Along with this raft of legislative change, the Australian Securities and Investments Commission (ASIC) has also introduced new licensing requirements for accountants who work with and advise Self Managed Superannuation Fund (SMSF) Trustees. Only approx. 10% of accountants have complied with these changes to date.
As such if you, as many, consider your accountant would be your 1st port of call for Financial Advice, they will likely advise you, they are unable to provide the information you require & should consult a qualified Financial Adviser / Planner.
This is general advice only and you should seek expert financial advice from a qualified financial adviser before acting on any of the information covered in these topics.
If it looks too good to be true it probably is
The Australian Government guarantees deposits up to $250,000 per account holder, per authorised deposit taking institution. Currently rates on term deposits are on average below 1%. So be careful in your search for higher yield. If it looks to good to be true, it nearly always is.
The main questions to ask yourself when you see interest rate investment opportunities significantly above the above the risk free rate available on cash and term deposits is:
- what is the credit or market risk applying to the investments that could result in partial or permanent loss of capital; and
- what is the liquidity risk applying to the investment. That is what event could occur that could prevent you accessing the underlying asset?
Bottom line is there are many investment options that look more attractive than 1% but this must be weighed up against the chances of you losing money.
“The best time to plant a tree was 20 years ago. The second best time is now.” – Chinese proverb.
