Every year, thousands of Australians and Australian businesses fall victim to online crime, or ‘cybercrime’. In the first 3 months of 2018 alone there were 14, 189 reports made to the Australian Cybercrime Online Reporting Network (ACORN). That was just the ones reported!
The financial services industry will always be a prime target. Our IT systems, supplier contracts and internal policies place client data, as the single most important asset our business needs to protect. Each of these areas is reviewed on a regular basis and every staff member and supplier is bound by regulation, policies and rules of engagement in these areas.
We see instances of fake and suspicious emails several times each week. We have seen several, sophisticated examples in the industry in recent weeks that prompted us to remind everyone of the need to remain diligent in your interactions when providing any sensitive data and to reassure you that our diligence in this area with our clients and their data is of paramount importance to Profile Financial Services.
Common types of attempted cybercrime in our industry include:
- Online scams or fraud
- Issues with buying or selling investments online
- Identity theft
- Attacks on computer systems
- Email spam and phishing
- Illegal and prohibited content
There are several things you can do if you become aware of an issue or you think something is suspicious:
Following our three-part series on planned giving that focused on a structure known as a Private Ancillary Fund (PAF) – a PAF requires a significant donation to make the structure feasible (of at least $500,000). This article discusses an alternative to a PAF called a Public Ancillary Fund that requires a much lower donation (of $50,000 in most cases).
There is still much consistency between a Public Ancillary Fund (PuAF) and a PAF, especially around the tax benefits and grant making.
What is a Public Ancillary Fund (PuAF)?
A PuAF is a communal tax exempt philanthropic trust that enables a number of donors to establish and name a ‘sub fund’ under the broader PuAF structure.
With a sub fund, the donor does not need to worry about the trustee obligations and responsibilities associated with a PAF and can put their energy into choosing charities they would like to support.
“To give away money is an easy matter and in any man’s power. But to decide to whom to give it and how large and when, and for what purpose and how, is neither in every man’s power nor an easy matter.” (Aristotle c. 384 B.C. to 322 B.C.)
This is the final chapter in our series on private planned giving structures and covers the most rewarding part of philanthropy – giving the money away! (otherwise known as grantmaking).
We cover grantmaking as it applies to a Private Ancillary Fund (PAF). The detailed workings of a PAF were considered in my last blog.
There is no single right way to grant. Grants can be for general purposes or to support specific projects or programs.
In my last blog, I mentioned a range of planned giving structures including Private Ancillary Funds (PAFs). I now take a deeper dive into the workings of a PAF.
In summary, a PAF is an efficient, satisfying and tax effective way to put a structure around your philanthropy. It allows a donor to set aside capital to generate investment income for charitable purposes in perpetuity.
What is a PAF?
A PAF is a type of private charitable trust established and operated in Australia. It is maintained under a Will or an instrument of trust (e.g. trust deed) under State or Territory law. Today there are roughly 1,600 PAFs across the country, with 80 – 100 established annually and total net assets valued at over $7 Billion. In the 2013/14 tax year, they gave away $300M.
How is a PAF structured and governed?
Although I’m a fairly recent appointee to Profile, I have shared the same philosophy of “Objectives-Based Investing” for well over a decade now! I thought it was worth revisiting what this approach means for clients and why it’s important in our current challenging investment environment.
What is Objectives-Based Investing?
Objectives-Based Investing (OBI for short) is an investment approach that seeks to align investments and portfolios with the specific objectives of the individual investor. This is very much unlike common industry practice, which typically just matches products to a client’s risk profile (that is, their preferred level of volatility).
Why is it important?
OBI recognises that individuals are unique, with needs and objectives that are equally unique and generally more complex than a preferred level of risk alone.
In our experience, not only do clients have several objectives and needs at any one time, but those goals also tend to change over time. Clients want and need investment portfolios and Read more
On 23 November 2016, Parliament passed legislation which significantly overhauled the retirement system. The Government hopes the reforms, due to commence on 1 July 2017, will improve the “sustainability, flexibility and integrity” of superannuation. Outlined below are some of the key changes and their potential impact.
Concessional contributions (before-tax)
“Concessional contributions” are the contributions employers make on your behalf or that you salary sacrifice; or in the case of self-employed Australians, personal contributions (that you claim a tax deduction on). They are known as ‘concessional’ because you pay a concessional tax rate on these contributions, rather than your marginal tax rate (which is often higher). The concessional tax rate is 15% if your income is under $250,000, and 30% if your income is over this amount.
From 1 July 2017, the annual maximum cap will be reduced to $25,000. This reduces the current limit by either $5,000 or $10,000 per year (depending on your age.)
Balancing this negative change, a positive change is the ability to “catch-up” on missed concessional contributions for the previous five years, for those with balances of less than $500,000 in super. This is due to come into effect from 1 July 2018. This enhancement to the superannuation system can potentially save clients thousands of dollars in tax and we are developing a number of strategies for our clients to take advantage of this.
Non-concessional contributions (after-tax)
Prior to the reform, working Australians were allowed to contribute up to $180,000 per year in non-concessional (or after-tax) super contributions – or, in special circumstances $540,000, by triggering a 3-year ‘bring forward’ rule. The reforms have reduced the annual cap to $100,000 per year, but leave intact the ability to ‘bring forward’ 3 years’ worth of contributions.
Australia is traditionally a giving nation. Australian’s have a deep-seated code of ‘mate ship’ believing that everyone is entitled to a ‘fair go’. If one of us is in need then we rally together to support those less fortunate (e.g. just recall natural disasters such as bush fires, cyclones or tsunami). Many of us have and still do donate to a charity on a regular basis. Others make ad-hoc donations to various charities when approached (e.g. Red Cross door knock appeal).
You don’t have to be wealthy to be philanthropic. Many people give little or no money but rather volunteer their time and/or expertise in their local community and/or to a charitable organisation. For wealthier Australian’s who make larger donations it is often more effective to channel giving ideas into a planned giving vehicle such as their own Private Ancillary Fund (PAF).
In what is the first of a series of three articles on philanthropy, we provide insights into what is philanthropy, some motivators on why people give, examples of significant philanthropists and explore avenues on how to give. Finally, we provide a link to on-line resources should you wish to read further.
What is Philanthropy?
Philanthropy Australia provides a formal definition as ‘the planned or structured giving of money, time, goods and services or other to improve the well-being of humanity and the community”.
If you are a person who has achieved a stage of financial independence, it is vital that you have an effective Estate Plan to protect you and your family. An Estate Plan is not limited to having a Will. It generally involves more complex decisions around the control of your personal, family and business affairs in the event of death or incapacitation.
If a plan is poorly constructed and communicated, it can lead to damaging disputes. You may have heard about the Rinehart family feud? Or the family who never reconciled when the granddaughter took her grandmother’s antique engagement ring? How about the estate that got whittled away to nothing by legal fees? And the neighbour who passed away without a Will and suddenly a mistress emerged in the aftermath? We’ve all heard the horror stories – and many of us, sadly, have been involved in them.
Poor planning, lack of open communication, high emotions and high stakes when handling an estate are a combustible mix and can lead to family relationships breaking down. None of us want this in theory – but it happens tragically often.
This article focuses on ways to help ensure you avoid such problems by putting in place an effective Estate Plan – by which we mean one that is complete, valid, and well-communicated. Read more