1 00:00:09,800 --> 00:00:13,480 Speaker 1: Hello, and welcome to The Australian's Money Puzzle podcast. I'm 2 00:00:13,560 --> 00:00:17,119 Speaker 1: James Kirkby. Welcome aboard everybody. Whoa what a week? So 3 00:00:17,200 --> 00:00:22,320 Speaker 1: here we go. Trump's Liberation Day has arrived. Ten tariffs 4 00:00:22,640 --> 00:00:26,599 Speaker 1: right across the board for everything coming into the US. Now, 5 00:00:26,680 --> 00:00:28,920 Speaker 1: just so you know the general tariff rate, you know 6 00:00:29,000 --> 00:00:31,000 Speaker 1: at the moment it's about two and a half percent, 7 00:00:31,120 --> 00:00:34,640 Speaker 1: so it's a quadrupling of tariffs going into the US. 8 00:00:34,720 --> 00:00:38,040 Speaker 1: It's a change to the world order as we know it. 9 00:00:38,080 --> 00:00:42,720 Speaker 1: And Australia got no exemptions whatsoever. That's worth pointing out too. 10 00:00:43,040 --> 00:00:45,360 Speaker 1: That was announced. We don't know what's going to happen 11 00:00:45,400 --> 00:00:47,479 Speaker 1: to markets, right, but it was announced after the Wall 12 00:00:47,520 --> 00:00:52,280 Speaker 1: Street in this says closed. But now Jones futures as 13 00:00:52,320 --> 00:00:56,040 Speaker 1: we speak to you middle of Thursday are down three percent. 14 00:00:56,840 --> 00:00:59,560 Speaker 1: And I want to put forward a show to you 15 00:00:59,800 --> 00:01:02,840 Speaker 1: to which hopefully you might listen to in conjunction with 16 00:01:02,920 --> 00:01:07,360 Speaker 1: Tuesday's show, because every now and again there is a 17 00:01:07,480 --> 00:01:12,160 Speaker 1: theme that dominates markets and we zone in on it 18 00:01:12,200 --> 00:01:14,520 Speaker 1: and it's worth bearing with us when we do this. 19 00:01:14,920 --> 00:01:19,240 Speaker 1: If you recall about a year ago we covered artificial intelligence, 20 00:01:19,560 --> 00:01:22,200 Speaker 1: I think a fair bit before it became a very 21 00:01:22,280 --> 00:01:24,520 Speaker 1: generally covered issue. It was probably more like a year 22 00:01:24,520 --> 00:01:26,600 Speaker 1: and a half ago. And this again is one of 23 00:01:26,640 --> 00:01:30,200 Speaker 1: those themes that's going to change how your super operates, 24 00:01:30,280 --> 00:01:34,680 Speaker 1: how your investments operate. It is crucial. So listen to 25 00:01:34,920 --> 00:01:37,440 Speaker 1: Cameron if you can. From Tuesday's show. You know one 26 00:01:37,480 --> 00:01:39,679 Speaker 1: of the things you think about how tuned in he is. 27 00:01:40,360 --> 00:01:42,480 Speaker 1: And if you listen to the show, you know that 28 00:01:42,840 --> 00:01:45,120 Speaker 1: he literally knows Trump. He has been in the Oval Office, 29 00:01:45,120 --> 00:01:47,400 Speaker 1: He's been at all the rallies. He met the point 30 00:01:47,400 --> 00:01:49,960 Speaker 1: that Adon Musk wouldn't last a year. And here we 31 00:01:50,000 --> 00:01:52,560 Speaker 1: are forty eight hours later, and there are reports this 32 00:01:52,680 --> 00:01:56,800 Speaker 1: morning that Mosk is, in the delightful phrase of Anthony Scaramucci, 33 00:01:56,800 --> 00:01:59,240 Speaker 1: heading for the wood chipper. So what does it all 34 00:01:59,280 --> 00:02:01,440 Speaker 1: mean for you, the active investor? I have a top 35 00:02:01,440 --> 00:02:05,680 Speaker 1: financial advisor this morning. He's on the top the Barons 36 00:02:05,720 --> 00:02:08,720 Speaker 1: one hundred and fifty list. It's Hugh Robertson of Centaur. 37 00:02:08,919 --> 00:02:12,480 Speaker 2: How are you, Hugh, I'm good, James, how are you going? 38 00:02:12,639 --> 00:02:13,600 Speaker 2: Interesting times? 39 00:02:14,160 --> 00:02:16,440 Speaker 1: You pick your moment, You pick your moment to come 40 00:02:16,480 --> 00:02:19,160 Speaker 1: on the show, or tell you that. I want to 41 00:02:19,200 --> 00:02:22,120 Speaker 1: just look for the listeners now, have in some ways 42 00:02:22,200 --> 00:02:24,720 Speaker 1: kind of cover the big picture about Trump on what's 43 00:02:24,760 --> 00:02:27,520 Speaker 1: going on, and it's all come to pass, and I 44 00:02:27,520 --> 00:02:29,000 Speaker 1: think it's you know, I think it's safe to say 45 00:02:29,080 --> 00:02:32,639 Speaker 1: it was worse and more severe than people might have 46 00:02:32,720 --> 00:02:35,280 Speaker 1: hoped in terms of what he's doing in terms of 47 00:02:35,280 --> 00:02:37,919 Speaker 1: closing the doors basically to free trade around the world. 48 00:02:38,160 --> 00:02:40,360 Speaker 1: And I want to look in two ways. It's simply 49 00:02:40,400 --> 00:02:43,000 Speaker 1: I mean, obviously anybody can do and make what they 50 00:02:43,000 --> 00:02:45,360 Speaker 1: wish of it for their investing. But let's just have 51 00:02:45,400 --> 00:02:48,200 Speaker 1: a look at super and let's split it into two parts. 52 00:02:48,639 --> 00:02:51,120 Speaker 1: Your super if you have big Super, and anyway, what 53 00:02:51,200 --> 00:02:53,640 Speaker 1: big super is doing is always interesting, even if you 54 00:02:53,680 --> 00:02:56,600 Speaker 1: don't participate in Big Super. And then we'll also look 55 00:02:56,639 --> 00:03:01,280 Speaker 1: at smsfs and their reaction. But I suppose the immediate question, Hugh, 56 00:03:01,960 --> 00:03:08,120 Speaker 1: which I certainly would be worried that our major super 57 00:03:08,160 --> 00:03:13,040 Speaker 1: funds in Australia have gone big basically on the US, 58 00:03:13,320 --> 00:03:17,440 Speaker 1: have lifted their bets on the US and you can 59 00:03:17,480 --> 00:03:19,880 Speaker 1: see the proportion of stocks that they hold there has 60 00:03:20,000 --> 00:03:23,280 Speaker 1: risen and they have dropped their cash levels as well 61 00:03:23,360 --> 00:03:25,840 Speaker 1: at the very same time just as this is happening. 62 00:03:26,160 --> 00:03:28,880 Speaker 1: It's just one of those times where I think the 63 00:03:28,919 --> 00:03:31,960 Speaker 1: power of the independent investor is at its best because 64 00:03:31,960 --> 00:03:34,639 Speaker 1: you can move. But what's your impression of big super 65 00:03:35,200 --> 00:03:40,120 Speaker 1: major super funds and their approach to these historic days 66 00:03:40,160 --> 00:03:40,520 Speaker 1: so far? 67 00:03:42,480 --> 00:03:45,080 Speaker 3: When you get times of great volatility, you want to 68 00:03:45,600 --> 00:03:48,040 Speaker 3: probably be invested a little bit closer to home, where 69 00:03:48,080 --> 00:03:48,720 Speaker 3: you feel you have. 70 00:03:48,720 --> 00:03:49,880 Speaker 2: A little bit more control. 71 00:03:50,400 --> 00:03:53,560 Speaker 3: When you look at the big super funds, I think, 72 00:03:53,600 --> 00:03:56,760 Speaker 3: as an example, Australian Souper now sins about seventy percent 73 00:03:57,040 --> 00:04:00,960 Speaker 3: of its inflows overseas, so that will be impacted by 74 00:04:00,960 --> 00:04:03,640 Speaker 3: the tariffs at a pretty grand scale. And I think 75 00:04:03,680 --> 00:04:08,000 Speaker 3: as we see more of this industry consolidation of the megafunds, 76 00:04:08,040 --> 00:04:11,840 Speaker 3: the big industry funds, they're going to dwarf. They're going 77 00:04:11,880 --> 00:04:13,280 Speaker 3: to be so big in size that they're going to 78 00:04:13,320 --> 00:04:16,400 Speaker 3: dwarf the ASX itself. So it's going to be a 79 00:04:16,400 --> 00:04:18,880 Speaker 3: continual thing that they're going to have to allocate money 80 00:04:19,400 --> 00:04:22,920 Speaker 3: overseas just so that they don't move markets with one 81 00:04:22,960 --> 00:04:27,000 Speaker 3: single investment. So I think you'll see more global exposure 82 00:04:27,839 --> 00:04:30,080 Speaker 3: and you're going to see more in the unlisted space. 83 00:04:30,200 --> 00:04:34,360 Speaker 3: So probably two areas that scare most investors right now. 84 00:04:34,400 --> 00:04:38,120 Speaker 1: I might suggest yeah, well, we know for a variety 85 00:04:38,120 --> 00:04:40,279 Speaker 1: of reasons. It's all come through in various ways. The 86 00:04:40,279 --> 00:04:42,719 Speaker 1: Morgan Standing, for instance, as sell that thirty percent of 87 00:04:42,760 --> 00:04:46,400 Speaker 1: the AX is held by Big Super. So okay, fair enough, 88 00:04:46,440 --> 00:04:48,640 Speaker 1: you know, they a hit saturation point and they must 89 00:04:48,960 --> 00:04:51,760 Speaker 1: move abroad. But the thing I'm a bit concerned about 90 00:04:51,880 --> 00:04:54,480 Speaker 1: is the nature of their exposure to the share market 91 00:04:55,000 --> 00:04:58,080 Speaker 1: and the nature of our Big Super choices for people, 92 00:04:58,360 --> 00:05:01,640 Speaker 1: the classifications, you know, we're balanced where what people think 93 00:05:01,720 --> 00:05:04,760 Speaker 1: is balanced has actually got a fair spin skew towards growth, 94 00:05:05,200 --> 00:05:07,680 Speaker 1: a fair skew towards the share market. And the share 95 00:05:07,720 --> 00:05:10,120 Speaker 1: market was good for Big Super for years and years. 96 00:05:10,120 --> 00:05:13,880 Speaker 1: But here's the thing. They've lifted their exposure to the US. 97 00:05:14,400 --> 00:05:16,400 Speaker 1: The US is the worst performing market in the world 98 00:05:16,520 --> 00:05:19,320 Speaker 1: so far this year. It's down about five five and 99 00:05:19,320 --> 00:05:21,920 Speaker 1: a half percent so far. Our market's down about four 100 00:05:22,080 --> 00:05:24,080 Speaker 1: four and a half. The European markets are actually up 101 00:05:24,120 --> 00:05:27,880 Speaker 1: about six percent. Point I'm making is is there something 102 00:05:29,120 --> 00:05:33,480 Speaker 1: of a reckoning perhaps coming for not so much for 103 00:05:33,560 --> 00:05:37,039 Speaker 1: Big Super, but for people who thought they're super funds 104 00:05:37,320 --> 00:05:39,280 Speaker 1: sort of knew something no one else did. They were 105 00:05:39,320 --> 00:05:40,640 Speaker 1: doing so well for so many. 106 00:05:40,520 --> 00:05:46,400 Speaker 3: Years yes, it needs to be because now earnings are 107 00:05:46,400 --> 00:05:46,840 Speaker 3: going to be. 108 00:05:46,800 --> 00:05:49,040 Speaker 2: Impacted by tariffs. 109 00:05:49,080 --> 00:05:52,320 Speaker 3: You've got price expansion that's happened over the past few 110 00:05:52,440 --> 00:05:55,599 Speaker 3: years that hasn't necessarily kept up with the earnings growth. 111 00:05:55,760 --> 00:05:58,440 Speaker 2: So you're globally, you know. 112 00:05:58,560 --> 00:06:01,760 Speaker 3: Especially the US market is expensive on you know, the 113 00:06:01,800 --> 00:06:06,240 Speaker 3: fundamental metrics, and where you where might your opportunities be, 114 00:06:06,520 --> 00:06:09,680 Speaker 3: maybe in Europe or in Asia. You're probably not getting 115 00:06:09,800 --> 00:06:11,919 Speaker 3: much of an allocation into. 116 00:06:11,800 --> 00:06:12,919 Speaker 2: Those asset classes. 117 00:06:13,480 --> 00:06:15,719 Speaker 3: So it's going to be in it's going to be 118 00:06:15,720 --> 00:06:19,680 Speaker 3: a difficult uphill road for investors in big super funds 119 00:06:19,720 --> 00:06:22,040 Speaker 3: over the next sort of three to five years, you'd imagine, 120 00:06:22,520 --> 00:06:26,880 Speaker 3: especially with the volatility that a Trump presidency usually brings. 121 00:06:27,640 --> 00:06:30,480 Speaker 1: What do you think people should do? Obviously we're going 122 00:06:30,520 --> 00:06:32,919 Speaker 1: to get people asking, as we always do times of 123 00:06:34,440 --> 00:06:38,680 Speaker 1: severe stress, whether they're in an appropriate setting in their 124 00:06:38,720 --> 00:06:42,440 Speaker 1: big super fund. And this issue of definitions, and you 125 00:06:42,480 --> 00:06:45,760 Speaker 1: think it's obscure, folks, it's not. This is so important. 126 00:06:46,920 --> 00:06:51,120 Speaker 1: There's no legal definition on these super funds allocation. So 127 00:06:51,160 --> 00:06:53,000 Speaker 1: you go into your big super fund number one and 128 00:06:53,040 --> 00:06:55,960 Speaker 1: you have your choices and one's conservative and one's balanced, 129 00:06:55,960 --> 00:06:58,960 Speaker 1: and one's growth. But the fact is, you know that 130 00:06:59,520 --> 00:07:03,000 Speaker 1: growth is really spins towards shares and balanced is a 131 00:07:03,000 --> 00:07:05,480 Speaker 1: lot more turned towards shares and a lot less balanced 132 00:07:05,520 --> 00:07:07,520 Speaker 1: than you might think in the classical sense of the world. 133 00:07:07,600 --> 00:07:10,480 Speaker 1: And I can prove this to you because the ratings 134 00:07:10,560 --> 00:07:15,280 Speaker 1: agencies they actually ignore, often ignore the classification the bonds 135 00:07:15,360 --> 00:07:18,880 Speaker 1: have calling them balanced, and they define them as grilled. 136 00:07:18,960 --> 00:07:21,360 Speaker 1: And they're right to do so. Am I on the right? Check? 137 00:07:21,400 --> 00:07:21,520 Speaker 2: Here? 138 00:07:21,560 --> 00:07:23,440 Speaker 1: Am I making? Am I over the top on this one? 139 00:07:23,480 --> 00:07:25,080 Speaker 2: Here? No, you're right. 140 00:07:25,120 --> 00:07:28,040 Speaker 3: There was a big industry fund a while ago that 141 00:07:28,280 --> 00:07:30,440 Speaker 3: used to call it self balance that had ninety two 142 00:07:30,520 --> 00:07:32,800 Speaker 3: percent in growth assets. There's no one in this world 143 00:07:32,920 --> 00:07:37,120 Speaker 3: that would think that's balanced, you know so. And that's 144 00:07:37,200 --> 00:07:40,880 Speaker 3: part of the regulatory regime where they need to hold 145 00:07:40,920 --> 00:07:43,600 Speaker 3: these big funds to account a bit more. 146 00:07:43,480 --> 00:07:46,040 Speaker 2: Which we're starting to see. We're starting to see that 147 00:07:46,080 --> 00:07:49,040 Speaker 2: there's you know, they've lost a bit of shine. 148 00:07:49,200 --> 00:07:51,400 Speaker 3: But I think from the investor point of view, going 149 00:07:51,440 --> 00:07:53,440 Speaker 3: through a market like now, you've really. 150 00:07:53,600 --> 00:07:55,160 Speaker 2: Got to focus on your cash flows. 151 00:07:55,320 --> 00:07:58,000 Speaker 3: If growth has been great for the past few years, 152 00:07:58,280 --> 00:07:59,880 Speaker 3: and what I mean by then in your shares you 153 00:08:00,040 --> 00:08:03,480 Speaker 3: had the capital appreciation, what you're seeing now is how 154 00:08:03,480 --> 00:08:05,360 Speaker 3: are we going to get that income from shares? How 155 00:08:05,360 --> 00:08:07,920 Speaker 3: are we going to get cash flows? So probably more 156 00:08:07,960 --> 00:08:10,920 Speaker 3: important than ever in times of uncertainty is that we're 157 00:08:10,960 --> 00:08:13,600 Speaker 3: going to go and get paid those dividends, whether Australian 158 00:08:13,680 --> 00:08:16,520 Speaker 3: or global, And that's probably one things where when you're 159 00:08:16,520 --> 00:08:20,320 Speaker 3: in those big megafunds or industry funds, they don't pay 160 00:08:20,320 --> 00:08:22,960 Speaker 3: out the dividends. That just keeps getting reinvested back into 161 00:08:23,000 --> 00:08:25,800 Speaker 3: the unit price. So I think there's a really big 162 00:08:25,840 --> 00:08:30,080 Speaker 3: difference there for people to appreciate that it's pretty valuable 163 00:08:30,120 --> 00:08:32,520 Speaker 3: now to be able to extrapolate that income out of 164 00:08:32,520 --> 00:08:36,080 Speaker 3: your investments. Both your growth assets shares and property and 165 00:08:36,080 --> 00:08:39,880 Speaker 3: your defensive assets are fixed interest in cash. 166 00:08:40,120 --> 00:08:42,560 Speaker 1: So what should people should they We're not telling people 167 00:08:42,640 --> 00:08:45,240 Speaker 1: what to do, it's not advice information only, but I 168 00:08:45,320 --> 00:08:49,959 Speaker 1: expect people should review at least whether they are comfortable 169 00:08:50,640 --> 00:08:53,400 Speaker 1: with the positions that they have taken, and they might 170 00:08:53,440 --> 00:08:57,640 Speaker 1: go an extra yard and find out exactly what their 171 00:08:57,679 --> 00:09:00,800 Speaker 1: allocation means. What does balance actually mean because it can 172 00:09:00,840 --> 00:09:04,880 Speaker 1: mean different things. I mean, our super's definition of balance 173 00:09:04,880 --> 00:09:07,719 Speaker 1: could be different than hestes, which could be different than holsplus. 174 00:09:08,559 --> 00:09:13,559 Speaker 3: And I think clients and investors would just assume that they're. 175 00:09:14,559 --> 00:09:16,040 Speaker 2: It's the same for all of them. 176 00:09:16,200 --> 00:09:17,920 Speaker 3: So I think that's a really good point, James, that 177 00:09:18,000 --> 00:09:21,439 Speaker 3: you've got to really look behind, you know, look behind 178 00:09:21,440 --> 00:09:23,800 Speaker 3: the label and actually spend a little bit of time 179 00:09:23,840 --> 00:09:25,960 Speaker 3: investigating it because there might be something that you're not 180 00:09:26,000 --> 00:09:30,120 Speaker 3: comfortable with as your risk tolerance or even your capacity 181 00:09:30,160 --> 00:09:32,319 Speaker 3: to take risks right now if you're nearing into retirement. 182 00:09:32,640 --> 00:09:35,559 Speaker 1: Yes, are they all? Can I paint them more of 183 00:09:35,640 --> 00:09:37,600 Speaker 1: the same brush By that, I mean, are the big 184 00:09:37,720 --> 00:09:41,520 Speaker 1: private ones than none, the retailed ones as we call them, 185 00:09:41,600 --> 00:09:46,240 Speaker 1: the whatever, the amps of this world, other colonial et cetera. 186 00:09:48,400 --> 00:09:50,360 Speaker 1: Is the issue similar with them. 187 00:09:51,920 --> 00:09:53,920 Speaker 2: You've usually got a little bit more choice there. 188 00:09:54,080 --> 00:09:56,280 Speaker 3: To be fair to them, you've got a bit more choice, 189 00:09:56,280 --> 00:09:59,240 Speaker 3: So you can break it down. They usually don't have, 190 00:10:00,200 --> 00:10:03,960 Speaker 3: you know, a set standard fund that you're in nowadays, 191 00:10:04,040 --> 00:10:06,839 Speaker 3: so usually you'll get options there. You know, you might 192 00:10:06,880 --> 00:10:09,320 Speaker 3: have over one hundred different investment options there that you 193 00:10:09,360 --> 00:10:12,640 Speaker 3: get to choose from, and you can kind of choose 194 00:10:12,679 --> 00:10:13,920 Speaker 3: your asset allocation a. 195 00:10:13,840 --> 00:10:16,320 Speaker 2: Little in a little bit more of a bespoke manner. 196 00:10:16,840 --> 00:10:20,440 Speaker 3: So again, though for any single person, you know, outside 197 00:10:20,440 --> 00:10:23,120 Speaker 3: we all know that outside of your house, your super 198 00:10:23,200 --> 00:10:25,520 Speaker 3: is your biggest asset. So you've really got to spend 199 00:10:25,520 --> 00:10:28,600 Speaker 3: the you know, spend an hour on it, looking for 200 00:10:28,760 --> 00:10:31,839 Speaker 3: looking through and understanding it and not to you know, 201 00:10:32,280 --> 00:10:34,520 Speaker 3: or talk to someone that can give you that advice 202 00:10:34,720 --> 00:10:38,000 Speaker 3: as you know that education might save you, you know, 203 00:10:38,320 --> 00:10:40,960 Speaker 3: possibly tens or hundreds of thousands of dollars. 204 00:10:41,280 --> 00:10:44,280 Speaker 1: Okay, really valuable folks. So I mean, we've had this 205 00:10:44,360 --> 00:10:46,560 Speaker 1: point on the shore before, but there's times for it. 206 00:10:46,559 --> 00:10:50,320 Speaker 1: It's really matters. Don't assume you understand what the definition 207 00:10:50,480 --> 00:10:53,280 Speaker 1: is of growth or balance. Have a look, have a look. 208 00:10:53,320 --> 00:10:56,000 Speaker 1: It's not that complicated, all right, It's really not that 209 00:10:56,080 --> 00:10:59,839 Speaker 1: complicated that that your fond it could be a lot 210 00:10:59,840 --> 00:11:03,320 Speaker 1: more exposed to shares than you realize if you just 211 00:11:03,400 --> 00:11:06,600 Speaker 1: assume that balance means balanced in the sense that you 212 00:11:06,679 --> 00:11:10,240 Speaker 1: and I understand balance to be. And as Hughes pointed out, 213 00:11:10,240 --> 00:11:12,319 Speaker 1: there is a major fund that had ninety percent of 214 00:11:12,320 --> 00:11:15,560 Speaker 1: their holding some shares and they were classified as balanced. 215 00:11:17,040 --> 00:11:19,080 Speaker 1: And by the way, can I just say, every time 216 00:11:19,120 --> 00:11:21,360 Speaker 1: I bring this up in print, I get a you 217 00:11:21,400 --> 00:11:23,959 Speaker 1: know that they're on like in two minutes complaining about 218 00:11:23,960 --> 00:11:26,199 Speaker 1: this and that it's all fine. Well, I don't think 219 00:11:26,240 --> 00:11:30,720 Speaker 1: it is all right now. Also, Hugh, while we're talking 220 00:11:30,760 --> 00:11:33,840 Speaker 1: about this, one of the big issues of late in 221 00:11:34,000 --> 00:11:36,640 Speaker 1: super and in Big Super. And when I say Big Super, 222 00:11:36,679 --> 00:11:38,640 Speaker 1: I mean all those big industry funds and all those 223 00:11:38,640 --> 00:11:43,520 Speaker 1: big retail funds that many people have their life savings in. 224 00:11:44,520 --> 00:11:47,120 Speaker 1: There's all sorts of scandals and letdowns going on at 225 00:11:47,120 --> 00:11:52,120 Speaker 1: the moment in terms of standards. Right Joe Longo, head 226 00:11:52,120 --> 00:11:55,040 Speaker 1: of ASIK, has said they're the poster child of poor 227 00:11:55,080 --> 00:11:58,400 Speaker 1: corporate governance. That's a spectacular line. I don't forget that 228 00:11:58,480 --> 00:12:01,560 Speaker 1: pretty fast. And we had all this stuff with death 229 00:12:01,600 --> 00:12:05,120 Speaker 1: benefits and disappointments and court actions Australian Super aera in 230 00:12:05,160 --> 00:12:08,319 Speaker 1: their SeaBus are in there. There's a blockout in Hester 231 00:12:08,480 --> 00:12:11,040 Speaker 1: where you can't even get at you through the site 232 00:12:11,080 --> 00:12:13,880 Speaker 1: for fifty days because they're doing a technology change over. 233 00:12:14,679 --> 00:12:17,360 Speaker 1: But here's what I want to point I'm leading to. 234 00:12:18,520 --> 00:12:22,320 Speaker 1: There used to be an enormous amount of funds. There's 235 00:12:22,400 --> 00:12:25,120 Speaker 1: mergers happening all the time. Art For instance, the second 236 00:12:25,160 --> 00:12:27,960 Speaker 1: biggest fund is the second biggest fund because it's a merger, 237 00:12:28,640 --> 00:12:31,520 Speaker 1: a recent merger of Sun Super around the old Queensland 238 00:12:31,559 --> 00:12:36,840 Speaker 1: super Now. Mercer says that there's still about ninety significant 239 00:12:37,000 --> 00:12:45,240 Speaker 1: super funds that's going to shrink to about twenty. And 240 00:12:45,280 --> 00:12:47,760 Speaker 1: the issue I want to bring up you is when 241 00:12:47,760 --> 00:12:50,600 Speaker 1: you're in one of these funds that's a target, you 242 00:12:50,600 --> 00:12:54,560 Speaker 1: can have a lot of headaches and complications and bureaucracy 243 00:12:54,679 --> 00:12:57,200 Speaker 1: drive you completely nuts. If you happen to be unfortunate 244 00:12:57,320 --> 00:12:59,079 Speaker 1: enough to be in a small fund that's taken over. 245 00:13:00,040 --> 00:13:02,320 Speaker 1: Find out a giant fund but at one hundred billion 246 00:13:02,480 --> 00:13:05,040 Speaker 1: in assets, just buys your fund that had sixty billion 247 00:13:05,040 --> 00:13:07,280 Speaker 1: in assets, and it gets two lines in a newspaper 248 00:13:07,320 --> 00:13:09,760 Speaker 1: one day, and that's about it. You might even miss it. 249 00:13:10,000 --> 00:13:14,239 Speaker 1: But all sorts of things happen afterwards as that consolidation happens, 250 00:13:14,880 --> 00:13:17,360 Speaker 1: and it will happen. It has to happen because they 251 00:13:17,440 --> 00:13:21,160 Speaker 1: need the scale and they need the technology investment to 252 00:13:21,240 --> 00:13:23,480 Speaker 1: stay at the level they're at. What's the sort of 253 00:13:23,559 --> 00:13:27,200 Speaker 1: upsides and downsides of that consolidation where the world we 254 00:13:27,240 --> 00:13:29,600 Speaker 1: know of big super funds is going to shrink fast, 255 00:13:29,840 --> 00:13:32,320 Speaker 1: is shrinking fast into a handful of key players. 256 00:13:34,720 --> 00:13:39,400 Speaker 3: I think you definitely lose innovation, there is competition around you, 257 00:13:39,400 --> 00:13:41,920 Speaker 3: You lose innovation and if you think, you know, we've 258 00:13:41,960 --> 00:13:45,360 Speaker 3: got an aging population, we should be spending more money 259 00:13:45,400 --> 00:13:49,520 Speaker 3: on designing better retirement outcomes for our clients. And how 260 00:13:50,040 --> 00:13:52,640 Speaker 3: the investors and the members of these super funds. I 261 00:13:52,679 --> 00:13:56,400 Speaker 3: think that's one that everyone will feel at the individual level, 262 00:13:56,640 --> 00:13:58,760 Speaker 3: it is a race of the bottom with costs. So 263 00:13:58,800 --> 00:14:01,760 Speaker 3: we're just trying to reduce fees, and then you get 264 00:14:01,760 --> 00:14:03,319 Speaker 3: these substandard service levels. 265 00:14:03,360 --> 00:14:04,480 Speaker 2: You get these issues. 266 00:14:04,200 --> 00:14:09,280 Speaker 3: Around death payments and pension payments. So you know they've 267 00:14:09,280 --> 00:14:12,240 Speaker 3: done a really good, you know, run on ad saying 268 00:14:12,240 --> 00:14:15,600 Speaker 3: that it's all about cost, but you know, clients, do 269 00:14:15,880 --> 00:14:17,880 Speaker 3: you know, do value good service? 270 00:14:17,920 --> 00:14:18,160 Speaker 2: Still? 271 00:14:18,160 --> 00:14:20,600 Speaker 3: People do value service, and I think that's something that 272 00:14:20,680 --> 00:14:25,640 Speaker 3: needs to lift within those funds. And I think you're 273 00:14:25,680 --> 00:14:28,120 Speaker 3: also going to see that they're going to become a 274 00:14:28,200 --> 00:14:30,360 Speaker 3: victim of their own success in the fact that they're 275 00:14:30,360 --> 00:14:33,240 Speaker 3: going to be so large that the way they invest 276 00:14:33,440 --> 00:14:36,840 Speaker 3: you lock yourself into very average returns. 277 00:14:36,920 --> 00:14:40,760 Speaker 1: Very interesting. We really flushed out out another day that point, Q, 278 00:14:40,960 --> 00:14:44,160 Speaker 1: but it's very interesting, and because as you see, if 279 00:14:44,200 --> 00:14:47,320 Speaker 1: you become it's like the old thing about the issue, 280 00:14:47,400 --> 00:14:50,560 Speaker 1: if some company or factor dominates and it's then it 281 00:14:50,560 --> 00:14:52,120 Speaker 1: becomes the average if you know what I mean, very 282 00:14:52,120 --> 00:14:53,800 Speaker 1: hard to be better than average if you represent the 283 00:14:53,840 --> 00:14:57,880 Speaker 1: average as those handful of funds will do sooner or later. Okay, look, 284 00:14:57,880 --> 00:14:59,720 Speaker 1: well take a short break. I want to bring up 285 00:14:59,720 --> 00:15:02,680 Speaker 1: a really interesting point now about Trump, about this sort 286 00:15:02,720 --> 00:15:05,200 Speaker 1: of inflection point we have in market. So where we 287 00:15:05,240 --> 00:15:07,480 Speaker 1: sit markets down five percent for the year or so 288 00:15:07,920 --> 00:15:10,840 Speaker 1: after a whole polygod years when you could just close 289 00:15:10,880 --> 00:15:13,280 Speaker 1: your eyes your fond are bringing in double digits every year. 290 00:15:14,600 --> 00:15:17,160 Speaker 1: Maybe it's time to take a look at self managed 291 00:15:17,160 --> 00:15:27,200 Speaker 1: super funds and who they might shoot back in a moment. Hello, 292 00:15:27,280 --> 00:15:30,480 Speaker 1: Welcome back to the Australian's Money Post little podcast. James 293 00:15:30,560 --> 00:15:34,360 Speaker 1: Kirby here talking to Hugh Robertson of Centaur Financial Services, 294 00:15:34,400 --> 00:15:38,080 Speaker 1: operates up in the Gold Coast. There with the beautiful 295 00:15:38,080 --> 00:15:42,720 Speaker 1: Gold Coast hinterland outside his window. Now, Q, you would think, 296 00:15:43,640 --> 00:15:46,800 Speaker 1: damn good time for the self managed super fun sector 297 00:15:46,840 --> 00:15:50,320 Speaker 1: to parade their wares. I mean I have a self 298 00:15:50,360 --> 00:15:53,320 Speaker 1: managed super fund. I don't. There are times when there 299 00:15:53,360 --> 00:15:56,640 Speaker 1: were times in the when the super funds were big. 300 00:15:56,680 --> 00:15:58,760 Speaker 1: Super funds were knocking it out of the park, you know, 301 00:15:58,880 --> 00:16:01,360 Speaker 1: ten eleven, twelve percent, and you were saying like, gee, 302 00:16:01,360 --> 00:16:03,320 Speaker 1: you know, we get ten or eleven twenty percent and 303 00:16:03,400 --> 00:16:06,600 Speaker 1: you don't have to think or do anything. You know, 304 00:16:06,720 --> 00:16:09,760 Speaker 1: why am I doing it now? This year? I feel 305 00:16:09,800 --> 00:16:12,120 Speaker 1: so much better, you know this feeler this year I have. 306 00:16:12,320 --> 00:16:15,040 Speaker 1: I am nimble, may I say? And I was able 307 00:16:15,040 --> 00:16:17,640 Speaker 1: to move in and I bought gold DTF for instance, 308 00:16:17,800 --> 00:16:20,440 Speaker 1: you know, relatively significantly for the size of my fund, 309 00:16:20,480 --> 00:16:22,320 Speaker 1: for instance, a few months ago. And I'm so glad 310 00:16:22,360 --> 00:16:24,280 Speaker 1: I did. I'm so glad I did because I couldn't 311 00:16:24,320 --> 00:16:26,920 Speaker 1: think of anything else worth buying at the time. Now 312 00:16:26,920 --> 00:16:31,400 Speaker 1: I'm not saying they're perfect, but the point I'm making is, 313 00:16:31,400 --> 00:16:37,120 Speaker 1: is this a climate where the attractions of a self 314 00:16:37,280 --> 00:16:40,920 Speaker 1: managed super fund, knowing their limitations and their difficulties and 315 00:16:40,960 --> 00:16:44,920 Speaker 1: the work involved in them, they may they may look 316 00:16:45,000 --> 00:16:45,680 Speaker 1: more attractive. 317 00:16:46,880 --> 00:16:49,640 Speaker 2: Yes, one hundred percent. 318 00:16:49,760 --> 00:16:52,840 Speaker 3: And we've done the same chimes within our business where 319 00:16:52,880 --> 00:16:54,640 Speaker 3: we've not always been. 320 00:16:56,240 --> 00:16:58,360 Speaker 2: It's not being necessary to have an SMSF. 321 00:16:58,360 --> 00:17:00,800 Speaker 3: We've been able to kind of get that those good 322 00:17:00,840 --> 00:17:04,200 Speaker 3: investment outcomes without having a self manation shuper fund. 323 00:17:04,240 --> 00:17:07,199 Speaker 2: But I think now control. 324 00:17:06,800 --> 00:17:10,800 Speaker 3: We've got this geopolitical uncertainty both within Australia and abroad. 325 00:17:10,960 --> 00:17:15,360 Speaker 3: So I think without having control over you know what 326 00:17:15,400 --> 00:17:19,320 Speaker 3: we said before, the second biggest asset you own is important. 327 00:17:19,720 --> 00:17:22,520 Speaker 3: The administration isn't what it used to be. Technology is 328 00:17:22,560 --> 00:17:25,320 Speaker 3: taken care of a lot of that, the costs aren't 329 00:17:25,359 --> 00:17:29,840 Speaker 3: as expensive as you may think, and just that element 330 00:17:29,880 --> 00:17:33,119 Speaker 3: of control, and it probably coincides with the rise of 331 00:17:33,359 --> 00:17:34,240 Speaker 3: ETFs and. 332 00:17:34,119 --> 00:17:35,760 Speaker 2: In particular thematic ETFs. 333 00:17:36,160 --> 00:17:39,960 Speaker 3: But now you can really tailor the portfolio to something 334 00:17:39,960 --> 00:17:42,800 Speaker 3: that you know, you're comfortable with. You're not relying on 335 00:17:42,840 --> 00:17:45,520 Speaker 3: a manager to allocate to gold, you know. If you 336 00:17:45,600 --> 00:17:48,800 Speaker 3: want that for that peace of mind of that inflation protection. 337 00:17:48,960 --> 00:17:51,880 Speaker 1: You just buy and good. Yeah, And I mean, really 338 00:17:51,920 --> 00:17:55,560 Speaker 1: one's as good as the other. They're just reproduced the price, 339 00:17:55,600 --> 00:17:57,960 Speaker 1: assuming that they're they're the same setting it that they're 340 00:17:57,960 --> 00:18:00,080 Speaker 1: all on hedged or whatever, and they're not playing any 341 00:18:00,119 --> 00:18:01,120 Speaker 1: games around leverage. 342 00:18:02,600 --> 00:18:05,040 Speaker 3: So I think that's I think it's a very valid 343 00:18:05,080 --> 00:18:07,960 Speaker 3: statement to consider looking at them at them now. 344 00:18:08,560 --> 00:18:10,399 Speaker 1: The other point I wanted to make was that the 345 00:18:10,400 --> 00:18:13,119 Speaker 1: big supper fonts had been dropping their cash levels going 346 00:18:13,160 --> 00:18:17,159 Speaker 1: into what was clearly and obviously a very difficult time. 347 00:18:17,880 --> 00:18:20,960 Speaker 1: Have we only notion about cash and smsfs and whether 348 00:18:20,960 --> 00:18:22,280 Speaker 1: they were being more defensive. 349 00:18:23,720 --> 00:18:26,879 Speaker 3: Yes, we're from our perspective, are the clients of ours. 350 00:18:27,040 --> 00:18:30,119 Speaker 3: We took profits the end of last year. Markets were good. 351 00:18:30,359 --> 00:18:33,439 Speaker 3: You know, you always harvest some of those returns and 352 00:18:33,480 --> 00:18:36,000 Speaker 3: you wait for winter. There was the uncertainty. Remember when 353 00:18:36,000 --> 00:18:39,240 Speaker 3: Trump got in, the markets were pretty bullish to begin 354 00:18:39,320 --> 00:18:43,520 Speaker 3: with around the tax cuts and very much pro business agenda. 355 00:18:43,960 --> 00:18:46,200 Speaker 3: But as we've now sort of got through a little 356 00:18:46,240 --> 00:18:48,720 Speaker 3: bit of that and we've seen you know, the impact 357 00:18:48,720 --> 00:18:51,840 Speaker 3: of tariffs, there's this little bit of uncertainty. So for us, 358 00:18:51,920 --> 00:18:55,840 Speaker 3: we've had the correction of ten percent. You know, now 359 00:18:55,920 --> 00:18:58,000 Speaker 3: we're actually waiting for today to be a time to 360 00:18:58,000 --> 00:19:01,560 Speaker 3: actually start looking back in markets via a dollar cost average. 361 00:19:01,600 --> 00:19:04,760 Speaker 3: So remembering when you're in an SMSF, you don't need 362 00:19:04,800 --> 00:19:07,960 Speaker 3: to if you wanted to take an allocation, let's say, 363 00:19:07,960 --> 00:19:11,000 Speaker 3: for example, NASDAK and you wanted a five percent allocation, 364 00:19:11,080 --> 00:19:13,680 Speaker 3: you don't need to take five percent today. You can 365 00:19:13,680 --> 00:19:16,520 Speaker 3: do one percent today, one percent next week and slowly 366 00:19:16,520 --> 00:19:16,960 Speaker 3: build up. 367 00:19:16,920 --> 00:19:20,359 Speaker 2: Your positions and deploying that capital as per. 368 00:19:20,359 --> 00:19:25,040 Speaker 3: Something that you're comfortable with is really intelligent in volatile markets. 369 00:19:26,359 --> 00:19:28,320 Speaker 1: One or two things I want to I'm bouncing around, 370 00:19:28,359 --> 00:19:31,159 Speaker 1: but I'm at the same time it's very interesting. I 371 00:19:31,160 --> 00:19:33,720 Speaker 1: hope for listeners too. There's big picture and a small 372 00:19:33,760 --> 00:19:37,840 Speaker 1: picture here in terms of SMSF as an option and 373 00:19:37,880 --> 00:19:41,720 Speaker 1: then options within smsfs. But just to go back to itself, 374 00:19:42,280 --> 00:19:45,919 Speaker 1: what's the working number you have? I come into you 375 00:19:45,960 --> 00:19:48,679 Speaker 1: and I said, off to start in an SMSF and 376 00:19:48,720 --> 00:19:52,560 Speaker 1: you see, well, listen, you really can't start it without X. 377 00:19:52,920 --> 00:19:55,720 Speaker 1: What's your number? As logan Roy says. 378 00:19:55,560 --> 00:19:57,080 Speaker 2: It would always be a number of names. 379 00:19:57,840 --> 00:20:00,080 Speaker 3: I think when you look at it, it used to 380 00:20:00,119 --> 00:20:02,600 Speaker 3: be seen as around five hundred thousand, but over the 381 00:20:02,680 --> 00:20:05,439 Speaker 3: last couple of years that's come down to two hundred thousand. 382 00:20:05,800 --> 00:20:09,760 Speaker 3: And that again coincides with the rise of ETFs technology 383 00:20:09,800 --> 00:20:13,600 Speaker 3: lowering the costs. And it's also this you talked about 384 00:20:13,640 --> 00:20:18,199 Speaker 3: it previously, around things around administration. If you want to 385 00:20:18,200 --> 00:20:21,719 Speaker 3: get contributions into super before end of financial year, you know, 386 00:20:21,760 --> 00:20:24,719 Speaker 3: with the big funds, it can be quite difficult to 387 00:20:24,720 --> 00:20:28,480 Speaker 3: meet their timelines, whereas in a self managed super fund 388 00:20:28,480 --> 00:20:30,640 Speaker 3: you can do it the day before in June twenty nine. 389 00:20:31,119 --> 00:20:33,520 Speaker 3: So there's things around that where there's a bit more 390 00:20:33,560 --> 00:20:37,280 Speaker 3: flexibility around the self managed super fund that I think, 391 00:20:37,680 --> 00:20:40,199 Speaker 3: and it's been interest too. The research is shown that 392 00:20:40,240 --> 00:20:42,560 Speaker 3: younger people are opening them as well, So it's not 393 00:20:42,640 --> 00:20:44,639 Speaker 3: just someone with a really big balance, it's someone that 394 00:20:44,680 --> 00:20:47,200 Speaker 3: actually wants to take control of it. Which makes a 395 00:20:47,240 --> 00:20:48,960 Speaker 3: lot of sense to me because it's you know, it 396 00:20:49,040 --> 00:20:50,959 Speaker 3: is going to be such a big investment for you 397 00:20:51,320 --> 00:20:54,560 Speaker 3: with your mandated SGC and the caps that you've got 398 00:20:54,600 --> 00:20:55,440 Speaker 3: to put money in that. 399 00:20:55,880 --> 00:20:57,600 Speaker 2: Why wouldn't you want to have more control over that? 400 00:20:57,920 --> 00:21:01,120 Speaker 1: Well? Yeah, twelve percent of the year money by low 401 00:21:01,240 --> 00:21:04,040 Speaker 1: having to go into super when you say two hundred thousand, 402 00:21:04,119 --> 00:21:07,600 Speaker 1: that sounds very low to me. Is that imagining an 403 00:21:07,640 --> 00:21:10,600 Speaker 1: ETF heavy SMSF Basically. 404 00:21:11,000 --> 00:21:14,320 Speaker 3: Yes, you'd be able to keep your costs down via that, 405 00:21:14,720 --> 00:21:18,119 Speaker 3: and it's also then you can use your software nowadays 406 00:21:18,119 --> 00:21:19,760 Speaker 3: that does a lot of the heavy lifting from the 407 00:21:20,720 --> 00:21:24,640 Speaker 3: reporting requirements, and even the accountants and the audits now 408 00:21:24,760 --> 00:21:27,600 Speaker 3: are quite well priced, so that that tends to be 409 00:21:27,640 --> 00:21:30,520 Speaker 3: as around between two hundred and two fifty was your 410 00:21:30,520 --> 00:21:35,359 Speaker 3: break even cost of having an SMSF versus the industry ones? 411 00:21:35,720 --> 00:21:37,680 Speaker 1: Well, I'll just say to listeners, I mean, as I said, 412 00:21:37,760 --> 00:21:40,320 Speaker 1: I'm skeptical on that one folk, So I think it 413 00:21:40,320 --> 00:21:43,960 Speaker 1: would be much higher than that myself. However, I'm talking 414 00:21:43,960 --> 00:21:47,240 Speaker 1: about a fully diversified SMSF where you're doing all sorts 415 00:21:47,280 --> 00:21:51,520 Speaker 1: of things. It's not just ETFs. It could be sharedes, 416 00:21:51,600 --> 00:21:54,879 Speaker 1: it could be young securitized model just it could be 417 00:21:54,920 --> 00:21:55,800 Speaker 1: property direct. 418 00:21:55,920 --> 00:21:57,720 Speaker 2: Yeah, yeah, you're going up there. 419 00:21:57,800 --> 00:22:00,639 Speaker 3: Back to that the notion that was and that was 420 00:22:00,680 --> 00:22:05,040 Speaker 3: more what portfolios looked like when around the early twenty 421 00:22:05,080 --> 00:22:08,359 Speaker 3: twenty to twenty one twenty two, and that number then 422 00:22:08,520 --> 00:22:10,000 Speaker 3: was closer to five hundred thousand. 423 00:22:10,400 --> 00:22:12,959 Speaker 1: Yeah, okay, thank you, Hugh. All right, now, one thing 424 00:22:13,000 --> 00:22:15,920 Speaker 1: I wanted to zone in on on the SMSFS, which 425 00:22:15,960 --> 00:22:20,240 Speaker 1: is relevant to all listeners, but if also on SMSFS, 426 00:22:20,240 --> 00:22:23,000 Speaker 1: you know, and Hugh mentioned at the start about income 427 00:22:23,400 --> 00:22:27,120 Speaker 1: we need income. Income will become more important defensive assets. 428 00:22:27,680 --> 00:22:29,560 Speaker 1: Have you noticed you that the big banks are now 429 00:22:29,600 --> 00:22:35,080 Speaker 1: paying eight percent franked except Comebank, Well, the top three 430 00:22:35,320 --> 00:22:38,560 Speaker 1: A and Z, West, BAK and now are between seven 431 00:22:38,600 --> 00:22:41,639 Speaker 1: and eight percent fully franked dividend yield as we speak. 432 00:22:41,680 --> 00:22:44,840 Speaker 1: If you bought them today, Comebank is less than four percent. 433 00:22:45,320 --> 00:22:47,600 Speaker 3: And if I was invested in those, I wouldn't really 434 00:22:47,600 --> 00:22:50,919 Speaker 3: be worried about the capital volatility because the eight percent 435 00:22:51,200 --> 00:22:52,840 Speaker 3: is going to meet my income needs. 436 00:22:53,119 --> 00:22:55,000 Speaker 2: Yes, especially from a retiree. 437 00:22:55,560 --> 00:22:57,639 Speaker 1: That's right. If you're a retiring and you're getting the 438 00:22:57,840 --> 00:23:01,439 Speaker 1: absolute maximum bank for your you grossed up to Frankie, 439 00:23:01,480 --> 00:23:03,040 Speaker 1: I'll be even higher than seven or eight. 440 00:23:03,080 --> 00:23:05,680 Speaker 3: Wuld it And yeah, and if you're an accumulator, it's 441 00:23:05,680 --> 00:23:08,920 Speaker 3: not bad to be reinvesting those and really getting that 442 00:23:09,200 --> 00:23:11,640 Speaker 3: snowball of compound growth working for you either. 443 00:23:11,880 --> 00:23:15,440 Speaker 1: Okay, very good. All right, now there's a lot there 444 00:23:15,480 --> 00:23:17,960 Speaker 1: to digest. I hope that was all useful to you. 445 00:23:18,040 --> 00:23:19,920 Speaker 1: I want to go to questions because we've got great 446 00:23:20,000 --> 00:23:32,480 Speaker 1: questions back in a moment. Hello, welcome back to the 447 00:23:32,480 --> 00:23:40,760 Speaker 1: Australian's Money Puzzle on Deliberation Day. Deliberation Day broadcast Liberation Day. 448 00:23:40,800 --> 00:23:42,880 Speaker 1: By the way, as if you don't know, is what 449 00:23:42,880 --> 00:23:48,440 Speaker 1: Trump is calling, He's Tariff's Day. All right, question, Luke, 450 00:23:48,800 --> 00:23:53,160 Speaker 1: what are your thoughts in education bonds, particularly their tax advantages. 451 00:23:53,280 --> 00:23:56,359 Speaker 1: I am seeing claims of a thirty percent bonus. This 452 00:23:56,440 --> 00:23:58,280 Speaker 1: works great if my six year old and four year 453 00:23:58,280 --> 00:24:00,560 Speaker 1: old can be beneficiaries. I'm sure of how it may 454 00:24:00,640 --> 00:24:03,640 Speaker 1: change under tax loan. A long time out of five 455 00:24:03,640 --> 00:24:05,879 Speaker 1: financial advisers don't like these when they're on the show. 456 00:24:06,160 --> 00:24:07,080 Speaker 1: What do you think of them? 457 00:24:07,119 --> 00:24:07,280 Speaker 2: Here? 458 00:24:08,760 --> 00:24:10,440 Speaker 1: I've just given you context, right, just. 459 00:24:10,760 --> 00:24:15,600 Speaker 2: In fairly fair, I'm in the eighty percent. Okay, look 460 00:24:15,720 --> 00:24:18,199 Speaker 2: they I see how it works. 461 00:24:18,240 --> 00:24:20,760 Speaker 3: But the fees, you've got a factor in the fees, 462 00:24:21,200 --> 00:24:23,960 Speaker 3: You've got a factor in the inflexibility of it. And 463 00:24:24,680 --> 00:24:29,320 Speaker 3: a thought that I've had around that is would you 464 00:24:29,400 --> 00:24:31,840 Speaker 3: not be better off and the kids are better off 465 00:24:31,840 --> 00:24:34,880 Speaker 3: getting the money when they're eighteen in the adult tax rates. 466 00:24:35,280 --> 00:24:39,560 Speaker 3: So given the ages of the children, you might be 467 00:24:39,600 --> 00:24:43,280 Speaker 3: better off salary sacrificing into super. And when the kids 468 00:24:43,320 --> 00:24:46,600 Speaker 3: go on to university or whatnot and get that debt, 469 00:24:47,119 --> 00:24:50,560 Speaker 3: you could probably compound the return better through putting the 470 00:24:50,560 --> 00:24:54,000 Speaker 3: money into Super taxed at fifteen percent on earnings, and 471 00:24:54,040 --> 00:24:57,000 Speaker 3: then upon retirement there might be a few years later 472 00:24:57,080 --> 00:24:58,959 Speaker 3: until your age sixteen can access it. 473 00:24:59,320 --> 00:25:00,880 Speaker 2: You could then pay that off for them. 474 00:25:01,320 --> 00:25:03,639 Speaker 1: What about the argument that if you're topped out, if 475 00:25:03,640 --> 00:25:05,560 Speaker 1: you're lucky enough to have topped. 476 00:25:05,320 --> 00:25:08,520 Speaker 2: Up, and I would probably then use my non concessionals. 477 00:25:08,640 --> 00:25:10,399 Speaker 1: You wouldn't over education bonds. 478 00:25:11,240 --> 00:25:14,800 Speaker 3: Yes, I've never we've never really been a big user 479 00:25:14,840 --> 00:25:18,000 Speaker 3: of them. The range of investment options was never great. 480 00:25:18,680 --> 00:25:21,199 Speaker 3: The tax you know, the examples there that you can 481 00:25:21,240 --> 00:25:24,560 Speaker 3: find online look good. But at eighteen, you know, I 482 00:25:24,600 --> 00:25:28,160 Speaker 3: think of myself with four children, ten, eight, six, and four, 483 00:25:28,800 --> 00:25:32,000 Speaker 3: and even though I've got what sixteen years until I'm sixty, 484 00:25:32,520 --> 00:25:35,080 Speaker 3: I still and my kids go to private school. I 485 00:25:35,119 --> 00:25:38,480 Speaker 3: still haven't thought about there hasn't been enough benefit there. 486 00:25:38,680 --> 00:25:41,640 Speaker 1: But you so like someone who would have thought it through, 487 00:25:42,000 --> 00:25:46,359 Speaker 1: both as a professional and privately. Okay, very interesting, all right, 488 00:25:46,600 --> 00:25:51,040 Speaker 1: I hope that's useful to you, Luke. We're not dismissing 489 00:25:51,080 --> 00:25:53,120 Speaker 1: them out of hand, but I just find, Luke, every 490 00:25:53,160 --> 00:25:56,159 Speaker 1: time I put this in front of an advisor on 491 00:25:56,200 --> 00:26:00,240 Speaker 1: the show, they are not supportive of them. Okay, that 492 00:26:00,400 --> 00:26:02,800 Speaker 1: is they are they believe there's better value to be 493 00:26:02,840 --> 00:26:06,560 Speaker 1: had elsewhere with your money. All right, Andy, And the 494 00:26:06,600 --> 00:26:11,159 Speaker 1: context of Andy question interesting because you know, in the election, 495 00:26:11,760 --> 00:26:13,760 Speaker 1: which we are in the middle of an election campaign, 496 00:26:14,080 --> 00:26:16,879 Speaker 1: people a sort of struggling to find differences between the 497 00:26:16,880 --> 00:26:19,639 Speaker 1: two parties. I don't mean we know they're different big government, 498 00:26:19,680 --> 00:26:23,480 Speaker 1: small government and all that, but precisely on financial measures 499 00:26:23,560 --> 00:26:27,440 Speaker 1: or investment measures and in housing. The big ticket from 500 00:26:27,640 --> 00:26:32,680 Speaker 1: the Albanasa administration is the Shared Home Ownership scheme, which 501 00:26:32,840 --> 00:26:35,359 Speaker 1: whereby the government will put up thirty percent for an 502 00:26:35,400 --> 00:26:38,639 Speaker 1: existing house forty for a new and you share ownership 503 00:26:38,640 --> 00:26:42,400 Speaker 1: with them. You know, that's their one and the Coalition's 504 00:26:42,440 --> 00:26:45,720 Speaker 1: one is Super for Home Deposit, where you can get 505 00:26:45,760 --> 00:26:49,920 Speaker 1: up to fifty thousand out of your SUPER to buy 506 00:26:49,920 --> 00:26:53,439 Speaker 1: a house which you of course own entirely yourself. Now 507 00:26:54,080 --> 00:26:58,040 Speaker 1: Andy's question, is the First Home Super saving scheme worth 508 00:26:58,200 --> 00:27:00,399 Speaker 1: the effort? I believe it is quite come plex, But 509 00:27:00,480 --> 00:27:02,679 Speaker 1: more recently I came across someone who had used it 510 00:27:02,720 --> 00:27:07,280 Speaker 1: and had no complaints at all. The First Home Super 511 00:27:07,480 --> 00:27:09,840 Speaker 1: Saber scheme, by the way, about thirty five thousand people 512 00:27:09,880 --> 00:27:13,840 Speaker 1: have used it. It's the lowest participation of the various 513 00:27:13,840 --> 00:27:17,320 Speaker 1: first home schemes, like the Guarantee scheme, but it is 514 00:27:17,520 --> 00:27:21,399 Speaker 1: a scheme where Super one way or another was being used, 515 00:27:21,760 --> 00:27:23,520 Speaker 1: or a super money that might have gone into Super 516 00:27:23,520 --> 00:27:27,080 Speaker 1: has been used. Have you used it, Hugh, have you 517 00:27:27,119 --> 00:27:28,120 Speaker 1: come across it? 518 00:27:28,240 --> 00:27:28,800 Speaker 2: Do you know? 519 00:27:29,359 --> 00:27:32,920 Speaker 1: Is it worth the effort to tunnel through the bureaucracy 520 00:27:33,000 --> 00:27:34,160 Speaker 1: to make it work. 521 00:27:34,960 --> 00:27:39,200 Speaker 3: In its current format. I'm not a big advocate for it. 522 00:27:39,720 --> 00:27:44,399 Speaker 3: I didn't mind what the Coalition put forward, though, I 523 00:27:44,400 --> 00:27:46,720 Speaker 3: thought that there was an element there that you know, 524 00:27:46,800 --> 00:27:48,600 Speaker 3: part of the gains would have to go back into 525 00:27:48,600 --> 00:27:49,520 Speaker 3: the super as well. 526 00:27:49,640 --> 00:27:51,320 Speaker 1: Yeah, to be fair, Yeah, to be fair, just to 527 00:27:51,320 --> 00:27:53,760 Speaker 1: finish off on that coalition. Think about the fifty thousands 528 00:27:53,800 --> 00:27:56,200 Speaker 1: you can take off to buy your house. When you 529 00:27:56,480 --> 00:28:01,560 Speaker 1: sell the house, if they distick, the fifty thousand must 530 00:28:01,560 --> 00:28:04,480 Speaker 1: be replaced back into your super isn't that right? Yeah, 531 00:28:04,480 --> 00:28:05,760 Speaker 1: which is the point people forget? 532 00:28:05,920 --> 00:28:09,280 Speaker 3: Yeah, And I think that that method people are still 533 00:28:09,520 --> 00:28:11,719 Speaker 3: you don't want to just rob your super fund, you know, 534 00:28:11,920 --> 00:28:13,600 Speaker 3: you don't want to take it out of there in 535 00:28:13,640 --> 00:28:15,600 Speaker 3: it not go back. I'm not a fan of the 536 00:28:15,600 --> 00:28:19,840 Speaker 3: co ownership model, and you know, we still want people 537 00:28:19,880 --> 00:28:22,240 Speaker 3: to be able to afford houses, but I think that's 538 00:28:22,840 --> 00:28:23,240 Speaker 3: more on that. 539 00:28:23,320 --> 00:28:24,840 Speaker 2: We just need to be able to build more. 540 00:28:24,640 --> 00:28:29,000 Speaker 1: Houses, yes, supply to yeah, taking out super. Okay, So 541 00:28:29,440 --> 00:28:32,399 Speaker 1: there you are, and the first home super skate Saber 542 00:28:32,480 --> 00:28:35,000 Speaker 1: scheme it's there. People do make it work for them. 543 00:28:35,040 --> 00:28:36,680 Speaker 1: I think they make it work for them because people 544 00:28:36,720 --> 00:28:40,040 Speaker 1: will try anything that's available on this and I think 545 00:28:40,080 --> 00:28:44,400 Speaker 1: the shared home equity scheme will be popular by the way, 546 00:28:44,480 --> 00:28:47,320 Speaker 1: I do, so will super from you from so will 547 00:28:47,360 --> 00:28:50,440 Speaker 1: housing deposits from your super They'll both fly because people 548 00:28:50,480 --> 00:28:54,320 Speaker 1: will try anything, even the FHSS. All right, final questions 549 00:28:54,360 --> 00:28:56,680 Speaker 1: from Rowan. There is usually quite a delay between the 550 00:28:56,760 --> 00:28:59,440 Speaker 1: RBA cutting the official indust rate and banks passing those 551 00:28:59,440 --> 00:29:03,320 Speaker 1: cuts through. Yes, does the RBA take into account banks 552 00:29:03,440 --> 00:29:07,520 Speaker 1: usual delays when deciding when to cut rates. I wouldn't 553 00:29:07,560 --> 00:29:10,240 Speaker 1: think so, Rowan. For what it's worth, there's no law 554 00:29:10,280 --> 00:29:14,840 Speaker 1: that says they must. In fact, the RBA has no particular, written, 555 00:29:14,880 --> 00:29:19,040 Speaker 1: explicit power to tell the banks to follow the official rate. 556 00:29:19,160 --> 00:29:23,040 Speaker 1: It's a guideline and the banks are pretty fast and 557 00:29:23,120 --> 00:29:25,000 Speaker 1: putting up the deposit rates. It's got to give them 558 00:29:25,120 --> 00:29:30,080 Speaker 1: full credence for that, don't you So they wouldn't. Basically 559 00:29:30,120 --> 00:29:32,600 Speaker 1: they wouldn't. I don't think so. I mean maybe if 560 00:29:32,640 --> 00:29:34,760 Speaker 1: they were thinking about it really finally, and maybe there 561 00:29:34,760 --> 00:29:36,560 Speaker 1: was atrocious behavior, they might. 562 00:29:36,680 --> 00:29:40,520 Speaker 4: But what do you think you I went and had 563 00:29:40,520 --> 00:29:43,880 Speaker 4: a quick research for this and it was an Z 564 00:29:44,040 --> 00:29:49,520 Speaker 4: and NAB have typically taken ten days to cut to cut, and. 565 00:29:49,600 --> 00:29:52,160 Speaker 2: Westpac has taken typically fourteen. 566 00:29:52,880 --> 00:29:57,040 Speaker 3: And again there's no it's a commercial reason for them, 567 00:29:57,360 --> 00:30:00,240 Speaker 3: you know, they don't have to. RBA's kind of meant 568 00:30:00,240 --> 00:30:03,760 Speaker 3: to be you know, somewhat an independent, but they take 569 00:30:03,800 --> 00:30:09,400 Speaker 3: it into account. And I think even when you compare it, 570 00:30:09,880 --> 00:30:13,720 Speaker 3: you know, a thirteen day delay on a five hundred 571 00:30:13,720 --> 00:30:16,840 Speaker 3: thousand dollars loan cost forty five dollars. 572 00:30:16,520 --> 00:30:20,920 Speaker 1: More assuming they cut. There's two things there isn't there. 573 00:30:21,040 --> 00:30:23,080 Speaker 1: There's the fourteen days, but then there's do they give 574 00:30:23,120 --> 00:30:25,560 Speaker 1: the whole cut? Which they don't always And again they 575 00:30:25,560 --> 00:30:28,080 Speaker 1: don't have to. A short answer roman is they don't 576 00:30:28,120 --> 00:30:32,880 Speaker 1: have to, and it wouldn't be it wouldn't be a 577 00:30:32,880 --> 00:30:36,360 Speaker 1: top factor for them in their deliberations, that is, if 578 00:30:36,360 --> 00:30:42,640 Speaker 1: they ever cut again. Oh yes, so the economists tell 579 00:30:42,680 --> 00:30:44,480 Speaker 1: us they're going to cut again, And I know I'm 580 00:30:44,600 --> 00:30:48,040 Speaker 1: terribly cynical about it. I hope, so I'll tell you, well, 581 00:30:48,080 --> 00:30:50,040 Speaker 1: but I wouldn't be. I wouldn't be building it into 582 00:30:50,040 --> 00:30:52,080 Speaker 1: my plans. Would you be building a recut into your plan? 583 00:30:52,160 --> 00:30:52,640 Speaker 2: To you? 584 00:30:52,800 --> 00:30:56,360 Speaker 1: No, right, there you go question without notice. I should 585 00:30:56,360 --> 00:30:57,440 Speaker 1: have warned you. I was going to hit you with 586 00:30:57,440 --> 00:30:58,840 Speaker 1: that one, but then I should have warned you. But 587 00:30:58,960 --> 00:31:00,840 Speaker 1: all the questions I hit you that I didn't line 588 00:31:00,920 --> 00:31:03,480 Speaker 1: you up for. And that's because you're very good to 589 00:31:03,520 --> 00:31:06,080 Speaker 1: talk on the show and We know you can handle 590 00:31:06,120 --> 00:31:08,400 Speaker 1: them all and you did very well as usual. Thanks 591 00:31:08,480 --> 00:31:11,240 Speaker 1: very much, Hugh Robertson of Centaur Financial. 592 00:31:10,920 --> 00:31:13,760 Speaker 2: Services, Thank you very much for having me, James. 593 00:31:14,160 --> 00:31:17,200 Speaker 1: Great to have Hugh on the show again. Okay, folks, 594 00:31:17,480 --> 00:31:23,400 Speaker 1: keep those questions, comments, observations, complaints. Happy to see them 595 00:31:23,400 --> 00:31:26,760 Speaker 1: all the money puzzle at the Australian dot com dot 596 00:31:27,000 --> 00:31:29,280 Speaker 1: u send them in, record them if you like, on 597 00:31:29,320 --> 00:31:31,520 Speaker 1: a voice memo and send them in as an email. 598 00:31:31,600 --> 00:31:34,240 Speaker 1: We'd love to hear them. We're collecting them. Talk to 599 00:31:34,280 --> 00:31:34,640 Speaker 1: you soon.