Name: Alistair Shields
Age: 51 years
Other members of the SMSF: My wife, Jane Macnaught, aged 53 years.
How long have you had your SMSF?
We began planning the SMSF in May / June 2014. By the time we had arranged a trust deed, ABN and tax file number, opened a bank account and then requested the rollover of our funds, it was September 2014 before we actually had money in the fund.
Why did you start it up?
We wanted more control of our retirement savings. We had noted that the super fund we were in had not grown by much more that the contributions our employers had been putting in. In fact for several of the past ten years it had gone backwards. Our combined super was enough to comfortably start our own fund.
How big is it?
We began with just over $217,000 between us.
Is it more or less difficult to manage than you thought it would be?
It is probably easier than I thought. My wife has done share trades before and has experience with those. We had an appointment with a financial adviser who set us on the right track with a statement of advice (SOA) and advice regarding our investments. We are yet to complete our first tax return, I am hoping it will be straight forward.
Do you enjoy managing it?
Yes, it is nice to be able to see the account growing. I have it visible on my online bank account. I keep an eye on the share portfolio within the fund.
Are you pleased with its performance?
At this stage the fund has not grown as much as I thought. The last month or so has been tough in the Australian equities market. We have some ETFs that are performing well and paying regular dividends. We are in it for the long term.
Can you give us some numbers around performance?
We are in our first year. Our fund has grown by about 6.5% since September.
What is your asset allocation?
We have a balanced portfolio, including local shares and Vanguard ETFs, and Vanguard international ETFs. We hold a little in cash, and so far have transferred the cash periodically into shares when the cash account builds up due to contributions and dividends.
Just over 25% is held in the two US Vanguard ETFs, 5% in cash and the remaining 70% in Australian equities.
Our current share mix is:
Utilities 3.23%
Financials 39.01%
Materials 21.69%
Telecom Services 16.53%
Consumer Staple 19.54%
What are your favourite investments/stocks and why?
I haven’t really developed favourites yet. The ones which pay good dividends are obviously attractive. The market growth has not been as strong recently. I will see how the next twelve months goes and then assess whether we should sell-off or change any particular stocks.
What investments do you have outside of superannuation?
My wife has a separate share portfolio, we do not have any other investments at this stage. When I have finished paying school fees at the end of next year, we will assess whether we purchase an investment property or just start catching up our balances by topping up the SMSF.
Do you use an advisor or any kind of service provider?
Yes, we have an adviser who has provided us with an SOA, advice on insurance and help with our investment strategy. We will engage an auditor annually and we have an accountant to complete our tax return.
Is there anything else you would like to tell us about your SMSF?
I was surprised by the length of time it took to start up the fund. There is a very structured process to follow, and it is not possible to jump any steps. We chose to have a corporate trustee for the fund.
I am hoping that we will be able to build a fund to a size where we will have a comfortable pension payment on retirement. We have a blended family with five children between us, and decided not to involve any of them in the fund and instead rely on our wills to distribute our funds fairly at the time of death.
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.
