Is your industry super so super?

On behalf of Ann* who we placed in an  industry fund some years ago we needed to provide her with current balances & cover & to update her details including a binding nomination. It is a piece in her financial gigsaw.

It now appears an adviser can’t find such details for his client  online as we can for all our other clients with many institutions. So we rang to ask for them. Now we could have been the client & if so what would Ann as the client thought after listening to a recycled message for 17 Minutes on how good the fund before it was answered.

Yes as you do, that is ridiculous. 

Is this service? 

What will they be like when you really need service & advice?

Lets recall Ann has come to us for advice for 10 years. We have converted over time her entire mortgage into a taxx deduction & Ann hasn’t used a rental property.

She just wants & needs strategic advice from someone who knows her position very well & she trusts so she achieves her ‘5 year plan’.

She doesn’t get her medical advice via a phone from the GP as another fund in a letter to its clients‘’a fee of $295 may be charged, and deducted from your Super* account with your approval," for advice’  is offering. What is that hourly Rate??

In the same letter to members, Super* also announced changes to the definition of total and permanent disability (TPD) in its group insurance policy.

The new definitions appear to make it more difficult to claim TPD. Where previously professionals would qualify if they could demonstrate they were unable to continue working in their own profession, in the new definition you must be "incapable of even engaging in any occupation for which you are, or may become, reasonably suited by education, training or experience." 

It also changed the threshold of 'unemployed' from 12 months of no work, to six months.

We understand that this particular fund has 1 adviser for 155,000 customers.

 Isn’t that reassuring for you?

Then we had Glen* who decided three years ago to find saner pastures abroad. He wrote ‘For the SCI I think that it would not be honoured if I needed to claim it as official tax records show only a very small salary, with the rest in loan repayments, loans, Director fees, dividends etc - so group certificate equivalent for companies in HK, Taiwan and Samoa would show a very low combined income.  Will take your advice though.

What is the max death benefit I could go with, without having to go for medicals etc. in Aus?

We discover the downsides to his group cover  as advice means please do the research for me & that can’t be googled.

Dear John 

Thank you for contacting Adviser Services* with your enquiry. 

The client is covered abroad. However if the client lives overseas for a continuous period of 3 years, the cover will end and he will not be able to make claim.

  Please refer to the Insurance PDS, on page 7.

 

Also, if the client is applying for additional cover, they will need to apply for this within Australia not overseas

 Glen just doesn’t have cover when he needs & wants it. He has a mortgage & family & yes we would recommend a serious sum of cover but will he be healthy enough to obtain it?  

Yes hidden in the fine print is what you need to know.

Group policies although cheaper & not out of your cashflow  have a price to pay & downsides & you may be affected.

And this in an article on the costs of your group insurance

‘The inclusion of lawyers in the process increases costs for the trustee and also reduces the benefits paid to members due to the legal fees being deducted,” said the report.

“Anecdotal evidence suggests these fees can be as high as 40 per cent of the insured benefit.”

Jayne had here birthday today & she did mention to us that she was considering increasing her cover. As Jane was born in 1929 then No chance of life cover.

Dominic who also has individual cover through us had been approached to obtain group cover via his employer. He did apply & was declined under his group cover. Fortunately he kept our cover whilst he was elsewhere applying.

Today we have another call from Melbourne who has some group cover with his employer. We note during underwriting he had mental questionnaires to complete. He is now covered for that but we wonder what exceptions are on the group cover. He also has individual life cover to Age 100 which certainly is Not on his group cover. 

Will it have an inflation hedge if he is disabled for some years?

Will it pay a claim maybe up to age 65?

Why is it that when a rental property is purchased then an income protection plan which could pay out millions must be dropped. Remember a rental property by definition is negatively geared & has negative cashflow which must come from his income and from his spouse’s lifestyle. We watch with interest from afar.

Nothing changes & yes you do get what you pay for. Frequently when you want protection later you are unable to obtain it or you pay a loading maybe 100% for it.

Also today another investment fund manager explained that they offered protection for your investment funds in the event of a market correction. The market is due for a correction sometime & wouldn’t it be great that your funds have protection from market downturns? 

Another fund manager this afternoon has funds globally for India, China & many other countries that your industry fund does not have. Just suppose for the moment that those countries do better than the lucky country for the next decade. Where will make your retirement the most money?

If you would like the opportunity at our expense for lunch here for an initial meeting then as  others do you are welcome to call us on 07 3848 1088 or email us or visit our websites.

‘we believe that we can generate significant financial certainty for you throughout our relationship & importantly add substantial value to ensuring you achieve all that is important & valuable to you as you have articulated to us.’

If we were to sit down in three years time & looked back what do we need to do today so that you are financially & personally better off & happier.

John McAuliffe