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Superannuation Advice

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    What Is Superannuation Planning?

    Superannuation is money that is put aside for an individual, to be accessed around the time when they retire. The idea is then that these funds are used to (at least partially) replace the income earned from employment and cater for all various expenses in retirement. Most people receive Super “contributions” from an employer throughout their working life. However, self-employed (and even unemployed) individuals can make contributions into a Super fund.

    Money can go into Super as a pre-tax or tax deductible contribution, or it can be paid in from after-tax money. If the money goes in pre-tax (such as employer contributions), this effectively reduces ones taxable income, which usually saves the person tax. The reason for this is that Super contributions are subject to a taxation rate of 15%. This is known as contributions tax. As long as you are earning over $18,200 a year (known as the tax-free threshold), then they are paying a higher income tax rate than 15%, hence Super contributions are tax-effective for most.

    Example. John earns $150,000 + Super from his employer. His employer makes the mandated minimum 10% contribution to John’s Super, known as the “Superannuation Guarantee”. So this equates to $15,000. Towards the end of the financial year, John decides he is going to “top up” these contributions by putting another $10,000 into his Super. The Super fund takes 15% contributions ($1,500). John then claims this as a tax deduction and after submitting his tax return receives $3,900 back from the ATO (based on his income tax rate of 39%). As such John saves ($3,900-$1,500 =) $2,400 in tax.

    Hudson financial planning’s super advisers are experts in Superannuation and can help you navigate the various challenges in order to maximise what you have in retirement. 

    We can:

    • Review your existing Superannuation policies to assess how it is invested and whether it is appropriate to you and your situation. It might be too conservative or aggressively invested. The past performance may have been poor. We will consider all facets of your Super, including the competitiveness of the ongoing fees, the appropriateness of any personal insurances being paid through your Super, and also whether you have beneficiaries named to benefit from your Super in the event of your death.
    • Consider alternate platforms and/or alternate investment options for your Super assets. We can work with you on an ongoing basis to help you maximise your Super contributions in preparation for retirement planning.
    • Take advantage of share, property and other market movements to boost performance returns.
    • Continue to monitor changes in legislation to make sure that a client is taking advantage of various Super related investment strategies and also abide by changing rules and limits relating to Superannuation.
    • Consolidate multiple Superannuation accounts into one. This will likely reduce the total ongoing fees being paid and is a good opportunity to make sure that the investment mix is appropriate to the client. It’s also possible that a client is “doubling” up personal insurance policies if they have multiple Super accounts.
    • Review your Defined benefit Superannuation policy and discuss options relating to if and when a client should access it.

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    What Is The The Superannuation Advice Process?

    Hudson would begin by obtaining information from you so that we know their whole situation before we look at options relating to Super. Part of this information we collect relates to a clients “attitude to risk’. This is very important when it comes to Super because it forms the basis for how they should invst.

    We would then begin the process of assessing the clients existing Superannuation accounts. Ideally we would obtain a “third part authority” from you so that we can call the Super funds in questions and ask them a range of questions. 

    We will consider:

    • Is the investment mix appropriate based on their risk profile?
    • Does the platform offer enough investment options or the necessary investment options to satisfy the needs of the client.
    • What are the ongoing fees relating to the account. These might include management fees for each investment option and administration fees relating to the platform itself.
    • Are there existing personal insurance policies within the account. E.g. Life insurance or income protection. If so, are the benefit levels (payout amounts) sufficient? Are the premiums competitive in the industry?
    • Has the client named a beneficiary, such as a spouse or their children to inherit the Super balance in the event of their death?

    Typically we would then schedule another appointment with you to run through all our findings and discuss potentially changes, either within the existing platform/s or through alternate platforms.

    If there are significant changes that we determine will help improve your situation we may present to you the idea of engaging us to prepare an advice document in order to action those changes.

    Any applicable fees would be discussed with you at this time.

    Are You Looking For A Self-Managed Super Fund? (SMSF)

    Some people opt not to invest in a retail Super but to set up their own “Self-managed Superannuation fund”, or SMSF. This is essentially a trust whereby the members are usually the trustees of the Super. As such the trustees are running the Super for their own benefit.


    • Setting up a SMSF can be great in terms of the level of control a personal can have regarding their Super assets.
    • It also significantly increases the amount of different investment options a person is open to. Traditional Super funds tend to predominantly invest in the five main asset classes; Cash, Fixed Interest (e.g. Bonds), Australian shares, Global shares and Property/Infrastructure. A SMSF on the other hand, as well as investing in such things, could also buy a house or block of land. It could even in rare coins, artwork or other collectibles.
    • Many self-employed individuals will buy a commercial premises in their SMSF and then have their own company rent the property. As such every time their business pays rent it is effectively boosting their Super. This is a very effective way to grow your Super on top of the allowable contribution limits.
    • Although a Super account can never be in “joint names”


    • There are significant costs associated with both the set up and the ongoing maintenance of a SMSF, including tax returns and auditing of the trust.
    • The trustees are responsible for abiding by all applicable laws relating to SMSFs, of which there are many,. It is not uncommon for SMSF’s to be fined for breaching said laws and regulations.
    • Investing for members that span different generations can be tricky, because the types of investments that suit someone in their 30’s are usually very different to someone in their 60s. E.g. The younger member may be seeking high growth, low income investments, where the older (potentially retired) member may be seeking higher yielding investments.

    A couple of things that SMSF trustees must adhere to in order to stay compliant include:

    • Arms-length investing. Assets must be bought and sold at market value and ongoing income that is received from investments must also be of a true market rate of return.
    • The sole-purpose test. This requires that investing in a SMSF is for the sole purpose of providing for ones retirement. As such its important that neither you nor your friends/family benefit in any way from the investments prior to your retirement.
    • The SMSF must have an appropriate “investment strategy” in place to dictate what can and cannot be invested in.
    • Although a SMSF can sell to a related party (including a member of the SMSF), it cannot purchase investments from a related party.

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    Self-Managed Super Funds For Property Investment

    Many people that set up a SMSF do it because they want to invest in property and this is something that is not possible within an industry or retail Super fund. There are various pros and cons relating to buying property in a SMSF compared to buying it in your personal name.

    The Pros of SMSFs For Property Investment

    • In theory, a property owned in a SMSF could be sold in the future completely tax free. This is contrast to property in personal names which accrue “capital gains” if the value of the property rises. In a SMSF on the other hand, if the members were to convert their Super from accumulation phase to “pension phase”, usually upon retirement, realised capital gains incur no tax. Imagine a property worth $1 million today, sold in 15 5o 20 years for $2 million. In personal names you are talking about potentially paying $150,000 to $200,000 in tax.
    • If the property is “positively geared”, i.e. the income outweighs the expenses, it is likely that the income tax treatment would be lower in a SMSF also. The reason for this is that the most tax a Super pays in a given year is 15%, unlike in personal names where the tax rate rises as high as 49% (inc medicare).

    The Cons of SMSFs For Property Investment

    • If the property is negatively geared, there may not be as much gearing advantages in a SMSF. i.e. Due to a potentially lower taxation rate than the persons income tax rate.
    • If the SMSF needs to borrow in order to purchase, this becomes a more involved and costly process. The reason for this is that a SMSF cannot borrow directly. It must set up a “bare trust” that owns only the property. This is so that the lending is non-recourse, i.e. The bank cannot access any other Super assets in the event of defaults on the loan. This means the cost and ongoing cost of an additional trust.
    • The interest rate charged by the bank for the lending is also generally around 1% p/a higher in a SMSF than in personal names.

    The Benefits Of Using Hudson’s Super Advisers

    5 Reasons to use Hudson to help manage your Superannuation

    1) Experience and expertise. Our 4 super advisers have over 50 years of accumulated knowledge and investment expertise. We have model portfolios that have been carefully prepared and can cater to any risk appetite. We continually test the investments within these models using an independent research house. Our advisers can work with you each year to continually revise your investments based on your situation and also market conditions.

    2) Knowledge. Hudson advisers never stop training and are constantly abreast of all changing legislation regarding Superannuation. This knowledge can assist when it comes to maximising Super contributions or suitably distributing Super assets between spouse members.

    3) Protecting yourself and loved ones. Hudson can assist in the set up and maintenance of personal insurance policies that can be funded from your Superannuation account. This might include Life insurance to protect your loved ones, or Total & Permanent Disability or Income protection to protect yourself. Hudson will also make sure that you have beneficiaries named on your Super and also have an appropriate, valid Will in place.

    4) A clear plan. Hudson advisers have access to detailed forecasting software that can map out your expected future assets, whether you are working and seeking to grow your Super, or if you are retired and require an income from your Super. These forecasts can be adjusted as time progresses to factor in changing market conditions and unexpected changes in your situation.

    5) Strategies. With 30 years behind us, Hudson have developed a range of strategies that can maximise returns and put you in the best possible position when you come to retire. These include but are not limited to:

    • The Bucket strategy. This is designed predominantly for retirees and is a way to invest for growth, while also protecting you from share market volatility through the segregation of defensive assets.
    • Core and Satellite. Hudson believe that minimising ongoing management fees are important in order to maximise returns and we also believe in diversification. A core holding of low cost index funds can help achieve both of these things. We also believe however, that there are fund managers out there with a proven history of beating the index. As such we also exercise the use of “satellite” investments to boost overall returns.
    • Re-contribution strategies to maximise concessional Super contributions and reduce taxable income.
    • Recycling taxable component to reduce the “taxable component” in ones Super and as such reduce the possibility of your beneficiaries paying tax in the event of your death.
    • Age pension strategies. We have employed legitimate “sheltering” strategies that have increased members age pension entitlements by up to $50,000 in some cases.

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    Step By Step Process For Superannuation Planning

    The Hudson step by step superannuation planning process is simple;

    Step 1: Reach out to one of Hudson’s superannuation advisers through calling 1800 804 296. Matt Paul, will organise a time with you to have your initial meeting with your super adviser.

    Step 2: A Hudson Advisor will call you at the allocated time to review your current financial status and to have a general chat about how we might be able to help you. Fees will be discussed at this initial meeting.

    Step 3: If we ascertain in our initial meeting that we will be able to add value to your superannuation portfolio, we will then map out goals and objectives that work for you and we will review your current superannuation with a third-party authority so that we can be sure that we are able to offer more competitive fees and better returns than where you are currently invested. After we have conducted a thorough review, we will provide a superannuation recommendation at this stage.

    Step 4: We will action your plan and confirm once everything is in place. We will then provide on-going support and assistance to help navigate both personal and legislative changes that may come our way. Adapting to your changing needs is the key to long term success. As part of your initial agreement we will have annual, bi annual or quarterly reviews, but we are always here if circumstances change and you need to speak with us.

    FAQs For Superannuation Advice

    Discover our most commonly asked questions relating to superannuation at Hudson.

    Superannuation is money that is put aside for an individual, to be accessed around the time when they retire and for purposes of providing an income in retirement.

    There are retail Super funds and “wrap accounts” that tend to have a broader range of investment options. There are Industry Super funds, which tend to have fewer options and specialise in “one-size-fits-all” options. You are also able to set up your own Super for you and/or your family, known as a Self-Managed Super fund.

    Only a qualified and registered financial adviser is able to provide you with personal advice relating to Superannuation.

    There is no minimum amount you need in your Super before you engage a financial adviser. The role of a financial adviser is to be “holistic” and consider all aspects of a person’s finances. As such, those with small Super balances may find that Hudson’s other services are of more use to them.

    Yes. Many of our clients have an ongoing % based fee arranged that is deducted from their Super account throughout the year to cater for the advice we provide.

    Superannuation in its purest form is a tax effective structure. It doesn’t necessarily have to invest in shares or any other form of investment, i.e. it can, in theory, remain in Cash. But this would be a terrible waste of such a fantastic structure! Contributions into Super can be tax effective. Once invested, the earnings are taxed very favourably. At a later stage in life, investments can be converted to Pension phase, which is a zero-tax environment. Superannuation is arguably Australia’s most effective “forced savings plan” that we have. Not every country offers such an amazing investment vehicle.

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