For most people the superannuation environment provides only part of their retirement solution, particularly when you consider the average timeframe an individual spends in retirement is over 20 years. That’s 20 years without a salary when you are effectively permanently on holiday. Therefore further investing for many is a must. Australians typically will utilise a combination of three investment vehicles being Managed Funds, Direct Shares or Direct Property. The aim of our investment portfolios is to meet our clients’ needs and objectives. As we appreciate that no two investors are the same, when recommending a client an investment portfolio we consider a range of factors including the following:
  • need for capital preservation over the short, medium and long term i.e. client’s risk tolerance
  • bias towards a specific asset class e.g. property, shares
  • projected pre-tax return of the portfolio
  • tax situation with the view of maximising after-tax investment returns
  • liquidity needs
  • need for income

Managed Funds

Managed funds work very much as the name suggests. Your money joins a pool with other individual investors and the combined capital is invested through a professional fund manager, in some cases being applied across a range of asset classes such as shares, bonds, property, and infrastructure assets. Managed funds are popular with investors as they make it easy to invest. One transaction can provide access to a range of underlying investments and to diversify your investment across different asset classes and market sectors. They also provide access to investments that may otherwise be out of reach. When you invest in a managed fund, you are allocated a number of shares or units in the fund. Each share or unit represents an equal portion of the fund’s value. You may receive regular payments – called dividends or distributions – from the fund, based on the profit or income it receives from the underlying investments.
  • Ease of diversification
  • Professional management
  • Access to a wide range of investments
  • Security and disclosure
  • Investment fees
  • Transparency of the fund
  • Track record of the fund manager (not the fund itself)
  • Internal gearing
  • Client risk profile
  • Structure of the investment

Direct Shares

Direct investment in shares involves the ownership of shares by private individuals, buying or selling through brokers, and not via holdings in unit trusts. Direct share investments are most suited to those who are prepared to follow the markets and play an active role in the process of buying and selling through multiple ongoing transactions. Investors in this space are generally looking to take greater control of their investment decisions or through a close relationship with a share broker. You can benefit from investing in shares from:
  • dividends
  • capital growth (through increases in the share price).
  The average return yielded by shares is normally higher than cash investments and fixed income assets and some shares may also offer tax benefits in the form of franking credits. The share market, however, is volatile and may be influenced by various factors such as company financials, the economic environment and government policies. That’s why, when investing in shares, it’s important to seek professional advice.

Direct property

Australians have long held a love of property. It has formed part of the lifestyle dream since European occupation and continues to be a strong driver of investment decisions today. Almost any homeowner who has held a property over the medium to long term has seen significant capital growth so it is only natural that investors wish to reciprocate this experience. Though real estate can be a great investment, it is far from simple with many factors to be considered in making the right decision. Complicating matters are the many self- proclaimed experts touting their wares across the country. It is important to understand that, as property is not considered a financial product, anybody can claim to be an expert. Here are a few things to consider when deciding on your investment property:
  • Are the key growth drivers in place (public infrastructure spending, private and commercial investment, transport networks, schools, jobs growth, population increases)?
  • Is there a restriction on supply forcing up property prices?
  • Are there multiple employment opportunities or is the location reliant on a single industry to sustain it?
  • Is the property affordable ( what is it going to cost you out of pocket to sustain ownership)?
  • Is your job secure and are you protecting your income?
  • Would changes in mortgage interest rates or rental returns impact on your ability to hold the property?
  • What are the tax implications for the property?
  • Is there strong rental demand?
  • Have you accounted for all the ongoing expenses?
  • Commercial, apartment, townhouse or house and land?
  • Who will likely be buying it from you in years to come?
  • Age of the property?
With so many things to consider, our team at Finpro Group includes licensed property experts with decades of experience in all major Australian markets. They can assist in analysing the viability of the property you are considering buying, advise on the most effective lending structures, and assist in selecting properties which will most likely achieve the results you are looking for. *As Direct Property is not a financial product, this service is not offered under Ballast Financial Management’s AFSL. However Finpro Group have access to vastly experienced licenced buyers agents. Any advice regarding Direct Property will be provided separately.