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Start the new financial year on the right track

A simple investment checklist to help investors ensure they start the new financial year on the right track towards achieving their investment goals.

With the end of the financial year (EOFY) approaching, AMP Capital is encouraging customers to run their investments against a simple checklist to ensure they start the new financial year on the right track towards achieving their investment goals.

AMP Capital Head of Retail and Corporate Business Craig Keary said: “The end of the financial year is traditionally associated with tax but it’s a good reminder to look at your investments, too, particularly superannuation.

“Some investments will have tax implications that will need to be addressed while changes to your personal circumstances and the economic landscape may have had an impact on how you’re tracking towards your investment goals.

“We’re encouraging people not to ‘set and forget’ their investments if they want to grow their wealth and have enough money for a comfortable retirement. EOFY is a good time to take stock and ensure you’re on the right path financially.”

AMP Capital’s EOFY investment checklist

1.  Review your investment goals. The end of the financial year is a good time to reflect on your long-term investment goals. While it’s important to remain focussed on the long-term performance of your investments, it’s worth checking in on whether your investments are aligned with your lifestyle goals both now and in retirement.

2.  Review your asset allocation. EOFY is also a good time to perform an annual review of your asset allocation to ensure your portfolio is constructed appropriately. If growth is a goal, do you have enough of an allocation to equities? Or if income is important, ensuring your portfolio has the right mix of equities, fixed income, property and infrastructure can help you generate income while potentially lowering volatility.

3.  Make an appointment to see a financial adviser. A financial adviser can help with asset allocation as well as make sure your investments match your overall objectives. If it’s been a while since you’ve seen your adviser, your goals or personal situation have changed or if you haven’t sought financial advice before, EOFY can be your annual reminder to connect with a planner and start the new financial year on a strong investment footing.

4.  Make full use of your concessional contribution limits. If you are able to make salary sacrifice contributions, or if you are eligible to claim a tax deduction for your superannuation contributions, making sure you make full use of your concessional contribution cap can be a great way to reduce your personal income tax.

5.  Check the tax effectiveness of your investments. If you’re concerned you’re paying too much tax on your investments, consider investing in Australian shares or direct property. Australian shares may provide you with the benefit of franking credits, depending on your marginal tax rate. Similarly, you can claim tax deductions through holding direct property, which means you reduce the amount of income tax payable.

6.  Ensure your self-managed super fund is in order. Two must-dos before 30 June for investors with a self-managed super fund (SMSF) are to rectify any outstanding breaches and appoint an approved SMSF auditor. From 1 July 2014, the Australian Taxation Office will have the power to give rectification and education directions and even administrative penalties for contraventions of the superannuation law. If past contraventions have not been rectified, penalties may also apply. Another new requirement this year is the need for SMSF trustees to appoint an approved SMSF auditor. Trustees should check the register of approved auditors on the Australian Securities and Investments Commission’s website.

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