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YourSpring 2023PERSONAL WEALTHWelcomeGlobal markets seem to defyeconomic reality as the sharemarkets appeared have beenbuoyed by consumer spending, We're still on uncertain ground assome analysts expect a soft landingwhilst others feel this stance may beoverly optimistic. Uncertainty leadsto market volatility, and alsoopportunity.As they say, the one thing that isconstant in life is change. Whilstgrowing your wealth is one part of agreat financial plan, protecting yourwealth in the event of your incapacityor death is just as important. Withthis in mind, we take a look at thepillars of estate planning, foreveryone.We hope you find this editionvaluable!We have witnessed asituation in global sharemarkets that has seemedto defy economic reality.The overarching theme isthat global central bankshave needed toaggressively hike interestrates to fight runawayinflation at a time of recordgovernment and consumerdebt levels. For example,the Reserve Bank ofAustralia (RBA) hasincreased rates 12 timessince May 2022.This has had a significantlynegative impact on globaleconomic growth.Throughout the year,nearly all economicindicators were flashing arecession led by the US.We saw a debt crisis in theUK in September 2022,followed by a collapse inseveral large US RegionalBanks in March 2023. Yet global share marketslargely shrugged off therecessionary outlook,specially in the US, whichreturned 23.6% for the fullyear and 9.1% for the Junequarter. However,Australia, which led themarket in the first half ofthe financial year, returned Leaving behind anunusual 12 monthsLeaving behind an unusual12 months Super strategiesBig Mac index & travelEmpowering choicesHow our habits changeEstate planning is foreveryoneContents134CONTINUED ON PAGE 2

14.8% for the year and only 1% for the final quarter. Thedrivers of return were very different in the second halfof the financial year, with the returns of the US sharemarket dominated by large-cap technology-relatedstocks – Nvidia being the standout. Australiaunderperformed due to the lack of technology exposureand continued uncertainty about China’s recovery.Why the share market performed well againstexpectations.Share markets were saved by consumers. Spending wasresilient during the year despite the huge increase in thecost of living due to historically low unemployment andassociated wage increases and large savingsaccumulated during COVID-19. Later in the year,markets took heart from the fall in US inflation.Australian inflation has also fallen, albeit still at highlevels.What does the year ahead hold?The times we face are essentially unchanged and arevery uncertain, as described by the following snapshotpresented by Magellan.Inflation, while falling, is well above targets. CentralBanks (including the RBA) seem willing to risk recessionto achieve their inflationary goals. So-called ‘stickyinflation’ (services inflation) remains stubbornly high.Further, surplus consumer cash from COVID is expectedto be exhausted by the end of September 2023, puttingdownward pressure on the economy and likelyincreasing unemployment. Overall, we are in a lowgrowth period, with the OECD forecasting Global GDPgrowth of 2.7% in 2023, rising to 2.9% in 2024. Growth in2023 is projected to be its lowest annual rate since theglobal financial crisis, apart from the 2020 pandemic.CONTINUED FROM PAGE 1Inflation is very unlikely to fall to Central Banktargets over the next 12 months, with stickyinflation and interest rates likely to be held at highlevels for longer than markets expect.Falls in consumer spending will continue withsignificant negative impacts on corporateearnings. Bank lending officers have tightened creditconditions to ‘credit crunch’ recessionary levels. Corporate insolvencies are increasing rapidlyglobally (a 50% increase on the prior year inAustralia).The yield curve is significantly inverted, which is astrong recessionary indicator. China’s economy appears to be in trouble, withmajor real estate collapses continuing, indicatorssuch as exports and imports plummeting, andunemployment rising rapidly.Data sets such as small business confidence,consumer confidence, and corporate CapExintentions are at low levels.Against this background, some analysts and fundmanagers expect a ’soft landing’ where a US recessionis averted, and the rally in stock markets continues.This may be overly optimistic, and our base caseexpectation is a US recession for the following reasons(noting that Europe and the UK are already inrecession):The odds of a recession in Australia were 50/50,primarily due to confidence that record-high prices foriron ore and coal would continue. The outlook is nowsignificantly more uncertain due to the deflation of theChinese economy. The significant pressure onhouseholds due to the ‘mortgage cliff’ will worsen inthe months ahead.What does this mean for portfolios? Uncertainty leads to volatility in investment markets,especially for markets where valuations are stretched,like the US market (which is 70% of the world marketby capitalisation). A US recession would cause a sharpfall in share prices globally as corporate earnings andPE multiples fall and unemployment increases. Thisrecession is hard to predict but will likely be in the lastquarter of the 2023 calendar year or early 2024. Weexpect that the recession will not be deep, and theeconomy may recover quickly. It may be the case thatshare market returns will be low and volatile forseveral years.Nevertheless, with volatility comes opportunity. Whilewe would be cautious in adding to equity exposuresnow, there may be opportunities if a correction doesoccur. Further, the increases in interest rates haveresulted in good returns for term deposits and fixedinterest and attractive opportunities for profits inlong-term bonds when interest rates do come down. Overall, we believe it is important to maintain a qualitytheme in portfolios in uncertain times and beprepared to make changes to your portfolio asopportunities arise.PAGE 2 SPRING 2023

PAGE 3The recent release of the 2023 IntergenerationalReport by Treasury demonstrates superannuation willplay a key role in reducing reliance on the Age Pensionand supporting the economy. The report anticipatesthat mandatory superannuation will lead to adecrease in expenditure on Australian governmentage and service pensions from approximately 2.3% ofGDP in the fiscal year 2022-2023 to about 2.0% of GDPby the fiscal year 2062-63.Recent Australian Prudential Regulation Authority(APRA) figures show Australia’s total superannuationassets reached $3.54 trillion at the end of June 2023; a12-month increase of 7.6%. Super strategiesWhere are you planning your next vacation?The Big Mac index has been used as a baselineindicator to help measure purchasing power betweennations. Interestingly, from July 2022 to January 2023,some nations, including the USA, Venezuela, China,and Indonesia, saw the relative price remain stable.Countries such as Singapore, Britain and India sawaround a 5% hike, whilst Australia, New Zealand,Japan, and the Euro area saw around a 10% jump. Those in the 60-64 age group have an averagebalance of $358,000 for males and $288,000 forfemales compared to those in the 30-34 age group,with an average balance of $49,000 for males and$40,000 for females. Increases in the governmentSuperannuation Guarantee rates up to 11% on 1July 2023, 11.5% on 1 July 2024, and 12% on 1 July 2025, will help boost these balances. Strategies including topping up concessional andnon-concessional contributions, spousalcontributions and selecting the appropriate superfund investment strategy with you are ways we canhelp ensure you’re ahead of the average.Big Mac index & travelUK-based AML/The Nursery Investor Index showsthat even though investors feel they have anincreased sense of control and opportunity, theyare generally hesitant to make big changes totheir portfolios. As professional financial advisers, we can help youto become more confident in making new ordifferent investment choices, focused on helpingempower you to achieve your goals.Empowering choicesWhen was the last time you paid in cash? It probably wouldn't surprise you that in 2022, only 13% oftransactions were paid in cash, compared to 69% in 2007. Conversely,in 2007, 26% of transactions were by card, 15% by debit cards and 11%by credit cards, increasing to 76% of transactions by card in 2022, 51%by debit cards and 26% by credit cards. https://www.finder.com.au/credit-cards/credit-card-statisticshttps://www.rba.gov.au/publications/bulletin/2023/jun/consumer-payment-behaviour-in-australia.htmlHow our habits changeSPRING 2023

Disclaimer: The content in this newsletter is of a general nature only and are not to be taken as recommendations as they might be unsuited to your specificcircumstances. The contents herein do not take into account the investment objectives, financial situation or particular needs of any person and should not be used asthe basis for making any financial or other decisions. Your Lifespan adviser or other professional advisers should be consulted prior to acting on this information. Thisdisclaimer is intended to exclude any liability for loss as a result of acting on the information or opinions expressed.AFSL 229892 ABN 23 065 921 735 lifespanfp.com.auLevel 24, 1 Market Street, Sydney, NSW, 2000Phone: 02 9252 2000 Email: advice@lifespanfp.com.auYour financial planner is an Authorised or Corporate Authorised Representative ofLifespan Financial Planning Pty Ltd The Public Trustee will determine how your estateis to be distributed, which can take a lot of timeand consultation with related parties. If you have a complex estate, children fromdifferent relationships, or are separated but havea new partner, this could lead to legal proceedings,infighting amongst relatives and your assets beingwasted on legal fees or distributed against yourwishes. 3. A Valid WillWhereas the first two pillars ensure that importantmatters are handled in accordance with your wishes ifyou’re incapacitated, a Will ensures that those samematters are handled in accordance with your wishesafter your death. A Will gives you the best chance ofensuring that your assets go where you want them to.It also provides an opportunity to set up atestamentary trust upon the person’s death foradditional protection and potential tax savings fornominated beneficiaries. If you die without a valid Will:4. Superannuation Superannuation is not automatically included as partof your estate. When you pass away, yoursuperannuation is distributed to the person(s) youhave nominated in the fund’s death benefitnomination. However, this may not be binding on thesuper fund, and if you haven’t nominated abeneficiary, this could result in a lengthy process asthe super fund trustee needs to decide who gets themoney. An estate plan gives you choice and control.Ensuring that your estate plan is in order gives youchoice and control over how your affairs and assetswill be handled, which in turn benefits both you andyour loved ones. If you would like to explore your estate planningoptions, contact us to get started. Give other people directions about any futurehealth care you may need,Make your wishes about the type(s) of treatmentyou want (and don’t want) known to medicalprofessionals and,Appoint someone you trust to make decisionsabout health care on your behalf.Whilst growing your wealth is one part of a greatfinancial plan, protecting your wealth in the event ofyour incapacity or death is just as important. Many people think that Estate Planning is only forpeople close to retirement, especially if we fall into thetrap of thinking that Estate Planning is just aboutgetting a Will. But did you know that Estate Planningaddresses key protection strategies whilst you’re stillalive? It doesn’t matter who you are, EstatePlanning is for everyone. What are the key pillars of Estate Planning?Estate Planning is all about making sure that you getthe choice as to what happens to you and your assets– whether you need someone to make decisions onyour behalf if you become incapacitated or you passaway, and your estate needs to be divided up. 1. Advance Care DirectiveShould something happen to you, and you are unableto communicate decisions about your medical careand treatment, an advance care directive allows youto:If the directive is valid, it must be followed and cannotbe overridden by medical professionals or familymembers. 2. Power of AttorneyA Power of Attorney allows a person you nominate tomake financial and legal decisions on your behalf ifyou lose capacity because of illness, injury, ordisability. They can help ensure important financialand legal matters are handled without delay if youcan’t manage them yourself – for example, payingyour bills, managing your bank accounts, managingyour investments, and buying and selling property.Estate planning is for everyone