Quick poll:
Hypothetically, let's say you had an SMSF managed by an investment firm with your investments in (what they call) a 'moderate' risk portfolio.
If your portfolio's (original 300k balance + 25k contribution per year) 3 year average performance is a 35% loss, would you find a new financial advisor?
Poll: Hypothetical SMSF Losses. What's Your Cut off?
lachhelix on 08/01/2019 - 01:05
Last edited 08/01/2019 - 09:23 by 1 other user
Last edited 08/01/2019 - 09:23 by 1 other user
Poll Options
- 40Yes
- 1No
Comments
My thoughts!
Thanks friend
Does it not sound contradicting, that a Self Managed Super Fund that's managed by someone other than yourself?
The absolute staples inside an SMSF has to be your own direct stock portfolio, and not a packaged investment fund - minimum 2 blue-chip stock that earns a regular dividend, then you can look at low-cost, high yield stock that can give you a quick 10% gain, that you have a automatic sell trigger. Otherwise it is the same as throwing the money into corporate super fund pool..
SMSF fund managers began taking a fixed fee, plus service fees for auditing. They can earn extra from a commission with the products they recommend (investment funds, property funds, insurance products, etc.) just like any other superannuation fund managers.
Last 3 years at least, the Big Four banks have paid minimum 85c/share, CBA was above $1 with Westpac at 94c/share, regardless of whether they are doing good or bad business, regardless of the overall economy status. So if your hypothetical SMSF had lost 35% then either the management is at fault and the person has fed them good fees, or simply blame the person himself/herself for not actually self managing the fund.
To summarise, have a look at what fees and charges the SMSF is paying and try minimising this aspect, and really take responsibility on having a direct investment portfolio.
Haha, yes now that I think about it you're 100% correct. I believe the advisor let's 'us' know his suggestions and 'we' say yes or no. It's not my fund (thank god), I'm just going off information provided to me. I don't have the time, money or patience to deal with my own super fund
The moderate risk returns havent been anywhere near that bad over the last few years. Unless your fund manager has been making some really bad choices, something doesn't sound right.
It'll be useful to know where those "earnings" figures are from. Is it from the Fund's Investment Report or your statement? The investment earnings figure is usually a "balancing item" on the statements.
Have you checked your indirect fees figures?
I would compare the "moderate risk" investment against that of other funds and ditch this fund completely if there's a huge difference in the returns over the past few years. It won't be an exact comparison, but good enough as an indicator.
Yeah I second this. The returns of the last few months have been pretty bad, but we had a great run up to August. I think overall there has only been around a 5% drop in the past 12-18 months at most (just off the top of my head exc. dividends)
Thanks guys - I will pass the message along. I believe I noticed there was a figure around something like 'investment losses'
Not having any background of your situation. Have you considered rejoining an established fund? Read the barefoot investor by Scott Pape.
My suggestion exactly. I'm with my own fund as I really don't have the time, money or patience (or skill) for an SMSF
Probably wouldn't bother with a SMSF with less than 500k starting balance in the first place.
But those losses are ridiculous. Hope your adviser is enjoying their new Audi.
Very true - I think you mean Mercedes-Benz AMG? 😏
$300k -> $195K -> $126.75K -> $82.39K excluding contributions? Eek.
Considering the market the past few years, bar 2018. If their past 3 years is 35% loss, I would definitely get a new advisor, no questions asked
All you have to do is look at the returns the regular funds have been returning to see that is a rip off.
Recent times have not been as good but overall definitely not a negative return.