Hern Financial Services

Please note that our offices will be closed during this Festive Season as of midday Friday 23 December and will reopen for business as usual as of 9:00am Monday 9 January, 2012.  We will be regularly checking for any urgent messages during this time and will endeavour to get back to you as soon as possible. We wish all our dear clients and friends a very happy and safe Christmas and start to 2012.

We had a great session this morning at our Learn about Xero Breakfast.  Attendees got to learn about how Xero can help their business save valuable time with a live demonstration of what Xero can offer.  Here are some comments from today's session:
		"It broadened my knowledge of Xero as I had only seen basic information on the product" "I now understand how Xero works and could benefit business.  The demo was excellent!"
		"It was helpful for gaining extra insight into the system I am already using" "It gave an overall understanding on how the product works and who could benefit from it" "We are considering Xero for our business"
If you are interesting in learning about Xero we have afternoon sessions in October and November - click here to find out more.

You may have read about events in the Australian and global financial markets over the past few weeks. The recent headlines have told about the dramatic swings in the US and other share markets around the world. It’s important to put these developments in the context of your longer-term financial plan, so we have an update with some questions and answers to help you understand what’s causing this volatility.

A number of factors have contributed to this extreme volatility, including political events, natural disasters, the US debt debate and concerns over the problems in Europe. On the upside, Australia does not have a huge government debt. Relative to other parts of the world, Australian banks are also quite financially strong. However, please bear in mind that markets will continue to go up and down for a while due to ongoing uncertainties in political and economic environments across the world.

At times like these it’s really important to stay calm and remember some of the fundamental principles of investing, such as making sure you have a diversified portfolio, and investing for the long term. By taking a long-term approach to investing, you give your investments time to recover from the downswings that are a natural part of any investment cycle.

We are here to help you manage risk and look at your long-term financial strategy. This is the best way to build and preserve wealth, so please don’t hesitate to contact us on 08 8373 1702 to discuss your situation and to clarify any questions you may have.

Investor FAQs on Market Volatility

This outlines key questions and answers to give you a greater insight into the current market conditions being experienced locally and abroad.

Q:        What’s happened in the markets?

A:        We’ve seen a lot of volatility in financial markets in recent weeks because of a number of factors:

·         The speed of global economic recovery has been sluggish.

·         Global policymakers in the US and Europe have been slow to make decisions to restore confidence in their markets.

·         Concerns about the ongoing debt situation in Europe.

·         The US government has been slow to increase the debt ceiling, and the ratings agency Standard & Poor’s downgraded the credit rating of the US last weekend.

·         The extreme swings of the past few days in global share markets were a result of all these factors building up, not just one single event.

Q:        What does this mean for Australia and Global investments?

A:        Global investments, mostly shares, have fallen sharply as investor confidence continues to fall. Until there is some level of certainty in the markets, shares will continue to be volatile. This uncertainty will also flow into other parts of the economy, affecting consumer confidence, housing prices and jobs growth.

The Australian share market is not immune to these macro (global) issues and is expected to be volatile in the short term as we react to US and European markets rather than stock specific issues.

However the Australian market is somewhat more insulated from the global issues because:

·         Our market is more reliant on emerging markets, which are less affected by current global market falls.

·         The large amount of investment in the resources sector is likely to continue, providing a solid base for earnings for next year for many companies.

Q:        How is this different to what happened with the GFC?

A:         The Global Financial Crisis (GFC) in 2008/2009 resulted in a global recession that was driven by a liquidity crisis across a significant number of global financial institutions. The situation of the past weeks is partially due to how investors are feeling rather than directly related to problems in the financial system or the economy. Panic amongst investors can cause extreme levels of market movements, such as has happened in the US and Australia over the past weeks.

Q:        Will this volatility continue?

A:         We expect that financial market volatility could continue for some time due to the general lack of confidence among investors, combined with worries about the health of the global economy. But Australia is in a relatively strong financial position compared to the rest of the world. We have:

·            Low levels of debt

·            A stable employment market

·            A strong regulatory and governance framework

·            Sound financial institutions

Some other positives for Australia are:

·            Australia doesn’t have a huge government debt burden compared to the US.

·            Australia is also able to use monetary policy to cut interest rates if necessary.

·            Stock market fundamentals for the market are still strong.

Q:        What strategy should I take?

A:         Keeping calm is key
Talk to your financial planner if you’re concerned about whether your investments are still appropriate to meet both your short-term and long-term investment and lifestyle goals. And remember, you will realise a loss only if you sell now.

Focus on your long-term investment horizon
Despite global downturns in markets over the past 100 years, history shows that if you had invested for any 10-year period over the last 50 years, you’d always have made a profit – on average, of around 12% per year[1].

Financial market volatility is not a new phenomenon
 It’s important for investors – especially during times like this – to take a deep breath, step back and look at where the value is. Markets move up and down but there is value represented in the marketplace currently.

Australian companies are still paying high dividends to investors. Income investors should focus on this. History says there will always be a bounce back. And, the long-term direction of the share market has always been up.

[1]Source: Shares index is ASX Accumulation Index-All Ordinaries to April 2000 and S&P/ASX 300 Index thereafter. ‘Year’ is calculated on a calendar year with annualised returns (capital growth and income reinvested). 12.7% is the average of the 10 year rolling compound returns between 1961 and 2010. Consider your personal objectives, financial situation and needs before acting on this information. Past returns are no guarantee of future performance.

Q:        What should I do next?

A:         If you have any further questions or concerns please speak to Brian or Matthew on 08 8373 1702

Important Information:Information is current as at 10 August 2011. BT Portfolio Services Ltd ABN 73 095 055 208 (BTPS) operates Wrap and administers SuperWrap.  BT Funds Management Limited ABN 63 002 916 458 is the trustee and issuer of SuperWrap. This information has been prepared without taking account of your objectives, financial situation or needs. Because of this you should, before acting on this information, consider its appropriateness, having regard to your objectives, financial situation and needs. Past returns are no guarantee of future performance.  All forecasts and estimates are based on certain assumptions which may change. If those assumptions change, our forecasts and estimates may also change. ©2010 BT Funds Management Limited ABN 63 002 916 458.

General Advice Warning: Please note that the advice provided is general advice only as, in preparing it, we did not take into account your investment objectives, financial situation or particular needs.  Before making an investment decision on the basis of this advice, you should consider how the appropriate advice is to your particular investment needs and objectives. Hern Financial Services is an Authorised Representative of Count. ‘Count’ is the trading name of Count Financial Limited, ABN 19 001 974 625. AFS Licence Number 227232. Principal Member of the Financial Planning Association of Australia Limited. Please note that any taxation and accounting services are not endorsed nor the responsibility of Count Financial Limited.

 

8th July 2011 - Hern Financial Services Feature In-Business Online

Hern Financial Services was proud to feature in the 8th July online edition of In-Business Magazine.  Please click here to read more about Hern Financial Services and our place in the finals of the South Australian Telstra Business Awards.

24th June 2011 - Telstra Business Awards Finalists

Hern Financial Services is very honoured to be named one the SA finalists in the 2011 Telstra Business Awards. We are finalists in the MYOB Small Business Award and the winners will be announced on the 22nd July.

To read more about the awards please click here to read an article from The Advertiser published on 24th June. Also clients and supporters are encouraged to send their messages of congratulations to the finalists which will be displayed at the Gala Dinner on the 22nd July. If you would like to submit a message of support, please click here to the Support Your Finalist page. Thank you to all our clients who support us.  Without your loyal support and referrals we would not be where we are today - thank you.

18th June 2011 - It's a Girl!

Congratulations to Maria and Rob on the safe arrival of Kaylee Rose! Kaylee was born at 6.45pm, Saturday 18th June, weighing 6Lb. Mum and baby are doing well! We look forward to many visits to the Hern Financial Services Office!

9th June 2011- Young Business Leaders Breakfast - CEO Roundtable

	We had a great morning with John Lynch, CEO of the Royal Flying Doctors Service.  John spoke about how to he leads his team, how he moved up in his career and how to create a great culture in your business.  His witty and interesting stories left us motivated and inspired. If you would like to attend our next Young Business Leaders Breakfast click on our Facebook page or Upcoming Events to RSVP.
Here is what some attendees from the breakfast thought of the session: 'It's fantastic to hear from someone who has started at the bottom and moved to the top!' 'Interesting to hear how someone else has worked through his life, how he balanced everything and what he views as important within the organisation.'

12 May 2011 - Walkerville Volunteer of the Year Lunch

Brian was very humbled to be nominated for the Walkerville Council “Volunteer of the Year” in May.  Brian was one of the 4 finalists to be honoured at the Volunteers lunch.  He was nominated for his involvement in the Walkerville community, his work with Brougham Place Uniting Church and providing pro-bono accounting and auditing services to Walkerville community groups.  Congratulations Brian!

May 2011 - Self Managed Super Month

May was Self Managed Super Fund Month at Hern Financial Services.  We had a great response to the 2 Information Sessions held. Session 1 was presented by Neil Sparks, a specialist in Self Managed Super Funds and a member of SPAA (Self managed Super Fund Professionals' Association of Australia).  He spoke about the SMSF Trustees roles and responsibilities and the legal aspects to make sure your SMSF is compliant. Session 2 was presented by Lester Jarmyn, Senior Estate Planner for AET Adelaide and licensed Financial Planner.  Lester spoke about the importance of appropriate estate planning for SMSFs. Here are some comments from people who attended the sessions:

Session 1 "Good presentation, clear explanation and relevant to my interests" " A very valuable seminar, I realise how much I don't know!" " Highlighted the complexities of SMSF and the need to be diligent and to have honest, reliable and relevant advice"

Session 2 "Excellent session, I need to review our existing wills" "The session updated my knowledge of reducing tax and estate planning for SMSF" "Was a great first introduction to estate planning"