The BFG Report

Welcome to the Summer Edition of the BFG Report.

Do You Hold a Centrelink Concession Card such as Commonwealth Seniors Health Card ?

If you are departing Australia temporarily you can generally remain overseas for up to six weeks without your concession card(s) being cancelled. You should contact Centrrelink prior to your departure to advise how long you will be away and update your income details. If you will be outside Australia for more than six weeks your concession card(s) will be cancelled. Upon returning to Australia, you will need to contact Centrelink to reclaim your card(s). You should also contact Centrelink regarding the above if you receive Family Tax Benefits for your children.

Which Assets Can You Gift In Your Will ?

Do you personally own the assets you use, invest, occupy or control? It is important to identify which assets you own personally so that you know which assets can form part of your estate and can, therefore, be given away under the terms of your Will. You should also be aware of how other assets will be treated in the event of your death.

Estate assets and non-estate assets

Assets owned by you personally, such as personal effects or bank accounts are classified as estate assets. Within your Will, you can specify to whom those assets should be gifted through your estate. Non-estate assets cannot be gifted in your Will. This may be because you are not the legal owner of the assets (even though you have control over them during your lifetime) or because you own them jointly.

Assets owned as joint tenants or tenants-in-common

If an asset (such as a property) is owned by more than one person it is owned as either joint tenants or tenants-in-common.

Joint tenants

If you own your family home with your spouse, it’s most likely that you are joint tenants. On the death of a joint tenant, full ownership of the asset will automatically pass to the survivor. The Will of the last-surviving owner will determine to whom the asset is eventually transferred. This also applies to many personal assets, such as household furniture.


If you own a business property or investment, it’s more likely that the asset is owned by you and another person as tenants-in-common. In this case the asset is classified as an ‘estate asset’ but is not affected by the law of survivorship. Your share or interest may be gifted or otherwise dealt with in your Will in the same manner as assets owned solely in your name.


Unless you have completed a valid binding death benefit nomination, the trustee of your superannuation fund has discretion as to how your super benefits are paid. Depending on the rules of your super fund, you can nominate a beneficiary such as your spouse, your children, a financial dependent, a person with whom you are in an interdependency relationship or your legal representative. If it’s paid to your legal personal representative it will be dealt with as part of your estate via your Will.

Life insurance

Generally the proceeds of a life insurance policy which is owned personally are paid to either the owner of the policy (his or her estate) or to any nominated beneficiary. It is only where the life insurance proceeds are paid to the estate that they are dealt with via your Will. If you have a life insurance policy within your superannuation fund, the insurance proceeds will become part of your superannuation (see above).

Investment Market Review – Quarter Ending 31 October 2013

AssetIndex1 year return
% p.a.
5 year return % paComments
Australian sharesS&P/ASX 300 Accumulation index24.8310.97The market put up a strong rally during the quarter as investors took the view that US Federal Reserve is likely to continue stimulating the market and maintain investor confidence amidst ongoing uncertainty from the political impasse over the decision to raise US government’s debt ceiling. The domestic market was also driven up on improving activity in the local housing market.
Listed property trustsS&P/ASX 300 A-REIT index (property)13.427.28While the AREIT index delivered a strong positive return over the quarter, it lagged the positive performance of the overall market. This could partly be explained by investors showing greater appetite for growth stocks and partly because the recent pickup in domestic housing activity foretells a rise in 10 year bond yields — rising 10 year bond yields can weigh on the defensive stocks such as the AREITs.
International sharesMSCI World accumulation index (AUD)34.054.12International shares returned 6% in Australian dollar terms during the quarter. Incrementally positive economic data in the US, Japan and Europe (which has emerged from recession) helped drive markets higher. Investor fears over Syria and an imminent tapering of quantitative easing by the US Federal Reserve were alleviated during the quarter,
also contributing to the strong returns.
Fixed interest and cashUBS Warburg Comp. Bond All Maturities index1.756.50Whilst it was a volatile quarter for bond yields, the Australian 10 year bond rate ended at 3.8% which was close to the levels at the start of the quarter. Bond yields are not expected to soar from here, given that inflation rates have slowed, currently at close to 1% in Europe and below 2% in the US. High levels of unemployment and low participation rates in the US and Europe, combined with significant excess capacity in most industries leads us to conclude that rampant inflation is a highly unlikely scenario. However, with the US Federal Reserve flagging a reduction of quantitative easing, it is difficult to ascertain at what yield level more natural demand will emerge. From a long-term perspective, investment grade credit remains relatively attractive versus bonds. However, credit spreads are not expected to narrow significantly from current levels.
CashUBS Bank Bill index (interest rate earned on short term to maturity of approx 45 days)2.984.10The RBA lowered its official cash rate again in August to a historic low of 2.50%, which will effectively give investors a zero real (inflation adjusted) return on cash going forward. Should the RBA be required to cut rates again, the real return to investors from holding cash may well be negative.


High Yielding Internet Savings Accounts        

Financial Institution                 Interest Rate                

RaboDirect – HISA                                  4.40% p.a.

ING Savings Maximiser                         4.35% p.a.

Citibank Online Saver                           4.30% p.a.

UBank – USaver                                     4.26% p.a.

Rams Saver                                            4.21% p.a.

ANZ Online Saver                                  4.10% p.a.

Rates sourced from and are subject to conditions and change.

Rates are correct as at 5/12/2013.