The rear-view mirror looks a lot like this:

A horrific bushfire season:

• Approximately 17 million hectares of land burned
• 3,094 homes lost and sadly 33 deaths
• Devastation to our beautiful wildlife

Just as some of our rural communities were getting back to their feet and ready to welcome visitors back to their communities, we faced the realisation that the coronavirus would make its way to Australian shores. Some numbers to date:

• 10.4 million cases globally (7,834+ in Australia)
• More than 510,000 deaths globally (104 in Australia)
• Cost to the global economy of around $17.8trillion ($170m in Australia)
• An estimated 3.5 million Australians filed for JobKeeper at a cost of $70billion
• According to the RBA, unemployment could peak at 10% in the June quarter

While the above numbers may seem horrific, to date Australia has avoided both a health and economic catastrophe. You may recall, initial estimates had virus cases peaking in June (it peaked in April) but as we are experiencing in Victoria currently, it is not over.

While life pre-COVID-19 almost seems difficult to remember, it certainly wasn’t all doom and gloom for Australia. Over the past 12 -18 months it’s important to reflect and appreciate the economic position we were in before COVID-19 hit. Consider these numbers:

Gross Domestic Product (GDP) – A measure of Australia economic growth was as follows:

• Jan-Dec 2019 GDP – 2.2%
• Jan-March 2020 GDP – 0.3%
• March 19-March 2020 GDP – 1.4%

Australia’s Budget

In December 2019, the Government was on track to deliver the country’s first budget surplus in a decade, of between $5-7billion.

Employment

In 2019 unemployment was 5.18%, almost a 10 year low (in 2011 it was 5.08%)

Market returns

Oil price goes negative

As the global economy shut down, the demand for oil fell off a cliff and the oil price followed. It left a huge surplus on the market and no buyers, thus, some holders of oil futures were willing to pay others to offload contracts for oil they would be unable to store, which actually saw a negative price per barrel for a short period.

Storage capacity on land has filled up quickly and some have resorted to storing oil by sea, paying up to $100,000 per day to lease tankers for storage purposes.

After briefly dipping to -$37, the oil price has since recovered to around $39.

Forecasting the year ahead

Whenever I am asked to make macro-economic predictions, I am reminded of a great quote from an unknown source – “the job of an economist is to explain why the predictions made 12 months ago did not come true”.

In my experience, economies are never as good as they seem, and never as bad as they’re predicted to be.

In Australia, we have really dodged a bullet economically. While the “bears” are predicting an economic cliff in September, the Government has shown a commitment to rescuing the Australian economy from financial ruin. I find it hard to believe that after all the hard work during lockdown, that further support and stimulus wouldn’t be provided later this year if required.

Yes, we are in a recession, given two consecutive quarters of GDP decline, but are we heading for a great depression? Absolutely not.

I cannot see us staying in a recession for longer than 6-9 months, that’s on the assumption that we don’t encounter a second COVID-19 wave.

If we could take anything from the United States it is their supreme confidence and optimism in recovering from hard times. COVID-19 has a tighter grip on them, however, the US stock market just notched its best quarter in decades, gaining 17.8%.

Overall, I find Australians have become far too pessimistic and lack confidence in our ability to recover from adversity. Times are tough, but what doesn’t kill you, makes you stronger. We are down, but not out. It will take resilience, perseverance, and hard work, but we will recover. Our rural communities have shown these strengths time and time again through the bushfires, drought and floods.

This brings me to what’s been happening at Hewison.

I could not be prouder of our team, particularly over the last six months.

Our senior management team were on the front foot planning for ‘business as usual’ whilst required to work from home.  It speaks to our innovative culture that systems were already in place to cope with such adversity, allowing our staff to pick up their office laptops and plug-in from home with minimal interruption.

Most staff have entered their 16^th week of working from home and I assure you, we are missing the fun and family vibe the office environment brings, but let’s hope an office return is not too far away.

In late 2019 we completed an extensive office expansion and refurbishment, missing these great new spaces is adding to the desire to return to the office! It’s likely that many clients are yet to visit the new office (same location) and we are excited to welcome you as restrictions ease.

Our staff numbers grew by around 20% in 2019/2020 and while bigger is not always better, we strive to continue providing a bespoke client experience with each client having a small dedicated team servicing their needs. Our new additions will certainly compliment this.

The Hewison Planning team

Our advice team grew by 30% in 2019 as Travis Schindler, Alison Dellow and Pierce Hanlen earned their respective promotions to Private Client Adviser roles.

Travis, Alison and Pierce are highly experienced and credentialled, but most importantly, they are extremely passionate about partnering with their clients to achieve their client’s goals and dreams.

Gladys Seah was elevated to Senior Associate Adviser status and is on track to become a Private Client Adviser within the next 12 months.

Finally, we welcomed Chris Colman into an Associate Adviser role, joining Alexi Guagas, Michael Peart and Fiona Fang.

Propensity Survey Results

Earlier this year you may have received a request to think about the service we provide you. This survey was part of our association with the Macquarie Virtual Adviser Network (VAN), which is a group of high performing financial planning businesses across Australia that we are fortunate to be a part of.

The survey examined a clients’ propensity to continue doing business with us, do more business with us, and refer their family and friends to us.

The results were outstanding and very humbling. Hewison Private Wealth was rated 9.1/10 for overall client satisfaction.

To read more on these results you can follow this link>>

Technology

As many of you already know, at Hewison Private Wealth we don’t follow the crowds, we tend to lead them.

Given our client service is unique, so too are our systems. We’re not interested in providing the same ‘off the shelf’ experience as other planners down the street.

We’ve been working tirelessly to overhaul our systems to improve our client experience. This includes improving efficiency in the back office so our staff have more time to service your needs and build relationships. Of most interest to you will be the launch of two significant enhancements to the way advice communication is delivered and the way in which you access your online portfolio.

Advice communication

Shortly, we will begin sending advice digitally, accessible by a text message link and email. The technology will allow clients to respond via tapping an ‘approve’ or ‘decline’ button. The response will be registered in real-time in our new portfolio management software.

It will allow you to access your advice quicker and remove delays or errors from missed emailed responses.

Prior to launch, much more detailed correspondence will be sent to clients detailing its use.

Online portfolio access

In conjunction with our upgraded advice communication, we will also launch a refreshed version of our online portfolio access. Currently, many of the features are similar to the existing experience, however; the new platform allows for some exciting new features which will be rolled out over the next 12 months.

We are confident the year ahead will see relationships with our clients and professional networks strengthen and grow.