Friday 1 February 2019

Financial Planning CPD and FASEA requirement progress

Now that I'm a registered Financial Planner/Adviser I need to meet the annual CPD requirements (basically 40 hrs of approved training pa) and also work towards the new FASEA education requirements that existing Financial Planners have to meet over the next couple of years.

I did 8.75 hrs of CPD during January via the MyKaplan website access provided by my AFSL, and also made a bit more progress towards completing the specialisation courses I'm doing in SMSF and Margin lending (these IIT courses *could* also provide some CPD credits when I complete them - the ML course quotes CPD Accreditation number 006725 for 11.5 CPD points and SMSF quotes the same CPD Accreditation number for 25.75 CPD points). And the Advanced DFP I'll be completing with IIT this year could also provide some CPD units (75.25 units!), however my AFSL tracks CPD compliance via Kaplan, so a maximum of 30 units of 'external' CPD can be counted towards the 40 unit requirement from their point of view. The four subject I complete for the Masters degree during 2019 could also provide some CPD units, but I won't need those CPD points to reach the minimum requirement this year. I find it quite amusing that some existing Financial Planners (and accountants providing SMSF 'advice') have been whinging online about having to complete 40 units of CPD pa!

What I will need is to complete the FASEA educational requirements by 1 Jan 2021. As I only have a DFP and a 'non-relevant' degree I will need to complete at least the 8 units required for the Graduate Diploma by then, although I'm currently planning to complete the 12 units for the Masters sometime in 2020 and have commenced a MRes degree by then.

Oh, and I also need to complete a TASA course from IIT later this year, as I won't get all the Master's degree courses that will satisfy TPB registration requirements completed before the end of this year, whereas my AFSL requires all new Financial Planners to get the training required for TPB registration completed within the first 12 months...

Looks like a fairly busy 2019 study-wise, not to mention trying to launch my business part-time while working full-time at my 'day job' ;)

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Net Worth: JAN 2019

A rebound in local and international share markets meant that my retirement savings balance increased $42,724 (4.64%) and my geared share portfolio increased $19,533. The continued deflation of the property bubble nationwide, and especially Sydney, meant that the gain in my share portfolio was more or less offset by the valuation of our home decreasing by $18,397 (2.37%) during the month. Overall, my net worth recovered $44,081 (2.05%) during the month to $2,194,981. Still well below my all time peak.

I've started using some of the credit available in my St George 'portfolio loan' facility to fund my financial planning expenses (the self-education costs of the Masters degree, and the monthly licencee fee and CRM/admin package fee for the basic module of 'Midwinter'). Until I start receiving some client fee income, this debt will accrue at a rate of about $2,430 per month. Using the one loan facility to fund the major business running costs and self-education costs will make it easy to keep track of the amount of (tax deductible) interest I pay.

My goal is to start generating business income during 2019, and to generate enough business income during 2020 to cover running costs ('break even'). Hopefully by 2021 the business will be profitable, or at least cover the running costs and related self-education costs (the Masters, then possible a MRes degree followed by a PhD in Financial Planning). We'll see how things pan out.

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QFF points for saving for my retirement

I received an unusual offer via email the other day - I could receive 20,000 Qantas Frequent Flyer points if I opened a superannuation account online with AustralianSuper using the provided link, and contributed $350 within six months.

I already have a SMSF (low cost admin/audit annual fee of around $900, with the cost shared across my account and that of DW and DS1) for the bulk of my retirement savings, and an account with the super fund specified by my employer (as they subsidize the admin fee, so its quite low cost, and they also pay the premiums for a fixed amount of life insurance within that fund, so the admin cost is less than the value of the insurance premiums benefit I receive). So the main question when deciding whether or not to take up the AustraliaSuper offer was how much will the account cost compared to the value of the QFF points? The fund has a fixed admin fee of $1.50/wk, which is rising on 30 March to $2.25/wk. There is also a $35 'exit fee'. So, if I keep the account open for five months (the QFF points are supposed to be allocated within 2-3 months of making the $350 contribution) and then rollover the account balance to my SMSF it will end up costing around $1.50x9 + $2.25x13 + $35 = $77.75. 20,000 QFF points are worth between $132 and $456, depending on what flight or 'Qantas Store' product the points are eventually redeemed for. For most domestic economy flights, 20,000 points are worth around $280 of travel. The points are 'worth' a lot more when used for upgrading economy international flights to business class, but that isn't something I'd actually spend cold, hard cash on. Overall, the 20,000 points are probably 'worth' around $280 to me, so my net gain for taking up this offer is around $200. Of course I am also locking away that $350 until I reach preservation age and can withdraw money from my superannuation, but that isn't too long to go now...

Anyhow, I decided to take up the offer. It took about 5 minutes to complete the online application process, and the BPay details for making a contribution were available the following day when I logged in to my new account. I did a BPay of the $350 personal contribution the day after I opened the account, and the funds were reflected in my balance the next day (I invested 50% in Australian Shares and 50% in International Shares) - which had gone up to $351.25. I'll wait an see when the promised QFF points get credited, and then do a rollover application. All in all, a fairly quick and painless way to 'earn' an extra 20,000 QFF points.

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