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As we launch into a new financial year, let’s look back through the rear-view mirror. I’m sure you don’t need me to remind you of Australia’s adversities over the past 6 – 12 months, but I will address its importance towards the end of my economic summary that I’ve sprinkled with some insights.
The rear-view mirror looks a lot like this:
A horrific bushfire season:
Just as some of our rural communities were getting back to their feet and ready to welcome visitors back to their communities, we faced the realisation that the coronavirus would make its way to Australian shores. Some numbers to date:
While the above numbers may seem horrific, to date Australia has avoided both a health and economic catastrophe. You may recall, initial estimates had virus cases peaking in June (it peaked in April) but as we are experiencing in Victoria currently, it is not over.
While life pre-COVID-19 almost seems difficult to remember, it certainly wasn’t all doom and gloom for Australia. Over the past 12 -18 months it’s important to reflect and appreciate the economic position we were in before COVID-19 hit. Consider these numbers:
Gross Domestic Product (GDP) – A measure of Australia economic growth was as follows:
In December 2019, the Government was on track to deliver the country’s first budget surplus in a decade, of between $5-7billion.
In 2019 unemployment was 5.18%, almost a 10 year low (in 2011 it was 5.08%)
2019 Calendar Year
2020 to date
2020 Fin year
ASX 200 (Aust shares)
Dow Jones (US shares)
As the global economy shut down, the demand for oil fell off a cliff and the oil price followed. It left a huge surplus on the market and no buyers, thus, some holders of oil futures were willing to pay others to offload contracts for oil they would be unable to store, which actually saw a negative price per barrel for a short period.
Storage capacity on land has filled up quickly and some have resorted to storing oil by sea, paying up to $100,000 per day to lease tankers for storage purposes.
After briefly dipping to -$37, the oil price has since recovered to around $39.
Whenever I am asked to make macro-economic predictions, I am reminded of a great quote from an unknown source – “the job of an economist is to explain why the predictions made 12 months ago did not come true”.
In my experience, economies are never as good as they seem, and never as bad as they’re predicted to be.
In Australia, we have really dodged a bullet economically. While the “bears” are predicting an economic cliff in September, the Government has shown a commitment to rescuing the Australian economy from financial ruin. I find it hard to believe that after all the hard work during lockdown, that further support and stimulus wouldn’t be provided later this year if required.
Yes, we are in a recession, given two consecutive quarters of GDP decline, but are we heading for a great depression? Absolutely not.
I cannot see us staying in a recession for longer than 6-9 months, that’s on the assumption that we don’t encounter a second COVID-19 wave.
If we could take anything from the United States it is their supreme confidence and optimism in recovering from hard times. COVID-19 has a tighter grip on them, however, the US stock market just notched its best quarter in decades, gaining 17.8%.
Overall, I find Australians have become far too pessimistic and lack confidence in our ability to recover from adversity. Times are tough, but what doesn’t kill you, makes you stronger. We are down, but not out. It will take resilience, perseverance, and hard work, but we will recover. Our rural communities have shown these strengths time and time again through the bushfires, drought and floods.
I could not be prouder of our team, particularly over the last six months.
Our senior management team were on the front foot planning for ‘business as usual’ whilst required to work from home. It speaks to our innovative culture that systems were already in place to cope with such adversity, allowing our staff to pick up their office laptops and plug-in from home with minimal interruption.
Most staff have entered their 16th week of working from home and I assure you, we are missing the fun and family vibe the office environment brings, but let’s hope an office return is not too far away.
In late 2019 we completed an extensive office expansion and refurbishment, missing these great new spaces is adding to the desire to return to the office! It’s likely that many clients are yet to visit the new office (same location) and we are excited to welcome you as restrictions ease.
Our staff numbers grew by around 20% in 2019/2020 and while bigger is not always better, we strive to continue providing a bespoke client experience with each client having a small dedicated team servicing their needs. Our new additions will certainly compliment this.
Our advice team grew by 30% in 2019 as Travis Schindler, Alison Dellow and Pierce Hanlen earned their respective promotions to Private Client Adviser roles.
Travis, Alison and Pierce are highly experienced and credentialled, but most importantly, they are extremely passionate about partnering with their clients to achieve their client’s goals and dreams.
Gladys Seah was elevated to Senior Associate Adviser status and is on track to become a Private Client Adviser within the next 12 months.
Finally, we welcomed Chris Colman into an Associate Adviser role, joining Alexi Guagas, Michael Peart and Fiona Fang.
Earlier this year you may have received a request to think about the service we provide you. This survey was part of our association with the Macquarie Virtual Adviser Network (VAN), which is a group of high performing financial planning businesses across Australia that we are fortunate to be a part of.
The survey examined a clients’ propensity to continue doing business with us, do more business with us, and refer their family and friends to us.
The results were outstanding and very humbling. Hewison Private Wealth was rated 9.1/10 for overall client satisfaction.
To read more on these results you can follow this link>>
As many of you already know, at Hewison Private Wealth we don’t follow the crowds, we tend to lead them.
Given our client service is unique, so too are our systems. We’re not interested in providing the same ‘off the shelf’ experience as other planners down the street.
We’ve been working tirelessly to overhaul our systems to improve our client experience. This includes improving efficiency in the back office so our staff have more time to service your needs and build relationships. Of most interest to you will be the launch of two significant enhancements to the way advice communication is delivered and the way in which you access your online portfolio.
Shortly, we will begin sending advice digitally, accessible by a text message link and email. The technology will allow clients to respond via tapping an ‘approve’ or ‘decline’ button. The response will be registered in real-time in our new portfolio management software.
It will allow you to access your advice quicker and remove delays or errors from missed emailed responses.
Prior to launch, much more detailed correspondence will be sent to clients detailing its use.
In conjunction with our upgraded advice communication, we will also launch a refreshed version of our online portfolio access. Currently, many of the features are similar to the existing experience, however; the new platform allows for some exciting new features which will be rolled out over the next 12 months.
We are confident the year ahead will see relationships with our clients and professional networks strengthen and grow.
Hewison Private Wealth is a Melbourne based independent financial planning firm. Our financial advisers are highly qualified wealth managers and specialise in self managed super funds (SMSF), financial planning, retirement planning advice and investment portfolio management. If you would like to speak to a financial adviser on how you can secure your financial future please contact us 03 8548 4800, email firstname.lastname@example.org or visit www.hewison.com.auPlease note: The advice provided above is general information only and individuals should seek specialised advice from a qualified financial advisor. The views in this blog are those of the individual and may not represent the general opinion of the firm. Please contact Hewison Private Wealth for more information.