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A Changing of the Guard; SMSFs and Young Australians

Superannuation is an ever changing industry and now, more than ever, it’s essential that young Australians use their retirement fund in an efficient and considered manner.

More often than not, superannuation is something that people sign up to in their youth and then forget about until it’s too late. Typically, Gen X and Gen Y have their retirement savings stored in the first fund they signed up to with their first job. They might even have multiple accounts they’re yet to consolidate.

But times, they are a-changin’! Over the past 12 months, the share markets have proven extremely volatile, encouraging more Australians – particularly young Australians – to consider taking control over what assets their superannuation is invested in.

The latest data from the Australian Tax Office (ATO) shows that 43% of new Self Managed Superannuation Funds (SMSFs) are established by members younger than age 45.

So why the shift?

Easing the sting of fees

SMSFs have always provided greater control and flexibility to members, but fees have sometimes been a deterrent to people with balances lower than $200,000.

The increase in average fees is due to the average balance sitting at $1,050,000* with advisers and accountants using a fee structure at usually 1% of the balance. If you have less than $200,000 in your account, this can be a big chunk of your savings and the reason lots have shied from taking the plunge into the SMSF world. But while fees within SMSFs have increased in recent times, the set up costs have decreased – making it a more accessible option for investors.

As more Australians take an interest in what is required to run a successful superannuation fund, they are shopping around and demanding more cost efficient options to keep fees down. These days, SMSF administrators are coming to the party and providing cost effective SMSF options with set up costs sitting at around $799. With those kinds of figures, SMSFs are not as out of reach for Gen X and Gen Y as they once were.

*As of December 2015

Bricks and mortar

Traditionally, Australians have always considered bricks and mortar a ‘safer bet’ than the share market and as such, the desire to invest in property is another motive that is enticing people under 45 to move towards an SMSF.

Less than ten years after the global financial crisis (GFC), uncertain global markets continue to cause major concerns so it’s common to find people seeking investments that they can touch and feel. The projected population growth in Australia’s major metropolises has also increased the demand for housing – a trend that investors can capitalise on.

With interest rates at record lows and real estate still producing fairly positive returns, Australians in their late 20s-40s are looking to move their retirement funds into bricks and mortar – something they can do through their SMSF.

Keeping a finger on the pulse

Finally, visibility and trust within a superannuation fund has become much more important to younger Australians. In the wake of the GFC, many were shocked when they received their superannuation statements or spoke to their adviser to realise the average fund balance had fallen by more than 17%.

Within an SMSF, people feel they have more control and visibility on the investments they elect, rather than entrusting the direction of their balance to their fund’s administrators. This hands-on approach that’s encouraged in an SMSF ensures highs and lows won’t come as such a shock, and investors can feel more involved in the growth of their wealth.


If you are keen to explore your options within an SMSF, call 1300 726 082 to speak to one of our financial advisers. Our team of accountants can also help with the management of the fund and handle all the administration on your behalf, keeping everything in-house and centralised.


Stats taken from ‘SMSFs winning over younger Australians’, Financial Standard, 23 March 2016


Dislaimer: John Hopkins Financial Services Pty Ltd is a Corporate Representative of WealthSure Financial Services Pty Ltd Level 1 190 Stirling Street PERTH WA 6000 ACN:130 288 578 AFSL: 326450. 

General Advice Warning: This advice may not be suitable to you because it contains general advice that has not been tailored to your personal circumstances. Please seek personal financial advice prior to acting on this information.

Know Your Window; Understanding the ASX Market

Many investors are aware that the Australian Securities Exchange (ASX) commences trading at 10am and ceases trading at 4pm, but did you know that there are small windows on either side of these times during which anyone can enter buy or sell orders in the market? The ASX goes through a number of phases on any trading day, and there are trading periods that exist beyond the official ‘opening’ and ‘closing’ times of the market.

Securities open in five groups according to the starting letter of their ASX Code:

Group Market Open ASX Code Starting With
Group 1 10:00:00am +/- 15 seconds 0-9 and A-B
Group 2 10:00:00am +/- 15 seconds C-F
Group 3 10:00:00am +/- 15 seconds G-M
Group 4 10:00:00am +/- 15 seconds N-R
Group 5 10:00:00am +/- 15 seconds S-Z

The time is randomly generated by ASX Trade and occurs up to 15 seconds on either side of the times given above, i.e. any group may open at any time between 9:59.45 am and 10:00:15am.

During the pre-open phase (from 7am to 10am), the overlapping bids and offers which exist within the market are matched off against each other resulting in an official ‘auction’ price, which is the price at which the stock opens. What this means is that investors can enter orders online which are placed in a queue according to price-time priority and will not trade until the markets open.

Between 4:00pm and 4:10pm the market is placed in Pre Closing Single Price Auction, (aka ‘Pre-CSPA’). Trading stops and stockbrokers enter change and cancel orders in preparation for the market closing.

Knowing when the market opens is one thing, but knowing when the right time to buy stocks is another. In general terms, many investors in the share market are drawn to the possibility of long-term wealth building through capital growth and the ability to earn dividend income. However, there are others who are drawn to the possibility of quick, large profits through more speculative trading activities, such as:

  • buying ‘penny dreadful’ (cheap stocks with high leveraged aspects),
  • buying stocks on ‘hot tips’ or rumours, or
  • day trading or speculation (i.e. buying and selling within the same day, usually with large amounts of capital, locking in profits from relatively small price movements).

Australian shares are characterised by generally high liquidity and relatively high volatility, with prices affected by both domestic and overseas influences. With this in mind, there is no real ‘right’ time to buy into a stock. Unless of course, you own a crystal ball and can see the future!

Instead, investors should look to diversification within an investment portfolio. Ensuring portfolios are well diversified at all levels of a portfolio should help ensure investors reach their investment goals in the least volatile manner. Diversification is crucial in reducing the likelihood of underperforming stocks and decreasing risk and volatility.

Whether you’re looking for capital gain or consistent income through dividends, diversifying your portfolio across different stocks as well as sectors and industries is a prudent way of managing your share portfolio.

If you would like to find out more about the share market and advice on how to invest, speak with one of our financial planners today on 1300 726 082.




General Advice Warning: This advice may not be suitable to you because it contains general advice that has not been tailored to your personal circumstances. Please seek personal financial advice prior to acting on this information.


The birds, the bees . . . and the ATO!?

The Australian Taxation Office (ATO) is all about sharing, caring and true love . . . oh didn’t you know? Now more than ever, lodging your tax returns has become a family affair.  

Your relationship and family circumstance affects the calculation of the Medicare levy surcharge, private health insurance rebate and other government entitlements. Thus, reporting certain details about your spouse and dependents is now required. Below is some of the information that you may need to supply to the ATO as your relationship and family situation change.

What’s in a name?

First comes love, then comes marriage, then comes . . . well, for the traditional amongst us, the joyous task of updating your name with numerous organisations. Never fear my friends, the fun isn’t over, the ATO also needs to be updated before your next tax return is lodged.

The quickest way to update your name with the ATO is over the phone. In order to do this you will need to have handy either your Australian marriage certificate or Australian change of name certificate.If you would like assistance, you may provide a copy of your certificate to a member of The Hopkins Group accounting team who will be delighted to contact the ATO on your behalf.

Are you going steady?

If you had a spouse during the financial year, it is necessary to include in your tax return their name, date of birth, and dates for which they were your spouse if not the full year. You must also include your spouse’s taxable income, reportable fringe benefits, and child support your spouse paid (see the ATO website for full list).

So who actually qualifies as your spouse? The ATO defines your ‘spouse’ to include another person who you are in a relationship with that was registered under a state or territory law, or although not legally married to you, lived with you on a genuine domestic basis in a relationship as a couple.


Blessed with a brand new bundle of joy? It is required that the number of dependent children you have during the financial year be reported in your tax return. If a new addition has arrived since you lodged you last tax return, you need to inform your accountant by providing them with the baby’s name and date of birth. This information allows the ATO to calculate the correct private health rebate amount you are eligible to receive, calculate the correct Medicare levy surcharge if applicable, and assess your eligibility for other entitlements which may benefit your family.

The ATO defines a ‘dependent child’ as your child who is under 21 years old, or 21 to 24 years old and a full-time student regardless of their income. The child must be an Australian resident and you must have contributed to their maintenance.

Empty nesters

Equally important as adding the number of dependents to your return, it is also important that the number be reduced as children become adults and begin to support themselves. If your child has finished their education and become independent financially, it is important to let your accountant know this change has occurred so that the correct number of dependants continues to be reported.

If you would like to discuss any of the above information please don’t hesitate to contact one of our accountants at The Hopkins Group on 1300 726 082 or info@thehopkinsgroup.com.au

Reference: www.ato.gov.au

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