Quarterly Newsletter | Issue 28 | March 2013

In this edition Improving Services & Communication .. 1 All In a Days Work ............................... 1 Economic Update .................................. 2

Improving our Services and Communication to you

We are committed to ensuring that you are kept informed of the ongoing services you receive from us and how much these services cost. This has been a key component of our transparent and straightforward fee for service philosophy for many years, and shortly it will also be a regulatory obligation as per the Future of Financial Advice (FoFA) reforms. Over the coming months, you will notice a few changes to our Service Package offerings. Each Service Package has a range of ongoing services you can expect to receive some are very obvious and others not. The details of each package vary depending on the complexity of your affairs, the types of services you require and the frequency with which these services are delivered. Over the next few months, you will receive a Service Agreement which will detail exactly the services we are committed to providing to you and the fees associated with the provision of those services. We ask that you read and sign this Service Agreement to confirm your understanding of the arrangements. Naturally if you have any questions, we encourage you to contact us. Each year you will continue to receive a Statement about the services you have received and how much you paid for them. For many of you this information is already being provided, either in your Statement of Advice and/or at your annual review. In this regard, the changes will not be significant. For some it may be the first time you are made aware of the extent of the ongoing services you are actually receiving. Although much is still to be finalised regarding the implementation of the FoFA reforms from a legislative perspective, we are pleased to say that we are fully supportive of these measures and will endeavour to keep you informed as and when changes occur.

Private Health Insurance Rebate

Dont forget to keep your health insurance provider updated on your income to avoid having to repay overpaid rebates at year end. Contact our office if you would like to discuss this with your adviser.

Keeping you up to date

If you would like to keep up to date with timely information from us, we encourage you to follow us on Facebook and Twitter. We are constantly posting and tweeting informative articles that may be of interest to you, your friends or a family member so follow us today!

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All In a Days Work

If you have ever had to deal with Centrelink you will know how frustrating it can be complicated forms, long queues, endless hours on hold! As part of our ongoing services, we are frequently asked by our clients to liaise directly with Centrelink on their behalf. This may be to complete paperwork, follow up on an Age Pension application or, even as we have done recently for a few clients, request Centrelink review their assessment. In one such case recently, the amount of a Centrelink benefit awarded to a client was considerably less than we had originally estimated. A thorough investigation discovered that Centrelink had indeed miscalculated the entitlement, and as a result our client is now around $9,000 better off! Calculating Centrelink benefits is often quite complicated. Moreover, if you are not happy with an assessment, an appeals process is available to reassess your entitlement. If in doubt about any Centrelink issue, please be sure to contact our office for assistance.

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McPhail HLG Financial Planning Pty Ltd 38 Ellingworth Parade, Box Hill VIC 3128 PO Box 93 Box Hill VIC 3128 Australia t +61 3 9898 9222 f +61 3 9890 6310 email planner@mcphail.com.au www.mcphail.com.au

Economic Update
We are happy to report that the Mayan predictions of the end of the world were either wrong or misinterpreted. Every time I pick up a newspaper or inadvertently find myself confronted by a breakfast T.V. show, I am further swayed towards the latter. Then again it is difficult to attract an audience with sober analysis alone the show must go on! The lack of an apocalypse appears to have been a positive for markets and global economic prospects, notwithstanding efforts of policy makers, seemingly to the contrary. Mayan divinations appear of less concern than the musings of mere mortals. Does the E.U. really think penalising Cypriot savers to rescue local banks is a good idea? I am continually astounded by the actions of those we choose to lead us. Global economic data has provided few surprises over the past quarter. Initial data from the U.S. suggesting a contraction of 0.1% annualised was recently revised to +0.1% annualised. U.S. inflation remains subdued while unemployment remains at 7.8%. Forward indicators continue to show positive, if sub-optimal, growth continuing. Growth in the U.K. stumbled again in the final quarter of 2012, raising talk of a potential triple-dip recession. Despite a strong performance in the third quarter, aided by the Olympics, growth throughout 2012 was flat. Unemployment remains at 7.8%, while inflation at 2.7% continues to exceed the Bank of Englands target of 2.0%. Fortunately they are able to compare themselves to the E.U. and gain some solace. Annualised growth across the E.U. in the final quarter of 2012 was -0.9%. Unemployment rose to 11%, while inflation is estimated at 1.8%. This average masks significant disparities between individual countries, but is indicative of the depth of European economic difficulties. In China, authorities continue to estimate GDP growth for 2013 of 7.5%. Nevertheless, as we have previously indicated, the shape of Chinese growth continues to evolve. Recent announcements aimed at curbing growth in parts of the property sector are instructive. As manufacturing continues to slow, these previous sources of growth will need to be supplanted by increased domestic consumption if the target growth rates are to be achieved. While Japan remains in recession, hopes of a recovery have risen with the election of Shinzo Abe as prime minister in December. Mr Abe has indicated that he will take aggressive measures to overcome the deflationary conditions that have beset Japan for over 20 years. The first act in this regard has been to replace the top bureaucrats at the central bank with those more sympathetic to the Governments policy direction. The immediate impact has been a sharp devaluation in the Yen. This provides a short term boost to Japanese exporters, but risks an escalation in the undeclared and much denied currency wars. The IMF expects global growth of 3.5% in 2013, with contributions, on average, of 1.4% by advanced economies and 5.5% from emerging economies. Annual growth in Australia was estimated at 3.1% for 2012. Despite relatively benign economic statistics of late, the Reserve bank continues to forecast slower growth in 2013, estimating a range of 2 3%, due to slowing investment spending.
Quarterly Newsletter Issue 28 March 2013

Financial markets have continued the trends established in the latter part of 2012, with equity markets generally performing quite strongly. As economic data has improved, longer term interest rates in most developed economies have risen. Rises in long term rates have contributed to a relatively muted performance by the fixed interest sector. A number of global equity indices have now matched or exceeded the all-time highs achieved just prior to the GFC. However, Australian equity markets remain some 25% below the pre GFC high of 6,873 for the All Ordinaries index. In absolute terms, the Japanese market has been the star performer with a rise of 20% in 2013 to date. This reflects the optimism surrounding the new Government and their proposals to finally end economic stagnation. An analogous fall in the value of the Yen has diminished the value of Japanese market gains for foreign investors. European markets have performed relatively well despite the proclivity of European policy makers to shoot themselves in the foot. After initially being slow off the mark, Australian equity markets have performed exceptionally, with banks and other high dividend payers most favoured. At this point we urge some caution. Recent moves in equity markets have been sharp and earnings growth has not yet unpinned these valuations. This is particularly true in Australia, and has been reflected in recent days by increasing market volatility. While individual stocks may rise where earnings surprise on the upside, continued market-wide support appears unlikely in the short term. Since 1 July 2012, the All Ordinaries index has risen by 23%. Indications are that the market needs to consolidate for a period. This is also applicable to global equity markets to varying degrees. We are pleased that returns have been strong in the year to date, and we dont want to rain on this parade unduly. However, sharp moves in asset prices in either direction should always be greeted with some degree of scepticism. As always, we prefer to concentrate on the long term outlook and the potential impacts on your long term requirements. We are confident that economic growth and company earnings will eventually vindicate increases in asset prices. As we have said many times before, markets generally run ahead of economic growth. However, as we also often remind clients, the road is rarely a straight one. David Graham CFP 18 March 2013
Disclaimer This information is of a general nature only and has been provided without taking account of your objectives, financial situation or needs. Because of this, we recommend you consider, with or without the assistance of a financial adviser, whether the information is appropriate in light of your particular needs and circumstances. McPhail HLG Financial Planning Pty Ltd ABN 27 091 207 000 is a Corporate Authorised Representative and Corporate Credit Representative of Securitor Financial Group Ltd ABN 48 009 189 495 AFSL and Australian Credit License 240687 Level 7, 530 Collins Street Melbourne VIC 3000 Australia
Liability limited by a scheme approved under Professional Standards Legislation
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