About Gavin Fernando

Gavin Fernando is Director, Financial Services at Prosperity Wealth Advisers and an authorised representative of Hillross Financial Services Ltd.

With over 20 years experience in the financial services industry, Gavin's has years of diverse financial knowledge that ranges from managing retail and commercial loan assets during his time with the Commonwealth Bank, to his present position as Director, Financial Services.

Gavin provides leading advisory services in the following areas of expertise:
• Superannuation and Rollover Advice
• Wealth Creation
• Redundancy and Retirement Advice
• Tax Minimisation
• Insurance or Risk Management
• Estate and Will Planning

Gavin focuses on bringing clarity and simplicity to financial matters, working to accelerate financial success through sound financial advice and enjoys bringing to his clients the extra measure of freedom that wealth building delivers.

Two Prosperity Advisers listed among Australia’s Top 50 Financial Advisers in The Australian’s Deal Magazine

Prosperity Directors John Manuel and Gary Dean have both been listed among Australia’s top 50 financial advisers in the inaugural list of Australia’s top advisers by The Deal, the monthly business magazine in The Australian in conjunction with Barron’s, a US based financial publication.

John Manuel a Director and partner of Prosperity Advisers was ranked in 13th position, while Gary Dean Director and partner based in the Sydney office of Prosperity Advisers came in at 40th position. In speaking about the recognition, John Manuel says, “Our clients are dynamic. They are attracted to us due to our willingness to understand their financial needs intimately and to deliver tailored, strategic and ongoing advice.”

Gavin Fernando, Director Financial Services at Prosperity Advisers says, “This list celebrates the leaders in the financial advice sector and we are very proud to have two of our advisers listed among a pool of very high calibre personal financial experts. Both John and Gary are the best of the best and this recognition builds on the feedback we regularly receive from their clients about the positive experience of working with each of them.”

The purpose in undertaking to rank Australia’s top financial advisers is twofold, to provide the market with a selection of quality advisers and to establish a benchmark for a high stand of client care that all advisers can emulate.

About undertaking the survey, the organisers of the list, Barron’s says, “It is to cast a positive spotlight on the advisory business in Australia broadly, by highlighting a group of leading advisers as examples of the tremendous skill, passion, and acumen represented within the industry. Our goal will be to recognise excellence in wealth advisory and educate the investing public on the value of a talented adviser.”

The survey comprised 73 questions covering everything from the financial performance of the advisers’ practices to their credentials, education and charitable philanthropic work.

“At Prosperity we firmly believe that reaching your financial goals may not always mean making more money, but rather making smart decisions with what you have”, says Fernando.

The partners and staff at Prosperity congratulate John and Gary for achieving this remarkable recognition!

Find out more about the Barron’s survey and Australia’s Top 50 Advisers listing here.

Gavin Fernando is an Authorised Representative of Prosperity Wealth Advisers Pty Ltd (ABN 32 141 396 376) is part of the Prosperity Advisers Group and an Authorised representative of Hillross Financial Services Limited, Australian Financial Services Licensee 232705. This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. Readers need to consider their own financial situation and needs before making any decisions based on this information.

Super changes just around the corner

For more than 20 years, superannuation has been compulsory for Australian employees. In this article we discuss the key considerations in relation to the changes foreshadowed in the 2016 Federal Budget, and enacted by legislation in November last year, which are the biggest superannuation changes that have come into play in the last 10 years.

Most of the changes will commence from 1 July 2017 and it’s important you have appropriately planned for, and taken any necessary action, in the months leading up to July.

Pension reforms

By way of background, there are two phases within the superannuation system:

  1. Accumulation (Savings Phase), subject to a 15% tax rate; and
  2. Pension (Drawdown Phase), exempt from tax.

There are two main changes to consider: 

  1. A limitation on the funds that can be held in the Drawdown Phase, known as the Pension Transfer Balance Cap (PTBC), being $1.6 million. Any excess funds will have to be moved to the Savings Phase, subject to15% tax, or withdrawn.The system will be managed by the ATO through measurement of your personal transfer balance account via a series of debits and credits. Credits will be applied when you commence a pension and debits will be applied when you cease a pension.Indexation on the $1.6 million is available, however it will only be indexed in $100,000 increments and will only apply if you haven’t fully utilised your PTBC.
  1. Cessation of the tax exemption applying to the pension type known as Transition to Retirement, meaning any earnings in that pension type will be subject to 15% tax. Note, no cap applies to this type of pension.

These reforms have no impact on the taxation of benefits you receive in your own hands. If you are over 60 and receive a super benefit, no matter how you are able to access it, it is non-assessable, tax-exempt income and it won’t affect your taxable income.

One-off CGT relief

Under the PTBC, some members will be required to move funds from the Drawdown Phase to the Savings Phase. To the extent that taking that action triggers a capital gain, an unexpected but welcome one-off relief is available through what is known as the Pre-Commencement Stage, being 9 November 2016 through to immediately before 1 July 2017.

During this time, the trustee of the fund must elect to apply for that relief, however it is important to note that this election is irrevocable. If a superannuation fund is in the Drawdown Phase and another member is in the Savings Phase, the relief will apply across all assets. This may trigger a capital gain in the Savings Phase that you will never be able to unwind.

This is a tricky area and you should seek close advice from your Prosperity Adviser before electing to apply for the relief.

Amendments to contribution caps 

Since 2007, contribution caps have been the main way in which super has been regulated. There are two types of contributions you can make to your superannuation fund:

  1. Concessional contributions, where a tax deduction is claimed either by yourself or your employer; and
  2. Non-concessional contributions, where no tax deduction is claimed.

Currently, the cap on concessional contributions is $35,000 for those over 49 years of age at 30 June 2016, or $30,000 for those under 49 years of age. After 1 July 2017 the cap will be $25,000, regardless of age.

The non-concessional cap is currently $180,000, and for those under 65 there is the ability to bring forward the next two years of contribution caps to make a $540,000 contribution.

From 1 July 2017, the cap will be reduced to $100,000 annually and a limit of $300,000 will be placed on the ‘bring forward’ limit for those under 65.

Apart from a reduction in the amount of money you can put into your superannuation fund, there is one other change, being a concept called Total Superannuation Balance. From 1 July 2017, balances which are close to or exceed the PTBC of $1.6 million will be assessed, and a further constraint on the money you can put into super on a non-concessional basis could be down to $0. Therefore, there may be a one-off opportunity available to some superannuants which will no longer be available after 1 July.

Time to act

 While the reforms may be seen as an attack on superannuation, you should not consider superannuation as any less useful in retirement savings. Notwithstanding the reforms, superannuation remains the most effective retirement savings vehicle. However, the clock is ticking and there has never been a more important time to contact your Prosperity Adviser for a review of your arrangements.




Gavin Fernando is an Authorised Representative of Prosperity Wealth Advisers Pty Ltd (ABN 32 141 396 376) is part of the Prosperity Advisers Group and an Authorised representative of Hillross Financial Services Limited, Australian Financial Services Licensee 232705. This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. Readers need to consider their own financial situation and needs before making any decisions based on this information.

Economic Update: Zigzagging markets looking for some summer confidence

World markets took a hit last quarter with a myriad of negative or concerning news, ranging from Scotland’s independence referendum, Hong Kong’s pro-democracy protests and the US and several other nations’ air forces entering in to Syria to fight against ISIS. These events lead to a shift in sentiment towards uncertainty that saw share market and consumer confidence fall initially before rocketing back to record highs in some markets in recent weeks.

The big stories are however, the deflation of the Yen that is underway to stimulate the Japanese economy and the on-off speculation that the US Fed may start raising interest rates sometime next year as it moves toward the end of quantitative easing. Risk assets were served up at severe discounts in the months of September and October, but have regained ground of late.

Domestically, interest rates have remained on hold this month, steady at 2.50% for the 13th consecutive monthly period. Whilst the RBA has warned previously that it may look to employ a strategy to rein in bank lending to keep house prices under control, this month, Governor Glenn Stevens barely acknowledged that concern, saying “Credit growth is moderate overall, but with a further pick-up in recent months in lending to investors in housing assets. Dwelling prices have continued to rise over recent months”.

Australian equity markets fell in September then bounced back in October, with the S&P/ASX 300 Index rising by 7.2%. September saw the ASX experience its worst month since May 2012, with around $90 billion sold off in the period, and Australian shares losing almost all the gains since the start of the year in a single month.

The pressure on commodity prices has been relentless, with Iron Ore prices continuing to fall and disappointing Chinese data weighing on sentiment.  We have seen a decline in the Australian Manufacturing PMI Index by 0.8 points to 46.5. Australian exports also deteriorated in September, however the fall of the Australian Dollar should see this sector improve in the months to come. Australian Manufacturing PMI measured exports sub-index declined by 11.0 points to 42.2 points, bringing Australia’s international competitiveness down by 4.17%.

Looking to international markets, concerns are rearing their head that Europe remains at risk of moving into a recession. ECB chief Mario Draghi weighed in on concerns saying “without reform [in the eurozone], there can be no recovery”… “I cannot see any way out of the crisis unless we create more confidence in the future potential of our economies”. In China the MSCI Local Currency Index underperformed, posting a loss of -6.20% in September before recovering confidence to achieve a 17.7% increase in retail sales and a 13.8% upturn in industrial production in October. The Hong Kong pro-democracy protests impacted on investor sentiment, resulting in the Hang Seng Index dropping by -7.31% over the month of September. Manufacturing activity in Mainland China has slowed as retail sales continue to decrease.

Gold and Oil pricing continued to fall in October. The downturn in Gold coming on the back of an appreciating US Dollar and rising expectations of the US tightening monetary policy.

Over the coming months we will be carefully watching the following:

  • The rising prices of property markets in Melbourne and Sydney and the concern of investors entering the markets chasing short term gains.
  • Geopolitical unrest and the threat of global terrorism destabilising the international economy, causing a decline in consumer confidence.
  • An increase in Australian employment market impacting local consumer confidence, impacting on small businesses.
  • Outcomes from the G20 meeting in Brisbane.


Economic update: Housing and property leading the economy again

In the wake of the Federal Budget consumer confidence has dipped in the quarter to June and our resilient Australian dollar is continuing to make our domestic outlook more difficult than it needs to be. This combined with the tragedy this week in Eastern Europe and escalating challenges in the Middle East makes geopolitical risk to the world higher than it has been of late.

The domestic cash rate remains unchanged at 2.50% and there is no sign of a rise to come in the near term. The Reserve Bank came out in early July and warned that Australians shouldn’t always expect house prices to rise and minutes in mid July indicated they will be holding rates steady until there are significant signs of improvement outside of the mining sector. On the positive, our economy has had moderate growth and there are continued signs that the transition away from mining is slowly occurring with growth in our tourism, oil and gas and property sectors.

Housing construction and new home sales have expanded significantly over the past year, although in the second quarter the pace of increase has moderated a little.

In international markets the US economy has continued to show very positive signs. The US Business output boomed over the month of June – manufacturing output and new orders rose at the fastest pace since April 2010 and job creation hit a four-month high.

A ‘mini-stimulus’ package from the Chinese Government has helped improve economic activity in the region. The Chinese economy has grown at an annual rate of 7.5% in the second quarter, up slightly from 7.4% in the first three months of the year.

The European share market was the only region posting losses in June, with slowed industrial growth.

The Australian bond market continued to perform steadily over the quarter with the UBS Australia Composite All Maturities Index increasing by 3.08%. Within the asset class Government bonds were the stronger performer gaining 3.55%, while corporate bonds increased by 2.57%.

While bonds performed well, Australian equities lost ground in the month of June, recording a loss of -1.45% as measured by the S&P/ASX 300. Over the entire quarter equities only recorded only a slight gain of 0.88%. [Read more…]

Rebalancing for a new financial year… Which asset class will prevail in 2012-13?

30 June 2012 closed a difficult year for share investors. Australian shares returned -6.7% and International shares (in Australian dollar terms) – 2.1%. By contrast the Australian and International fixed income segments returned 12.4% and 11.6% respectively. That was the year that was but where to from here…

Firstly, for those investors relying on income from their investments, it is worth remembering two things about last year’s results

1.       Negative share returns do not equate to no income from shares (particularly in the case of domestic equities). The price of a share may fall but that does not necessarily translate to a fall in payout (for example, the share price of BHP fell nearly 30% but the dividend per share increased); and

2.       Positive fixed income returns do not equate to higher income from fixed interest. The pure income return from fixed interest does not change over the life of that fixed interest investment. But, similar to a share, fixed interest investments are traded and it is this market quality that results in price volatility. In general terms, as interest rates fall, the (traded) value of a fixed interest investment rises.

The headline constraints for International shares still remain – Eurozone weakness, a fragile US economy and slowdown in emerging economic growth.  However, resolution of the Greek political landscape appears to have prevented a breakdown of the economic union, there are signs of subtle recovery in the US and with inflationary pressure reducing, emerging countries such as China and India have scope to ease policy and stimulate growth. In Australia, the three big drags on shares – relatively high interest rates, a high Australian dollar and concerns about a hard landing in China – appear to be diminishing.

By contrast, with interest rate policy generally eased or easing around the World (and as noted above fixed interest prices move inversely with interest rates), there are headwinds for the fixed interest sector in the next year.

Successfully predicting the asset class that will outperform the others for the next 12 months, let alone the return itself, is fraught with danger. If you wish to speculate on that, and back that with your money, I wish you the best of luck. A less volatile approach is to diversify a portfolio of assets across a range of asset classes.  In general terms, the lower the return required from your portfolio, the lower the allocation to equities that is required. However, given that equities are yet to recover to their 2007 highs (and may well take longer than the 40 month average since 1900 to do so following the GFC), and the relative tailwinds/headwinds facing equities and fixed interest, I would be disinclined to significantly reduce existing equities exposure in re-balancing a portfolio.

Gavin Fernando is a Director and Financial Adviser with Prosperity Advisers

Economic Update: March 2012

Quarter 1 of 2012 brought mixed messages in Australia, with two months of strength, followed by a weaker March. 

Australian Equities, as measured by the ASX All Ordinaries Index, gained 0.72% in March. The top 200 companies, measured by S&P/ASX 200 market capitalisation Index, gained 0.85% to outperform the market.

Leading these gains was the S&P/ASX 300 Information Technologies industry sector which ended the month 13.5% higher and the Healthcare Sector which ended the month up 7.51% and the quarter up 11.76%.

The Materials sector was the worst performing industry during March, declining by 3.96% due to falling commodities prices. Poorer than expected manufacturing data from China, as well as an announcement by the government to slow down economic growth, triggered a decline in the price of production metals; aluminium, nickel and zinc, in anticipation of reduced demand from the nation.  This flowed through to many Australian resources stocks.

The Reserve Bank of Australia (RBA) kept the overnight cash rate steady during March, defying some analysts’ predictions of a further interest rate drop.

This is said to have had some impact on Australian property where confidence remains fragile.  The sector experienced a minor correction during March, declining by 0.59%, after posting two solid months of gains, to end the quarter 7.14% higher. Also contributing to the March decline was a decrease in the number of new home loans and housing construction commencements, which are leading property indicators, directing investors to exercise caution in the sector.

On the back of the lack of interest rate cut, and other global liquidity movements the Australian Dollar recorded a decline against the Euro, depreciating by 4.08% last month. The AUD also fell against the British Pound (GBP), finishing the March quarter 4.61% lower.   It also fared badly against the US Dollar (USD) and the Japanese Yen (JPY), depreciating by 4.16% in the quarter and 1.83% during March.

The first quarter of 2012  saw optimism returning worldwide to equity markets from the nearing conclusion of the European sovereign debt crisis. While the disaster is not yet entirely averted, as seen in recent days, an important stabilising block was implemented during March, with the EU and IMF providing Greece with a second bailout package. Investors in Europe responded positively to this announcement and drove the MSCI Europe index 3.68% higher, to end a strong quarter during which it appreciated 9.51%.

Asian equity markets did not perform with as much consistency, seeing varied results with the TOPIX (Japan) gaining 2.15%, while the Hang Seng Index (Hong Kong) declined by 5.47%.

Looking Ahead

Looking ahead we are watching for the following activity this quarter:

  • Volatility at lower levels, but continuing as Europe continues to traverse fiscal austerity in many nations.
  • Continued improvements in international confidence as the US economy strengthens towards the pre-election period.
  • Continued potential for an interest rate cut in Australia in coming months.


Source: Data and statistics drawn from Zenith Monthly Market Report, March 2012

Disclaimer: This article has been written by Prosperity Wealth Advisers Pty Ltd, Corporate Authorised Representative (No 345322) of Primeplan Securities Pty Ltd AFS Licence No 229537 (ABN 59 070 507 274). Suite 16, Level 3, 299 Toorak Road, South Yarra VIC 3141. Tel 03 9826 2800

The information contained in this article (including any attachments) has no regard to the investment objectives, financial situation or needs of any specific recipient.  It is soley for information purposes and is not to be taken as personal financial advice.  The content is based on information from sources believed to be reliable as at the time of compilation. Past performance is not indicative, or guarantee, of future performance.  Please contact Prosperity if you require specific information or advice.