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Posts by The Investment Collective

Why compliance is important

Why is compliance important?

This is Molly after we spoke to her about the importance of compliance.

For her, the rules are less complicated, do not pee inside! However, there are still consequences if she ignores them. Nevertheless, with one simple compliance statement, she nodded

We get it. For many, compliance can be a snooze-fest. Compliance statements lack the cracking page-turning pace of a John Grisham novel, but the rules we must meet are embedded in those pages. There are a lot of them because there are a lot of risks. Little is more personal to us than our money.

The rules, while necessary, are increasing in complexity, sometimes leaving us to feel that we are made to jump through the hoops of a bored bureaucrat’s design in some sort of bizarre other-worldly circus. Then again, what if we were to re-frame how we think about compliance? Familiar with the names Bernie Madoff and Melissa Caddick? Madoff died in prison about 12 months ago while serving a 150-year jail sentence for defrauding up to US $65 billion from his clients. He fooled some of the best.

Closer to home is Melissa Caddick. Many of us had heard of Caddick in 2020 when the Australian Securities and Investment Commission (ASIC) raided her home, froze her bank accounts and properties, and prevented her from leaving the country. Court documents revealed that Caddick’s fraud had started some 11 years earlier when she set up her financial firm without the necessary AFSL (Australian Financial Services Licence). An AFSL, issued by ASIC, is required for all those providing financial advice to clients or trading in financial products or markets. Among other things, an AFSL imposes ongoing conditions such as legal compliance, training and development as well as sufficient financial resources to carry on the approved business. It is a means of oversight in a complex and changing world.

Unlike advisers at The Investment Collective, neither Caddick nor her company had an AFSL. What Caddick appeared to have was an abundance of confidence, an enviable lifestyle (both leading to an impression of credibility) and a lack of remorse or regret about conning friends and loved ones out of their hard-earned cash. It also appears she played on certain biases, a key one was herd mentality bias (or an ‘everyone else is doing it’ strategy). As humans, we are social animals who want to be part of the herd. Confirmation bias was at play. From what we know, Caddick’s investors took her at her word, accepting Caddick’s after-the-fact confirmation about investments and trades that she had made on their behalf. It is estimated that Caddick defrauded approximately 72 investors of around $23 million. Among these investors were family and friends – people who both loved and trusted her and who perhaps aspired, at Caddick’s urging, to greater levels of financial success, increasing their vulnerability and decreasing their critical thinking. She created the perfect storm of deceit, desire and dependency by carefully controlling the information she disseminated to them. As for Madoff, he fooled some of the best, even when the reported returns were too good to be true.

The saying is true – “if it feels too good to be true, it probably is.” The reality is that investment markets go up and down, our needs change and although we might wish to be part of the herd, that does not allow for strategic differentiation and tailoring. The Investment Collective exists to ensure the integrity of your investments (but not to guarantee the outcome). Anyone who promises high returns with little to zero risk is not telling you the full story. Investment carries risk, but most aspects of our lives do.

At The Investment Collective, our advisers are registered with ASIC. This means that The Investment Collective holds an AFSL and as a condition of that, our advisers are appointed as authorised representatives. You can find the ASIC registration for each of our advisers at the following website.

Coming back to compliance, and speaking for myself, compliance sometimes makes me want to tear my hair out. There are two ways of looking at it; one is to characterise it as a costly, burdensome, bureaucratic exercise in box-ticking; the other is to consider it as simply ‘good business’.

Please note this article provides general advice only and has not taken your personal, business or financial circumstances into consideration. If you would like more tailored advice, please contact us today.

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Pension halving legislation

Pension halving legislation – 4th consecutive year

The Australian Government has announced that the pension halving legislation originally announced on 1 July 2019 will continue for a further 12 months. It is now scheduled to finish on 30 June 2023. The announcement has come as a shock to many people within the industry as it was originally introduced to help retirees cope with market volatility throughout the COVID-19 pandemic. Now the markets have recovered to near all-time highs.

Pension halving legislation

The original legislation states “the government has reduced the minimum annual payment required for account-based pensions and annuities, allocated pensions and annuities and market-linked pensions and annuities by 50% for the 2019–20, 2020–21, 2021–22 and 2022-23 financial years.” This minimum pension is calculated as at 1 July each financial year and is calculated as a percentage of the pension balance. This is the minimum pension that must be paid to beneficiaries for the fund to remain compliant.

An example of this would be a 65 year old retiree with a superannuation fund in drawdown/pension mode valued at $700,000. Under normal circumstances, the minimum pension drawdown would be $35,000 (5%). With the pension halving legislation in place, this same individual would only be required to draw $17,500 (2.5%).


The major benefit to the pension halving continuation is it allows retirees to preserve their super balance which serves as a tax haven. All income from investments and capital gains that are made within this environment are tax free.

Not being required to crystallise losses in volatile market conditions. Although the markets have recovered from the COVID-19 sell off, there is still a lot of volatility in the markets today with inflationary concerns and continuing geopolitical issues in Europe.

Key takeaways

  • Pension halving is not mandatory. Individuals will need to review their situation and assess if pension halving will be of benefit.
  • This legislation will apply to account based, transition to retirement and term allocated pensions.

If you would like to take advantage of this legislation, please reach out to your Financial Adviser.

Please note this article provides general advice only and has not taken your personal, business or financial circumstances into consideration. If you would like more tailored advice, please contact us today.

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Creating stability in an uncertain world

Creating stability in an uncertain world

At times it can feel difficult to get out of bed in the morning. It seems each day the financial landscape changes at a rapid rate. We are continually faced with challenges that seem to be never ending.

Whether it’s COVID-19 and its continual spread (here in Australia and abroad), the uncertainty of the Russian/Ukrainian war and world peace, rapidly rising inflation across the globe, the increasing severity and frequency of natural disasters as a result of global warming or global supply issues increasing the cost of living, it is easy to feel like not getting out of bed in the morning.

However, there is light at the end of the tunnel. There are small measures you can take to protect you and your family’s financial wellbeing. This will ensure that you continue to have a comfortable night’s sleep and are rested and ready to tackle a new day head-on!

There are 5 simple steps to improve your financial resilience:

Spend within your means

Create a budget and spend within your means. Allow for flexibility when big life moments happen (buying a property, having a baby to name a few).

Prioritise your debt

It is always good to clear any debt, however, paying the debt with the highest interest rate will decrease debt faster. If you stick to this principle, the sooner you will pay off the amount borrowed. High interest credit cards are always a good place to start.

The 50/30/20 budgeting rule

Life is short, so you do not want to miss opportunities to enjoy yourself. Using this method, you can use 50% of your salary for essentials (groceries, bills etc.), 30% for wants and 20% to build
your long-term savings.

Build your emergency fund

Life can throw unexpected expenses your way, so it’s always wise to be prepared. Having an emergency fund (usually between three to six months of your salary) will mean you are adequately prepared for life’s unexpected moments.

Use extra cash wisely

Sometimes life provides an unexpected windfall. While it is important to treat yourself from time to time, it is also important to put this extra money to work. Whether it is paying your debt off faster, saving more for retirement or propping up your emergency fund, utilise your money wisely.

How you feel about your finances can play a pivotal role in your everyday wellbeing. Having your finances in order can ensure that you have the extra spring in your step to tackle life and all of its challenges head-on.

Studies have shown, that those who prioritise financial wellbeing are more inclined to be healthy and live happier and more fulfilling lives.

As Guns ‘N’ Roses drummer Steven Adler once said; “You can have all the riches and success in the world, but if you don’t have your health, you have nothing.”

Please note this article provides general advice only and has not taken your personal, business or financial circumstances into consideration. If you would like more tailored advice, please contact us today.

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Unpredictable stock market

Coping with the unpredictability of financial markets

Coping with the unpredictability of financial markets

There she sat, perfectly still with a look of concentration on her face – yes cats have facial expressions too!

Quietly, patiently, she waited. What was making that rustling sound in the bushes? Was it a plaything? Was it something she could eat? Or was it merely something to be toyed with for her amusement? With her body on high alert, she poked her nose forward for a closer look, but she had to protect herself too. It was compelling, too compelling to just walk away. She had to be certain, was it friend, foe, food or simple frivolity? At last, we see it, a dinosaur (or, to you and me, a skink). The hapless creature shed its tail but she was too smart for that. She knew where the
real prize lay.

Molly’s commitment to finding out what was in the bushes, and her willingness to sit and wait, got me thinking about the parallels between Molly’s behaviour and human behaviour.

Molly needed to be certain. And so do we. The human brain is wired for survival. Its number one priority is to keep us alive and to do so, it constantly scans for threats. But our brain, in its little black box (our heads), has no direct contact with the outside world. Instead, it must wait for signals from our senses and then make lightning-fast decisions about whether something is a threat to us or not. Uncertainty, by its very nature, is a threat to the brain.

How then, as humans, do we cope with the unpredictability of financial markets, let alone life itself when our brains find uncertainty so difficult? As humans, we are generally better able to cope with bad news than we are with the anticipation of bad news. Why? Because when we know, we can act. A recent study showed that participants who had a 50:50 chance of getting a painful electric shock had higher stress responses than those who knew for certain they’d receive an electrical shock. It’s the fear, the unknown and the anticipation that causes anxiety or stress.

But there are some useful tips that can help:

  1. Simply knowing that our brain dislikes uncertainty is a start. When we are uncertain, different parts of our brain are playing tug of war and that uncomfortable feeling we get is perfectly natural. Did you know that excitement and anxiety trigger similar physiological effects? We can wrestle back control by naming and reframing our emotions. That doesn’t change the external world, but it can change the way we view it.
  2. Knowing that markets are volatile, uncertain, complex and ambiguous is also important. We work with you for long term benefit. What happens daily shouldn’t derail your long term strategy. In 2002 Steven Bradbury won the 1000m Olympic Skating by sticking to his game plan even as he was almost lapped by his four leading competitors. Like Molly with her skink, Steven’s commitment to his strategy ultimately saw him get his prize.
  3. Speaking to your financial adviser. We can’t predict the future, nor can we give you the certainty you crave, but we can draw on our experience. We have experts who watch the markets for a living. That doesn’t mean we have superpowers to pick the super stocks, but it does give us, and you, an edge. And, sometimes, just being able to talk through your concerns can help.

In the financial markets and indeed the world, nothing is fail-safe. But your investment and your trust are as serious to us as that skink was to Molly.

After her successful slaying of the dinosaur, Molly was able to retreat to the comfort of her easy chair for blissful sleep. We hope you can too.

Please note this article provides general advice only and has not taken your personal, business or financial circumstances into consideration. If you would like more tailored advice, please contact us today.

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Thoughts in mind when investing

Understanding investment biases

Why do we have investment biases?

As he took the turn, he was edging ever closer to his idyllic cottage. It had been a tough week and he was looking forward to relaxing and unwinding. And then it happened, he ran out of petrol. On a country road, with no petrol stations for a couple of kilometres, he came unstuck, figuratively and literally. The cursing began, followed by a good kicking of the tyres; he wondered how he could have been so stupid. Why didn’t he check the petrol tank before leaving? He’d meant to do it, but he’d forgotten.

He was unaware that the brain’s thinking centre (the pre-frontal cortex) which sits right behind our forehead, has limited capacity, a capacity that we can increase and improve upon, but only with focussed practice. We only get so many good decision-making hours a day (and this will vary by individual).

The man’s week had been tough. Waking up exhausted, he deliberated over which tie to wear, what to pack for his weekend away, whether he’d leave straight from work or come home first, whether to have the muffin or the toast for breakfast, carefully weighing up the pros and cons of each decision. These decisions, though small, were eating into his limited brain capacity, at the same time lowering both his judgement and his tolerance.

Every decision we make, every piece of self-control we exercise (like denying ourselves chocolate to eat a raw carrot instead), no matter how big or small, chips away at that powerhouse in our head.

The brain supports us by giving us shortcuts. We can call them heuristics, stereotyping, assumptions or biases. In essence, if we have a brain, we are biased. We need these biases, assumptions and beliefs to help us navigate the estimated 11 million pieces of stimuli we receive every day (most of it without our conscious awareness). But biases also have their pitfalls. It is estimated there are around 200 cognitive biases, but let’s take a look at three of them:

Overconfidence bias

This includes a self-belief in one’s ability to pick the right stocks and to time entry and exit into the market or certain stocks. Yes, a level of confidence is good and certainly, things won’t go our way all the time, but overconfidence bias can leave us blinded to contrary indicators or red flags. In this way, it can be akin to confirmation bias (where we only consider information that supports our beliefs or assumptions and discount the rest).

Loss aversion

Our brain is more geared towards avoiding loss than towards chasing gains. A loss aversion bias could result in us not acting at all, standing on the sidelines with our cash ‘safely’ in the bank or channelling our hard earned savings into a risk-averse portfolio when, to fund our wants and dreams, we need a growth geared portfolio (which appropriately assesses and balances risk).

Anchoring bias

If I asked you whether the man’s car would cost more or less than $500 to refill with a new green energy petrol that’s brand new to the market, your guess will likely be influenced by the $500 as it’s the first piece of information you’ve been given. If I tell you that it’s only $200, it will likely seem cheap. But, if I’d anchored you at $100, $200 would seem like a bad deal and you may back away.

Any of these biases (plus the other estimated 197 of them) can cost you money.

Investing can be very personal and therefore very difficult. When things are difficult, the emotional part of our brain (the limbic system) usually comes into play. Our emotional and executive brains co-exist, but when one is active, the other is not. It’s like the rider and the elephant. The rider (the executive brain) thinks it’s in charge. But if that elephant (the emotional brain) wants to go running through the jungle, the rider is next to powerless to stop it.

Here’s where your financial advisor comes in. Backed by a team, and by each other, they are skilled in understanding your circumstances, your goals, your risk appetite, the markets and the best strategy for you. Our robust research and processes are designed, as much as possible, to guard against cognitive bias to improve decision-making and present you with objective options and advice. And, they are trained elephant tamers. Their role is to clear the path, manage the emotion and allow the rider to regain control.

Please note this article provides general advice only and has not taken your personal, business or financial circumstances into consideration. If you would like more tailored advice, please contact us today.

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Downsizing and moving boxes

Are you looking to downsize?

Whether it’s a financial or lifestyle decision, downsizing your home once the kids have flown the nest is a common occurrence for many Australians. Selling the family home is a great way to unlock equity and help fund the next phase of your life. However, completing the sale and purchasing a new property is only one part of the problem. The next step can be just as tricky, as you need to identify the best way to get any excess cash generating a return into your superannuation.

Making voluntary contributions

For people aged under 67, the easiest way to contribute to super is by using the member contributions cap. Each year you are eligible to contribute $27,500 of pre-tax money (concessional contribution) and a further $110,000 of post-tax non-concessional contributions. If you are wanting to make concessional contributions, it is important to claim these on your tax return as an income tax deduction.

For people aged between 67 and 74, they will need to satisfy the work test before being able to make voluntary super contributions.  What is the work test and how can we ensure it is met? For the work test to be met you must be gainfully employed for at least 40 hours during a consecutive 30 day period in the financial year in which the contributions are made. If you are currently employed while you are looking to downsize, then meeting the work test is not a task that you will need to complete and you will have the ability to contribute to your super.

Downsizer contribution

For those aged 67 and older, the downsizer contribution scheme could be the best way to funnel the released equity from downsizing the family home into the superannuation environment. The downsizer contribution allows individuals to contribute the direct proceeds of downsizing into superannuation of up to $300,000 and $600,000 for couples. This contribution is treated as a post-tax non-concessional contribution and will not affect your contribution caps. To be eligible to make a downsizer contribution, the following criteria must be met;

  • The individual is aged 65 or older.
  • The property was owned for at least 10 years and must have qualified as your primary residence at some point during that period (making it wholly or partially CGT exempt).
  • The contribution is made to the superfund within 90 days of receiving the proceeds of the sale (This is usually the settlement date).
  • You provide the superfund administrator with the required NAT75073 form before or at the same time as making the contribution.
  • You have not previously made a downsizer contribution (This is a once in a lifetime opportunity and cannot be repeated).
  • The property being sold is in Australia and is not a caravan, houseboat or other mobile home.

Using this once in a lifetime downsizer contribution gives retirees the ability to contribute one last time into Super which holds significant advantages over investing the funds outside super or holding the equity in cash.

  • Income is taxed concessionally at 15% within the superannuation environment.
  • Upon meeting retirement conditions, the entire balance of your super may be tax-free in terms of both income and ongoing drawdowns.
  • Upon meeting retirement conditions, unrealised capital gains could be waived.
  • It does not affect your contribution caps/limits.
  • Once invested, the funds will generally produce a higher return than holding cash.

If you wish to seek advice around downsizing options, please reach out to one of our Financial Advisers.

Please note this article provides general advice only and has not taken your personal, business or financial circumstances into consideration. If you would like more tailored advice, please contact us today.

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Man Age Pension

The Age Pension – Mistakes to Avoid

For many retirees who were unable to enjoy the wonderful retirement savings vehicle that superannuation now affords, the age pension is a major source of income for them. A bonus of part-pension eligibility is the prized ‘Pensioner Concession Card’ (PCC), even if the actual benefit is only minuscule.

Eligibility for the age pension is tested under both an ‘income test’ and an ‘assets test’ and the test that produces the lower benefit is the one that is used. Accordingly, the following traps need to be avoided.

Additional income

If you are assessed under the assets test then you can potentially earn additional income without having your benefit impacted. For instance, a home owning couple with $800,000 in assessable assets will receive an age pension benefit of $137 each per fortnight under the assets test. Under this scenario, their assessable income can be as high as $68,000 before their benefit reduces.

This potentially allows pensioners to undertake some form of work, if they are inclined, without having their age pension or PCC entitlement affected.

Valuing assets

The principal residence is not an assessable asset, however, furniture, vehicles, boats and caravans are. Many pensioners fall into the trap of valuing these assets at replacement value which could be costly as every $10,000 of excess assets reduces the age pension by $780 a year. To avoid the trap, furniture, vehicles, boats and caravans should be valued at what you expect to get from them in a garage sale, not what it will cost you to replace them.

Don’t spend just to get or increase the pension

There is absolutely nothing wrong with spending money on a holiday, renovating the home or enjoying a better quality of life. $100,000 worth of family home renovations increase your age pension by $7,800 per year, however, it will take almost 13 years of the increased pension to get that $100,000 back, not to mention the forgone return on that money. The benefits of renovating the home or travelling may be compelling, however, the main thing is to not spend money with the sole purpose of getting a higher age pension benefit.


Each year on 20 March and 20 September, Centrelink updates the value of market-linked investments such as shares and managed funds. Notwithstanding this automatic update, at any time the asset value can be updated. This means the rules favour pensioners because if the value of your investments rises, you can wait for Centrelink to run the automatic update in March and September. Conversely, if the value of your investments decline, you should notify Centrelink immediately which may lead to receiving a greater benefit.


A pensioner can reduce their assessable assets by giving money away, however, it is important to seek advice. The rules allow gifts of $10,000 in a financial year with a maximum of $30,000 over five years. A pensioner could reduce their assets by $20,000 in a matter of days by giving away $10,000 just prior to 30 June and then another $10,000 on 1 July or thereafter.


Where a member of a couple has not yet reached age pension age, it can be beneficial to hold as much super in the younger person’s name in ‘accumulation’ mode as it will be exempt from Centrelink assessment. However, the moment that person is age pension age or a pension is commenced from that accumulation account, Centrelink will assess that asset.

Mortgaged assets

A common trap arises where a loan is used to purchase an investment property and the loan is secured by a mortgage against the pensioner’s residence. A debt against an investment asset is only deducted from the asset value if the mortgage is held against the investment asset. If the mortgage is secured against another asset, the full value of the investment asset will be assessed. The effect could be a complete disaster.


Another trap can arise due to the significant difference between the asset cut-off point for a single person and that for a couple. At 20 September 2021, the single home owner asset cut-off point was $593,000, whereas for a couple it was $891,500. By leaving assets to each other, the surviving partner may lose entitlement to the age pension, hardly helping the grief being experienced at that time.

Jointly owned assets with adult children

A decision without proper planning can have consequences in the future. A scenario many of you have no doubt faced, especially in recent times, is helping a child to enter the residential property market for the first time. It might seem like a great idea at the time for a couple aged 55 to take on a 50% share of a house worth $400,000 to enable their child to borrow against their portion of ownership, but how might this look when you get to age pension age and you still own 50% of that property?

The value of the property could appreciate substantially over the next 12 years i.e; when the couple become eligible for the age pension, to the point that it results in their assets being above the asset test cut-off point.

If their 50% interest is then transferred to their child, not only will there be potential Capital Gains Tax implications but Centrelink will treat that ’gift’ as a deprived asset for the next 5 years, further adding to age pension eligibility woes.

In this instance, it would be far more appropriate for the couple to become a guarantor for their child, possibly putting up their own home as part security. The rules of the age pension are complex, sourcing appropriate advice could pay dividends!

Please note this article provides general advice only and has not taken your personal, business or financial circumstances into consideration. If you would like more tailored advice, please contact us today.

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Saving for a home

Saving for a home? Maybe smashed avo will help

Purchasing a first home is a high priority goal for many clients. This is particularly true for Millennials based on current demographics.

On the surface, this sounds easy, but with many banks requiring a 20% deposit, a full time work role and sourcing the ongoing payments for the loan, a home purchase can be a difficult and onerous task that requires forgoing or delaying other goals.

As an example, the 20% deposit is getting increasingly harder to achieve, with Domain’s December 2021 House Price Report showing capital city buyers across the nation forked out an average of $1,066,133 to buy a house over the past 12 months.

Without going into full time vs casual employment, let’s have a look at the classic statement from a few years back featuring everyone’s favourite breakfast ensemble – smashed avo and feta (and maybe some bacon and eggs) and the compulsory cappuccino.

Bernard Salt wrote in an article for ‘The Australian’, “I have seen young people order smashed avocado with crumbled feta on five-grain toasted bread at $22 a pop and more. I can afford to eat this for lunch because I am middle-aged and have raised my family. But how can young people afford to eat like this? Shouldn’t they be economising by eating at home? How often are they eating out? 22 dollars several times a week could go towards a deposit on a house.”

So, for those with calculators, they will have worked out that $22 a meal. If this is ordered say twice a week, it totals $2288 per year.  Whilst this would certainly help cover rent, it won’t get a home deposit by itself!

Of course, his point was not that the smashed avo by itself would get someone a home, but that we need to consider our needs and wants when creating our budgets.  At the end of the day, it isn’t easy for everyone to save and it often comes at the expense of luxuries such as eating out or paid activities and holidays, but for anyone who wants to buy a house, saving the required deposit means reducing discretionary spending and establishing a means for storing the hard earned home deposit.

It is often pointed out in the smashed avo discussion that there is also the value of social engagement, absolutely!  With present day circumstances and with many people having faced lockdowns and isolation, this personal interaction has value in itself and the target for discretionary savings may need to fall elsewhere. The debate on what is a need vs want is a personal debate so I will leave that for individuals out there.

So how can we have our smashed avo and eat it too?

This is the best bit…..prepare it ourselves.  Sometimes the simple things in life can be the best. Nothing is to say that with a little preparation, a morning picnic with friends can be a great way to get outdoors and save a few dollars on the way.

Courtesy of (, here is a very easy morning breakfast to put together.

  • Simple ingredients which should feed around 4. Here are the estimated costs
  • 2 avocados – ($3 to $4)
  • 80g creamy feta ($1.50 for around 100g)
  • 2 tablespoons fresh mint ($3 or even better, grow your own herbs in pots – smells great and can save a lot at the checkouts)
  • 1 lemon ($1.50) – add to taste (and stops the avocado from going brown)
  • Half a loaf of rye bread or any crunchy bread would really be fine (around $3 to $4 for a loaf)

Total expenditure ~ $13.

Preparation is easy, mix the ingredients and place them on the bread.

Of course, if you are at home, you could impress your guests with an egg and some bacon too – having spent less than $5 per person on the avocado dish, you can treat everyone a little. Maybe as an accompaniment, some homemade baked beans to impress your friends further (

The smashed avo debate was never going to solve the homeownership issue but it does highlight the value of budgeting.  It doesn’t matter what your expenditure goal is, making your own breakfasts isn’t going to necessarily get you that dream, but will certainly leave a few more dollars in your pocket and heading in the right direction.

Please note this article provides general advice only and has not taken your personal, business or financial circumstances into consideration. If you would like more tailored advice, please contact us today.

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Man placing coins

Why is Molly so lucky?

We rescued our cat, Molly, from the RSCPA about 10 years ago. When we found her, she was in a large cage with about a dozen other cats waiting for their forever home. Some of those cats paraded around the cage, jumping around and darting from one spot to the other proactively seeking out their new owners. Molly, by contrast, was passive. There she was, curled up and snoozing towards the back of the cage near the litter trays. My wife, Kathy, was immediately drawn to her. Why? She looked lonely, dejected and without hope. Molly’s world changed that day, in what was perhaps Molly’s version of a very positive black swan event.

Fast forward about 10 years, and here’s a typical morning for Molly, sprawled out on one of our deck chairs catching the morning sun with a full belly and a contented peace.

Molly the cat

Why am I telling you this? Well, while it’s impossible to know for sure, Molly’s behaviour suggests she spends most of her time in the present moment, simply enjoying what that moment brings. But she remains attentive to possible threats and if a threat arises, she has a strategy, run inside to safety!

While Molly’s life may be simpler than ours, we can draw some interesting parallels.

Unlike Molly, humans spend very little time in the present moment. Instead, we spend most of our waking hours in time travel, ruminating on the past or worrying about the future. There are good evolutionary reasons for this. Principally, we’re wired for survival, making us sensitive to threat (which, in the modern day world, might include stock market fluctuations), and attuned to reward, particularly near term reward. You see, our brains have shiny new object syndrome in that they like newness and novelty. Giving into it feels great but usually only fleetingly, and then we want the next shiny new thing. It’s pernicious, powerful and entirely controllable, with conscious effort.

What does this mean for me? Saving and investing for retirement is a long term goal that our brains, developed over thousands of years, aren’t well suited to. Sticking to our longer term objectives, especially when it means deferring instant gratification, can be hard. For example, thousands of years ago one of the most precious resources was food (still is). However, we could only use what we could consume as saving it was nigh on impossible. We humans, have a natural instinct to consume.

In terms of human evolution, the discipline of saving and investing is a relatively new concept and it is alien to our natural instincts. This creates tension between our natural instincts and our rational decision making. We know what we should do, but it’s easy to fall into the trap of doing what we want to do, unless we have help.

Working with an adviser to clarify and quantify your long term financial objectives and putting in place strategies, structures and investments that help you achieve your longer term financial goals, such as retirement, can help override our natural impulses to consume all that we have today. Plus, our process of regular reviews can help to satisfy the shiny new object part of our brain. You see, achieving goals or milestones can give us the same sense of reward as instant gratification.

So, like Molly, we can have the best of both worlds, enjoying the present moment knowing that we have a safety net in place. For Molly, it’s the ability to run inside; for us, it’s financial security and empowerment.

Please note this article provides general advice only and has not taken your personal, business or financial circumstances into consideration. If you would like more tailored advice, please contact us today.

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Australian money savings

What is SuperStream?

From 1 October 2021, rollovers into and out of a Self Managed Super Fund (SMSF) can only be processed via ‘SuperStream’.

What is ‘SuperStream’?

SuperStream is the electronic system used to transfer money and data to super funds. It is used to process employer contributions to APRA-regulated funds and for rollovers between super funds.

The move to include SMSFs in SuperStream rollovers is welcomed by many SMSF fund members who have experienced delays in receiving rollovers into a SMSF.  The SuperStream protocols require paying funds to process the rollover of a member’s benefit electronically and within three days of receiving a valid request.

Many SMSFs have mature members who are not anticipating receiving any further rollovers hence, they have paid little attention to the SuperStream requirements.  However, if members decide to wind up their SMSF and rollover into a retail fund, they will generally need to register for SuperStream before the SMSF can process the rollover.  SuperStream, however, can be activated at any time and can be expected to be established within days.

ASIC’s requirement for a SMSF’s investment strategy to outline an exit strategy may require SMSF trustees to consider SuperStream as part of their next regular investment strategy review.

What is required for an SMSF to be SuperStream ready?

Most professional administrators are SuperStream ready, and many have been using SuperStream to process rollovers for some time. Where a SMSF doesn’t use professional administration services they will need the following:

  • An electronic service address (ESA) which is provided by most SMSF software platforms, administrators, tax agents and some third-party suppliers. The ATO provides a list of ESA suppliers on their website – ATO ESA providers.
  • A unique bank account recorded with the ATO.
  • A Unique Superannuation Identifier (USI) which is the fund’s Australian Business Number (ABN).

Processing a rollover

The paying fund has three days from receiving an actionable rollover request to process the payment. If the rollover request has incomplete information, the trustee of the paying fund must request the required information within three days.  Additional time may be allowed if the paying fund needs to sell down assets.

Whilst the prompt receipt of rollovers into SMSFs is welcomed, there may be many practical reasons why a SMSF is not able to action a request to rollover into another fund within the three day timeframe.  In the absence of professional administration, it is not always possible to accurately calculate a member’s entitlement within three days.  In addition, the sale of assets to make the cash payment may take longer than the time allowed.

Where one member is leaving because of a dispute with another member, further difficulties in meeting the required timeframes may occur.

Another requirement of the SuperStream system is that the trustee of the receiving fund must allocate the rollover to the member’s account within three days of receipt of the funds. For SMSFs without professional administration, a minute regarding the allocation may be required.


SMSFs expecting to receive member benefits rolled over from another fund will need to ensure they are registered for SuperStream prior to the member requesting the rollover. Likewise, registration will be required before a SMSF trustee can rollover a member benefit to another fund.

Please note this article provides general advice only and has not taken your personal, business or financial circumstances into consideration. If you would like more tailored advice, please contact us today.

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