3 days of all things Self Managed Super Fund (SMSF), what more can an accountant want? Especially when it started on Valentine’s Day!!
I had the pleasure of getting away from the Melbourne weather and the office, along with Mark Debeljak, to attend the annual SMSF Association Conference in Sydney. This yearly conference keeps us at the forefront of what is happening in the SMSF industry.
There was a lot of professional development with industry insights over the course of the 3 days but I will summarise my experience so you can see how I spent my Valentine’s Day.
Firstly, a little information on the SMSF Association. As Mark and myself both have a passion for SMSF and providing up to date, relevant expert advice in this space, we became members of the SMSF Association.
The association is an independent, professional body representing the SMSF sector. With over 1.1 million Australians now self-managing their super, the SMSF Association’s mandate is to raise the standard of education and lead the professionalism, integrity and sustainability of the SMSF sector.
We assist a number of clients with SMSF requirements from administration to investment strategies. Our clients establish SMSF for varying reasons including achieving a better return, taking control of their own super, lowering the costs and access a wider range of investment types. Recently we were given an increased level of advice in this space which will allow us to provide more specialist advice to our valued clients to achieve their goals.
The Conference
Since last year’s conference a lot has changed in the Superannuation sector that has made running an SMSF and providing specialist advice more complex. This made the content of this year’s conference very timely and relevant for our clients; giving us additional strategies for our clients around “accessing CGT relief”, “pensions”, “transfer balance caps” “super contributions”, “estate planning” and “asset diversification”, to name a few.
A worrying insight that came from the conference was that 42% of people with an SMSF have no retirement plan. A retirement plan can be a working document that is reviewed each year and updated when circumstances change. Many of our clients have a retirement plan which we assist them with and I’m certain they are now more comfortable having a plan. The retirement plan can be around pension strategies, estate planning or accumulating enough for retirement.
Transitional capital gains tax (CGT) relief is a temporary tax relief available to superannuation funds who adjust their asset allocations to comply with the transfer balance cap, and transition-to-retirement income stream (TRIS) reforms, that commenced on 1 July 2017. The conference discussed when to apply the relief, what assets can be applied and how to limit tax exposure. We have worked closely with our clients recently around this change and the results have been very beneficial.
The transfer balance cap applies from 1 July 2017. It is a new limit of $1.6 million in super balances that can be transferred into the retirement phase. The conference discussed what to do when in excess of the cap, strategies in reducing tax, if over, and when approaching the cap strategies to limit exposure as well as estate planning around the caps. Our clients look to us to get this balance right based on individual situations. We have worked hard with our clients and are very happy in the successful results for those who had to deal with this change in regulations.
TRIS’s are commonly used for people to access their super prior to retirement. The conference discussed the new rules in how Funds are now taxed on income, appropriate strategies going forward post the new rules and other methods of accessing super. These changes have effected our clients retirement plan and tax saving strategies. We are reviewing each scenario to develop new plans that will assist our clients to achieve their goals.
Concessional superannuation contributions are now $25,000 regardless of age. The conference discussed how this will effect 50-60 year old’s retirement strategies. Non concessional contributions have also been adjusted. The association mentioned this is an aspect they will lobby to change.
A very relevant session for me was purchasing property in SMSF and borrowing from the bank. We have a number of clients using their SMSF to do this so learning additional strategies and practical tips in dealing with different banks was worth while.
One of the highlights of the conference was a session with Robert Jeremenko the Division Head of Treasury, James O’Halloran the Superannuation Deputy Commissioner from the ATO and Peter Kell, Deputy Chair from the ASIC. The good news they gave was that no further changes to super rules where planned, however there would be tweaks to current laws to make them work better. All of the representatives had the opinion that industry was running well with a high level of compliance. The ATO commented that the level of non compliance was very low compared to the level of SMSF out there. The industry has $700 billion of assets invested so it has to be monitored; such as review of Australians living overseas doing something with their super. ASIC has in their sights inappropriate property spruiking as well as correct advice given when an SMSF is established. An interesting stat that was mentioned; 48% of new SMSF set up are done by people under the age of 50.
Another highlight of the conference was a presentation by Adam Spencer, a mathematician and former breakfast radio host. He was very funny and engaging. Although a lot of what he said went over my head (he talked prime numbers and the largest one found), relating playing chess and a story about Cameron Diaz to the accounting industry was clever.
The conference also showed us that engaging with clients digitally is the way forward. We saw this as an opportunity a few years ago and invested in technology which uses automation and online formats for easy client access and communication. It is always rewarding to know that you are a step ahead of the norm.
Reflecting on the conference, we both found it valuable and it has given us more tools to utilise with our clients and improving their situations. When we invest in training it pays dividends for our business and clients. We look forward to passing on the knowledge to our staff and clients. Can’t wait for next year’s conference, hopefully it’s not on Valentine’s Day.