La Trobe’s stop order a wake-up call for retirees chasing higher yields

La Trobe Financial Services was in the headlines lately after the ASIC issued a stop order preventing the La Trobe Australian Credit Fund from accepting new money into its 12-month and two-year term account products.

These funds represent the bulk of La Trobe’s inflows, and there has been speculation about where all this might end up.

I have no money invested in La Trobe and no inside knowledge of its financial position.

However, this does provide an opportunity to reflect on some of the basics of investing.

The first principle is simple: the higher the return, the higher the risk.

Second, beware any heavily advertised investment.

From my experience, this is the biggest red flag of all—and La Trobe was a master of it. I’ve long believed the bigger the advertisement, the bigger the risk. Estate Mortgage, Cambridge Credit, and, more recently, Mayfair are three names that spring to mind.

But the fundamental question is, what is the role of interest-bearing products in your portfolio, that is, what is the role of cash?

In my view, the sole purpose of cash is to give you certainty about having funds available for a specific purpose in the next two or three years. This could be living expenses, renovations, travel, or helping the kids.

For longer-term income, there are companies such as FIIG Securities that invest in fixed-interest assets such as government bonds and corporate debentures. They are currently providing yields of around 6% to 6.5%. But they’ve never been my thing because there is no franking, and capital gain depends on what markets are doing.

Non-residential property can provide a steady income and good capital growth, but it is way outside the resources of most Mum-and-Dad investors.

A good alternative is property syndicates run by well-regarded fund managers who buy quality non-residential properties and let you have a slice of the action.

By making the right choices, you can make your money grow. Image Credit: Shutterstock

I’ve long been a fan of these; I have about 15% of my superannuation fund in this area, with a limit of $100,000 per property. The syndicates are currently yielding around 8% with potential for capital gain. The downsides are standard for property: no liquidity—you can’t redeem until the property is sold—and no franking, but they do provide a dependable running yield.

Which brings us back to my favourite investment: shares.

I know they scare many people, as headlines are constantly predicting the next crash, and even those inclined to invest in shares often don’t know where to start.

The good news is you don’t need to try to pick winners.

You can simply buy an Exchange Traded Fund (ETF) like STW or VAS, which mirrors the top 200 or 300 companies on the ASX. They are paying a running yield of about 3.4% at the moment, equivalent to 4.86% when franking credits are included. Because they are an ETF, they are traded on the stock exchange, which means you've got instant liquidity.

Their track record is good. The return from the All-Ordinaries Accumulation Index, which includes income and growth, was 7% for the nine months ended 30 September 2025 and 9.72% per annum for the five years ended 30 September 2025.

Just remember that every investment has advantages and disadvantages.

Shares are by far the best investment for liquidity, franking credits, and potential for capital growth. And history shows that in every 10-year period, you can expect four negative years and six positive ones.

The key is to focus on your long-term goals and not let day-to-day headlines distract you.

Noel Whittaker, AM, is the author of Wills, death & taxes made simple and numerous other books on personal finance. An international bestselling author, finance and investment expert, radio broadcaster, newspaper columnist and public speaker, Noel Whittaker is one of the world’s foremost authorities on personal finance. Connect via Twitter or email ([email protected]). You can shop his personal finance books here.