DelphiNews May 2013

Welcome to the May edition of Delphi Financial Management's newsletter.

Firstly I would like to update you on Government reforms that are being introduced and the anticipated positive outcomes they’ll have for you.

Last year, the Federal Government introduced reforms to the financial services industry called the ‘Future of Financial Advice’ (FoFA). These reforms aim to increase confidence and trust in the financial planning industry by enhancing the quality of advice delivered to clients, strengthening investor protection and increasing fee transparency. The majority of these reforms become effective on 1 July 2013.

This is a positive move for the industry and at Delphi we support the reforms which are to ensure anyone providing financial advice always puts their clients’ interests first. For a number of years now we have also ensured that all new client accounts are transparent about the fees and services associated with their advice.

As a continuation of this process, for clients who have agreed to an Adviser Service Fee, we’ll now be providing you with a document called a ‘Fee Disclosure Statement’ on an annual basis. This statement (which is in addition but separate to your Annual Portfolio Statement) will list the services you received, the services you were entitled to as well as the associated ongoing fees you paid.

If your account was opened over five years ago, it is likely that the remuneration Delphi receives is not in the form of an Adviser Service Fee and you will therefore not receive a Fee Disclosure Statement. However your total fees paid will continue to be listed in your Annual Portfolio Statement. If you would like to update your account and alter the method of remuneration so that you receive a separate Fee Disclosure Statement please contact us.

I’m also pleased to enclose the May 2013 edition of Market Update.

Last month the ongoing issues in Cyprus further eroded market confidence in Europe, with the decision to “bail-in” depositors only adding to the sentiment.

In the US, the Dow Jones continued its upward trend to reach all-time highs in April. The housing sector was also a stand-out performer last month and continues to be one of the most rapidly growing sectors.

In domestic news, the RBA cut the official cash rate to 2.75% at the May meeting. All eyes will now be on the Federal Budget next week and any potential changes to fiscal policy before the September election. MLC's Technical Services will provide a breakdown of the Federal Budget just hours after it's handed down. This includes an overview of the key measures and their likely impacts. We will forward a copy of this report as soon as it is available.

MLC's Investment Strategist, Brian Parket reviews events in Australia and overseas markets and provides an outlook for investment returns in the April Edition of the Economic Update.

Finally the opportunity to make larger tax-effective contributions from your pre-tax money just before you retire is limited. So it’s really important you make the most of your contribution cap* each financial year to boost your super balance (if your cashflow allows). The article below provides more information on contributions.

Should you have any questions regarding the proposed Fee Disclosure Statement or the other information contained in this edition please contact us.

Regards

Vince Dore

Director