Technical Basis – May 2008

By Matthew Esler General Manager of Strategy & Technical Services

Welcome to the first edition of Technical Basis, the new financial planning strategy and technical newsletter provided by Midwinter Financial Services to subscribers of both Midwinter’s Reasonable Basis and Back 2 Basis financial advice technology.

The volatility of the Australian and global share markets is without doubt the greatest concern for most financial advisers at the present time. Never has there been a more important time to fall back on the financial planning strategy that can be controlled by the adviser. That is, reducing investment costs, enhancing social security entitlements, minimising tax, and protecting wealth in the event of trauma, disablement, death (or some other unfortunate event).

The ALP Government have introduced their tax cuts prior to the May Budget so we thought it would be opportune time to analyse the effect of these cuts in Tax News – The effect of the ALP Government’s proposed tax cuts. Also in this edition of Technical Basis, Midwinter’s technical experts take this analysis further in the Tech Q&A – Using additional net income to make an optimal contribution to super, by showing advisers how additional net income from a tax cut or other source can be used to make an optimal super contribution using Contribution Uplift (available within both Reasonable Basis and Back 2 Basis).

This edition’s Compliance News includes a paper presented by ASIC Chairman Tony Aloisio to the FPA Conference on Wednesday 28th November 2007 which outlines what ASIC sees as the current opportunities and challenges of regulating financial advice.

Our Technical Article – Strategic Use of Contribution Splitting was written by Andrew McClelland, General Manager of Financial Planning and appeared in Money Management magazine 1 November 2007.

This edition’s Compliance Article – Ensuring a Reasonable Basis for Super Switching Advice was written by Matthew Esler, General Manager of Strategy & Technical which has appeared in IFA Education.

The Law reform section includes What’s Law & What’s Pending – two very handy summary documents keeping you abreast of the latest legislation and regulatory developments affecting all forms of financial planning and advice.

Over the coming months, Midwinter will be adding new documents to the Quick Reference Guide section – if there are specific guides you would like to appear in this section, please email your suggestions to info@midwinter.com.au. In this edition we have included Net Income Guide – from 1/7/2008 to 1/7/2010.