Play 4CRB Radio Segment: ‘Let’s not lose our super perspective’ with Troy Theobald of RFS Advice

It has been a big month since our last show. 

Inflation continues to be a big issue along with rising interest rates. The Government is still forced with trying to either stop or slow spending or increase taxes.

The main talking point though at the moment is around superannuation changes.  The government has managed to unsettle Australians about super and just like trying to curve inflation, sometimes governments need to do what is less popular. Spend less of all our money!

Super latest

Let’s consider the latest news about the proposed superannuation changes.  These are not set to come in until 2025 and what we are expecting to see will be balances over $3 million be taxed at 30%. There is a lot of time and politics still to come and it is suggested that it will affect around 80,000 Australians.  For the majority of most Australians we need to focus on what is important to them.

If they dare to attack franking credits then this is a bigger issue for all retirees. That will take more money out of retiree’s pockets.

There is even talk of government directed investing for superfunds. This would be the government trying to control some of the asset allocation of the large default superfunds.

All of this points to the current government’s opinion that it is their money not yours.

All of this creates a divided Australia and uncertainty for all the retirees that have worked, saved and paid taxes their whole lives.

What can you do for your household to get through these times?

Super Balance brackets – Will you be affected?

0 – $500,000

We would anticipate that these proposed changes should not affect you, although if the Government did mess with franking credits that could see a reduction in return of around $2,000 per annum.

Throughout your working life you may be happy with an online super approach or prefer some individual personal advice along the way around how to structure your funds in retirement.

Advice can help you structure this but you may also be happy with an online solution.

$500,000 – $1 million

Again in this bracket we wouldn’t expect that these proposed super changes should affect you either and like the previous bracket you may prefer an online super approach and/or some tailored personal advice.

Also like the previous bracket we could see a reduction in return of around $4,000 per annum in franking credits if the Government were to change the rules.

As you near retirement you should seek some advice on how to structure your situation to deliver your desired income need each year and how long your money will last depending on different drawdown rates.

You may like to have an individually tailored solution and benefit from some Centrelink strategies along the way. You may also like to work with an adviser to set some goal and work on your total position.

$1- $3 million

You may be impacted by the new rule changes proposed.

There will be some factors that you therefore may need to consider.  For example, you may need to consider your estate planning needs and what would the affects be if you were to inherit your partner’s super balance?  We would recommend seeking advice and speaking to an adviser in advance.  It’s always easier to seek advice earlier, rather than trying to get advice at the time of having to deal with an unfortunate event when you’re already experiencing enough stress. Taking away the financial burden away will help alleviate unnecessary stress.

Similarly, if the Government altered the current franking credits rules you could see a reduction in return of around $6,000 per annum.

Over $3 million

If this is inside super it is clear the current government is coming after you and in this bracket you would see a much larger reduction in franking credits compared to the other brackets if these rules were changed also.

You may however have this outside of super already and you may have some wealth both inside super and/or within other structures.

We work with our clients on a strategy we call “honouring your legacy” program. This is about how to generate the income you need in your life and then this passing to the next generation in a tax effective way. This is complex and needs personal consideration.

Why Advice

Why should you seek advice when you can read the newspaper, watch the news and talk to colleagues about changes like this?  You need to ask yourself, do these opinions take into account your own situation and how you may be potentially effected? What is appropriate for you to do?

Advisers take these and other changes into account every day and work to ensure their clients are getting the best possible outcome for their own situation.

Most will offer a fee for service advice model now. Yes you are paying them but they are making sure your individual circumstances are taken into account.

In the last show we had a caller and he had to deal with the unenviable situation of placing his wife into care due to dementia. For our clients they only need to call us and we will take care of that with them. From one call, he was able to access qualified advisers who know and understand the next steps that need to be taken.

These super changes may sound daunting and I’m sure there will be people listening today that will be effected by this and feeling unsettled. For our clients, if they have concerns about what they’re hearing in the news, they simply pop in or give us a call and we work on a solution that will work best for them. 

This is what advice is all about. Yes there are fees. But you never know when life will throw you up a challenge and you’re going to need someone to help you through it.  Having to speak to someone on a phone or online that you’ve never met about making big financial decisions, just doesn’t sit well with me.  For some, they may be happy with this arrangement and that is fine too.  That is why Australia is a great place to live as you have choices.

Different choices for receiving super advice

Online or industry super fund providers

When dealing with an industry super fund provider they will manage your super and if you have questions they will generally provide answers to product related questions.  

If you wanted specific advice on the other hand around what to do with your super then they are still bound by the same rules as Financial Advisers if they offer personal advice. They are trying to help their members but they do not have the ability to provide a personal adviser to every member and a big limitation is that most will not offer advice on your assets outside of super.

We see a lot of Australians are happy with this approach.

Stock Brokers

Stock brokers are popular with Self-Managed Superfund clients that may want a portion or all of their funds managed. This allows you to keep control over your fund and they will look after the investment decisions. The limitation is that their advice may be restricted to direct equity investing only and for super purposes they are probably more suited to assist with a Self-Managed Superfund.


Accountants will generally provide accounting and administration service for Self-Managed Superfund clients.  They would also help you have your fund audited each year.

Unless Accountants hold the proper licence, they are not able to provide you with personal advice that could be considered product or investment related advice. Like Financial Advisers, if Accountants are licenced to provide this advice then they should be providing you with a Statement of Advice.

Financial Adviser

To answer what they do you firstly need to consider some history.

Traditionally, in the past banks and large institutions trained and licenced advisers and provided them access to their own products for clients to invest in.

Over the last twenty plus years we have seen a complete turnaround with legislative changes now tightening up on the rules around who is able to provide financial advice. We think the governments got this correct to ensure that the person providing the advice is duly qualified. In our office we mandated long before these changes that any adviser advising a client should have a tertiary degree at a minimum.

More recently, there is now a compulsory professional year of supervision for any new entrants which we support and encourage. These new entrants must have approved education and remain supervised for at least 12 months by a qualified financial adviser before they are able to provide advice on their own.

This is all helping move this industry to a profession.  We, along with many of our colleagues in this industry have been vocal in our support for this and it is a great step forward to ensuring Australians receive appropriate, personalised and professional advice and we want more Australians to have access to this professional advice.

When you seek services from a financial adviser, some areas they can help with may include:

  • Strategy and Guidance, now and in the future
  • Managing your portfolio(s)
  • Support and advice for when things change
  • Providing proactive advice
  • Help if you need Centrelink or Aged Care advice

Some may have specific areas they also offer. As an example of this in our office at RFS Advice

  • We provide our clients access to professional managers at a discount due to our size and scale
  • We have one of the largest teams to provide aged care advice in SE QLD
  • We always try to have two qualified advisers in each meeting
  • We have a team that cater to business clients and understand their time poor life stage
  • We offer a professional office our clients can use for meetings
  • A large referral network that can help our clients in transactions such as Accounting, Legal, Lending, Real estate, Car purchase etc; and
  • A friendly and professional team that will treat you like family. 

If you have a great adviser or advice team you are working with then that is fantastic as we would encourage all Australians to seek financial advice and assistance.

If had a bad experience in the past then may be it is time to try again. There has been some great improvement in the quality of advice.

It is about having a team of people that you can turn to when you need a hand. That is what good advice should be about.

Sometimes the advice is similar, sometimes the strategies are a lot different based on your asset size, family dynamics and risk tolerance. That is what personal and tailored advice is all about.

Professional advice firms deal with this every day. Clients will generally deal with it only once.  It is ok to seek help and guidance, in the same way that you would seek advice from an Accountant or Solicitor.

The best tip when dealing with a Financial Adviser is – Trust your gut.  If you are not happy with the advice then seek another opinion. You should be able to trust your firm you are working with and have confidence knowing that they acting in your best interests.

In conclusion, there are lots of ways to manage your super and investments. That is something both sides of government have thankfully maintained…It is complex and it is ok to ask for help. But be prepared to pay for this help. The old saying “you get what you pay for” definitely rings true.

Also remember that if you go for an online solution just remember who is paying the person that you are dealing with. Who is paying them? In the world of advice you are paying the advice firm. You have a 12 month opt in to continue each year. This puts the power clearly in your hands.

Of course my team would love to be the ones to help you, but we also know the number of clients we can help and be able to deliver on our service promises.  We have added to the team over the years to allow for more growth to be able to help more Australians.

The great thing about Australia is you have the freedom of choice. If you have a great team already then that is fantastic. If you feel let down by a past experience I would urge you to reach out to someone again as with lots of legislative changes we have seen a great increase in the quality of advice.

Let’s see more great advice for more Australian households.

RFS Advice is a Gold Coast based financial planning practice who believes that relieving financial stress is one of the most important things we can do for our clients. Knowing their financial life is under control, and that their family and loved ones are taken care of if anything should happen to them, is a responsibility we take seriously.

I also asked Brooke, one of our younger advisers about how super changes may affect them:

While it doesn’t impact a huge percentage of people now, it does take away any incentive for people in the younger generations to voluntarily make contributions into superannuation beyond the mandatory rate and utilising this as a disciplined method of saving for retirement.

We’ve only just had superannuation for 30 years now, but looking forward another 30 years from here… what will the rules of the retirement vehicle be when we have seen the foundations of the system tampered with multiple times thus far.

Say for instance, modelling my sister who has gone to university and worked the hard yards to be on a high income (she’s 28).

Based on her current balance (about $70,000) and the anticipated 12% raise to mandatory employer contributions to come in effect from 2027, she’d likely hit the 3 million cap before she’s 60… if she earns an average over 7% (and presumably at that age you’d be growth tilted for a reasonable portion over that period). This would be the case for someone on an income of $150,000 or more. That’s with only SG considered, no personal member contributions, downsizer, or concessional to claim a tax deduction.

Or to put it another way, you might be on an income of $70,000 and you could be looking at hitting over the 3 million with an average earning rate of 9.5%.

Yes, rules can change and indexation could be considered in future years (currently the reports indicate this is not likely to be the case initially), but more importantly it fundamentally takes away the faith in the system and in essence adds a layer of gambling on potential government policies for those further away from reaching a condition of release.

For those further away from touching their superannuation benefits, where is the desire to contribute into the system with any windfall, inheritance, downsizing, business CGT opportunities that might arise?

There are other investment vehicles available for use towards building your wealth and the wealth of your family – outside of the superannuation environment. This is where professional advice is imperative to ensure you are giving the opportunity to build your wealth in an appropriate solution for your personal circumstances in order to create and pass on your legacy effectively. There is no one fits all solution and personal advice will take the complexities into consideration to ensure you are able to make an informed and financially beneficial decision to meet your financial freedoms and goals.

This will have people of my age looking at other investments outside of superannuation.

Thank you for the great perspective and the calculations you made below.

Example 1: 150,000 income

Example 2: 90,000 income

Example 3: $70,000 income