WEBVTT - Time to consider an SMSF? 0:00:09.800 --> 0:00:13.480 Hello, and welcome to The Australian's Money Puzzle podcast. I'm 0:00:13.560 --> 0:00:17.119 James Kirkby. Welcome aboard everybody. Whoa what a week? So 0:00:17.200 --> 0:00:22.320 here we go. Trump's Liberation Day has arrived. Ten tariffs 0:00:22.640 --> 0:00:26.599 right across the board for everything coming into the US. Now, 0:00:26.680 --> 0:00:28.920 just so you know the general tariff rate, you know 0:00:29.000 --> 0:00:31.000 at the moment it's about two and a half percent, 0:00:31.120 --> 0:00:34.640 so it's a quadrupling of tariffs going into the US. 0:00:34.720 --> 0:00:38.040 It's a change to the world order as we know it. 0:00:38.080 --> 0:00:42.720 And Australia got no exemptions whatsoever. That's worth pointing out too. 0:00:43.040 --> 0:00:45.360 That was announced. We don't know what's going to happen 0:00:45.400 --> 0:00:47.479 to markets, right, but it was announced after the Wall 0:00:47.520 --> 0:00:52.280 Street in this says closed. But now Jones futures as 0:00:52.320 --> 0:00:56.040 we speak to you middle of Thursday are down three percent. 0:00:56.840 --> 0:00:59.560 And I want to put forward a show to you 0:00:59.800 --> 0:01:02.840 to which hopefully you might listen to in conjunction with 0:01:02.920 --> 0:01:07.360 Tuesday's show, because every now and again there is a 0:01:07.480 --> 0:01:12.160 theme that dominates markets and we zone in on it 0:01:12.200 --> 0:01:14.520 and it's worth bearing with us when we do this. 0:01:14.920 --> 0:01:19.240 If you recall about a year ago we covered artificial intelligence, 0:01:19.560 --> 0:01:22.200 I think a fair bit before it became a very 0:01:22.280 --> 0:01:24.520 generally covered issue. It was probably more like a year 0:01:24.520 --> 0:01:26.600 and a half ago. And this again is one of 0:01:26.640 --> 0:01:30.200 those themes that's going to change how your super operates, 0:01:30.280 --> 0:01:34.680 how your investments operate. It is crucial. So listen to 0:01:34.920 --> 0:01:37.440 Cameron if you can. From Tuesday's show. You know one 0:01:37.480 --> 0:01:39.679 of the things you think about how tuned in he is. 0:01:40.360 --> 0:01:42.480 And if you listen to the show, you know that 0:01:42.840 --> 0:01:45.120 he literally knows Trump. He has been in the Oval Office, 0:01:45.120 --> 0:01:47.400 He's been at all the rallies. He met the point 0:01:47.400 --> 0:01:49.960 that Adon Musk wouldn't last a year. And here we 0:01:50.000 --> 0:01:52.560 are forty eight hours later, and there are reports this 0:01:52.680 --> 0:01:56.800 morning that Mosk is, in the delightful phrase of Anthony Scaramucci, 0:01:56.800 --> 0:01:59.240 heading for the wood chipper. So what does it all 0:01:59.280 --> 0:02:01.440 mean for you, the active investor? I have a top 0:02:01.440 --> 0:02:05.680 financial advisor this morning. He's on the top the Barons 0:02:05.720 --> 0:02:08.720 one hundred and fifty list. It's Hugh Robertson of Centaur. 0:02:08.919 --> 0:02:12.480 How are you, Hugh, I'm good, James, how are you going? 0:02:12.639 --> 0:02:13.600 Interesting times? 0:02:14.160 --> 0:02:16.440 You pick your moment, You pick your moment to come 0:02:16.480 --> 0:02:19.160 on the show, or tell you that. I want to 0:02:19.200 --> 0:02:22.120 just look for the listeners now, have in some ways 0:02:22.200 --> 0:02:24.720 kind of cover the big picture about Trump on what's 0:02:24.760 --> 0:02:27.520 going on, and it's all come to pass, and I 0:02:27.520 --> 0:02:29.000 think it's you know, I think it's safe to say 0:02:29.080 --> 0:02:32.639 it was worse and more severe than people might have 0:02:32.720 --> 0:02:35.280 hoped in terms of what he's doing in terms of 0:02:35.280 --> 0:02:37.919 closing the doors basically to free trade around the world. 0:02:38.160 --> 0:02:40.360 And I want to look in two ways. It's simply 0:02:40.400 --> 0:02:43.000 I mean, obviously anybody can do and make what they 0:02:43.000 --> 0:02:45.360 wish of it for their investing. But let's just have 0:02:45.400 --> 0:02:48.200 a look at super and let's split it into two parts. 0:02:48.639 --> 0:02:51.120 Your super if you have big Super, and anyway, what 0:02:51.200 --> 0:02:53.640 big super is doing is always interesting, even if you 0:02:53.680 --> 0:02:56.600 don't participate in Big Super. And then we'll also look 0:02:56.639 --> 0:03:01.280 at smsfs and their reaction. But I suppose the immediate question, Hugh, 0:03:01.960 --> 0:03:08.120 which I certainly would be worried that our major super 0:03:08.160 --> 0:03:13.040 funds in Australia have gone big basically on the US, 0:03:13.320 --> 0:03:17.440 have lifted their bets on the US and you can 0:03:17.480 --> 0:03:19.880 see the proportion of stocks that they hold there has 0:03:20.000 --> 0:03:23.280 risen and they have dropped their cash levels as well 0:03:23.360 --> 0:03:25.840 at the very same time just as this is happening. 0:03:26.160 --> 0:03:28.880 It's just one of those times where I think the 0:03:28.919 --> 0:03:31.960 power of the independent investor is at its best because 0:03:31.960 --> 0:03:34.639 you can move. But what's your impression of big super 0:03:35.200 --> 0:03:40.120 major super funds and their approach to these historic days 0:03:40.160 --> 0:03:40.520 so far? 0:03:42.480 --> 0:03:45.080 When you get times of great volatility, you want to 0:03:45.600 --> 0:03:48.040 probably be invested a little bit closer to home, where 0:03:48.080 --> 0:03:48.720 you feel you have. 0:03:48.720 --> 0:03:49.880 A little bit more control. 0:03:50.400 --> 0:03:53.560 When you look at the big super funds, I think, 0:03:53.600 --> 0:03:56.760 as an example, Australian Souper now sins about seventy percent 0:03:57.040 --> 0:04:00.960 of its inflows overseas, so that will be impacted by 0:04:00.960 --> 0:04:03.640 the tariffs at a pretty grand scale. And I think 0:04:03.680 --> 0:04:08.000 as we see more of this industry consolidation of the megafunds, 0:04:08.040 --> 0:04:11.840 the big industry funds, they're going to dwarf. They're going 0:04:11.880 --> 0:04:13.280 to be so big in size that they're going to 0:04:13.320 --> 0:04:16.400 dwarf the ASX itself. So it's going to be a 0:04:16.400 --> 0:04:18.880 continual thing that they're going to have to allocate money 0:04:19.400 --> 0:04:22.920 overseas just so that they don't move markets with one 0:04:22.960 --> 0:04:27.000 single investment. So I think you'll see more global exposure 0:04:27.839 --> 0:04:30.080 and you're going to see more in the unlisted space. 0:04:30.200 --> 0:04:34.360 So probably two areas that scare most investors right now. 0:04:34.400 --> 0:04:38.120 I might suggest yeah, well, we know for a variety 0:04:38.120 --> 0:04:40.279 of reasons. It's all come through in various ways. The 0:04:40.279 --> 0:04:42.719 Morgan Standing, for instance, as sell that thirty percent of 0:04:42.760 --> 0:04:46.400 the AX is held by Big Super. So okay, fair enough, 0:04:46.440 --> 0:04:48.640 you know, they a hit saturation point and they must 0:04:48.960 --> 0:04:51.760 move abroad. But the thing I'm a bit concerned about 0:04:51.880 --> 0:04:54.480 is the nature of their exposure to the share market 0:04:55.000 --> 0:04:58.080 and the nature of our Big Super choices for people, 0:04:58.360 --> 0:05:01.640 the classifications, you know, we're balanced where what people think 0:05:01.720 --> 0:05:04.760 is balanced has actually got a fair spin skew towards growth, 0:05:05.200 --> 0:05:07.680 a fair skew towards the share market. And the share 0:05:07.720 --> 0:05:10.120 market was good for Big Super for years and years. 0:05:10.120 --> 0:05:13.880 But here's the thing. They've lifted their exposure to the US. 0:05:14.400 --> 0:05:16.400 The US is the worst performing market in the world 0:05:16.520 --> 0:05:19.320 so far this year. It's down about five five and 0:05:19.320 --> 0:05:21.920 a half percent so far. Our market's down about four 0:05:22.080 --> 0:05:24.080 four and a half. The European markets are actually up 0:05:24.120 --> 0:05:27.880 about six percent. Point I'm making is is there something 0:05:29.120 --> 0:05:33.480 of a reckoning perhaps coming for not so much for 0:05:33.560 --> 0:05:37.039 Big Super, but for people who thought they're super funds 0:05:37.320 --> 0:05:39.280 sort of knew something no one else did. They were 0:05:39.320 --> 0:05:40.640 doing so well for so many. 0:05:40.520 --> 0:05:46.400 Years yes, it needs to be because now earnings are 0:05:46.400 --> 0:05:46.840 going to be. 0:05:46.800 --> 0:05:49.040 Impacted by tariffs. 0:05:49.080 --> 0:05:52.320 You've got price expansion that's happened over the past few 0:05:52.440 --> 0:05:55.599 years that hasn't necessarily kept up with the earnings growth. 0:05:55.760 --> 0:05:58.440 So you're globally, you know. 0:05:58.560 --> 0:06:01.760 Especially the US market is expensive on you know, the 0:06:01.800 --> 0:06:06.240 fundamental metrics, and where you where might your opportunities be, 0:06:06.520 --> 0:06:09.680 maybe in Europe or in Asia. You're probably not getting 0:06:09.800 --> 0:06:11.919 much of an allocation into. 0:06:11.800 --> 0:06:12.919 Those asset classes. 0:06:13.480 --> 0:06:15.719 So it's going to be in it's going to be 0:06:15.720 --> 0:06:19.680 a difficult uphill road for investors in big super funds 0:06:19.720 --> 0:06:22.040 over the next sort of three to five years, you'd imagine, 0:06:22.520 --> 0:06:26.880 especially with the volatility that a Trump presidency usually brings. 0:06:27.640 --> 0:06:30.480 What do you think people should do? Obviously we're going 0:06:30.520 --> 0:06:32.919 to get people asking, as we always do times of 0:06:34.440 --> 0:06:38.680 severe stress, whether they're in an appropriate setting in their 0:06:38.720 --> 0:06:42.440 big super fund. And this issue of definitions, and you 0:06:42.480 --> 0:06:45.760 think it's obscure, folks, it's not. This is so important. 0:06:46.920 --> 0:06:51.120 There's no legal definition on these super funds allocation. So 0:06:51.160 --> 0:06:53.000 you go into your big super fund number one and 0:06:53.040 --> 0:06:55.960 you have your choices and one's conservative and one's balanced, 0:06:55.960 --> 0:06:58.960 and one's growth. But the fact is, you know that 0:06:59.520 --> 0:07:03.000 growth is really spins towards shares and balanced is a 0:07:03.000 --> 0:07:05.480 lot more turned towards shares and a lot less balanced 0:07:05.520 --> 0:07:07.520 than you might think in the classical sense of the world. 0:07:07.600 --> 0:07:10.480 And I can prove this to you because the ratings 0:07:10.560 --> 0:07:15.280 agencies they actually ignore, often ignore the classification the bonds 0:07:15.360 --> 0:07:18.880 have calling them balanced, and they define them as grilled. 0:07:18.960 --> 0:07:21.360 And they're right to do so. Am I on the right? Check? 0:07:21.400 --> 0:07:21.520 Here? 0:07:21.560 --> 0:07:23.440 Am I making? Am I over the top on this one? 0:07:23.480 --> 0:07:25.080 Here? No, you're right. 0:07:25.120 --> 0:07:28.040 There was a big industry fund a while ago that 0:07:28.280 --> 0:07:30.440 used to call it self balance that had ninety two 0:07:30.520 --> 0:07:32.800 percent in growth assets. There's no one in this world 0:07:32.920 --> 0:07:37.120 that would think that's balanced, you know so. And that's 0:07:37.200 --> 0:07:40.880 part of the regulatory regime where they need to hold 0:07:40.920 --> 0:07:43.600 these big funds to account a bit more. 0:07:43.480 --> 0:07:46.040 Which we're starting to see. We're starting to see that 0:07:46.080 --> 0:07:49.040 there's you know, they've lost a bit of shine. 0:07:49.200 --> 0:07:51.400 But I think from the investor point of view, going 0:07:51.440 --> 0:07:53.440 through a market like now, you've really. 0:07:53.600 --> 0:07:55.160 Got to focus on your cash flows. 0:07:55.320 --> 0:07:58.000 If growth has been great for the past few years, 0:07:58.280 --> 0:07:59.880 and what I mean by then in your shares you 0:08:00.040 --> 0:08:03.480 had the capital appreciation, what you're seeing now is how 0:08:03.480 --> 0:08:05.360 are we going to get that income from shares? How 0:08:05.360 --> 0:08:07.920 are we going to get cash flows? So probably more 0:08:07.960 --> 0:08:10.920 important than ever in times of uncertainty is that we're 0:08:10.960 --> 0:08:13.600 going to go and get paid those dividends, whether Australian 0:08:13.680 --> 0:08:16.520 or global, And that's probably one things where when you're 0:08:16.520 --> 0:08:20.320 in those big megafunds or industry funds, they don't pay 0:08:20.320 --> 0:08:22.960 out the dividends. That just keeps getting reinvested back into 0:08:23.000 --> 0:08:25.800 the unit price. So I think there's a really big 0:08:25.840 --> 0:08:30.080 difference there for people to appreciate that it's pretty valuable 0:08:30.120 --> 0:08:32.520 now to be able to extrapolate that income out of 0:08:32.520 --> 0:08:36.080 your investments. Both your growth assets shares and property and 0:08:36.080 --> 0:08:39.880 your defensive assets are fixed interest in cash. 0:08:40.120 --> 0:08:42.560 So what should people should they We're not telling people 0:08:42.640 --> 0:08:45.240 what to do, it's not advice information only, but I 0:08:45.320 --> 0:08:49.959 expect people should review at least whether they are comfortable 0:08:50.640 --> 0:08:53.400 with the positions that they have taken, and they might 0:08:53.440 --> 0:08:57.640 go an extra yard and find out exactly what their 0:08:57.679 --> 0:09:00.800 allocation means. What does balance actually mean because it can 0:09:00.840 --> 0:09:04.880 mean different things. I mean, our super's definition of balance 0:09:04.880 --> 0:09:07.719 could be different than hestes, which could be different than holsplus. 0:09:08.559 --> 0:09:13.559 And I think clients and investors would just assume that they're. 0:09:14.559 --> 0:09:16.040 It's the same for all of them. 0:09:16.200 --> 0:09:17.920 So I think that's a really good point, James, that 0:09:18.000 --> 0:09:21.439 you've got to really look behind, you know, look behind 0:09:21.440 --> 0:09:23.800 the label and actually spend a little bit of time 0:09:23.840 --> 0:09:25.960 investigating it because there might be something that you're not 0:09:26.000 --> 0:09:30.120 comfortable with as your risk tolerance or even your capacity 0:09:30.160 --> 0:09:32.319 to take risks right now if you're nearing into retirement. 0:09:32.640 --> 0:09:35.559 Yes, are they all? Can I paint them more of 0:09:35.640 --> 0:09:37.600 the same brush By that, I mean, are the big 0:09:37.720 --> 0:09:41.520 private ones than none, the retailed ones as we call them, 0:09:41.600 --> 0:09:46.240 the whatever, the amps of this world, other colonial et cetera. 0:09:48.400 --> 0:09:50.360 Is the issue similar with them. 0:09:51.920 --> 0:09:53.920 You've usually got a little bit more choice there. 0:09:54.080 --> 0:09:56.280 To be fair to them, you've got a bit more choice, 0:09:56.280 --> 0:09:59.240 So you can break it down. They usually don't have, 0:10:00.200 --> 0:10:03.960 you know, a set standard fund that you're in nowadays, 0:10:04.040 --> 0:10:06.839 so usually you'll get options there. You know, you might 0:10:06.880 --> 0:10:09.320 have over one hundred different investment options there that you 0:10:09.360 --> 0:10:12.640 get to choose from, and you can kind of choose 0:10:12.679 --> 0:10:13.920 your asset allocation a. 0:10:13.840 --> 0:10:16.320 Little in a little bit more of a bespoke manner. 0:10:16.840 --> 0:10:20.440 So again, though for any single person, you know, outside 0:10:20.440 --> 0:10:23.120 we all know that outside of your house, your super 0:10:23.200 --> 0:10:25.520 is your biggest asset. So you've really got to spend 0:10:25.520 --> 0:10:28.600 the you know, spend an hour on it, looking for 0:10:28.760 --> 0:10:31.839 looking through and understanding it and not to you know, 0:10:32.280 --> 0:10:34.520 or talk to someone that can give you that advice 0:10:34.720 --> 0:10:38.000 as you know that education might save you, you know, 0:10:38.320 --> 0:10:40.960 possibly tens or hundreds of thousands of dollars. 0:10:41.280 --> 0:10:44.280 Okay, really valuable folks. So I mean, we've had this 0:10:44.360 --> 0:10:46.560 point on the shore before, but there's times for it. 0:10:46.559 --> 0:10:50.320 It's really matters. Don't assume you understand what the definition 0:10:50.480 --> 0:10:53.280 is of growth or balance. Have a look, have a look. 0:10:53.320 --> 0:10:56.000 It's not that complicated, all right, It's really not that 0:10:56.080 --> 0:10:59.839 complicated that that your fond it could be a lot 0:10:59.840 --> 0:11:03.320 more exposed to shares than you realize if you just 0:11:03.400 --> 0:11:06.600 assume that balance means balanced in the sense that you 0:11:06.679 --> 0:11:10.240 and I understand balance to be. And as Hughes pointed out, 0:11:10.240 --> 0:11:12.319 there is a major fund that had ninety percent of 0:11:12.320 --> 0:11:15.560 their holding some shares and they were classified as balanced. 0:11:17.040 --> 0:11:19.080 And by the way, can I just say, every time 0:11:19.120 --> 0:11:21.360 I bring this up in print, I get a you 0:11:21.400 --> 0:11:23.959 know that they're on like in two minutes complaining about 0:11:23.960 --> 0:11:26.199 this and that it's all fine. Well, I don't think 0:11:26.240 --> 0:11:30.720 it is all right now. Also, Hugh, while we're talking 0:11:30.760 --> 0:11:33.840 about this, one of the big issues of late in 0:11:34.000 --> 0:11:36.640 super and in Big Super. And when I say Big Super, 0:11:36.679 --> 0:11:38.640 I mean all those big industry funds and all those 0:11:38.640 --> 0:11:43.520 big retail funds that many people have their life savings in. 0:11:44.520 --> 0:11:47.120 There's all sorts of scandals and letdowns going on at 0:11:47.120 --> 0:11:52.120 the moment in terms of standards. Right Joe Longo, head 0:11:52.120 --> 0:11:55.040 of ASIK, has said they're the poster child of poor 0:11:55.080 --> 0:11:58.400 corporate governance. That's a spectacular line. I don't forget that 0:11:58.480 --> 0:12:01.560 pretty fast. And we had all this stuff with death 0:12:01.600 --> 0:12:05.120 benefits and disappointments and court actions Australian Super aera in 0:12:05.160 --> 0:12:08.319 their SeaBus are in there. There's a blockout in Hester 0:12:08.480 --> 0:12:11.040 where you can't even get at you through the site 0:12:11.080 --> 0:12:13.880 for fifty days because they're doing a technology change over. 0:12:14.679 --> 0:12:17.360 But here's what I want to point I'm leading to. 0:12:18.520 --> 0:12:22.320 There used to be an enormous amount of funds. There's 0:12:22.400 --> 0:12:25.120 mergers happening all the time. Art For instance, the second 0:12:25.160 --> 0:12:27.960 biggest fund is the second biggest fund because it's a merger, 0:12:28.640 --> 0:12:31.520 a recent merger of Sun Super around the old Queensland 0:12:31.559 --> 0:12:36.840 super Now. Mercer says that there's still about ninety significant 0:12:37.000 --> 0:12:45.240 super funds that's going to shrink to about twenty. And 0:12:45.280 --> 0:12:47.760 the issue I want to bring up you is when 0:12:47.760 --> 0:12:50.600 you're in one of these funds that's a target, you 0:12:50.600 --> 0:12:54.560 can have a lot of headaches and complications and bureaucracy 0:12:54.679 --> 0:12:57.200 drive you completely nuts. If you happen to be unfortunate 0:12:57.320 --> 0:12:59.079 enough to be in a small fund that's taken over. 0:13:00.040 --> 0:13:02.320 Find out a giant fund but at one hundred billion 0:13:02.480 --> 0:13:05.040 in assets, just buys your fund that had sixty billion 0:13:05.040 --> 0:13:07.280 in assets, and it gets two lines in a newspaper 0:13:07.320 --> 0:13:09.760 one day, and that's about it. You might even miss it. 0:13:10.000 --> 0:13:14.239 But all sorts of things happen afterwards as that consolidation happens, 0:13:14.880 --> 0:13:17.360 and it will happen. It has to happen because they 0:13:17.440 --> 0:13:21.160 need the scale and they need the technology investment to 0:13:21.240 --> 0:13:23.480 stay at the level they're at. What's the sort of 0:13:23.559 --> 0:13:27.200 upsides and downsides of that consolidation where the world we 0:13:27.240 --> 0:13:29.600 know of big super funds is going to shrink fast, 0:13:29.840 --> 0:13:32.320 is shrinking fast into a handful of key players. 0:13:34.720 --> 0:13:39.400 I think you definitely lose innovation, there is competition around you, 0:13:39.400 --> 0:13:41.920 You lose innovation and if you think, you know, we've 0:13:41.960 --> 0:13:45.360 got an aging population, we should be spending more money 0:13:45.400 --> 0:13:49.520 on designing better retirement outcomes for our clients. And how 0:13:50.040 --> 0:13:52.640 the investors and the members of these super funds. I 0:13:52.679 --> 0:13:56.400 think that's one that everyone will feel at the individual level, 0:13:56.640 --> 0:13:58.760 it is a race of the bottom with costs. So 0:13:58.800 --> 0:14:01.760 we're just trying to reduce fees, and then you get 0:14:01.760 --> 0:14:03.319 these substandard service levels. 0:14:03.360 --> 0:14:04.480 You get these issues. 0:14:04.200 --> 0:14:09.280 Around death payments and pension payments. So you know they've 0:14:09.280 --> 0:14:12.240 done a really good, you know, run on ad saying 0:14:12.240 --> 0:14:15.600 that it's all about cost, but you know, clients, do 0:14:15.880 --> 0:14:17.880 you know, do value good service? 0:14:17.920 --> 0:14:18.160 Still? 0:14:18.160 --> 0:14:20.600 People do value service, and I think that's something that 0:14:20.680 --> 0:14:25.640 needs to lift within those funds. And I think you're 0:14:25.680 --> 0:14:28.120 also going to see that they're going to become a 0:14:28.200 --> 0:14:30.360 victim of their own success in the fact that they're 0:14:30.360 --> 0:14:33.240 going to be so large that the way they invest 0:14:33.440 --> 0:14:36.840 you lock yourself into very average returns. 0:14:36.920 --> 0:14:40.760 Very interesting. We really flushed out out another day that point, Q, 0:14:40.960 --> 0:14:44.160 but it's very interesting, and because as you see, if 0:14:44.200 --> 0:14:47.320 you become it's like the old thing about the issue, 0:14:47.400 --> 0:14:50.560 if some company or factor dominates and it's then it 0:14:50.560 --> 0:14:52.120 becomes the average if you know what I mean, very 0:14:52.120 --> 0:14:53.800 hard to be better than average if you represent the 0:14:53.840 --> 0:14:57.880 average as those handful of funds will do sooner or later. Okay, look, 0:14:57.880 --> 0:14:59.720 well take a short break. I want to bring up 0:14:59.720 --> 0:15:02.680 a really interesting point now about Trump, about this sort 0:15:02.720 --> 0:15:05.200 of inflection point we have in market. So where we 0:15:05.240 --> 0:15:07.480 sit markets down five percent for the year or so 0:15:07.920 --> 0:15:10.840 after a whole polygod years when you could just close 0:15:10.880 --> 0:15:13.280 your eyes your fond are bringing in double digits every year. 0:15:14.600 --> 0:15:17.160 Maybe it's time to take a look at self managed 0:15:17.160 --> 0:15:27.200 super funds and who they might shoot back in a moment. Hello, 0:15:27.280 --> 0:15:30.480 Welcome back to the Australian's Money Post little podcast. James 0:15:30.560 --> 0:15:34.360 Kirby here talking to Hugh Robertson of Centaur Financial Services, 0:15:34.400 --> 0:15:38.080 operates up in the Gold Coast. There with the beautiful 0:15:38.080 --> 0:15:42.720 Gold Coast hinterland outside his window. Now, Q, you would think, 0:15:43.640 --> 0:15:46.800 damn good time for the self managed super fun sector 0:15:46.840 --> 0:15:50.320 to parade their wares. I mean I have a self 0:15:50.360 --> 0:15:53.320 managed super fund. I don't. There are times when there 0:15:53.360 --> 0:15:56.640 were times in the when the super funds were big. 0:15:56.680 --> 0:15:58.760 Super funds were knocking it out of the park, you know, 0:15:58.880 --> 0:16:01.360 ten eleven, twelve percent, and you were saying like, gee, 0:16:01.360 --> 0:16:03.320 you know, we get ten or eleven twenty percent and 0:16:03.400 --> 0:16:06.600 you don't have to think or do anything. You know, 0:16:06.720 --> 0:16:09.760 why am I doing it now? This year? I feel 0:16:09.800 --> 0:16:12.120 so much better, you know this feeler this year I have. 0:16:12.320 --> 0:16:15.040 I am nimble, may I say? And I was able 0:16:15.040 --> 0:16:17.640 to move in and I bought gold DTF for instance, 0:16:17.800 --> 0:16:20.440 you know, relatively significantly for the size of my fund, 0:16:20.480 --> 0:16:22.320 for instance, a few months ago. And I'm so glad 0:16:22.360 --> 0:16:24.280 I did. I'm so glad I did because I couldn't 0:16:24.320 --> 0:16:26.920 think of anything else worth buying at the time. Now 0:16:26.920 --> 0:16:31.400 I'm not saying they're perfect, but the point I'm making is, 0:16:31.400 --> 0:16:37.120 is this a climate where the attractions of a self 0:16:37.280 --> 0:16:40.920 managed super fund, knowing their limitations and their difficulties and 0:16:40.960 --> 0:16:44.920 the work involved in them, they may they may look 0:16:45.000 --> 0:16:45.680 more attractive. 0:16:46.880 --> 0:16:49.640 Yes, one hundred percent. 0:16:49.760 --> 0:16:52.840 And we've done the same chimes within our business where 0:16:52.880 --> 0:16:54.640 we've not always been. 0:16:56.240 --> 0:16:58.360 It's not being necessary to have an SMSF. 0:16:58.360 --> 0:17:00.800 We've been able to kind of get that those good 0:17:00.840 --> 0:17:04.200 investment outcomes without having a self manation shuper fund. 0:17:04.240 --> 0:17:07.199 But I think now control. 0:17:06.800 --> 0:17:10.800 We've got this geopolitical uncertainty both within Australia and abroad. 0:17:10.960 --> 0:17:15.360 So I think without having control over you know what 0:17:15.400 --> 0:17:19.320 we said before, the second biggest asset you own is important. 0:17:19.720 --> 0:17:22.520 The administration isn't what it used to be. Technology is 0:17:22.560 --> 0:17:25.320 taken care of a lot of that, the costs aren't 0:17:25.359 --> 0:17:29.840 as expensive as you may think, and just that element 0:17:29.880 --> 0:17:33.119 of control, and it probably coincides with the rise of 0:17:33.359 --> 0:17:34.240 ETFs and. 0:17:34.119 --> 0:17:35.760 In particular thematic ETFs. 0:17:36.160 --> 0:17:39.960 But now you can really tailor the portfolio to something 0:17:39.960 --> 0:17:42.800 that you know, you're comfortable with. You're not relying on 0:17:42.840 --> 0:17:45.520 a manager to allocate to gold, you know. If you 0:17:45.600 --> 0:17:48.800 want that for that peace of mind of that inflation protection. 0:17:48.960 --> 0:17:51.880 You just buy and good. Yeah, And I mean, really 0:17:51.920 --> 0:17:55.560 one's as good as the other. They're just reproduced the price, 0:17:55.600 --> 0:17:57.960 assuming that they're they're the same setting it that they're 0:17:57.960 --> 0:18:00.080 all on hedged or whatever, and they're not playing any 0:18:00.119 --> 0:18:01.120 games around leverage. 0:18:02.600 --> 0:18:05.040 So I think that's I think it's a very valid 0:18:05.080 --> 0:18:07.960 statement to consider looking at them at them now. 0:18:08.560 --> 0:18:10.399 The other point I wanted to make was that the 0:18:10.400 --> 0:18:13.119 big supper fonts had been dropping their cash levels going 0:18:13.160 --> 0:18:17.159 into what was clearly and obviously a very difficult time. 0:18:17.880 --> 0:18:20.960 Have we only notion about cash and smsfs and whether 0:18:20.960 --> 0:18:22.280 they were being more defensive. 0:18:23.720 --> 0:18:26.879 Yes, we're from our perspective, are the clients of ours. 0:18:27.040 --> 0:18:30.119 We took profits the end of last year. Markets were good. 0:18:30.359 --> 0:18:33.439 You know, you always harvest some of those returns and 0:18:33.480 --> 0:18:36.000 you wait for winter. There was the uncertainty. Remember when 0:18:36.000 --> 0:18:39.240 Trump got in, the markets were pretty bullish to begin 0:18:39.320 --> 0:18:43.520 with around the tax cuts and very much pro business agenda. 0:18:43.960 --> 0:18:46.200 But as we've now sort of got through a little 0:18:46.240 --> 0:18:48.720 bit of that and we've seen you know, the impact 0:18:48.720 --> 0:18:51.840 of tariffs, there's this little bit of uncertainty. So for us, 0:18:51.920 --> 0:18:55.840 we've had the correction of ten percent. You know, now 0:18:55.920 --> 0:18:58.000 we're actually waiting for today to be a time to 0:18:58.000 --> 0:19:01.560 actually start looking back in markets via a dollar cost average. 0:19:01.600 --> 0:19:04.760 So remembering when you're in an SMSF, you don't need 0:19:04.800 --> 0:19:07.960 to if you wanted to take an allocation, let's say, 0:19:07.960 --> 0:19:11.000 for example, NASDAK and you wanted a five percent allocation, 0:19:11.080 --> 0:19:13.680 you don't need to take five percent today. You can 0:19:13.680 --> 0:19:16.520 do one percent today, one percent next week and slowly 0:19:16.520 --> 0:19:16.960 build up. 0:19:16.920 --> 0:19:20.359 Your positions and deploying that capital as per. 0:19:20.359 --> 0:19:25.040 Something that you're comfortable with is really intelligent in volatile markets. 0:19:26.359 --> 0:19:28.320 One or two things I want to I'm bouncing around, 0:19:28.359 --> 0:19:31.159 but I'm at the same time it's very interesting. I 0:19:31.160 --> 0:19:33.720 hope for listeners too. There's big picture and a small 0:19:33.760 --> 0:19:37.840 picture here in terms of SMSF as an option and 0:19:37.880 --> 0:19:41.720 then options within smsfs. But just to go back to itself, 0:19:42.280 --> 0:19:45.919 what's the working number you have? I come into you 0:19:45.960 --> 0:19:48.679 and I said, off to start in an SMSF and 0:19:48.720 --> 0:19:52.560 you see, well, listen, you really can't start it without X. 0:19:52.920 --> 0:19:55.720 What's your number? As logan Roy says. 0:19:55.560 --> 0:19:57.080 It would always be a number of names. 0:19:57.840 --> 0:20:00.080 I think when you look at it, it used to 0:20:00.119 --> 0:20:02.600 be seen as around five hundred thousand, but over the 0:20:02.680 --> 0:20:05.439 last couple of years that's come down to two hundred thousand. 0:20:05.800 --> 0:20:09.760 And that again coincides with the rise of ETFs technology 0:20:09.800 --> 0:20:13.600 lowering the costs. And it's also this you talked about 0:20:13.640 --> 0:20:18.199 it previously, around things around administration. If you want to 0:20:18.200 --> 0:20:21.719 get contributions into super before end of financial year, you know, 0:20:21.760 --> 0:20:24.719 with the big funds, it can be quite difficult to 0:20:24.720 --> 0:20:28.480 meet their timelines, whereas in a self managed super fund 0:20:28.480 --> 0:20:30.640 you can do it the day before in June twenty nine. 0:20:31.119 --> 0:20:33.520 So there's things around that where there's a bit more 0:20:33.560 --> 0:20:37.280 flexibility around the self managed super fund that I think, 0:20:37.680 --> 0:20:40.199 and it's been interest too. The research is shown that 0:20:40.240 --> 0:20:42.560 younger people are opening them as well, So it's not 0:20:42.640 --> 0:20:44.639 just someone with a really big balance, it's someone that 0:20:44.680 --> 0:20:47.200 actually wants to take control of it. Which makes a 0:20:47.240 --> 0:20:48.960 lot of sense to me because it's you know, it 0:20:49.040 --> 0:20:50.959 is going to be such a big investment for you 0:20:51.320 --> 0:20:54.560 with your mandated SGC and the caps that you've got 0:20:54.600 --> 0:20:55.440 to put money in that. 0:20:55.880 --> 0:20:57.600 Why wouldn't you want to have more control over that? 0:20:57.920 --> 0:21:01.120 Well? Yeah, twelve percent of the year money by low 0:21:01.240 --> 0:21:04.040