of others, or an individual investor saving for your personal goals.

(This article originally appeared in Cuffelinks)

 

Aidan Geysen
Head of Investment Strategy Group
30 September 2019
vanguardinvestments.com.au

 

Latest Articles

All Australia’s vital statistics – October 2019

A great place to keep up-to-date with the 'bigger picture'.           Please click...

Read More

Does your mind help or hinder your investment success?

Of all the decisions we make, investments ought to be the most rational. We should be able to whip off...

Read More

Four key principles that help achieve portfolio success

Buy low and sell high is the mantra of many a seasoned investor regardless of the asset class. Just stick to...

Read More

Traversing a synchronised economic slowdown

The International Monetary Fund (IMF) grabbed headlines this month on releasing its latest World Economic...

Read More

A positive pension change with a cash rate twist

Later this month around 630,000 Australians currently qualifying for a partial age pension will receive a...

Read More

Shares to remain volatile as trade war heats up

Shane Oliver - Investors should expect more sharemarket volatility over the next year as the trade war...

Read More

NALI, LRBA measures pass Parliament

The government’s further restrictions to non-arm’s length income and LRBAs have passed Parliament...

Read More

Interest rising in SMSF set-up

Interest in setting up an SMSF among those in APRA-regulated super funds is on the increase, while the...

Read More

Choosing your investment strategy

Investors are faced with a significant and growing challenge. Stretched government balance sheets and...

Read More

ATO letters indicate a wider SMSF warning

Letters sent by the ATO to nearly 18,000 SMSFs may serve as a warning to a far greater number of funds...

Read More

Australia by the numbers – September 2019

One great source of data about Australia. Become better acquainted with the country we love.  An up-to-date...

Read More

ATO opens applications for SG exemption

High-income-earning SMSF trustees with multiple employers will be able to apply from mid-October to gain...

Read More

Retirement Planning

Retiring on your own terms is not always easy to achieve, however it is evident that those who plan for retirement are more likely to do so. Results also show that obtaining professional help during the pre-retirement years further improves the probability of attaining your retirement objectives.

The earlier you start implementing a plan the better the outcomes.

During one’s working life there is always an income to make ends meet when raising children, paying off a mortgage, etc.

Retirement planning is about the lifestyle you will have after you stop work and receiving employment income.  Planning focuses on issues such as how much superannuation is enough, taking a super pension, claiming the Age Pension, making superannuation contributions while receiving a pension from a super fund, estate planning and looking after your family.

Planning properly is becoming even more important now we are expected to live longer.  This greater need means that professional help has never been more important.

At Wybenga Financial we will provide the time and expertise needed to help you implement the best pre-retirement plan possible.  Contact us today to discuss how we can work together on: 02 9300 3000 or info@wybengagroup.com.au

Building Wealth

Investing your hard earned savings can be a complex task.  There are many issues such as levels of risk, market timing, asset classes, and your own goals, objectives and preferences that need to be considered. It can often seem a daunting task. At Wybenga Financial we have the expertise to assist you in taking control of your finances and making sure you are generating the wealth you need both now and in the future.

The first step is to create a plan. At Wybenga Financial we take great care in getting to know our clients and their future goals and objectives. We combine our knowledge of your personal goals together with an analysis of your current situation, to create a detailed, personalised plan that will help you meet your objectives. This plan will become your road map which outlines how we are going to meet your goals, whilst aligning all investment decisions to your specific risk tolerance.

After we have created your personal plan, we move to implementation. This is where we action the immediate changes set out in your plan, and put in place reminders for anything that is to occur in the future. As your professional advisers, we can action many steps on your behalf making the implementation of changes as painless for our clients as possible. We aim to make the process smooth and seamless, providing a holistic service that can be executed with ease.

The final and most important phase of the relationship with Wybenga Financial is the ongoing management and monitoring of your wealth. This ensures you are sticking to your plan and that your portfolio is aligned to your needs and attitude toward risk. An ongoing relationship ensures that we know when your circumstances change and that these can be recognised and reflected in changes to your investment approach.

While we are monitoring your portfolio from the perspective of your personal goals and situation, we also take into account the wider economic landscape and changes to legislation. We continually review and analyse our preferred investments in a structured and objective way. The benefit to our clients is that we are unemotional. This can be significantly beneficial over the long term.

At Wybenga Financial we can provide the time and expertise that will help you invest intelligently and prudently.  Contact us today to discuss how we can work together:  02 9300 3000 or info@wybengagroup.com.au

Personal Insurance

Life insurance isn’t just a cost, though it often feels like it.  You buy peace-of-mind that should a serious issue effect you then the consequences won’t unduly affect your family.  Insurance provides you with the ability to manage the financial and emotional impact of some of the more drastic events, whether personally or in your small business.

Insurance can’t replace a loved one but it can help reduce the financial burden by providing the capital to ensure your family has choices.

Many Australians are underinsured and the consequences can be very serious for families should there be a death or serious injury. A yes to any of the following questions means you may have a need for insurance coverage:

  1. Do you have a mortgage?
  2. Do you have school fees?
  3. Do you have any personal loans?
  4. Do you have any credit card debt?
  5. Do you have dependents?
  6. Would your financial position be affected if you were to suffer from an illness or injury?
  7. Do you want to have enough capital to look after your dependents if you were unable to care for them for an extended period of time or perhaps indefinitely?

We understand that it can be difficult determining the type and level of cover you might need, let alone choosing an insurer. We can assist by helping you determine your needs and recommend an insurer that is right for you.

At Wybenga Financial we know how to protect your wealth and will recommend solutions that best suit your needs.  Contact us today to discuss how we can work together:  02 9300 3000 or info@wybengagroup.com.au

Superannuation

Superannuation is mandatory but taking an early and active interest in your retirement planning is critical to ensuring your benefits are maximised by the time you retire.  Many will have a superannuation scheme through employment but increasing numbers are starting their own Self-Managed Super Fund (SMSF).

For many, simply relying on employer contributions may not be enough to provide the lifestyle you desire at retirement. We can assist in building strategies to ensure your retirement goals are met and your required lifestyle is maintained throughout retirement.

It is always best to start saving and planning for your retirement as early as you can. 

At Wybenga Financial we know our job is to help you meet your retirement needs and we have the skills and experience to do this for you.  Contact us today to discuss how we can work together:  02 9300 3000 or info@wybengagroup.com.au

Self Managed Super Funds

Self-Managed Superannuation Funds (SMSFs) offer a good strategy option for many individuals, families and small business owners to build tax effective wealth and to protect assets over time. SMSFs are becoming popular for those who are ready to take control of their own super investments as they give you ultimate control and flexibility to manage your retirement benefits.

It must be noted though, that you will have increased responsibilities as a trustee of the fund. As a SMSF Trustee you need to keep up to date with all required regulations and keep up with the fast paced financial markets.

Wybenga Financial can work with you to understand your personal financial situation and decide whether a SMSF structure is appropriate for you. We will also make sure your assets are invested in the most effective way to maximise your retirement benefits.

Should you wish to consider establishing a SMSF then we can help with all aspects of the process from establishment to managing your compliance obligations.

Wybenga Financial would welcome the opportunity to discuss how we can help maximise your opportunities to grow your wealth through a Self Managed Superannuation Fund (SMSF).  Contact us today to discuss how we can work together:  02 9300 3000 or info@wybengagroup.com.au

Estate Planning

Your estate is made up of everything you own. This includes your home, property, furniture, car, personal possessions, business, investments, superannuation and bank accounts.

Having an estate plan is extremely important.  Having a will is just the first step in your estate plan. It is critical to consider what outcomes you would like for your estate and to ensure a plan is in place to achieve those outcomes, both including and beyond the terms of your will.

Wybenga Financial would welcome the opportunity to discuss how we can help ensure your estate is organised to ensure your plans are implemented as you wish.  Contact us today to discuss how we can work together:  02 9300 3000 or info@wybengagroup.com.au

Finance

Loans and loan management are central to overall financial management.  Obtaining the best loans for your needs is crucial and Wybenga Financial can help you with solutions that meet your short and long term needs.

At Wybenga Financial we work with experienced mortgage brokers that can assist you in obtaining the best loan for your needs and objectives. Whilst this is an external service, we work closely with the brokers to ensure the process is as easy and smooth as possible.

Property

We have partnerships with many respected property agents and research firms. This enables us to source suitable properties for individuals, couples and families looking to make an investment into property.

At Wybenga Financial we will provide the time and expertise needed to help you implement the best property investment plan possible.  Contact us today to discuss how we can work together:   02 9300 3000 or info@wybengagroup.com.au

Strategic Planning

Strategic planning is determining how an investor is going to meet their goals and objectives. It is about helping clients define their goals, gathering information and analysing data to make a plan, then implementing the plan and monitoring the results. It is also monitoring and updating goals and objectives as clients move through different phases of life.

At Wybenga Financial, this is the most critical service we provide. For more information please visit our Building Wealth through Strategic Planning page or contact us to discuss how we can work together:   02 9300 3000 or info@wybengagroup.com.au

Financial Videos

 

Secure File Transfer

Secure File Transfer is a facility that allows the safe and secure exchange of confidential files or documents between you and us.

Email is very convenient in our business world, there is no doubting that. However email messages and attachments can be intercepted by third parties, putting your privacy and identity at risk if used to send confidential files or documents. Secure File Transfer eliminates this risk.

Login to Secure File Transfer, or contact us if you require a username and password.

General Calculators

Please enjoy the links to these free tools supplied by MoneySmart – a great resource for general financial information. Please get in touch if you would like to discuss any questions that you may have as a result of using these calculators.

Tess Uncle

B.Sc, M.Com, CA, DipFP

Tess has over 15-years experience in Chartered Accounting Firms and in this time has had a broad range of experience in superannuation, taxation, business services, and financial strategy.

Over the last two-years, Tess has turned her attention to Financial Planning, earning a Diploma of Financial Planning in 2015 and leading the newly established financial division of the Wybenga Group as a director of Wybenga Financial.

Tess’s mission is to bring the ethics and integrity of her Chartered Accounting background to the area of wealth management.

As a woman in a male dominated field, Tess is active in promoting gender equality in the industry through various programs and mentoring opportunities.

Using her depth of knowledge and experience in tax and accounting Tess is able to demonstrate a level of competence that is unique in the Financial Planning sector.

  • 2001 – Commenced employment with Wybenga & Partners and part-time accountancy studies
  • 2004 – Graduated Masters of Commerce from the University of New South Wales
  • 2005 – Admitted as an Associate Member of the Institute of Chartered Accountants Australia
  • 2007 – Promoted to Manager at Wybenga & Partners
  • 2012 – Appointed as Associate Director
  • 2015 – Awarded a Diploma of Financial Planning
  • 2016 – Appointed as Partner of Wybenga Group and Director of Wybenga Financial

Adam Roberts

B.Bus, B.Sc, CA, DipFP

Adam has over 13-years experience in Chartered Accounting Firms and in this time has had a broad range of experience in superannuation, taxation, business services, and financial strategy.

Over the last two-years, Adam has turned his attention to Financial Planning, earning a Diploma of Financial Planning in 2015 and leading the newly established financial division of the Wybenga Group as a director of Wybenga Financial.

Adam’s mission is to bring the ethics and integrity of his Chartered Accounting background to the area of wealth management.

Combining traditional accounting and financial services has been a welcome move for Adam, allowing him to operate and advise in the financial sector that has been a long time personal passion.

Using his depth of knowledge and experience in tax and accounting Adam is able to demonstrate a level of competence that is unique in the Financial Planning sector.

  • 2005 – Graduated Bachelor of Science from the University of Western Sydney
  • 2005 – Commenced employment with Wybenga & Partners and part-time accountancy studies
  • 2007 – Graduated Bachelor of Business from the University of Western Sydney
  • 2010 – Admitted as an Associate Member of the Institute of Chartered Accountants Australia
  • 2010 – Promoted to Manager at Wybenga & Partners
  • 2012 – Appointed as Associate Director
  • 2015 – Awarded a Diploma of Financial Planning
  • 2016 – Appointed as Partner of Wybenga Group and Director of Wybenga Financial

Advisory Cadetships

What is an Advisory Cadetship?
An Advisory Cadetship enables you to commence your career whilst attaining the necessary university qualifications by studying part-time.

How does it work?
Generally, our cadets complete a relevant business or accounting degree at the University of New South Wales, the University of Technology Sydney, Macquarie University, or the University of Western Sydney.

The Firm provides 3-hours paid study leave per week to attend university. This can either be taken at the one time or broken between days depending on the individual’s requirements. In addition, the Firm provides paid study leave for both mid-semester and end-of-year exams.

We take the work life balance very seriously at Wybenga Financial and our cadets are encouraged to have a fulfilling life outside the office. A typical day will have you arriving at the office at around 8.30am with most days concluding at 5.30pm.

What are the benefits of an Advisory Cadetship with Wybenga Financial?
Our cadets benefit from the following:

  • Career path – on completion of their degree our cadets have significant practical experience which will assist them in advancing their careers
  • Work helps your studies – by working full-time our cadets are able to apply their practical knowledge in the university subjects
  • Camaraderie with other cadets – the Firm has a number of cadets at various stages of their career
  • Mentoring – cadets are paired with a senior staff member who oversees their progress and training both at work and with their studies
  • Communication and feedback – the Firm has an open door policy which enables all cadets to interact with all members of staff including Directors
  • Culture – the Firm promotes a friendly social culture with a number of functions throughout the year
  • Modern environment – including ‘socialising’ areas such as pool table and break out area
  • Training – ongoing support and technical training. We also provide internal and external training on a monthly basis
  • Remuneration – working full-time provides a market salary and independence with salaries being reviewed every 6-months

What happens when I complete my degree?
The completion of your degree is the first step of what we hope to be a long and successful career with us. The next step is the commencement of a Diploma of Financial Planning followed by completing the requirements to become a Certified Financial Planner (CFP).

There are always progression opportunities for the right cadets and we are dedicated to the long term development of our staff.

Who should apply?
Current Year 12 students or first/second year University Students who:

  • want to commence their career in financial advisory;
  • are due to commence or are currently completing a part-time business or commerce degree at university with an advisory major;
  • want to gain valuable hands-on experience while completing their qualifications;
  • are looking for a friendly working environment;
  • are team players who display initiative;
  • have a commitment to self-development;
  • possess excellent personal presentation and communication skills; and
  • are motivated and mature minded.

How do I apply for an Advisory Cadetship?
To apply for a Cadetship position at Wybenga Financial send us your details. Please also include in your covering letter why you wish to do a cadetship, include relevant qualities you possess, main interests / achievements, and any previous employment.

Interested candidates should initially forward a resume/covering letter of no more than 3-pages. Please provide full details of contact information (telephone or e-mail).

What if I have more questions?
For further information about our Cadetship program, please send your enquiry to info@wybengagroup.com.au