Investors should revisit and refresh their financial goals in time for the start of the new financial year, according to AMP Capital.
AMP Capital’s End of Financial Year (EOFY) investment checklist ensures customers are in optimum financial shape for the year ahead. While tax is often the focus for individuals in the lead up to 30 June, the period is a timely reminder to look at other investments including superannuation.
AMP Capital Director, Australia and New Zealand, Craig Keary said: “In light of a complex tax and superannuation environment, now is an important time for investors to examine their investments to ensure they continue to align with their goals.
“Touching base with a financial adviser, reviewing asset allocation and investing in your financial education are all things individuals can do to stay abreast of their investments, how they’re performing and ultimately whether their financial goals are being met.
“The end of the financial year is a great time to do this given many people are already using the period to address their finances from a tax perspective.”
AMP Capital’s EOFY checklist is as follows:
1. Review your investment goals: Recent market volatility has made it more important to review your investments and ensure they are still delivering against your lifestyle and retirement objectives while being mindful that long-term – not short-term – performance needs to be the focus.
2. Review your asset allocation: The impact of market volatility also means it’s important to look at asset allocation and assess whether your portfolio could benefit from exposure to asset classes you may not have traditionally considered such as infrastructure. More broadly, your annual asset allocation review needs to be considered in the context of your goals. Do you have enough exposure to growth assets such as equities if growth is your objective? If income is important but it has dipped in a low interest rate environment, should you consider moving out of cash into other asset classes such as property or infrastructure or allocating to a better-performing incomefocused product?
3. Make an appointment to see a financial adviser: A lot can happen in 12 months so if it’s been a year (or longer!) since you’ve seen a financial adviser, consider making an appointment to talk about your goals and any change in your personal situation. A financial adviser can also provide guidance on asset allocation and help you assess your investments in line with your overall objectives. In addition, they can advise on any recent changes to superannuation or tax legislation that may affect you.
4. Make full use of your concessional contribution limits: If you are able to make salary sacrifice contributions, or if you are eligible to claim a tax deduction for your superannuation contributions, you can reduce your personal income tax by making full use of your concessional contribution cap.
5. Check the tax effectiveness of your investments: Australian shares and direct property may be suitable investments for you if you’re concerned you’re paying too much tax on your investments. You may be eligible for franking credits if you invest in Australian shares (this is dependent on your marginal tax rate) or you may be able to claim tax deductions through holding direct property.
6. Continue to invest in your own financial literacy and learning: As the old saying goes, knowledge is power. The more you understand about finance, the better you will be able to manage your investments to ensure you’re on the right path to achieving your goals. Subscribe to finance newsletters from media outlets as well as service providers to receive updates on investment opportunities, economic trends and general information relating to investing and superannuation. The AMP Capital website – www.ampcapital.com.au – is a good place to start!
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While every care has been taken in the preparation of this article, AMP Capital Investors (UK) Limited, Registered Office at Companies House, 4th Floor Berkeley Square House, Berkeley Square, London W1J 6BX (no. 05524536) makes no representations or warranties as to the accuracy or completeness of any statement in it including, without limitation, any forecasts. Past performance is not a reliable indicator of future performance. This article has been prepared for the purpose of providing general information, without taking account of any particular investor’s objectives, financial situation or needs. An investor should, before making any investment decisions, consider the appropriateness of the information in this article, and seek professional advice, having regard to the investor’s objectives, financial situation and needs. This article is solely for the use of the party to whom it is provided.