Keystone Private Advisory – The recession is officially upon us.

The recession is officially upon us following the release of June quarter GDP figures.

Stimulus packages, primarily the JobKeeper and cash flow boost measures, have maintained our economy on reasonable life support. 

Eligible employers will see the first financial impact of the extension in early November, as their JobKeeper payments are made at the revised rates in respect of payments from 28 September 2020, being:

  • $1,200 per fortnight for those working in the business ≥ 20 hours at 1 March or 1 July 2020;
  • $750 per fortnight for those working in the business for < 20 hours as at 1 March or 1 July 2020.

Employers will need to demonstrate a continued decline in turnover to qualify for the extended JobKeeper program beyond 4 January 2021 by demonstrating a decline in turnover for the December 2020 quarter, comparing December quarter 2020 actual turnover to December quarter 2019 actual turnover (30% decline if aggregated turnover ≤ $1 billion; 50% decline if aggregated turnover > $1 billion; 15% decline in turnover for charities and not for profits).

Employers should keep in mind that they may still be eligible for the extended JobKeeper program from 4 January 2021, notwithstanding that they may not have been eligible for the initial extension (28 September 2020 to 4 January 2021).

The revised JobKeeper rates from 4 January 2020 will be:

  • $1,000 per fortnight for those working in the business ≥ 20 hours at 1 March or 1 July 2020;
  • $650 per fortnight for those working in the business for < 20 hours as at 1 March or 1 July 2020.

The 2020/21 Federal budget has added to the stimulus measures, with key additional benefits available being:

  • A JobMaker hiring credit of $200 per week (for employees aged 16 to 29 years) or $100 per week (for employees aged 30 to 35 years). The eligible employees must work at least 20 hours per week and have received the JobSeeker, Youth Allowance or Parenting Payment before being hired.  Importantly, an employer receiving JobKeeper payments will not be eligible for the credit.
  • Instant asset write-off extended to new assets (no cost limit) acquired from 6 October 2020 to 30 June 2022 for businesses with a turnover less than $5 billion.
  • Temporary loss carry-back for companies with turnover less than $5 billion. Losses from 2019/20, 2020/21 and 2021/22 can be carried back and offset against taxed profits from the 2018/19 or later years.  Together with the instant asset write-off measure, this measure is a great cash flow boost, particularly for capital intensive industries.
  • Bringing forward personal income tax cuts so that they now commence from 1 July 2020 instead of 1 July 2022 – many employees will have already seen the benefit of these tax cuts in their take-home pay.

The Keystone Private Advisory team can assist you to navigate through the evolving COVID 19 stimulus environment. Reach out if you need assistance.

Keystone Private Wealth Open Advisory Panel – 100s of experts with 1000s of years’ experience

Most financial services and wealth management practices have some form of advisory panel or investment committee.

Such panels and committees are often populated with a mix of:

  • Industry heavyweights (the power)
  • Technical expertise (the boffin)
  • Semi/retired colleagues (the grey hair)

and are used for:

  • Compliance purposes (regulatory requirement)
  • A sounding board for ideas or problems (fair enough)
  • Marketing (me being a little cynical)

At Keystone Private we believe this formula is outdated and counterproductive to ensuring our clients have access to the broadest knowledge and experience base possible.

We think outside traditional methodologies and to demonstrate this have developed an OPEN ADVISORY PANEL concept to maximise the knowledge, experience and understanding available to our clients.

Through our extensive network or clients, contacts, industry colleagues, friends and family, we have access to 100s of experts with 1000s of years’ experience across every field of expertise. This expertise is available to assist across all aspects of the wealth management landscape as well as your business environment, family continuity considerations and beyond.

Why settle for the usual when you can access the exceptional?

The Keystone Private Wealth team and our Open Panel are available to assist at your request.

K2 Private Property More than just property.

Whilst K2 Private Property functions as  commercial real estate agency providing

  • Sales and acquisition
  • Leasing and tenant representation
  • Property and Facilities managemen

services across commercial, retail and industrial asset classes, it is so much more.

As part of the broader Keystone Private Group, we assist clients with

  • Due diligence
  • Contract negotiation
  • Structuring
  • Financing
  • Insurance
  • AFSL needs
  • Capital raising, and
  • Accounting and reporting needs

In simple terms K2 Private Property can provide a complete end to end service for the acquisition, ownership and disposal needs of a property owner, whether they be for an individual property owner or a portfolio within a funds management structure.

To find out how your current property landscape could benefit from something more than just an agency environment, touch base with us today.

Keystone Private Cyber – World-Class Cyber Security Services

Keystone Cyber Security is excited to announce an exclusive agreement with SYPAQ Systems to expand the cyber security services and solutions of both organisations.

The agreement will see these Australian owned companies unite to deliver world-class cyber security services to the Department of Defence, Defence Prime Systems Integrators, the broader National Security Community, other Commonwealth and State Government Departments, and private enterprise.

The combined experience and expertise is leading-edge, providing peace of mind to Australia’s most discerning organisations including the Australian Government and the military, where the protection of privacy, intellectual property, trade secrets and national security is paramount.

The combination of SYPAQ’s and Keystone Private Cyber’s decades of Defence and National Security experience provides the partnership with a deep and unique perspective on the protection of critical infrastructure that all Australians rely on, including cyber security obligations for owners and operators.

Keystone Private Cyber Managing Director, Ross Jackson said “We look forward to the opportunity partnering with SYPAQ brings.  We share values and philosophies that will underpin our relationship. The relationship enables our aligned service approach and proven expertise to continue to deliver the best quality information assurance services and to grow capability in the dynamic and increasingly hostile cyber environment.”

Keystone Private Cyber’s expertise centres on the delivery of tailored best practice security management to protect client’s high-quality information, aligned with their personal and business needs.

Cyber risk is often only identified when it is too late. Let Keystone Private Cyber help you get in front of potential problems before they arise.

Keystone Private Foundation – already making a difference


Keystone Private Foundation has now been operating for 18 months.

Whilst the philanthropic environment has been impacted by current COVID 19 circumstances (much like every other aspect of our lives) our Foundation has still been able to provide a number of philanthropic solutions to employers, employees and also a Private Ancillary Fund (PAF) in the process of vesting its capital.

The Foundation has already received numerous requests for funding from eligible charities, made its first distributions, and will be allocating the next round of distributions in the December/January period.

Should you be interested in our Foundation assisting with your philanthropic needs, please read more Keystone Private Foundation and reach out to the team.

Factors to consider in deciding whether you need the services of a multi-family office.

At Keystone Private Family Office our client relationships are driven by mutual respect, independence, transparency and integrity.

We are keenly aware that business interests allied with family continuity and wealth transition can be extremely complex, demanding at times, and highly emotive.

Our strategic oversight of this specialist area requires a deep appreciation for the values of relationships as every decision will impact loved ones and potentially affect family dynamics long into the future.

Factors to consider in deciding whether you need the services of a multi-family office. 

It is common for clients to want (or need) to separate their personal business and investment interests from their core business activity.

Whilst we can and do act in both capacities, at Keystone Private, we strongly encourage this separation as it has a number of distinct advantages including:

  • Allowing the core business team to concentrate on the business without the distraction of personal and family requirements
  • Providing a better framework for confidentiality around personal and family matters
  • Access to a skillset that may not be available within the core business team
  • Creating an independence framework around the need for business capital vs the desire to build up wealth outside the business
  • Allowing for smoother transition upon sale or transition of the core business
  • Ensuring that personal accounting, reporting and administration is not ‘left behind’

 There is, of course, a need to ensure that the advisors looking after the personal interests have an open and transparent relationship with the business team. There will often be a crossover between the two teams, and it is important to ensure minimal if any duplication of effort or cost occurs.

A number of other drivers can crystalize the use of a family office however the above is often that first inflection point where such considerations are raised.

If implemented well, the use of a family office can ensure that the evolution from wealth creation to wealth management and generational transition is achieved smoothly in a planned, pro-active and cost-efficient manner.

Full-service accounting, taxation and advisory services tailored to your needs.

The 2020 financial year has been different from any other.  Whilst businesses and employees have been slowed down and even halted over the past months, tax obligations remain.

Treasury and the Australian Taxation Office (ATO) have been tremendous in their respective efforts to create and administer a number of stimulus packages.  The Job keeper program and cash flow boost have allowed cash flow to be managed through this difficult time.  The ATO has also been accommodating with requests for deferral of tax payments.  The Keystone team has been working with our clients to ensure compliance obligations are met to access the relevant stimulus payments.

The economic impacts from business closures will continue through to 2021 and beyond. Cash flow management will continue to be paramount for success.  Appropriate tax planning through this period will assist in successful cash flow management.

Given the budget constraints, we expect that Treasury and the ATO will be looking at tax gaps.  The Top 500 private groups tax performance program, which is part of the Tax Avoidance Taskforce, aims to ensure that large private groups and high net wealth individuals are paying the appropriate amount of tax. 

Business owners in this target group should ensure they understand their tax risk management processes and are aware of potential focus areas of the ATO.

We are seeing calls from many quarters regarding significant tax reform to pay for what will now be a long-term budget deficit.  Whilst reforms such as a higher rate and broader base of GST, a re-think of property taxes away from stamp duties, and changes to income tax rates are all welcome ideas, in theory, the tight political reality may make such reform difficult, if not impossible in the near term.

Our key tax focus points for businesses over the coming months are:

  • Prepare cash flow projections for all taxes (e.g. income tax, GST, PAYG)
  • Review shareholder loans and manage required repayments (Division 7A)
  • Understand your risk areas in the event of ATO enquiry
  • Monitor your eligibility to enter the job keeper program (if not yet qualified)

The tax team at Keystone Private Advisory have enjoyed the first year of operation and are looking forward to assisting many more clients throughout the 2021 year and beyond.

Truly independent wealth services – July 2020 News

Keystone Private Wealth has been providing independent wealth management services to our family office and broader client base since incorporating in 2008. In recent years this included successful funds under management business with a dedicated investment team.

To maintain the fiercely independent approach expected of us by our clients, a decision was made to separate the funds under management function from Keystone Private Wealth and the broader Keystone Private group. This was finalised on 1st June 2020. Keystone Private Wealth will continue to provide its expert and truly independent wealth management services, including:

  • Development of wealth management framework
  • Capital allocation
  • Asset allocation
  • Manager selection
  • Fee negotiation
  • Reporting and administration
  • Investment due diligence
  • Investment committees and advisory board representation

The above wealth management process can be developed via a blank canvas approach or by building around an existing advisor and manager framework

K2 Private Property announce a NABERS Energy 6 stars rating for 55 Russell Street

K2 Private Property is an independent, specialist commercial real estate agency with an exceptional reputation for delivering outstanding results for clients.

We bring a wealth of knowledge, experience and professional acumen to every commercial and industrial property project.

We provide independent experience with integrity and honesty.

The K2 Private Property team are excited to announce Queensland’s first existing building to achieve a 6 Star NABERS ENERGY Rating – 55 Russell Street

This is the first time in Queensland an existing building has achieved this rating. The 6 Star rating is the highest available by the rating agency.

55 Russell Street, South Brisbane was awarded 6 Star Nabers rating following a 3-month upgrade program focusing on sustainability.

There are only 6 buildings in QLD that have this rating for the ‘whole of building’.

These include landmark new developments such as;’

111 Eagle St, CBD

123 Eagle St, CBD

1 William St, CBD

100 Skyring Terrace, Newstead

2 King St, Bowen Hill

The measures taken by K2 Private Property that has led to the 6-star rating include: –

  • Constant monitoring of AC temperatures to maximise the efficiency of the AC plant.
  • Constant electricity readings for both tenant and common areas which allowed us to provide a base building rating.
  • Clear identification of the tenant’s spaces to allow us to accurately calculate 24/7 operational spaces.
  • Removal and replacement of all 24/7 lighting in the fire stairs with LED lighting that includes microwave sensors to dim lights based on activity.
  • Removal and replacement of all car park lighting with LED lighting.
  • Installation of new sensors in the car park to allow lights to turn off when there is no activity.

The K2 Private Property team have been at the forefront of building upgrades over the last 10 years and most recently have completed upgrades for 333 Adelaide St, 420 George Street and now 55 Russell Street.

Keystone Private Cyber July 2020

Keystone Private Cyber is an information and cyber security practice within the Keystone Private group that supports the group with maintaining their cyber security posture and is available to provide these services to the Group’s clients. We are currently engaged in a variety of consultancies with Federal Government and commercial entities delivering services to identify and manage their business risk from the perspective of information and cyber security threats and vulnerabilities.

The announcement by the PM, Scott Morrison on June 19th highlighted an escalation in cyber-attacks on Australian Government and business entities. The PM’s message is a timely reminder that the more connected we become collectively and individually the more we expose ourselves to possible threats. Essentially, the information and cyber security challenge has not changed; and though threats continue to evolve, and their numbers increase there are actions you can take to reduce your exposure.

Those actions will require you to understand; the threats that can manifest in the environment you work and live in, the technology you have chosen to support your business and life, that these intersecting aspects are continually evolving and therefore your visibility and management needs to be continuous to become and remain resilient in an ever-changing world.

Contact our team to understand our approach to building and developing resilient information and cyber security posture for your business and indeed, your family.

 

Feature Article

Keystone Private Family Office -The tenth man principle.

Having recently spent a week in hospital and a further week at home recovering from surgery (not a great start to the year), I have spent a lot of time watching movies, most of which I had already seen.

One such movie is World War Z, starring Brad Pitt. The basic premise of World War Z for those that haven’t seen it is that an infection has spread throughout the world which turns those exposed into Zombies and Brad Pitt’s character is charged with investigating the outbreak to find a cure.

Now, before you bemoan yet another article trying to use a COVID-esque segway to provide relevant, urgency or a call to action and move on to the next article, hear me out.

This missive is not about the problem (being the Zombie apocalypse), rather it is about being aware of the alternative viewpoint.

During his investigations, Pitt’s character has cause to fly to Israel where he finds the city protected by a very large wall which (until later in the movie) is keeping the Zombies at bay and the people safe. Observing the time, cost and effort involved in building the wall, Pitt queries how did Israel ‘predict’ the unfolding Zombie apocalypse?

This brings me to the point of this article.

Pitt’s host points out that they didn’t predict the event, they prepared for it. Such preparation was based on the ‘tenth man principle’. In simple terms, if 9 people in the group (of ten) all agreed on any topic, it was the job of the tenth man to take the opposing view and investigate such.

I am a firm believer that where there is consensus, especially overwhelming consensus, it is foolhardy not to challenge the assumptions behind such consensus and consider alternatives. This process is relevant across the entire spectrum of the family office environment, whether it be:

  • Financial
    • State of the markets
    • Investment proposals
    • Good and bad investments
    • Return expectations
    • Accepted practices
  • Estate Planning
    • Use of testamentary trusts
    • Bloodlines or blended lines
    • Structuring of philanthropic activity
    • Managing expectations
  • Family dynamics
    • Who is the black sheep?
    • Who is or is not going to get divorced?
    • Timing and method of generational transition
    • Next-gen in the business or not

Within the broader family, the advisor framework, industry experts and even the community at large there will always be opinions on the above (and many more topics), often these opinions can lead to an apparent consensus and considered alternatives are lost in the noise.

Please note that I am not suggesting that consensus, whether it be based on professional advice, expert opinion or even just the simple majority is not correct or an appropriate course of action, simply that it is important to take a step back, consider the alternatives and make informed decisions.

Hope for the best, plan for the worst.

By David Jackson