Super advice: the difference of direct ownership

In times past, superannuation was something that happened to Australian workers rather than something they actively controlled. Outside the home, for most of us, it is our largest financial asset left under the control of large corporations. This is changing, and over the last few decades, the industry has seen shifts in customer demands and in their level of financial education. Most superfunds, whether industry or retail, are now being held accountable for their decisions. If you value transparency, clarity, and genuine strategy, it may be time to reconsider how your super is managed and who manages it.

There is a significant difference between receiving personalised advice built around a direct ownership portfolio model and being one of thousands (or millions) of members in an industry or retail super fund.

Industry and retail super funds serve an important purpose. They provide diversified, professionally managed portfolios designed to suit broad investor categories, including conservative, balanced, and growth. However, these investment options are designed for the average member. They typically involve:

• Pooled investment structures
• Unitised pricing
• Limited visibility into underlying holdings
• Restricted ability to tailor specific investments

Even when you seek advice through an industry or retail fund, the scope of advice is often limited to switching between pre-set options. You are rarely receiving advice on the individual shares, bonds or exchange-traded funds (ETFs) that make up your portfolio. because you don’t directly own them.

For Australians who want greater involvement, clearer reporting and true customisation, this can feel restrictive.

There is an alternative: many Australians are turning to a direct-ownership portfolio model. So, what is it?

Instead of investing through pooled fund structures, your superannuation directly holds the underlying investments, such as:

• Individual ASX-listed shares
• Exchange traded funds (ETFs)
• Listed investment companies
• Fixed income securities
• Cash

You can see exactly what you own. Importantly, your portfolio is constructed around your goals, risk tolerance, tax position and time horizon.

Super is not only about choosing “balanced” or “high growth”, and strategic advice will make a difference to your retirement plans. Holistic retirement strategies must consider:

• Your stage of life
• Your retirement timeline
• Your income needs in retirement
• Your tax position
• Your estate planning objectives
• Your broader wealth outside super

For example, a 45-year-old business owner with volatile income may need a different structure than a 58-year-old employee planning to retire in five years. Yet both might be placed in the same “growth” option within an industry fund.

A financial adviser using a direct ownership model can:

• Tilt your portfolio towards income or growth
• Manage capital gains tax strategically
• Adjust sector exposure deliberately
• Remove underperforming holdings
• Respond quickly to market changes

It becomes a living, evolving strategy, rather than a static product.

A significant source of frustration for investors is not knowing exactly where their money is invested.

With pooled funds, reporting is often high-level. You may see asset allocation percentages but not the individual securities. You may see performance numbers, but not the drivers behind them. When seeking advice within an industry or retail super fund, you are typically working within their product framework. This can create limitations, and the advice you receive may focus only on switching between fund options or be restricted to in-house products. There is little scope to personalise individual holdings.

While this model works well for many Australians, it may not suit those who want greater involvement and oversight.

If you are engaged with your finances, run a business, manage family wealth or simply want to understand what you own, a more tailored structure may better align with your expectations. Direct ownership provides greater clarity. You see every holding, you understand the rationale, receive transparent reporting and can have informed conversations about performance.

Greater control does not mean managing everything yourself. A professional adviser employing a direct ownership model provides:

• Structured portfolio construction
• Ongoing monitoring
• Rebalancing discipline
• Risk management
• Strategic reviews

The difference is that decisions are made specifically for you, not for a large pool of anonymous members. Keep in mind that direct ownership portfolios are not for everyone. They tend to suit individuals with larger super balances who value involvement and strategic input and prefer customised solutions. Whatever your preference, your superannuation should not be left on autopilot.

The decision comes down to philosophy. A direct ownership portfolio model offers Australians the opportunity to take greater control of their super while still benefiting from professional expertise.

Our goal is to help you focus on long-term growth and wealth preservation.
Cayle Petritsch, Director and Wealth Advisor, is a leading financial advisor on Sydney’s North Shore.

He has helped many Australians maximise their financial positions and leverage opportunities, leading to sustained, profitable wealth accumulation.

Contact Cayle today.