redundancy

[RufflyRustic]

http://www.ingdirect.com.au/ is another great online saver account. I couldn't be happier with it and it's high interest rate 5.4% - ok so it's probably not the highest around, but it certainly beats 0.01%

cheers
RufflyRustic

[BobR]

A bit dangerous giving other people financial "advice" (only people qualified to put their hand in your pocket can give advice). Having said that, IF you must talk to a financial adviser, and IF you must go into managed funds, be careful about Wrap accounts. IMO the only beneficary of a Wrap account, is the wrap provider, the accountant, and the financial advisor. It will also lock you into the Wrap provider, and their approved advisors. Should you give your advisor the flick, then you may not get to use a new financial advisor of your choice. And if you do, they might not be prepared to use this wrap provider and you will have to exit the current funds and move to another. You will wear the costs associated with this which include any capital gains tax, plus exit and entry fees. All I am saying is BEWARE!.

[Iain]

Send the money to me, I have a secure account which pays well.
Your Account Number is 1

[woodbe]

be careful about Wrap accounts.

Funnily enough, I have never heard of Wrap accounts until about an hour ago.

Bob, are you able to explain how they work? I don't know anything about them, but it sounds like I should...

woodbe.

[ozwinner]

Funnily enough, I have never heard of Wrap accounts until about an hour ago.

Bob, are you able to explain how they work? I don't know anything about them, but it sounds like I should...

woodbe.

They send a cheap hooker around to your place, she wraps around your leg, you give her money, she leaves with your money, neither to be seen ever again.

Al

[BobR]

This is a crude description but should give you some understanding of what they are all about. If we step back a few years, when you had some funds to invest and you did not want to play the stock market, you could place your money with managed funds. You selected the fund manager, and the type of fund(s) you felt comfortable with. You paid an entry fee, which in a retail fund could be anything up to about 4% of funds invested. That was your only cost. At the end of the financial year your fund would issue you with a statement which you used to fill out your income tax return. Should you be with several funds this process may become a bit of a nuisance. You could pass it all off to an accountant who could manage the process for you. Enter the wrap accounts. This is a marketing umbrella. The wrap provider sets up a particular wrap account that contains a bundle of managed funds. You are restricted to these funds but may move between them based upon terms dictated by the wrap provider. The wrap provider takes an annual fee for this based on the value of funds invested. They will promote access to wholesale funds at a lower entry cost as a positive. What they don't tell you is that with sufficient funds you can go directly to a wholesale fund. The BIG benefit you will be presented with is that they will do all the paperwork for you. You then give this to your accountant - another fee. Your financial advisor not only gets a trailing commission from the fund managers, but will charge you a fee for reviewing your investments each year. Everyone has their hand in your pocket. BTW, you still have to pay the entry fee for each fund you invest in. As mentioned in my last post, you are to some degree now locked in. Could be big dollars to get out if you trigger CGT, exit fees, then reinvesting fees. Hope this crude outline helps you ask more questions when investing.

[woodbe]

Cool. Thanks Bob, I will certainly be asking

Thanks for the quick and succinct response.

woodbe.

[johnc]

The only comment I would make concerning Bob's post is the cost of the annual fee in wrap accounts which can be up around 2.4% of the funds invested by the time you add the managed fund fee, the wrap account fee and the investment advisors cut. Probably the last great rip off really. The industry funds have a fee hidden in the return of around 1% but don't feel fooled because the rate of return is after the fee so at least the declared rate is an honest one. Some of the earlier mentions are of no fee but low return products which are fine for short term investing. There is always self managed super but nothing is free and although investing directly in shares etc might save you fees your accountant will still charge an audit fee which can be hefty so that comes down to the amount invested.

So in a nut shell the wrap accounts are a hefty cut to the advisor up front followed by an annual fee of up to 2.4% which when you consider that the dividend yield is often around 4% leaves you relying heavily on capital gains to keep in front.

John.

[Farm boy]

thanks for your advice guys
it is great to have different opinions from everybody the redundancy takes effect in june 2007, my wife is keen to buy a nice property at this stage to rent or leave the money in the bank for a few months until we come back to reality
bodgy you hit the nail on the head about status i am slightly scared working for one employee since leaving school but glad this will pass.
married to a good women helps unfortunately she has already warned me no extra shed time will be granted:mad: until all jobs around the house are completed man i hate varnishing windows
cheers
greg