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Information You won’t get from Unlicensed Accountants #14

Along with this raft of legislative change, the Australian Securities and Investments Commission (ASIC) has also introduced new licensing requirements for accountants who work with and advise Self Managed Superannuation Fund (SMSF) Trustees. Only approx. 10% of accountants have complied with these changes to date.

As such if you, as many, consider your accountant would be your 1st port of call for Financial Advice, they will likely advise you, they are unable to provide the information you require & should consult a qualified Financial Adviser / Planner.

This is general advice only and you should seek expert financial advice from a qualified financial adviser before acting on any of the information covered in these topics.

Why the Chartered Accountants Australia & New Zealand (CA) and Certified Practicing Accountants (CPA) recommend against a return to the Accountants Exemption.

Both of the CPA and CA have noted the significant limitations of the old ‘accountants exemption’ especially given the events of the Royal Commission, and the increasing complexity of the financial advice environment. Both the ATO and ASIC have ramped up their efforts to ensure financial advice is being delivered in a compliant and ethical manner. So a return to something like the ‘accountants exemption’ would seem to be at odds, with the stringent new educational, ethical and compliance requirements being introduced over coming years.

When you look at the statistics around SMSFs, this would seem to be for good reason, especially where SMSF trustees have not been given the opportunity to obtain expert advice around the operation of their SMSF.

  • The take up of transition to retirement pensions was and continues to be poor.
  • Asset allocation for SMSF in general is ordinary and lacking in diversification.
  • Only around 1 in 10 Small Businesses take advantage of the generous small business CGT rollover concessions.
  • Limited take up of spouse split concessional contributions.
  • Limited use of spouse contributions.

As such, you would expect the implementation of the following strategies will also be poor for non advised SMSF trustees.

  • Super balance equalisation strategies between spouses given the new $1.6 million transfer balance cap.
  • Downsizer contributions.
  • 5 year ‘carry forward’ aggregation of concessional contributions.

SMSF trustees that don’t get the opportunity to obtain expert advice around the operation of their SMSF are unlikely to get an optimal outcome with potentially higher taxes and lower returns eroding the retirement nest egg.

As Mark Twain said, ”The secret of getting ahead, is getting started”.

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