Meg Heffron

Automated investment provider Six Park has announced it has partnered with leading independent self-managed super fund (SMSF) administration provider Heffron to offer a transparent, low-cost, digitally driven, end-to-end SMSF service.

The partnership allows SMSF trustees to establish an SMSF and take advantage of robo-advice for their fund, with Heffron managing the compliance and Six Park managing the investments.

Six Park CEO, Patrick Garrett, said that while there will always be a place for traditional advice, the solution offers a unique value-for-money proposition for trustees and a lower prospective entry point to set up an SMSF.

“Digital technology and automation are disrupting the wealth industry not because they’re new but because they meet a need for investors, reduce barriers to investment and reduce costs,” said Mr Garrett.

The solution also provides a significant level of transparency for investors at a time when this is more important than ever before, said Mr Garrett.

“Both companies are unaligned with any financial institutions and have shared values of trust and transparency. Six Park chooses investments based on what we believe is best for our clients, not any other incentive or commission.  Heffron’s fees are fixed, independent of the size of the portfolio and do not include any commissions.

“We believe we’ll see more and more investors turning to fintech solutions that can provide the level of accessible, transparent and trustworthy asset management that should be standard in this industry.

“We’re very excited to be working with Heffron – their team of experts leads the industry, having won awards for SMSF administration, education, documents, actuarial certificates and more. With them, we can offer the best of innovative technology, automation and human expertise across professional investment management, SMSF set-up and ongoing administration.”

Heffron co-founder and Head of Product, Meg Heffron, said of the partnership: “Both Six Park and Heffron have a vision of bringing expertise normally only available at the big end of town to everyone.”

Both firms are also passionate about ‘simplicity on the far side of complexity’.

“By that, we mean taking something that can be complex and making it accessible and simple without dumbing it down – breaking through the complexity to achieve simplicity rather than achieving simplicity by pretending the complexity never existed in the first place. Six Park does this by taking an enormous amount of experience, expertise and skill in investment markets and wrapping it up in a service that appears very simple to its clients. Heffron does the same thing with SMSFs – sure, they can feel complex if you don’t know anything about them but with the right partner it’s surprising how simple they can be.

“If you’ve decided to manage your own superannuation, the Six Park and Heffron partnership provides a great entry point to having your own fund. Over time, it’s inevitable that a client’s needs will change. Some will want to branch out beyond Six Park investments, others might want to take advantage of some of the strategic opportunities available in SMSFs and will need different technical support. Six Park and Heffron can work with people throughout their superannuation life.”

The new offering will be available from this weekend, when it will officially launch registrations of interest at the Self Managed Super Fund Expo being held at the Melbourne Convention & Exhibition Centre, April 27-29.

Prospective trustees should consider whether an SMSF is right for their personal situation and whether an individual or corporate SMSF structure is appropriate. Six Park is not licensed to advise on the suitability of an SMSF for prospective trustees.

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Corporate earnings growth in developed and emerging markets has been strong (above 10%) and continues to strengthen (see Chart 1 below).

We believe that global markets are fairly to generously valued, but the continuation of earnings growth would be sufficient to make the case that markets are not overvalued for the near-term, given the breadth of positive news and ongoing low inflation, particularly in the US.

Capital is also flowing into emerging markets on the heels of improving global conditions and a belief that global interest rate rises will be gradual.

What has been lost in much of the market commentary is the positive and transformative impact of renewable energy in creating jobs and lowering energy bills, and how advances in technology and automation will be drivers of economic growth.

China and the EU

Despite slowing growth in China, President Xi Jinping appears intent to do what it takes to keep the economy and banking sector stable. In the European Union, French President Macron’s intention to implement structural reform and unite the region, gives hope that the EU might navigate its way through the post-Brexit era without significant disruption.

There are no major political elections this coming year, which is in stark contrast to numerous elections over the past year, which brought an element of uncertainty and fear to global markets.

Local growth

A strong June quarter GDP growth suggests that last year’s Q3 (Jan – Mar 2017) weakness was temporary. Our economic outlook remains positive with growth in business investment in non-resource sectors and infrastructure spending. Job growth has been strong, even if wage growth is modest, and interest rates are expected to remain flat, or increase slightly over the next year.

Somewhat unheralded, immigration remains the oil that keeps Australia’s economic engine running. Population growth of 1.6% (in the 12 months to March 2017) is almost twice that of the US.  Much of this growth (0.96%) came from Net Overseas Migration (NOM), much of it skilled labour which helps drive consumer demand that underpins labour markets (source: Australian Bureau of Statistics).

The domestic property market will likely cool off, but is not an imminent valuation bubble about to burst.  This will be a change from previous years, which saw exponential growth. It may also provide some respite for potential buyers.

We will also see domestic political activities mimic the US to some extent; turbulent and possible changes, but nothing that is likely to seriously impact market our economic conditions.

Prospect of a market correction

Central banks have either started, or have announced intentions to raise interest rates.  We expect the unwinding of fiscal stimulus to be gradual; markets seem to have priced the expected increase in rates into asset valuations.

However, with global share markets recently reaching record highs, pessimists have been more boisterous about an imminent share market crash.  Markets will almost certainly move off recent highs, though the timing, catalyst, and magnitude is unknown.

If a pullback occurs, then fear and emotion will come into play, and a very important question arises for investors: is a pullback a healthy correction or a more significant reversal of market trends into bear market territory?  We will make that assessment at the time and review our investment strategy accordingly. The recent run up in markets has been more of a “creep” versus “soar”, and based more on fundamentals versus speculation, so we are hopeful that any near-term correction will be of the “normal market cycle” variety.

Globally, there is a risk that central banks raise rates too quickly, which could prematurely slow down global growth.  Despite the potential passage of a tax reform bill (pro-business) in the U.S., the specter of the Russian inquiry creates a measure of uncertainty for US political stability.  Generally, markets do not like uncertainty, which can be a catalyst for sell-downs.

By Patrick Garrett, CEO

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