A crucial part of investing is getting your investment strategy integrated across:
1. Strategic Asset Allocation: What to invest in — Aus shares, Global shares, Property, Private assets (Infrastructure, PE, VC, etc.) and defensive assets.
2. Structuring & Tax: Where it hold your investments — SMSF, Family trust, Investment Company or Personal title, and optimising for Australia’s unique tax system (dividend imputation, SMSFs, negative gearing and much more are unique to Australia).
3. Leverage and Risk Management: Risk-in by borrowing to invest and Risk-out with insurance and hedging.
4. Implementation: The right products (ETFs vs Managed funds vs discount brokerage vs full-service brokerage, for instance) and the right advisors.
A classic example of getting integration wrong is to hold an apartment (what to hold) in personal title (where to hold it) with low leverage. The high-yielding, low-leverage apartment throws off a lot of cash, but it is not held in a family trust where the cash can be properly distributed across family members and across time. There are many, many other examples.
Getting integration of your strategy right is difficult because advisors don’t talk to each other. Your accountant almost never talks to your broker or financial advisor.
But, integration of the parts of investment strategy makes a huge difference to long-term returns. You have do it yourself. That means you need to learn to do it yourself.
Copyright Sam Wylie May 2025