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Case Study: Superannuation Consolidation

We recently had a young, 32-year old single male come to see us about superannuation consolidation.

He came to us as he had accrued five different super funds over time as a result of switching jobs and working for different companies during his career. He wanted to consolidate his super, but wasn’t sure which investment option was right for him. This is a similar issue we see with a number of clients who have moved jobs and end up with multiple super funds.

 

1.What We Did:

Firstly, we were able to help him reduce his fees by consolidating his super funds, resulting in him saving $370 pa. Consolidating not only means saving money but means he won’t lose track of this money over time or that it will get eroded in fees.

Because of his age, and time to retirement, we helped him invest the funds he has within super into a high growth style account. A strategy which better suits his age, income and financial position.

To help our client manage and keep track of his investments we set him up with an online account. Helping our client to become more engaged with his super and give him projections of what his funds might look like to him over time.

 

2.Example: The Benefits of Compounding Interest

By making these simple changes, based on current circumstances, if our client was to receive a 6% return between now and 65, his super balance was projected to be $573,600. By being proactive and getting his money invested in an option that better suits him, if the return increases to 8% (2% difference), his balance projection jumps $285,000 to $858,600.

 

 

3.Protecting Our Clients Future:

The client is also in the process of purchasing his first property. We put him in touch with a mortgage broker to help him through the process and make sure the loan was structured correctly and he was getting the best rate.

To ensure our client’s assets are protected we worked with him to make sure he has the right personal insurance (mainly income protection). Being the sole bread winner, it’s important that his income is going to be covered if he were unable to work.

 

 

4.Summary:

All in all, this was simple but effective advice.

By implementing some small adjustments to his superannuation,  our client is on a better investment strategy for his age, income and risk appetite. At the same time making sure he is protecting himself now for income and his ability to maintain his mortgage repayments, in the event he is unable to work.

Financial advice and planning doesn’t need to be complicated and it can often be the small changes that make all the difference.

 

 

SIMMONS LIVINGSTONE & ASSOCIATES GENERAL ADVICE WARNING This information is of a general nature only and neither represents nor is intended to be specific advice on any particular matter. Simmons Livingstone & Associates and Infocus Securities Australia Pty Ltd strongly suggest that no person should act specifically on the basis of the information contained herein but should seek appropriate professional advice based upon their own personal circumstances.

SLG Financial Services Pty Ltd ABN 63 734 659 141 Ltd atf for the SLG Financial Services Unit Trust t/a Simmons Livingstone & Associates is a Corporate Authorised Representative of Infocus Securities Australia Pty Ltd ABN 47 097 797 049 AFSL and Australian Credit Licence No. 236523.