If any of the following statements sound familiar, it might be time for a review:

• “I only hear from my advisor once a year.”
  
• “We mostly talk about my investment returns, not my broader goals.”
  
• “No one’s ever discussed or strategised what happens to my super when I pass away.”
  
• “I’ve never been advised to review my structure since retiring.”
  

If that’s you, you might not have a proactive advisor, rather you might have a portfolio manager.

There’s nothing wrong with investment management. It’s important, but it’s only one piece of the puzzle. True financial advice is about seeing the whole picture, and making adjustments as your life and your circumstances change.

Being proactive means looking beyond market movements or quarterly returns. It’s about anticipating opportunities and risks long before they appear - and making strategic decisions that protect your wealth and legacy.

A proactive advisor helps you:

• Anticipate tax consequences and structure your finances accordingly.
  
• Review and update estate and superannuation strategies regularly.
  
• Understand how your assets will be distributed and taxed after you pass.
  

It’s not just about the performance of your portfolio. It’s about the performance of your overall strategy.

Australia doesn’t have a formal inheritance tax, but there is one area where a “hidden inheritance tax” applies, and it’s through superannuation death benefits.

When someone passes away, their super fund may pay a death benefit to their beneficiaries. How that payment is taxed depends on several factors:

• Whether the recipient is a tax-dependent (like a spouse or a child under 18) or a non-tax-dependent (like an independent adult child).
  
• The composition of the super balance - how much is “tax-free” versus “taxable”.
  
• Whether it’s paid as a lump sum or income stream 

Here’s where it matters:
If your super is paid as a lump sum to an adult child, the taxable portion can be hit with a 15% tax plus 2% Medicare levy - a total of 17%.

That means a lifetime of careful saving and investing can be diminished by tens or even hundreds of thousands of dollars in tax simply because of how your super is structured when you die.

Most Australians are unaware of this rule because it’s not called an inheritance tax - but in practice, that’s what it is.

If your super is left to a non-dependent (like an adult child), part of it can be taxed at death. This applies even if your estate and tax affairs are otherwise simple. It’s often discovered too late - when families are finalising estates and realise a significant portion has been paid to the ATO.

Example

Imagine your super balance is $1 million - with $200,000 in the tax-free component and $800,000 in the taxable component.
If your adult child inherits this as a lump sum:

• The $200,000 tax-free portion passes to them intact.
  
• But the $800,000 taxable portion is reduced by 17% - or $136,000 in tax.
  Your child receives $864,000, not $1 million

That’s $136,000 gone - not because of market losses, but because of missed strategy.

This issue isn’t new - but the difference lies in whether your advisor has implemented strategies early enough to avoid it.

We regularly meet new clients in their 70s who say, “I’ve had a financial advisor for fifteen years.” But when we review their file, we find no estate planning strategies, no superannuation re-contribution plan, and no proactive tax minimisation - just investment performance reports.

By contrast, a truly proactive advisor will begin planning for this as soon as you enter pension phase, not years after retirement.

That’s because the structure of your super - and the mix between taxable and tax-free components - can be strategically adjusted through re-contribution strategies, careful withdrawal and recontribution, and binding death benefit nominations.

These approaches don’t change your retirement lifestyle. But they can make a world of difference to what your children or beneficiaries ultimately receive, and how your hard earned wealth remains, or erodes.

Here’s what to look for if you want to ensure you’re getting true, proactive advice:

1. They talk about more than investments.
   Your advisor should understand your lifestyle, values, and family goals.
   
2. They anticipate, not react.
   You shouldn’t have to raise issues. This is a partnership whereby their professional knowledge and understanding of you means they should be once step ahead and bring any potential concerns to you.
   
3. They explain the “why.”
   Every recommendation should be backed by education, not mystery.
   
4. They collaborate with other professionals.
   Accountants, estate planners, and mortgage brokers should all work together for your benefit.
   
5. They measure success by your peace of mind, not just your portfolio balance.
   

If your advisor isn’t doing these things, it might be time to reconsider who’s really guiding your financial future.

Many Australians are now discovering that their long-term advisors never implemented key retirement or estate strategies. And unfortunately, these are not the kind of issues that can always be fixed later.

The difference between a proactive and reactive advisor could be the difference between your children inheriting your life’s work - or losing 17% of it to tax.

If you’re unsure whether your current advisor has addressed this, or if you’ve recently entered pension phase and haven’t had a strategic review, now is the time to act.