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Have you heard about the legislative changes to how accountants can provide advice to you regarding your superannuation? In the past, we have been able to provide certain information regarding superannuation under an accountants’ exemption.  From 1 July 2016, this exemption will be removed and will mean changes to the way we can provide advice to you and your Self-Managed Super Fund (SMSF).

The legislation was introduced in response to a number of failures in the wealth management sector (remember Storm, Opes Prime and Westpoint?) and attempts to protect investors by ensuring Australians have availability, accessibility and affordability to high quality financial advice.

So, what has this got to do with you and your SMSF? 

Superannuation (including SMSF’s) is considered to be a financial product.  Anyone advising on a financial product needs to be licensed.  This means that from 1 July 2016 any advice provided by accountants in relation to superannuation must meet the rules of providing financial advice. This includes assisting you to determine contributions, facilitating a pension or lump sum withdrawal, or even winding up your SMSF.

In practical terms, this means that the person providing the advice must be licenced and they must provide you with a Statement of Advice (SOA). A SOA is a formal advice document which must include a snapshot of your current position and the reasoning behind the recommendation made. 

Without a licence the information that can be provided is very limited and a conversation after 1 July would have to go a bit like this……..

SMSF Trustee:   “How much should I put into my SMSF before the end of the year?

Accountant:       “I’m not licensed to provide you with that type of advice. But I can tell you that someone your age is able to contribute up to $35,000 as a concessional contribution.”

SMSF Trustee:   “I think I’ve already put in about $10,000 this year. Should I put in another $25,000?”

Accountant:       “Unfortunately, I’m not licensed to provide that advice. However, I can tell you that the tax on the $25,000 contribution would be $3,750 should you decide to do this.”

Helpful? We don’t think so either!

So what is the solution? We believe in providing holistic advice to our clients and don’t feel that there is much value in telling you about contributions limits and tax rates when you can Google these yourself.  In order to maintain our ability to provide the advice you need and deserve, we have become licensed and will continue to provide that advice to you under our new licence. This licence is held by Bentleys (QLD) Super Pty Ltd (AFSL 476816).

The Future of Financial Advice (FOFA) legislation requires that superannuation advice supplied to you in the future is supported by more extensive internal documentation and that you are provided with a Statement of Advice. We expect that the extra time now required on our part will result in an increase in cost but we are doing everything we can to streamline our processes ready for 1 July to keep the cost as low as possible.

We will have more information on this in the coming months, but if you wish to discuss your situation with us please don’t hesitate to give us a call.

p.s. The Australian Financial Review also recently published an article on this very topic. To read what they have to say about it, please click here.

General Advice

The information provided by Bentleys (Sunshine Coast) Pty Ltd does not constitute financial product advice and is for general information only. It is written without taking into account any individuals personal objectives, situation or needs, and is not intended as professional advice. Any person acting upon such information without receiving specific advice, does so entirely at their own risk. Please contact your Accountant to discuss your personal situation before relying on this information.