Shane Ellis runs his own business SMSF Law Equity Protect. As a senior consulting lawyer, he provides specialist advice on SMSF estates and asset protection. He shares with us his views on managing his SMSF.
Age
53
Other members of the SMSF?
My wife Vicki, and two of my three adult children. If the SMSF membership number restrictions of only being able to have four members in a SMSF did not exist, I would have my wife and all three of my children in my SMSF.
Why did you start it up?
Sovereignty of my affairs and retirement savings were key to me setting up my own SMSF.
How big is it?
At this time under $1 million. This will greatly increase between now and age 75.
Is it more or less difficult to manage than you thought it would be?
As I have a great team of accountants and investment advisers supporting me, and as I stay abreast of the rules pertaining to SMSFs, I believe it is easy to manage.
Do you enjoy managing it?
I am not an investment expert even though I have attended a lot of educational seminars on share investments, derivative trading and property investment. I outsource my investment advice to an investment adviser and his team who I trust. I am not an accountant, even though I have a good understanding of the accounting needs for my SMSF.
I likewise outsource my SMSF accounting and book keeping needs to a SMSF specialist accountant who I trust. Both my investment adviser and my accountant have great qualifications and experience in the SMSF arena.
Are you pleased with its performance?
Currently, yes, I am. I understand with the volatility of the markets why we are down a little at present.
I have experienced other advisers’ work whilst I was up-skilling. Some were doing only as good as, or worse than the ASX, or selling wrap accounts where the person most benefiting was them and not the members of my SMSF. This is what prompted my move to my current advisers. I currently use an adviser to help manage my investments. The cost is marginal compared to most services on the market.
Can you give us some numbers around performance over the last 1, 3 and 5 years?
I have only been working with my current adviser for a little over one year. Previously, my portfolio had been quite heavy in resources and financials. Given the volatility in those sectors recently, it’s been a process to diversify slowly as opportunities arise. Overall, the portfolio is down over the past year, although not by as much as it would have been under my past allocation to resources and financials. Since the start of this year, my portfolio is down about 4%. My previous portfolio of top 20 stocks would have been down 10%. So diversification has paid off in that respect, and we will just continue to focus on the long term.
What is your asset allocation?
My asset allocation is:
Securities portfolio: 43.26%;
Managed funds: 54.49%; (international equities and property)
Cash: 2.25%.
What are your favourite investments/stocks and why?
My SMSF is currently all in shares, managed funds and cash. I personally own my current commercial business premises outside of the SMSF, but the next commercial property will likely be in the SMSF. My wife attended many of the up-skilling courses on investments that I did. We have always done well in real property investments, principally rental properties. She likes real property and having the ability to drive past and see the investment.
What investments do you have outside of superannuation?
Principal place of residence, residential investment rental properties and commercial business premises.
Important: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. Consider the appropriateness of the information in regards to your circumstances.
