SUPPERANNUATION
Managing Your Super
Research
Multiple levels of research is conducted on a client’s super portfolio before anything even begins.
We check the existing products for the basic features such as fees and charges, but we also delve into each product more deeply to look at the detail. These details include factors such as communication methods, simplicity, and ease of use.
The final level of research is the investment assets and the manager of those assets. How do they manage the money and how has it performed given the market conditions?
For example; a popular fund recently returned for the financial year about 15%. A good return, but why was it -15% Growth and +30% Income?
As this was rather strange and would impact on the client’s tax returns, we spoke directly to the fund manager. We were able to find out why this occurred and what impact it would have on the future of the fund.
Monitoring
Like in the above example, the need to monitor the investments and changes in market conditions is extremely important. Market conditions have the potential to change very rapidly so the days of a set and forget balanced fund are gone.
Depending on client circumstances, investment portfolios are monitored on a weekly, fortnightly, or monthly basis.
Super is a Life Long Friend
Superannuation is a life-long friend that will be with you from age 18 to grave. It is something that needs to monitored and respected as it will grow with you and provide a huge benefit for your when you retire.
Because of the longevity of the account it is often forgotten about during our youth. Importantly though, it is because of this longevity that small changes and regular monitoring can have a huge impact over the life of your superannuation fund.
There is a simple rule called the “Rule of 72”. This rule basically states that if you divide 72 by the average return you will get how long it will take to double your money. So think about if you increased your average return by 1% (from 8% to 9%) in your 20’s it would take only 8 years to double your money and not 9 years.
This minor change would give your super fund the chance to double 1 or 2 times extra before you retire.
Superannuation – Outside the Normal Rules
With superannuation there is always odd elements of regulation that do not fit into the normal rules. or conditions of superannuation, this page will list some of those issues
Defined Benefit Super
You don’t see many of these being created new for clients most are related to people who have been with the same employer for many years
These funds are not like the normal superannuation we have all come to know, firstly they are normally not based on market performance instead they have a formula based on your average salary, length of service, and a productivity portion, and secondly they can be even more complex than the normal superannuation we deal with today.
So if you have a defined benefit superannuation policy, contact us and let us guide you through its maze.