Holes in the argument
Bruce Brammall's piece "Hands off our Super" was probably worth a read ... at least for the input by Bruce. But, really, the TAI input from Richard Denniss and David Richardson was so full of holes it was embarrassing. Could they seriously expect anyone with even a basic understanding of Super and Pensions to swallow this rubbish? The Australia Institute should close its doors if that's the best it can do.
Thanks for the clarity
As a now second-year subscriber to your report I was beginning to think I had some understanding of the world of finance.
I am confused daily with what's been happening... So I just read your report and the bits I do think I understand, take action on some recommendations and hey presto I am a chance of not selling pens at a railway station to survive in my retirement, whenever that may be. Thank you to the team and special thanks to Roger Montgomery.
In Percy Allen's article "Is the Bear Market Turning" he uses the term 'secular'. I understand the definitions he uses and I understand that there are rapid, short term market changes and longer term market rises and falls.
I question strongly the use of the term 'secular' as it implies by its basic definition that there is a religious / non-religious distinction to be made.
Why include such a possibility? Why not use a term such as "secondary" or "slow" or "long-term" or "multi-cyclic".
I expect that the Eureka Report provide accurate and insightful articles that use terms which are accurate and useful and descriptive rather than misleading or misused.
SMSFs are not that pricey
Your comment: The article on SMSFs repeated some of the shibboleths about SMSFs. It actually only costs about $300, not $1000, to set up an SMSF using a package from a company like Patricia Holdings which is acceptable to the ATO. If you cannot fill out the simple forms and post it to the ATO you are not competent to have an SMSF. With $500,000 of super you could have nine $50,000 investments in blue chip equities and utilities plus $50000 cash in an interest bearing deposit that would give you a conservative return of $30,000 pa. With a CommSec account you could set it up to transfer a weekly pension of $500 (or more) to your personal account and have all the documentation required by the ATO for the annual audit in the CommSec reports, And yes there are some simple things the trustees have to do but the ATO sets these requirements out in simple English. In the suburbs there are public accountants operating one man businesses who would be delighted to audit the accounts and submit the annual return for less than $1000. In summary, much of the published advice on SMSFs tends to urge people to pay unnecessary fees to advisers, lawyers and accountants.
Super performance problems
Alan, your article in Eureka Report is spot on and the lack of returns and the costs are a national disgrace!
I run my own SMSF but my business pays around $200,000 into super for employees each year and I have worked out that if I had been putting that same amount into savings accounts for staff members, most would have been nearly 50% better off than they are today with their super accounts.
Yet, I am not able to take that decision for the benefit of my staff - I am required to pay into superannuation which has been a disaster in recent years. Well done in highlighting this.
Sensible SMSF advice
Robert’s article, ‘Friendly advice: manage your own fund’ is probably one of the most sensible bits of advice you have given.
Put a bunch of cash in term deposits guaranteed by the Australian government and equity exposure in ARGO or Australian Foundation It’s safe, simple, low cost and will most outperform most managed investments with similar weightings, and importantly weightings you can choose yourself. Great article.
What are SMSF fees?
Eureka Report often comments on SMSF fees. Could someone please do a reasonably thorough presentation of what the "going" rates for the various types of management are?
To cater for the average retiree, how about considering funds of $500,000, $1.5m, and $3m? It is difficult for the average punter to get any really meaningful data on this subject.
Editor’s response: Keep an eye out in Eureka Report in coming days for more information on this subject.