Tony Gilham has been working with super for many decades and has seen it evolve from a niche concern in the 1970s into a hot bed political package that pollies love to tinker with.
In fact, Gilham calls the way super has become a political bun fight disappointing.
“Treasurer Scott Morrison had previously said in February that there would be no changes to the retirement sector, but the government is in debt and they’re looking for ways to get some money back,” Gilham says. “Retirees have been encouraged previously by generous allowances and sure, maybe they were too generous, but to turn around now and say to someone who has built up their super to $2 million that we want more money from you? It’s a bit disappointing.”
Over the years, he has become increasingly loyal to the idea of self-managed superannuation, with 93.4 per cent, to be exact, of his business income now coming from his company’s SMSF portfolio.
“It is the most transparent method,” Gilham says. “When you are dealing with a large institution it’s much harder for clients to see their investment; they just get a report that their fund secured a 7 per cent return.
“With the SMSF, the client can see what is doing well, and what isn’t. They see every investment they own and in that way it suits clients who like to take a very active role in their investments.
“For instance, we have very little exposure to Telstra right now and that is something clients are happy to see, as Telstra hasn’t really grown in 10 years.”
Gilham’s specialisation in SMSF has certainly paid off. He employs 26 staff, including six planners, and has more than 500 SMSFs in place and funds under management of $700 million.
“We set up our first SMSF just over 21 years ago,” Gilham says. “ASIC has questioned whether it’s worth starting a SMSF for people with less than $200,000 in super, and we would agree. There are fixed costs and a tax return and audit can cost $2000, which isn’t worth it for those with smaller balances.
“So our clients tend to have super balances that start at $250,000 and go up from there.”
Gilham also takes great pride in becoming self-licensed. In 2003, GFM applied for its own Australian Financial Services licence to ensure the company wasn’t aligned to any financial institution, bank or fund manager.
“I just didn’t want the influence of a huge financial institution and we were finding our previous licence requirements to be quite onerous,” he says.
These days, he is trying to ease into retirement by gradually cutting back his hours, but he still loves working with clients.
“You know, it’s nice to see clients that have done OK for themselves and those who have followed our recommendations,” he says. “We have lots of clients who have been with us for 30 years and some who have been with us for 40.
“We also have lots that have $2 million in super and they are receiving $100,000 a year and they don’t even need that much.
“But it means they’re comfortable. If they want to take a holiday they can. If they want to upgrade their car, they can.”
Name: Gilham Financial Management Pty Ltd
Academic qualifications: Diploma of finance; Diploma AII; Certificate of Superannuation Management (Macquarie University); SMSF Association Specialist Adviser