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Financial Happenings Blog
Wednesday, October 13 2010
Back in July, Scott Francis spoke with Warren Boland on ABC radio about the 7 key things to understand about superannuation.  These included:

1 Generally, people who are over the age of 18 and are working are entitled to superannuation contributions at the rate of 9% of their income.

 Super is your own money, not the Government's money and not your Employer's Money. 

 Superannuation is not an investment - it is a tax effective structure.

4 Fees matter in investing.

5 It can be effective to make extra contributions - especially as you move toward retirement. 

6 After the age of 60 all superannuation withdrawals are tax free.

7 If you are over the age of 55 you MUST, in my opinion, investigate a 'transition to retirement' income stream, where you withdraw some superannuation while salary sacrificing you income.

Click on the following link to read the full summary of the program - 7 keys to understanding superannuation
Posted by: AT 12:07 am   |  Permalink   |  Email
Tuesday, October 12 2010
Scott Francis regularly presents on ABC's Weekends with Warren radio program on Saturday.  The ABC are now providing audio file recordings of these shows.  The latest presentation was held on Saturday the 2nd of October and looked at the topic of millionaires.  Scott reported an interesting fact that around 1/2 of a millionaire's portfolio is held in defensive assets.  The other key characteristic of a millionaire is their frugality.

To listen to Scott's thoughts please click on the following link - Characteristics of a millionaire

Posted by: AT 11:53 pm   |  Permalink   |  Email
Tuesday, October 12 2010
Today we have emailed out the latest edition of our free email newsletter to subscribers.  In this edition we:
    - consider whether Portfolio Rebalancing is worth it,
    - look at the new Australian fear index - the S&P ASX200 VIX,
    - update major investment market performance,
    - outline recent additions to the online blog,
    - look at an article from the archive - Winning in the retirement risk zone,
    - outline recently published Eureka Report articles,
    - provide details from the latest Westpac ASFA Retirement Standard report, and
    - provide updated evidence of the three factor model in action.
To view a copy of the newsletter please click on the following link - Clear Directions October edition

To sign up to receive the newsletter directly into your inbox follow this link -
Sign up for Clear Directions
Posted by: AT 12:18 am   |  Permalink   |  Email
Tuesday, October 12 2010

Users of our website, through our User Voice feedback forum, have requested that we regularly update the graphs outlining the performance of the Dimensional trusts that we use in building portfolios for clients.  In response to this feedback we have updated these graphs to reflect performance up to the end of September 2010.



The graphs show a strong month of returns for all asset classes.  However the premiums from investing in the value, small and emerging markets areas of markets have shrunk since our last report.
Over the long run, the graphs continue to clearly show the existence of the risk premiums (small, value and emerging markets) that the research tells us should exist.


Australian Share Trusts - 7 Year returns



7 Yr Return

to September 2010

Premium over ASX 200

Accumulation Index

ASX 200 Accumulation Index



Dimensional Australian Value Trust



Dimensional Australian Small Company Trust




International Share Trusts - 7 Year returns



7 Yr Return

to September 2010

Premium over MSCI World (ex Australia) Index

MSCI World (ex Australia) Index



Dimensional Global Value Trust



Dimensional Global Small Company Trust



Dimensional Emerging Markets Trust




NB - These numbers are average annual returns for the 7 year period which are slightly higher than the annualised returns.


Please click on the following link to be taken to the graphs - Dimensional Fund Performance Graphs.


For anyone new to our website, it is important to point out that we build investment portfolios for clients based on the best available academic research.  Take a look at our Building Portfolios and Our Research Based Approach pages for more details.  In our view, this research compels us to use the three factor model developed by Fama and French.  In Australia, the most effective method of investing using this model is through trusts implemented by Dimensional Fund Advisors (  We do not receive any form of commission or payment from Dimensional for using their trusts.  We use them because they provide the returns clients are entitled to from share markets.


However, academic theory is nothing if it can not be implemented and provide the returns that are promised by the research.  Therefore, we like to provide the historical returns of the funds that we use to build investment portfolios.


Please let us know if you have any feedback regarding these graphs by using the Request for More Information form to the right or via our User Voice feedback forum.



Scott Keefer
Posted by: AT 12:10 am   |  Permalink   |  Email
Wednesday, October 06 2010

The main headline for Tuesday’s Australian Financial Review read “Planners’ fees slug consumers”.  If this did not get your attention it sure got mine.  Leong Yeow provided the following analysis:

  • Consumers are paying up to 3 times more in annual fees for financial advice since the changes banning commissions were introduced
  • Percentage based fees are as high as 1.5% of assets under management
  • Additional one-off upfront financial plan fees of $1,000 to $5,000 are being charged

You might think that as a financial planner I would be cringing at headlines such as these.  Granted it is not good for the industry as a whole but personally my reaction is quite the opposite.  It reminds me and hopefully my clients and future clients that A Clear Direction has been positioned to fight against the fee gouging that goes on through the industry.


So how do our fees stack up?


We would prefer to offer clients a flat annual fee that included all financial strategy and investment advice, capped at $4,400 p.a..  For some clients this flat fee is prohibitive so we also offer a fee based on a percentage of assets under management.  The maximum fee that any client pays this firm is 0.55% of their assets under management.  Research I have read suggests the average rate is more like 1.1% of assets under management.


We do charge one-off financial planning fees at a standard rate of $660 per annum,  a little bit more for complex plans.  We think this sits pretty well against the standard $1,000 to $5,000 being charged elsewhere.


One last point to cover is a definition for the term “Assets or Funds Under Management”.  For A Clear Direction this refers to the assets we manage on the behalf of clients.  For investment clients and clients with their own Self Managed Superannuation Fund, we don’t think we need to charge a fee to manage their cash assets so this does not fall under the assets we manage and therefore we do not charge a fee on this.  We do however continue to provide these clients with guidance as to how to make these cash assets work as hard as possible for them.


Without wanting to beat our own drum (we acknowledge we are giving the drum a pretty good going over in this blog) we think our service offering and pricing is very competitive.  In the end though, you need to find an adviser you feel comfortable with and who applies an approach to financial planning strategy and investment advice which you are at ease with.


If you would like to find out more information about A Clear Direction please take a look through our website or get in contact –



Scott Keefer

Posted by: Scott Keefer AT 12:05 am   |  Permalink   |  Email
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If you have questions, or would like more information, please go to our Contact page and leave your name and contact information.