All posts by Sean Richardson

Our story of community first focus



Community minded involvement is at the very essence of what Freshwater Financial Services stands for. The company, set up in 2003, offers much more than just residential and commercial property finance solutions.

Before getting to the mortgage side of finance, the team ensures that clients are mortgage ready and able to service the loan they are seeking.

“We are dealing with mums and dads who are acquiring the most expensive asset they will ever own.

“They are going to have children and their cash flow will be challenged so we look at how to structure their cash flow so they will get the best outcome. People sometimes don’t fully understand cash flow and budgeting and we help them work through the process.”


Clients are often referred through word of mouth and come to the business through the extensive community involvement of owners Sean Richardson and Denis Mulcahy.

Freshwater Financial Services supports various organisations and currently sponsors the Harbord Harlequins Rugby Club,  Curl Curl Youth Club Soccer, as well as the schools their children attend including St Augustine’s College in Brookvale and St John the Baptist, in Freshwater.

“When we set up the business we had young families and so we structured the business around the ability to attend school plays and events. We weren’t so fixated on business growth but our clients are the people we come into contact with and we understand their needs because we have lived through them too.

“We understand the challenges clients have in terms of the cost of living here,”

If they generate a profile from a sporting event they attend, Freshwater Financial donates $500 to the sporting organization involved to buy equipment they would have to raise funds to buy.

Sean has been in the area for almost 20 years and Denis for more than 12 years. Between them, they have over 20 years’ experience in the mortgage and finance industry.

The company has been accredited with the Mortgage & Finance Association of Australia since its inception and Sean is president of the Freshwater Chamber of Commerce.

Self Managed Super Funds (SMSF) How big does it need to be to work?

Andrew Baker compares the returns Vs the costs of SMSF funds of different size and questions whether it is cost effective if your super fund is less than $500,000.

Why SMSFs make no sense below $500K

Wednesday 29 January 2014Columnist: Andrew Baker

    Why SMSFs make no sense below $500K

    If smaller SMSF funds are ever to make sense, the data shows there is an urgent need for more cost-effective, better performing SMSF outcomes than those that currently prevail.
    Santa comes but once a year. So too does accurate SMSF data, in the form of the ATO annual statistics, released just before Christmas.

    SMSFs are a large and fragmented segment, with the only comprehensive – albeit still limited – data coming from SMSF tax returns. These take a long time to be filed, processed and analysed, hence why we are only seeing data from the June 2012 year in December 2013.

    What about all the other SMSF data you see during the year? A combination of estimates, projections, small survey samples, guesses and outright propaganda. Sometimes useful, often not, but never comprehensive.

    There is lots of interesting stuff in the annual data, but today we’re going to look at the vexed and much debated issue of scale – ie at what balance size do SMSFs become superior to collective funds? ASIC has also been driving at this issue recently in its consultation paper CP216, relating to advice and SMSFs.

    Needless to say, there is little agreement out there on the question. Rule of thumb estimates have often been around $250,000. Proponents suggest $100,000 or even lower; sceptics generally go for $500,000. What does the data say?

    There are a couple of useful tables which can be compared with collective funds:

    1. Average SMSF operating expenses by fund size – although not an exact match, it’s close enough to this with total costs of equivalent account sizes in collective funds.
    2. Average SMSF return on assets (ROA) by fund size – again, while not an exact match, we can compare this with average investment income (not reported investment returns) of collective funds.
    Let’s look first at costs, via average SMSF operating expenses versus large collective funds:

    SMSF fund size table

    This comparison is actually flattering to SMSFs given there are increasing numbers of SMSF-like products offered by collective funds with fixed dollar costs of around $250 per year. For a balance of $1 million, this would be a fee of 0.025% (2.5bps).

    Now, let’s look at returns, via average SMSF return on assets versus collective funds

    SMSF Funds
    A few things are clear – even from just a cursory glance:

    – SMSFs are astronomically expensive and inefficient for average funds of under $200,000. They cost triple or more the costs of a typical large collective fund, and underperform by more than 5% per annum. Even worse, the ATO data suggests that costs are rising for funds of less than $500,000.

    – The SMSF cost story is not remotely compelling until you get to average SMSF fund sizes of $1 million or more. Up to $1 million, it is line ball at best.
    – The SMSF returns story doesn’t appear compelling at any balance. As the above table demonstrates, the only material outperformance by SMSF occurred for SMSFs averaging $2 million or more in 2012. There is an argument that SMSFs should structurally underperform because more are in the pension phase, with higher exposures to cash deposits, but that doesn’t explain all of the differentials above.

    Averages conceal many things of course. There are SMSFs which are much lower cost and higher performing than average, and equally there are costly and poor performing collective funds.

    But the data above is comprehensive, so it’s hard to argue with. And it shows that the story for SMSFs below $500,000 – well, there really is no story right now. For the average SMSF below $500,000, the current reality is much higher costs and lower returns than members would have obtained in many readily available collective funds.

    The irony is that the picture was exactly the same when the Super System Review looked at SMSF statistics in 2009. The tragedy is that those statistics were ignored.

    For the industry, the message is also clear. It wants to engage with the SMSF segment as a source of growth in a landscape where organic growth is getting harder to come by. Fair enough. And it should – the data shows there is an urgent need for more cost-effective, better performing SMSF outcomes than those that too often currently prevail, especially if smaller SMSF funds are ever to make sense.

    Andrew Baker is managing partner at Tria Investment Partners

    Fixed home loan rates on the rise

    If you have been thinking of fixing your home loan interest rate, you may or may not have noticed the fixed rates have started to increase slightly over the past week. Please remember to give us a call before you do – there are important implications to consider and they are not suitable for everyone. Call Sean, Denis or Kylie on 02 99074624 or email

    Fixed home loan rates on the rise

    Super fund returns power back


    For many of us, access to Superannuation is many years away so taking the opportunity to review your risk profile with your financial planner is now more appropriate than ever.

    Current & future governments are going to be placing more importance on us as individuals being self- supported during our twilight years so the time to act is now.

    By now you should have received your annual report from your Superannuation provider, look at and consider how you’re placed for the future. Make calls and be proactive!

    Super fund returns power back

    Is Bondi more expensive than Paris?

    The second weekend in spring 2012 saw the release of the Pacific Swiss Grand apartments at Sydney’s iconic Bondi Beach and with overseas interest they sold like hot cakes. A one bedroom 70 square metre unit, sold for $1,900,000 or $27,000 per m2. This is a sharp increase on $10,000 per m2 the price-bracket where beach front apartments previously sold. Everything but the penthouse was snapped up. Agents were confident that ongoing negotiations would finalise a sale for the penthouse at $15,000,000 or $50,000 per m2. 
    Has Bondi moved into the ranks of the uber luxury apartment pricing? The most expensive prime luxury apartments are found in Monaco with prices at $58,300 per m2. London is cheap by comparison at $48,900 per m2; Paris $27,000 per m2 and Manhattan, depending on the share market on the day would set up back $23,000 per m2.
    For more interesting property market articles have a look at the Buying Houses Australia blog.