Key Discussion Points

Feb 2019

Key Discussion Points – Feb 2019 2019-02-21T11:48:51+11:00

PRIME NEWS

Sydney Accounting Forum:

Revised Date - 2 May 2019

We apologise for changing the date, but feel like the deferral is in the best interests of everybody. In terms of word of mouth interest, this one looks like it will be even bigger than last years forum and we will definitely endeavour to tighten up the format and to incorporate suggested topics.

On that note you should expect to receive a ‘save the date’ email shortly from us, and we will seek to engage you on the topics that matter the most.

I think most agreed that the last event was a success even simply for putting different firms in a room together to discuss business process and the industry, and to foster further interaction between the various JV’s. With any luck we can go one better in Sydney in May and have over 10 firms in attendance.

We would love as many of you there as possible.

Thanks Jono

Prime SMSF Solution:

We want to transform your practice.

The Prime SMSF Solution is not just annual outsourcing. You can’t compare us with a $700 annual service where you still do the majority of the work! We’re talking about a bespoke, game-changing white-label SMSF solution. Increasing complexity surrounding accounting for SMSFs means annual accounting just doesn’t cut it anymore. The introduction of Transfer Balance Account Reporting (TBAR) presents every SMSF Accountant with a new business risk.

How do you even know which clients you need to report for TBAR unless you’re processing your funds at least quarterly?

The Prime SMSF Solutions provides:

  • A daily online reporting service to your clients using Class Super with;
  • Daily reconciliation and monthly queries;
  • Providing you and your clients with live SMSF information and reliable data;
  • So we can manage your compliance requirements for you (including TBAR)!
  • This is what we do that an annual outsourcer doesn’t!



    Don’t take our word for it. Here’s what one of our JVPartner’s has to say:

    We started using Prime super when our in house superannuation manager resigned and we needed to quickly find a high quality solution. We have been very impressed with the quality of Prime’s work and also their approach to SMSF compliance. The Prime team is also very responsive and personable and they feel like an extension of our own team.

    Prime offer more than your standard SMSF compliance solution, they are also very technically strong and have been consistently adding value to our SMSF clients.
    W R Matley
    Partner
    Crispin & Jeffery - Chartered Accountants

    Outsourcing is so much more than just price.

    It’s important to fully understand what time/costs savings you will recognise as a result of outsourcing your SMSF along in order to provide your clients with a market leading SMSF solution.

    So call Olivia Long on +61 455 566 426 and take the first step to transforming your SMSF solution.

    Marketing: Tiffany Gray

    We are pleased to announce the appointment of Tiffany Gray to the role of Marketing Manager.

    Tiffany has 8+ years experience in both product and service marketing, spending the past 3 1/2 years with a leading aggregator which supports Australian mortgage brokers. Tiffany has great experience in increasing brand awareness, project management and hands on end-to-end experience developing and delivering marketing plans.

    We look forward to introducing you to Tiffany over the coming months.

    Prime and Platinum:

    Travel Marketing Tie-up

    In the week after Australia Day, Prime clients and accounting JV partners will receive notice in the mail of Prime’s partnership with national corporate travel agency, Platinum Travel Corporation.

    Platinum late last year won the Australian Travel Awards prestigious ‘Travel Agency of the Year’ award.

    Clients will receive a lovely card in the mail highlighting Prime clients access to the Platinum Travel ‘Platinum Card’, and the benefits this could offer them on airfares, hotels, insurance and access to club lounges.

    Platinum intend on an ongoing basis to curate select travel opportunities for the Prime client base, and in using their substantial buying power at highly competitive prices. We think this partnership will be extremely well received by the client base, and a worthy benefit to clients from their association with Prime and its JV partners.

     

    INCENTIVES, FIGURES & REPORTS

    Grants & Tax Incentives:

    R&D Tax Incentive Program

    There has been some recent media in the AFR regarding the R&D tax incentive program, with several companies such as Airtasker reporting entire claims being disallowed and significant refunds asked to be repaid.

    This has created doubt regarding the eligibility of software applications in particular. Prime recently prepared a guide for clients which was published by the BioMelbourne Network, and might be useful for the accounting network interesting in understanding have these claims can be managed.

    Please contact Matt Murphy with any queries.
    [Table will go here]

    Risk Profile Portfolio Performance Figures

    As at 31 December 2018

    * Annualised return(s). Portfolio Inception date 3/7/2012


    [Table will go here]

    Prime SMA - Model Portfolio Performance Figures

    As at 31 December 2018

    * Annualised return(s). Portfolio Inception date 18/2/2016

    Prime SMA:

    Monthly Commentary

    Global equity markets recorded heavy losses in December with the MSCI World Index falling -7.6%.

    Trade tensions between the world’s two largest economies, the withdrawal of liquidity from financial markets, geopolitical issues such as Brexit and rising interest rates led to stock markets suffering their worst calendar year of performance since the GFC.

    The US equity market underperformed falling 9% and the Federal Reserve increased interest rates 0.25% as forecast. However, a change in the Federal Reserve’s stance on monetary policy suggests fewer rate rises in 2019.

    Volatility was the overriding theme in December with the VIX (Volatility Index) climbing back to its February highs. US bonds pointed further towards investor caution as bond yields fell to near 12-month lows below 2.70%.

    The plunge in crude oil prices continued in December with WTI and Brent oil falling a further 10% and 8.5% as OPEC agreed to reduce supply by 1.2m barrels per day. Oil fell more than -20% for the calendar year on account of oversupply fears.

    The AUD/USD fell 3.5% in December and nearly 10% for the year as concerns over the impact a US-China trade war may have on Australia saw the currency fall to 70c.

    Locally, the Australian equity market outperformed with the ASX200 Accumulation Index essentially flat in December.

    Miners were the best performing sector rising 5% as iron ore likewise bounced 10% to trade $71/tonne. Sector weakness was felt across telcos -5%, IT stocks -4% and financials -3%.

    Downer (DOW) was the shining light in December rising 7% to reverse some prior month’s weakness. DOW now trades on a 12.5x FY20 PE with a dividend yield in excess of 5% and remains a core holding. We view DOWs road services, transport infrastructure and rail services divisions as likely beneficiaries of a boost to infrastructure spending and a potential sale of its mining services division may pave the way for a capital return to investors.

    Detractors from performance were IOOF (IFL) and BWX (BWX) which fell 25% and 50% respectively. IFLs share price has lagged on account of the Royal Commission throughout 2018 but a show cause notice alleging breaches of the Superannuation Industry Act and the disqualification of five senior executives saw investors sell down holdings. We anticipate a new CEO to be duly appointed in time and maintain the acquisition of the ANZ wealth business will continue. IFL remains a hold.

    Weakness in BWXs domestic export sales to China and softer sales in its flagship Sukin branded products saw BWX release its second downgrade to earnings numbers in six weeks. In our view the selloff has been overdone with shares now trading on <9x FY20 earnings numbers. It is disappointing but we believe momentum will turn in Sukin products and that the downgrade is seasonal and not systemic.

    Activity across the SMAs was relatively subdued in December. The Growth and Diversified Income SMAs went unchanged. The Defensive Income SMA reduced MXT and added the Artesian Corporate Bond Fund which invests in liquid, investment grade fixed and floating rate corporate bonds. The International Growth SMA reduced MGG and added to existing weights in the Platinum Asia and Orbis Global Equity funds. On a risk profile performance basis our 5-year numbers continue to perform well against their respective benchmarks..

    Disclaimer: This information has been prepared by Primestock Securities Limited ABN 67 089 676 068, AFSL 239180 (“Prime”). Prime accepts no obligation to correct or update the information or opinions in it. This information does not take into account your objectives, financial situation or needs. Before acting on this information, you should consider whether it is appropriate to your situation. It is recommended that you obtain financial, legal and taxation advice before making any financial investment decision. Prime is bound by the Australian Privacy Principles for the handling of personal information.

    How to download:

    FY18 Macquarie WrapTax Reports

    To assist you in preparing FY18 tax compliance documents for your clients, we hosted a brief webinar where a Macquarie Group representative provided step-by-step instructions to guide you through accessing tax reports via their platform.

    A recording of the webinar was prepared and is available by clicking on the link below and using the password: PFGMCQtax2018

    Click here to view Tax Reporting Webinar

    Do not hesitate to contact us on 1800 064 959 or by emailing if you have any queries.

     

    CONTACT US