2016 is a big year for me and my family. Mitchell Wilson will celebrate its 25^thAnniversary, my wife Leonie and I both turn 60 and we are looking forward to becoming grandparents for the first time. It definitely feels like we’re entering a new phase of life, like many of our clients who have been with us since we took over the business in September 1991.

Along with the personal changes ahead, it seems the nation is also undergoing another phase of economic transformation impacting both individual wealth management and the ability to grow, sustain and improve our businesses. Change has always been part of life, but this time several forces are coming together at once to create continuous uncertainty, which makes long-term planning difficult.  
 

So, what's new?

Firstly, change is happening more rapidly than ever before. There is unprecedented access to information (which doesn’t necessarily help us make decisions!) and our shift to a services economy, along with digital disruption and globalisation which in turn increases business risk, technological change and competitive pressures for SMEs. Luckily, many of these same factors create opportunities for those willing to adapt.

Negative gearing, super and pensions under pressure

Our slow-growth economy means the Government is under constant pressure to make tough decisions about spending and taxes though reform will be difficult with a slim majority in parliament. We’ve already seen a couple of unpopular budgets and they won’t be the last with high-stakes issues like GST, negative gearing, superannuation and pensions likely to remain on the agenda given the focus on budget repair.

The boom we've enjoyed is behind us for now

On top of all this, long term low interest rates – contributing to lower rates of investment return - and low wages growth, off-shoring and automation are impacting all of us. From Baby Boomers nervously watching their super balances during the transition to retirement to 30-something  professionals trying to get into the housing market and university graduates seeking their first full time job.

New conditions require a new mindset & better planning 

For me, this highlights the need to not only understand the impacts of local and global economic transformation, but also to put it in a meaningful context and create a successful plan of attack despite a lack of clarity. This is something we’ve been helping clients with for the last 25 years. The right approach will be different for every individual and business. My advice is not to wring your hands and do nothing, but instead to recognise we need a new mindset for new conditions and a commitment to reassess our plans more often.

We're here to help 

So we’ve created an 8-week email series exploring the big questions each age group should consider in face in the context of continuous change – and changing aspirations. From the big issues our kids need to consider around education, re-skilling and careers, to the new rules of investing in a low growth environment for those in the working years, and how to plan the transition to retirement, manage business succession and reasonably fund our lifestyles in the years ahead. So keep an eye on your inbox every Tuesday in September and October. The first of our series, focussed on the challenges for those aged 55-69, will arrive next week.

I hope you find our economic transformation series informative. If you’d like to make an appointment to review your current situation, we’re always here to help.