The $53,100 Question

Hello Scott,

I will be 65 next year and I am in good health. I have seen a financial advisor who advised me to transfer all my AustralianSuper money ($680,000) to Netwealth and to put it under my wife’s name so I can obtain a health card. We have cash and shares of $500,000 and no debts. Should I transfer at an entry fee of 4.5 per cent or stay with AustralianSuper? What is your opinion of Netwealth and the advice?

Bruce

G’day Bruce,

The strategy of sheltering your super in your wife’s name to reduce your assessable assets is a good idea. You can then qualify for a pension and a concession card, which can be worth up to $2,500 a year. (It gives you everything from free passes at your local tip to a cut on your rates bill and, of course, a range of concessions from the health system.) So in that sense it’s good advice.

However, you’re getting legged. If your advisor is charging you a 4.5 per cent entry fee, that works out to be $30,600, and if he can get his mitts on your other dough it’ll cost you $53,100. Bruce, just so you know, right now I’m leaning back in my chair, whistling, with one eyebrow cocked. Definitely do the strategy but stick with AustralianSuper. When your advisor follows up with you, give him a whistle for me.

Scott