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The speaker, Tim Henry, discusses superannuation basics, recent fund losses, and the importance of understanding how super funds are regulated. He emphasizes the need for individuals to take control of their superannuation, mentioning the role of APRA in overseeing fund regulations. Explaining the benefits of utilizing MyGov for monitoring and managing super funds, he also touches on investment decisions within super funds, highlighting the distinction between growth and defensive assets. Tim encourages listeners to be proactive in managing their superannuation for future financial security. G'day, welcome back to the grass is greener. It's just me this week, Tim Henry, and wanting to do a short sharp episode, Superannuation 101. And a few things I want to try and unpack here. So firstly, there's been a bit of a disaster in the world of superannuation recently, and we'll chat about that with those investors that have been burnt. But I want to talk about how superannuation funds are regulated and why that was important with that situation. Also want to talk about myGov and how you can actually, if you're needing to really get control of your super and find out what's going on, and you definitely you've got that MyGov is an awesome first stop. And I'll talk you through a couple of aspects of MyGov. Also want to talk about how your super is invested and why I feel that a lot of people, you know, that they don't step up and take that control. And they're really missing out there on the way that's invested. And then we'll talk about upcoming episodes we're going to do on superannuation. So let's just start if we can. I want to bust a few myths because I do hear a lot from either people in the general public, or could be new clients coming in saying, you know, super actually any good. You know, I don't really like super, I can't choose how it's invested. You know, like there's, or you know, that the systems are wrought. I've heard people say that. Basically, superannuation is highly regulated. It is, like it or not, you're going to get 12% of your salary as of the 1st of July this year 2025, 12% of your salary in each pay period is going to get paid into this vehicle. You're going to have it for a lot of your life and can really, if looked after, can provide a great benefit to you later in life. So why would you not take control of it? And why would you not nurture it? So I did really like Susan Alexander a couple of weeks ago saying the line I love was be in charge. So you actually can take control of your situation. And I'm really, I guess imploring you to do that. So let's just quickly start if we can with just the basic thing with superannuation. There's been a recent controversy or loss of funds for around 10,000 to 12,000 investors that invested in funds called Shield and First Guardian. And those investors have lost, I think it's in excess of $1 billion, maybe $1.2 billion has been lost. Those funds were badly run and no doubt I think the Australian Securities and Investment Commission will investigate how those funds were run and they certainly did not do what they were telling their investors they were going to do. But I do really want to talk about, now I've seen on social media off the back of some of this reporting, either on the media or on social media, people saying super's a rort, packing your money safe, these types of things. So the first thing I do just want to point out is that superannuation is regulated by a group called APRA, the Australian Prudential Regulation Authority. So they do oversee the regulation or the registration to APRA indicates that the fund adheres to specific prudential standards and regulations. It's designed to protect the members' interests and the financial stability of the fund. Now if you look at say an industry super fund or some of the bigger super funds that you see out there in the market like Dangard or there's many different funds out there, they are likely to be regulated by APRA and it's not hard to see whether they are. The difference with the super fund, those funds that were lost with Shield and First Guardian, they were investment options that were offered within a super fund. They're not the fund themselves so they were not regulated by APRA themselves. It probably feels like a grey area Let's just take a group like, well let's take Vanguard Super or Australian Super as an example. On those funds you can really only invest in their products so they're not offering anything other than their own products. A little bit like going to Aldi I suppose, if you're shopping most of the products on the shelf are Aldi. Where Shield and First Guardian investors would have invested their money is going into a bigger platform type of fund that offers hundreds if not thousands of different investment options all different companies, all different investment schemes. So obviously choosing those different things means that the protections are probably weakened if you like through doing that and unfortunately those investors are not going to be protected in the same way because they were not managed by APRA. So probably if it's a concern to you, and I've seen a lot of people commenting saying it is a concern, that's probably a really good starting point just to check about your fund and is it regulated by APRA and if it is I think you can feel that there's very strong guidelines that the actual investment of the money is having to adhere to. So that's the sum pack. Now we will actually do, we're going to try and explore that whole topic around Shield and First Guardian in a later episode and I'm trying to organise the guests for that now so stay tuned on that. Let's just talk about the basics of getting your super fund in action and getting control of it. One of the best ways you can do that, governments don't get a lot of credibility these days, we're always thinking they could be doing things better, but one thing that has really been great in the last 10 years is myGov and the functionality through that system. We all have a myGov account, we all can have our APO data linked up to that, our Medicare data. If you're on aged care services, you can have myAgedCare linked up to that. It's really excellent because you can really view what they can view and as a great starting point for superannuation, if you log into your myGov and go into the Australian Tax Office now super funds have to report back to the Tax Office if they're holding a fund with your tax file number so you are going to see all of the funds that the ATO has registered against your tax file number. So great spot for people to see straight away, do I actually know all of the super funds I've got and what are they? You'll see them all there under fund details, so if you're able to log into myGov and then go into the Australian Tax Office portal, there's a menu item called super and then under fund details you can see all of the funds they have for you. I also think once you've identified what funds you've got, also probably good to check the employer contributions tab there and see what's been coming in for you over the last few years. Does that align to 11.5% of your salary, now 12% of your salary? So just making sure that those funds have been coming in and also where are they going into? I did have a client recently this year who I said to her, we haven't been seeing any contributions coming in and as far as she was concerned I was mentioning them on the pay slip and where they've been paying them but the funds hadn't actually come in so we're still finding out what's occurred there but again it's just always good to check. Another great feature I think you would want to have a look at if you're trying to clean up your funds there is there's a great comparison tool in there that compares your funds or anything you want to compare against other funds out there in the market. It does compare the my super option with your super and what I'll just talk to you about my super is every super fund out there has to have what's called a my super option. It's a default fund designed to be simple and cost effective. The regulators have imposed that on the funds that they must have a version called my super which is their normally balanced option, very diversified option and is the default if you haven't actively chosen an investment option with the fund. So that's what they're going to put you into. Now the mygov even has a really basic comparison tool, it's a great starting point I think to say well it's going to compare all of my super options across all the super funds for cost and what's its performance over the last 10 years. Really good first step to go does my fund look like it stacks up broadly there. Now you probably would want to potentially look at a more detailed comparison if you're thinking of making a decision to leave your fund but just a good starting point there to see where it's at and very easy to use, I was able to jump on there and use it, I thought it was really good. Let's just briefly chat if we can about investing in the super. Again it's something that a lot of people don't really either realise or they're not entirely confident to look into how their money is invested or how they'd like it to be invested. So I just want to give you this brief summary that I normally talk to people about when they come in to see us. One of the questions I'll ask them is do you understand the difference between a growth asset and what they might call a defensive asset when they invest your money. Just at a really base level, the growth asset things like shares, property and that type of thing, things which can have good capital growth over the long term but that capital growth can from time to time decline in value and may even go down. Then your defensive assets or safer assets are more income producing assets where you're mostly not risking the capital and you can have some of these products that risk a little bit of capital but wouldn't risk the capital and is just really trying to produce safer income off the back of that. So the more you're exposed to those defensive assets in your whole pie if you like, the safer or less volatile your investment is going to be. The more exposure you've got to the growth assets, the more assertive you're going to be, probably exposed to more growth over the long term and probably in the long term get a stronger return. In any given year that could even be a negative if you're really exposed to growth assets but in the long term should play out okay. Every fund and every APRA regulated fund would have a menu that has conservative options or stable options that have low levels of exposure to those growth assets and higher exposure to just those steady assets. All the way up to, and you're going to see names like conservative balanced or moderate balanced fund, high growth fund, aggressive fund. So there's a scale there and you can choose where you invest on that scale depending on how much growth you're shooting for. It depends on your stage of life really in a lot of cases. How much money have I got in there? Do I want to risk it? Do I even need to risk it? Quite often with younger clients they're just starting out, we're sort of saying we'll just let it roll fairly assertively because money's going to be in there for a long time. But if you're older and you want to tap into this money soon then there might be different considerations at play there. So just to sort of unpack that as a big myth that I hear a lot is that I'm just at the whim of whatever the Superfund does. Not actually true. One, you can choose your Superfund and two, you could and should choose where it's invested not just being the default. Now the default options are actually reasonably good but it may not suit where you actually are and I think a lot of times people think they're more conservatively invested than what they really are when we show them and they're actually fairly aggressive. So those three steps of just quickly tackling elements of your Super is is it an APRA regulated fund? Jumping on your myGov and looking at all the funds you've got, checking your employer contributions, doing a quick comparison, a really quick way to sort of take control of that situation and then think about how you want to invest the money. Are you feeling like you want to be aggressive with that? On the scheme of that, on that scale where does that sit with you? It becomes a personal decision. A big part of what we do with clients when we're sitting in front of them is to help them balance off that natural feeling of safety for them with a longer term view on it as well as if you stay in this type of product for a period of time, this is the likely outcome and is there going to be enough money for them in the future? And those dynamics tend to come out with a really solid decision. The final thing I just want to touch on before you make any changes in these funds, if you do, you've got to just check that you've got life insurance or have you got life insurance. If you leave that fund you will lose that life insurance quite often. You've either got life or what they call death cover, total and permanent disability cover, which means you can never work again, there's a lump sum there. It could be income protection cover like a monthly payment if you can't work temporarily. So just need to make sure that you're certain you don't need that or you've got sufficient elsewhere. Now if you're going to go and try and get your own insurance with an insurer, they're going to ask a lot of questions about your medical history. Now if you've got medical challenges, particularly in the last few years, a lot of insurers are going to say look we don't really want to insure you to that full level or we're going to exclude some of these issues that you've already had. So if you've been given default cover in your super over the years that doesn't have those exclusions, you definitely wouldn't want to get rid of them without thinking about making an informed decision. So I really encourage you if you're needing to take control of that super and take those initial steps of engaging with it and getting control of it, there's some great steps there. Don't hesitate to fire in any questions via our website at thegrassesgreen or tgigpodcast.com.au. There's a way you can shoot us a message there and you'll see that on the bottom of this page. Also you can contact us through social media as well. We're always open to help guide anyone that's got questions. We've got some great episodes coming up on this topic. We're going to be unpacking superannuation strategies as some of the cool things you can do with the Real Gun Advisor in the next couple of weeks. Also really trying to track down some guests to talk about that first Guardian and Shield issue and just some red flags that people could have seen with what they were getting asked to invest in. In a lot of these cases those flags should have raised alarms but if you're uninitiated in this you can see why it happens. So we're going to try and unpack some of that. Also in the future when I'm working on how to even find a financial advisor if you're looking for one. So stay tuned for some of those.