Insights I Testimonials I Podcasts I Interviews I Spotlights
MEMBER SPOTLIGHT: JESSICA SCHUBERT, INTACT TEAMS
Our roving reporter recently sat down with Jessica Schubert, BWA Premium Member, founder and Director of Intact Teams to discuss her journey, and the changing workforce. Jessica has been coaching corporate teams on leading the multi-generational, and multicultural modern workforce since 2013, founding her own business Intact Teams in 2018. Having worked in Europe and the Asia Pacific for over a decade Jessica has accumulated a wealth of experience leading cross-cultural teams.
The modern workforce is changing, the offices of Australia are more culturally and linguistically diverse than ever, and by 2025, Millennials (or Gen Y) will make up 75% of the workforce, already making up 34% of the workforce. By 2030, there will be no baby boomers in the work force. These changes alongside digitalisation, the rise of the ‘gig’ economy, and the growth of multiple income streams or “side hustles.” Jess explains that, on an organisational level, businesses need to “embrace [these changes] and adapt leadership strategies to optimise the advantages that come with these changes.
“We can’t lead the way we were led, or are currently leading”
The younger generation has a different mindset, generation Z and generation Alpha are “internet raised.” They have shorter attention spans, a different approach to learning, place significant value on sustainability, and require flexibility. On average, Gen z and alpha will have 18 jobs and 6 careers spanning across their lifetime, in comparison baby boomers would have 1-2 careers in their life. Jessica recommends having varying job content to entice younger employees to keep on at an organisation. The younger generations need to be led differently to be led effectively.
“We’re leading across borders without ever leaving Australia”
Australia is an incredibly diverse country, and often time domestic teams will be made up of culturally and linguistically diverse people. Or, a business may have international suppliers, clients, or teams. Jessica spent a decade leading cross-cultural teams spanning Europe, and the Asia-Pacific, and shares her tips on leading across cultures and borders. Some of the biggest lessons she has learnt in her career come down to planning and communication. Jessica ensures her planning is based in knowledge, awareness and empathy.
Leaders need to be aware of leadership differences –hierarchal leadership structure vs Egalitarian leadership structure, decision-making differences, top down vs by consent, how negative feedback is conveyed and what respect for time looks like. For example, in the Australian workforce decisions are made top-down, we look to the ‘boss’ to make the decisions, but decisions once made are flexible to change. In Germany, decisions making is by consent – every individual needs to be consulted and have their say, but once a decision is made it is final. These differences are important to remember when leading cross-cultural teams, and communicating how meetings, projects, or interactions will be structured can avoid confusion and misunderstandings.
The first step to effectively leading a multi-generational, or a multi-cultural team or workspace is getting a little help. An outside opinion can help set in motion the changes that will optimise the team’s interactions, and keeping everyone happy, safe, and productive.
BWA is very excited that Jessica will be presenting a series of boardroom workshops with for our Business Women Australia community in Melbourne. The next event in the series Leading Multi-Generations and Culture, a breakfast presentation on the modern and future workforce. More details HERE
ADAVANTAGES AND DISADVANTAGES OF INSURANCE IN SUPER
Holding insurance in your super fund differs in some ways to holding insurance outside of your super. Here are some of the advantages and disadvantages of holding insurance in super.
Premiums can be tax-effective in super
If you make or your employer makes pre-tax contributions to your super fund and your fund deducts a premium for life and total and permanent disability (TPD) insurance from your super account, the premium is effectively paid from your pre-tax income. Pre-tax contributions include compulsory super guarantee and salary sacrifice contributions made by your employer and personal contributions made by you. These are taxed at just 15% within the fund which could result in a significant cost saving compared to paying for premiums outside of super, with your after-tax income.
No medical underwriting
Most super funds offer a basic level of life and TPD cover without needing you to complete a medical questionnaire to assess the risk of insuring you (known as ‘medical underwriting’). This makes it easy to obtain a basic level of life and TPD cover and can be beneficial if you have pre-existing health issues. However if you want to increase the level of cover, you will need to undergo medical underwriting.
Super funds offered to the public usually have a large number of members and can negotiate group discounts for members. The premiums for insurance in super may be cheaper than the premiums for equivalent insurance outside of super members’ premiums.
Limited cash flow
Insurance premiums deducted from your super account won’t affect your cash flow. This can be useful if your cash flow is limited.
Restrictions on type and terms of insurance in super
Only life, TPD and income protection insurance is available in super. You cannot have trauma insurance in super, which covers you if you suffer a critical illness. TPD insurance in super is generally only payable if you become unlikely to work in ‘any’ occupation for which you are reasonably qualified. Outside of super, you may be able to get TPD insurance which covers you, if you are unlikely to work in your ‘own’ occupation. This might be more appropriate for you depending on your personal circumstances. If you choose income protection in super, the cover is basic compared to cover you might be able to get outside of super.
Taxation of proceeds
TPD and life insurance proceeds received from your super fund may be taxed depending on your or your beneficiary’s circumstances. If you own life insurance or TPD insurance outside of super, the proceeds are generally not taxed.
Premiums reduce your retirement savings
Insurance premiums deducted from your super account reduce your super balance which reduces your retirement savings.
Insurance may be cancelled
If you have insurance in super, you need to ensure that you or your employer continue to make contributions to your super fund. Your insurance will be automatically cancelled if you haven’t contributed in 16 months or haven’t advised the fund you want to opt-in to retain the cover.
Trustee owns the policy
The trustee of the super fund owns the policy and may make changes to the policy including changes to definitions and payment terms. Holding insurance outside of super means that, provided the premiums are paid, the terms of the policy don’t change.
To check if you have insurance in super, contact us or your super fund. If you would like to review the type or level of insurance you have, contact us and we can help.
If you have any questions on how to make the most of your super and optimise your tax position, please contact Shadforth Financial Group.
THIS CONTENT IS SPONSORED
WHAT’S NEW IN SUPER AND TAX THIS FINANCIAL YEAR?
The 2019/2020 financial year introduces some new opportunities to allow you to save for your retirement through super. In this article we cover these and also provide an overview of the ‘protecting your super’ legislation and personal income tax changes.
Claiming a deduction on personal super contributions
Since 1 July 2017, employees as well as the self-employed, can claim a tax deduction on personal super contributions.
If you are aged between 65 and 74 you can make a contribution to super but you need to meet a work test. To pass the work test, you need to have been ‘gainfully employed’1 for at least 40 hours over 30 consecutive days during the financial year in which you plan to make the contribution. That’s a little over one week’s worth of full-time work in a single month.
Also, if you’re aged between 65 and 74 and have a ‘total super balance’2 under $300,000, you can make personal contributions to super in the first financial year in which you no longer meet the work test. This is likely to be the first year following your retirement.
Unfortunately, if you are 75 or over you are not eligible to make a personal contribution to super.
Generally, the cap on concessional contributions is $25,000 each financial year.
What if you didn’t contribute last financial year – do you miss out?
For the first time this financial year, if you have a total super balance of under $500,000, you can contribute the unused portion of your concessional contributions cap, or ‘carry-forward’ amount, from last financial year. That is, if you didn’t contribute in the 2018/19 financial year, you may be able to carry forward $25,000 to this financial year and contribute up to $50,000.
Currently, only the unused concessional contribution cap amounts in the 2018/19 financial year can be carried forward. Then, for future financial years, the unused concessional contribution cap amounts can be carried forward, on a rolling basis, for five years.
So, if you’ve accrued a carry-forward concessional contribution amount, you may want to start, or increase your salary sacrifice contributions, or make a personal concessional contribution to super. This can be particularly beneficial for your tax bill if you’ve significantly increased your income, for example, if you’ve sold an asset with a large capital gain.
Protecting your super legislation.
The ‘protecting you super’ legislation came into effect on 1 July 2019 and is designed to protect people’s super balances. The three main changes are:
Insurance in super – if you have an inactive super account, defined as an account where you have made no contributions in the last 16 months, your insurance will be cancelled unless you take action. You can retain your insurance by contacting your super fund and ‘opting-in’ to retain your insurance or having a contribution made into your account every 16 months.
Low super balances – if your super account balance is under $6,000 there is a cap placed on fees, limiting them to no more than 3% per year. Also, if you have an ‘inactive low balance’ account, the Australian Taxation Office (ATO) is now responsible, where possible, for consolidating this money with your active super account. An inactive low balance account is broadly defined as an account with a balance of under $6,000 where no activity has occurred in the last 16 months. This includes where no contributions have been made to the account in the last 16 months and where there is no active insurance on the account. Other new definitions apply.
Exit fees – when you exit a super fund you will no longer be charged an exit fee.
Low super balances – If your super account balance is under $6,000 there is a cap placed on fees, limiting them to no more than 3% per year. Also, if you have an‘inactive low balance’ account, the Australian Taxation Office (ATO) is now responsible, where possible, for consolidating this money with your active super account. An inactive low balance account is broadly defined as an account with a balance of under $6,000 where no activity has occurred in the last 16 months. This includes where no contributions have been made to the account in the last 16 months and where there is no active insurance on the account. Other new definitions apply.
Personal income taxes
Australians can continue to enjoy the first round of personal income tax changes that started in July 2018.
From 1 July 2022, the Government will increase the 32.5% tax threshold from $90,000 to $120,000. This means there will be less people in the 37% tax bracket and more in the 32.5% tax bracket. On 1 July 2024, the 37% tax bracket will eventually disappear and the 32.5% tax bracket will reduce to 30%. It’s estimated that 94% of personal taxpayers will have a marginal tax rate of 30% or less in the 2024/25 financial year.
In addition to the changes to income tax, the Government has introduced a temporary tax offset called the low and middle income tax offset (LMITO), of up to a maximum of $1,080 per person and phases out for those earning over $126,000 per annum.
This is in addition to the low income tax offset (LITO) for those earning under $66,666 per annum.
The LMITO offsets will end after the 2021/22 financial year. However, from 1 July 2022, the Government will increase the (LITO), from $445 to $700to continue to support low income earners.
You don’t need to do anything to receive the tax offsets, the ATO will assess your eligibility when you complete your personal tax return.
Future changes to tax rates and thresholds
THRESHOLD FROM 1 JULY 2022
THRESHOLD FROM 1 JULY 2024
0 – $18,200
0 – $18,200
0 – $18,200
$18,201 – $37,000
$18,201 – $45,000
$18,201 – $45,000
32.5% (current and from 1 July 2022) 30% from 1 July 2024
$37,001 – $90,000
$45,001 – $120,000
$45,001 – $200,000
$90,001 – $180,000
$120,001 – $180,000
If you have any questions on how to make the most of your super and optimise your tax position, please contact Shadforth Financial Group.
1 The ATO defines gainful employment as employed or self-employed for gain or reward in any business, trade, profession, vocation, calling, occupation or employment.
2 Your ‘total super balance’ is measured on 30 June of the previous financial year and is calculated by adding several items together including both accumulation and pension interests of your super.
This is sponsored content.
How Our Decisions Affect Our Investments
Looking at share market returns over time, it can be said despite volatility that is naturally experienced, investors are rewarded for their patience and discipline with growth over the long term. However, plenty of research indicates that investors are not getting the returns they are entitled to.
In order to capture returns in the share market, investment time horizon does matter. Most investors intend to invest for the long term, however, emotions come into play which often leads to irrational decision making. The Dalbar Quantitative Analysis of Investor Behaviour releases annual reports comparing the returns of the market (in this case S&P 500) and the returns of an average equity investor. Over the 30 year period to December 2016, the S&P 500 returned 10.16% per annum while the average equity investor achieved a return of 3.98% per annum. That is a staggering difference of 6.18% which is referred to as the ‘Behaviour Gap’.
The behaviour gap is the outcome of all the biases and psychological pitfalls previously discussed, which is magnified by an oversupply of information and media coverage. It can be the result of a fearful withdrawal of funds from the market following a major political event or perhaps the overconfident additional investment in the market after reports of a year of very strong returns.
Essentially it is when our emotions are interfering with our disciplined approach. Perhaps the two emotions most likely to get in our way are fear and elation, despite being at opposite ends of the spectrum.
In falling markets, it is natural to feel fear and a sense of panic. How you act on those emotions is what will determine your investing outcomes. Option 1 is to succumb to the fear and sell your investments to try to avoid further loss. As a result, you have sold low and consolidated the loss rather than waiting out the market cycle. Option 2 is to embrace the opportunity presented and make additional investments to maximise the likely subsequent recovery of markets.
In rising markets, investors experience elation and excitement as they see the strong return for their investment. Again, how you act on your emotions determines the investment experience. Option 1 is to get carried away in the thrill and invest additional funds at the top of the market cycle. While markets may continue to rise for a while, buying at this high point can then maximise the loss when the market goes through a downturn in the next phase of the cycle. Option 2 is to sell some of your assets and consolidate the gains you have achieved. The profits can then be used to invest elsewhere.
Data shows that most investors in either scenario go with option 1. Data looking at investment performance and the flow of funds into and out of the market, shows that in rising markets there is a significant net flow of funds into the investments but when there are market downturns, money is flooding out. Meaning the average investor is reacting to current market conditions, selling low and buying high. This is what results in the behaviour gap and missing out on the returns that they should be achieving.
Source: Investment Company Institute, 2017 Investment Company Fact Book. Past performance is not a guarantee of future results. Data shows industry flows into equity funds plotted as a 6-month moving average. Total return based on the MSCI All Country World Daily Total Return Index, a free float-adjusted market capitalization-weighted index that is designed to measure the equity market performance of developed and emerging markets.
Knowing when to buy and sell is a difficult process to manage and we don’t advocate trying to time the market. Rather, the key is to remain disciplined and not reactive while investing. An adviser can keep you accountable and help you remain on track when all your instincts are pointing towards making decisions which will sabotage your financial future. Often, the value in an adviser is quantified by the decisions they help you make and the progress towards goals. While this is important, I would place equal importance on the adviser’s role in preventing you from making the wrong decisions.
To find out more, contact a Shadforth Financial Group adviser on 1300 308 440 or click HERE
This is sponsored content.
MEMBER SPOTLIGHT: CINDY TURNER, EVOLVING WOMEN
Our Insights Spotlight is on Cindy Turner, our Sunshine Coast Circle Leader. Cindy is a conscious Entrepreneur and a Master Coach with over ten years of experience. She recently relocated from Victoria to the Sunshine Coast which “was part of [a] bigger vision to create a lifestyle that [she loves], and [chasing] a warmer climate!” Cindy established the Sunshine Coast chapter of BWA earlier this year and brings a dynamic enthusiasm and great ideas coupled with warm energy and a generous spirit to the role. The response to our Sunshine Coast events has been fantastic!
Speaking about her fellow Business Women on the Sunshine Coast and across the nation – the BWA Community, Cindy says
“women bring a unique feminine nature to the way they lead and live that is very much needed in the world today… qualities such as: communication, collaboration, empathy and heart.”
Cindy herself is passionate about women in leadership, having been inspired by the likes of Oprah Winfrey, Brene Brown, and Jacinda Arden, women that are “leading the way in demonstrating a different way to lead.” Having worked with corporate women for over ten years, Cindy has been inspired by the strength, compassion, and achievements of these women. However, she found many corporate women, especially high achieving women, to be “self-critical, minimising and restrictive.” Seeing these incredible women not performing at their best left Cindy frustrated at “continually seeing women hold themselves back and play too small.”
Evolving Women, an online meeting place of brilliant women creating new paradigms that support the advancement of women in leadership and life globally, was born out of this frustration. Often times these women simply needed the right tools and resources in order to achieve their full potential. As such, Evolving Women will “specifically bring together women of influence who are experts in their field and have a desire to give back, [offering] a vast array of transformational programs and tools that are easily accessible and affordable for women globally.” Although the website is not yet up and running, the team here at BWA could not be more excited!
Subscribe to BWA eNews here and get in touch with Cindy to be kept up to date with all the BWA events on the Sunshine Coast and to be updated about Evolving Women opportunities.
As an entrepreneur, and Master Coach, Cindy often works independently which can be a tough gig. We asked Cindy to share her tips and tricks on how she stays motivated and energised.
“I am very clear on my bigger purpose or ‘why’ I do what I do and the impact I want to make. When I feel unmotivated, I refer back to my purpose. I have created a visual representation of my purpose on my laptop screensaver so it is never far from mind.”
Visual representation is so important particularly for executing goal achievement. Cindy’s goals include taking Evolving Women globally, as well as interviewing Oprah, an achievement that Cindy sees as her “pinnacle.”
Cindy views joining the BWA collective as “being part of an amazing community of female leaders… [which was] the right decision for [her.]” The team here at BWA couldn’t agree more!
Book your tickets for our upcoming Sunshine Coast event HERE.
New Year, New You!
Six months ago the gym was full of January-joiners and we were all taking stock of what we achieved last year and what we could do better in 2019.
If you embarked on a physical fitness overhaul this January, chances are you measured your baseline (a brave undertaking!) before you began. You may have also set some goals.
Understanding your starting point is paramount to tracking progress. You can’t know what goal to set if you don’t know where you are now.
Another new year
The start of the new calendar year is a great time to make lifestyle resolutions. Why not think of the start of the new financial year as the time to make some financial resolutions?
Most of us know how much lands in our bank accounts every month, but we don’t always know where it all goes. Too often people find they’ve got ‘too much month at the end of the money.’
Where to start
Just like beginning a new fitness routine, start simple. Rather than making a complex budget that traces every single dollar, start with a few small steps.
Know your expenses
If you have a mortgage, determine your current interest rate and monthly payments. If you haven’t reviewed this in the last two years or so, it may be time to do a comparison to see if there’s a better arrangement out there for you. Lenders may even offer you a better rate for switching.
Most of us also have home, contents and car insurance. What do they each cost? Check a bank statement to find out.
37% of Australians1 don’t review these expenses because of the perceived effort involved – so to kickstart your financial new year and get you on the right track, we can review these items for you and check the ‘healthiness’ of your current arrangements.
You could also include some other expenses such as property rates, energy bills and phone accounts. These are often on contracts and easy to determine.
Then, check your bank statement to calculate your average grocery spend and you’re starting to understand where all those dollars are heading each month.
Get a personal trainer
Let us do the heavy lifting. You just have to provide the details of your current arrangements (simply, a statement for your mortgage and/or a renewal notice for your insurances).
Getting financially fit starts with understanding your cash flow – what comes in the door and what goes out again – and determining what to do with the surplus (and if there isn’t a surplus, working out how long you can sustain your lifestyle with a deficit).
Just like a personal trainer will get you on track with your diet and exercise plan, a financial adviser can help you get on top of your cash flow, and get you some results you can really see.
To get to know more about your cash flow and what a difference making the most of those annual surplus amounts can make, contact a Shadforth adviser on 1300 308 440. In the meantime, start tracking your spending now with our handy Budget Spreadsheet.
To find out more, contact a Shadforth adviser on 1300 308 440 or click HERE
This content is Sponsored.