Craig Brooke

Craig Brooke, CEO of KeyInvest, an APRA-regulated, member-owned mutual and specialist provider of tax-effective investment bond solutions, has made the following comment in response to the 2026-27 Federal Budget.

“The Budget is one of the most significant for wealth structuring in a generation. Taken together, the confirmation of Division 296, the overhaul of the CGT discount, and the introduction of a minimum 30 per cent tax on discretionary trusts fundamentally reshape the landscape for high-net-worth clients and the advisers who serve them.

“Division 296 proceeds as legislated from 1 July 2026, with no threshold adjustments and no relief. With thresholds remaining CPI-indexed rather than linked to asset price growth, the cohort of affected clients will only grow over time. What looks targeted today becomes a structural consideration for a much broader group of Australians over the next decade.

“The replacement of the 50 per cent CGT discount with inflation-linked indexation, and a 30 per cent minimum tax on gains from 1 July 2027 further narrows the attractiveness of directly held investments as an alternative to superannuation.

“For investment bonds, where there are no CGT events on internal switching or rebalancing, this is a meaningful structural advantage that advisers should be modelling for clients now.

“Perhaps the most significant measure for advice practices is the introduction of a 30 per cent minimum tax on discretionary trusts from 1 July 2028.

“For decades, trusts have been one of the most commonly used structures for high-net-worth clients managing wealth outside superannuation. That advantage is now materially diminished. As a friendly society, KeyInvest’s investment bond structure sits entirely outside this measure, earnings are taxed internally at a maximum of 30 per cent, withdrawals are tax-free after ten years, and there is no annual personal tax reporting required. Tonight’s Budget makes that proposition more compelling than ever.

“The task is no longer about understanding these changes, it is about acting on them. Advisers who engage early and position clients across a genuinely diversified set of structures will be best placed to navigate what comes next.”

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Craig Brooke

KeyInvest, a member-owned mutual society, has released a new whitepaper on Division 296, putting a spotlight on how adviser thinking is shifting from understanding the policy to managing its long-term impact, with modelling showing a $5 million super balance could generate more than $200,000 in additional tax over a decade.

The paper, ‘Division 296 and the end of unconstrained super’, unpacks the legislated changes and what they mean in practice, particularly for clients approaching or exceeding key balance thresholds.

KeyInvest CEO, Craig Brooke says, “The conversation has moved beyond the detail of the policy itself, and towards how advisers are responding. Most advisers now understand how Division 296 works, but the challenge is what do they do about it.”

The whitepaper points to a growing need for earlier planning, as balances trend higher and more clients move towards the $3 million threshold.

“What we’re seeing is a shift in timing, rather than waiting until a client breaches the threshold. Advisers are starting to plan for it well in advance, which changes the structure of advice.”

A key theme in the paper is the increasing importance of asset location, as marginal tax outcomes within superannuation become less consistent at higher balance levels.

“Super remains central, but it’s no longer the default destination for all long-term capital, and this is what’s leading to a more deliberate decision about what sits inside and outside of superannuation.”

The analysis also displays how the tax efficiency of superannuation narrows at higher balances, particularly once the additional tax layers apply. Over time, this is expected to influence greater interest in complementary structures that can sit alongside superannuation.

Investment bonds are increasingly part of that conversation as clients shift their priorities to intergenerational planning and tax certainty.

The whitepaper forms part of KeyInvest’s ongoing work with advisers, providing practical guidance as the impact of Division 296 becomes a more active consideration in client strategies.

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Their appointments follow the recent addition of Ciaran McAssey, formerly Head of Sales – Asia (ex-Japan), Australia and New Zealand at BlueBay Asset Management, and forms part of a broader investment in national distribution coverage, adviser engagement, and client outcomes.

Craig Brooke, KeyInvest CEO said, “Jason, Jarrad, and Ciaran each bring depth, credibility and a clear understanding of what advisers are seeking and need.”

“As more Australians seek alternatives to traditional investment structures, we’re ensuring our partners have the support and expertise to meet that demand with confidence.”

Jason Goodacre, based in Sydney brings more than 35 years’ experience across roles with BT Financial, Thomson Reuters, IRESS, and MidWinter. He will focus on strengthening KeyInvest’s presence along the East Coast.

Jarrad Gray, based in Adelaide joins with over 25 years’ experience in financial services, having held positions in large institutions such as ANZ & CBA’s Wealth Management business. Alongside this, Jarrad understands Investment Bonds, having spent time at Australian Unity, and maintains a strong adviser network.

With the introduction of Division 296 tax reforms targeting large superannuation balances, advisers and clients are rethinking how they grow and preserve wealth over the long-term. Investment bonds are attracting renewed attention for their tax-paid structure, estate planning benefits, and accessibility across generations.

At the same time, wholesale investors are increasingly seeking alternatives to listed markets – driving greater interest in the evolving private credit sector.

Brooke added, “We’re seeing stronger demand from advisers and family offices in investment solutions that prioritise flexibility, capital preservation, and income certainty. It’s a shift that’s reshaping how wealth is managed across Australia.”

The expansion of KeyInvest’s distribution team aligns with the firms broader transformation efforts, including the rollout of a new adviser portal, enhancements to client servicing, and a continued focus on delivering results through disciplined investment management.

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Craig Brooke

The intergenerational wealth transfer currently underway will have a significant impact on estate planning, says Craig Brooke, CEO of KeyInvest, an independent member-owned mutual friendly society.

He notes the Productivity Commission has estimated $3.5 trillion will change hands by 2050, with 70 per cent of the combined wealth of baby boomers expected to be passed on as inheritances.

“The numbers are enormous – but so are the potential problems this intergenerational wealth transfer could create.

“The simple fact is that estate planning is not straightforward. Families are complex, with 25 per cent of marriages involving at least one person who has been married previously. The divorce rate is estimated at 44 per cent, with the median duration of marriage at divorce being 13 years and the median age at divorce being 45 years.

“To further complicate matters the number of divorces for those aged over 50 – are increasing.”

Brooke says this departure from the nuclear family concept is partly reflected in the growing number of estate disputes, with more than half of all wills being contested.

“Data from the law firm Solomon Hollett shows that 74 per cent of estate challenges succeed to some degree. When breaking down that figure, the success rate is 83 per cent when its claimed by partners and ex-partners, 76 per cent when it’s claimed by children and 73 per cent when it’s the extended family.

“Further figures that highlight the conflict that estate planning causes is that 100 per cent of challenged estates over $3 million succeed to some degree, a figure that drops to an estimated 88 per cent when estates are valued between $1 million and $3 million, and a 60 per cent success rate for estates valued at less than $600,000.”

Brooke says in this complex environment there is a growing focus on estate planning, other factors contributing to the uncertainty being:

• The proposed tax on the earnings of superannuation balances exceeding $3 million is expected to impact 80,000, with that number expected to grow significantly.
• Baby boomers wishing to financially support education costs and help younger generations gain a foothold in the property market.
• Growing philanthropy, supported by increasing donations and the integration of estate planning into charitable activities.

Brooke says investment bonds are an ideal vehicle for resolving estate issues.

“In most cases, they bypass the estate and are protected from will and estate disputes. In addition, there are no restrictions on the number of beneficiaries, or the type of relationship, individuals, trusts, companies or charities can be nominated and there is no requirement for probate.

“Additionally, it’s important to remember that it’s tax-free on death, whether it goes to an estate or directly to beneficiaries, regardless of the relationship connection.”

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