One on one with…Adam Goldstien

Adam Goldstein

Skeggs Goldstien director Adam Goldstien is a true early adopter of providing advice in the SMSF space, having been a founding member of the SMSF Association. He talks to Darin Tyson-Chan about his desire to have accountants and financial planners combine their skills when providing advice and for the industry to improve the current minimum education standards.

How did your SMSF involvement come about?

I entered financial planning in 1989 and a few years later, in 1992, I started working with my mentor Neil Skeggs. At that time he had a lot of clients that were radiologists and he was losing business to SMSFs. So we decided to get involved in the SMSF sector early in the piece and in about 1998 we undertook some of Grant Abbott’s courses, like a lot of people did at the time. So we spent lots of money and lots of time getting really involved and immersing ourselves in self-managed super funds, not because we were losing clients, but because it was obvious that was where clients with lots of money were gravitating towards and we just wanted to be part of it.

Something more came out of those beginnings didn’t it?

Out of that environment SPAA (SMSF Professionals’ Association of Australia) was formed by a group of people. So I got involved in the very early stages and was one of the founding members of SPAA and have continued to be on the committee since. I’ll probably see out another 18 months and then pass the baton onto someone else.

And how has your involvement with the professional body developed from there?

When I first started I was the deputy chair for the Sydney chapter, which was the first chapter to be established. Since then I was asked to move into the role of chair and I now sit on the SMSF Association membership committee as well, which is one of the national committees. So I have involvement at a national level as well, which I’ve really enjoyed and if anything I think I’ll be stepping away more from the chapter-level activities.

What do you think the impact of SPAA’s rebranding as the SMSF Association will be?

SPAA always had feedback from its members there is not enough awareness in the marketplace of who the body is and what it does. For example, CPA is a very well-known brand, but they’ve spent a lot of money establishing it. SPAA didn’t have those types of funds, so the first part of the awareness campaign was to change the name because it was needed. SPAA didn’t mean anything to anyone unless you were working inside the industry. People outside the industry thought it was a pool company. So the first thing to do was to change that perception. The SMSF Association wasn’t taken as a domain name, which is quite amazing, and the more it gets used and found, it will rank highly in search engines. That will in turn lift the organisation’s profile.

Were there any particular signs that drove you to think the sector will be significant in the future?

There’s nothing I can say that was glaringly obvious other than the fact that I really enjoyed what I was learning and listening to. I’d been in the industry for 10 or 11 years by then and I’d got to the stage where I wasn’t necessarily bored with what I was doing, but was looking for an area where I could add more value to people’s lives and give them more control over their financial situation, and I saw the SMSF sector as the only way to do that. The biggest thing for the practice was, because we are located north of Sydney in a business park, the majority of our clients are small business owners. These people are very control oriented and we just didn’t get engagement with our clients in the other segments of the superannuation industry, so if we wanted to maintain that client base, SMSFs were the perfect vehicles to do so.

Was your involvement from a financial planning perspective?

Yes, my background and qualifications are financial planning oriented, but my firm incorporates accounting and did that by choice. We’d been looking for an accounting practice to work closely with for a long time and six years ago we found one. It was a practice in Chatswood [in Sydney] we acquired and one of my business partners is a qualified accountant, so he runs our accounting practice.

And how has the integration between the two different activities been?

The two businesses have such great synergies it’s amazing. One of my goals or objectives of our business is to build what we call ‘orange advisers’. When we bought the accounting practice we had what we categorised as a red business and a yellow business and we want to combine those two to make an orange business. Orange is just about the combination of those two professions together and more importantly the combination of the advice space together. I see a lot of businesses that have accounting and financial planning services, but they operate as separate silos within the same business and it doesn’t make sense to me. So I think the last part of this process is to actually combine the skills of both professions into an adviser – so advisers that are both financial planning and accounting qualified that can leverage off both skills. I must admit I’m a person who didn’t have much of an appreciation for accountants in the past, but having worked with them closely now I got a significant appreciation for what they do. Hopefully accountants feel the same about financial planners.

What services do you offer  your clients?

We’re pretty holistic. The only thing we don’t offer is legal advice. What we do offer is all of the accounting services such as tax, accounting and business advisory, as well as financial planning. We also have a large corporate super business in addition to the SMSF business. We provide administration services for SMSFs, but we don’t perform any auditing of funds. So what we do with our business clients is start looking at the situation of the owners instead of examining the business itself. That means covering off what the owners’ objectives are and how the business fits in with that. We feel it’s all about the owners because the business is just a means to what they want to achieve. It allows us to identify what the business will provide them and move onto other structures that will be of use as well. If the clients need advice on specific areas like property investment or legal matters, we bring in other experts to satisfy that demand.

Is there anything concerning you about financial services right now?

My biggest concern is that the public is losing faith with the advice industry – not specifically with financial planners or accountants, but with the industry as a whole. It doesn’t seem to matter if you say you’re independent or aligned or vertically integrated or if you’re a CPA because they put you all in the same bucket as advisers. So unless we can get the advice profession to come together at the same stage, we’re all going to be disadvantaged by that. Of all the associations I can’t see any other being as proactive as the SMSF Association because its membership crosses four or five professions.

What’s the most significant change you’ve seen in the sector?

From a client perspective I think it was making superannuation income tax free for individuals over 60. However, I can see both sides of the current argument. On the one hand I sit with clients and look at how their portfolios are structured and the tax refunds they’re getting and think that’s great. On the other hand I think it can’t continue. That’s the change that’s had the most impact. The ability to use limited recourse borrowing arrangements (LRBA) has been a big change as well. It’s had the effect of re-engaging a lot of people, but I think it might be engaging the wrong type of people. The purchase of residential property in an SMSF is ramping up and some of the promoters are being a little bit too aggressive. It would be a shame if something like that were to cause LRBAs to cease because there are still many good businesses out there that would benefit from this type of strategy with their commercial business real property, for example.

What would be the one thing you’d change in the SMSF sector?

I think the minimum licensing and education standards need to change for giving SMSF advice. It’s still at the stage where RG 146 and an additional course enables you to give SMSF advice. I believe if there was a basic general advice standard and a specialist requirement on top of that which had to be satisfied before practitioners could even talk about this sector would be fantastic. I’ve put together a couple of submissions to licensees in the past where I’ve recommended exactly this and it hasn’t been taken up and I just don’t understand why it would be the case. It’s such a risky area and it doesn’t matter how simple people try to make things, it is not simple.

What’s the biggest challenge facing the sector over the next year?

The level of trust and confidence the general public has with the advice industry. We have a long way to go to get that back and whatever requirements that are needed to do that is what we should be doing. Arguments over little points of FOFA (Future of Financial Advice) and arguments over whether we should be paid commissions on insurance products are really irrelevant right now. All that is relevant is the need to do whatever it is so there is no perception in the public that advisers are doing things for the wrong reasons, because we don’t have any room to move anymore. All of our ‘get out of jail free’ cards have been used up. We have to do it right and we only have one more chance.

Copyright © SMS Magazine 2024

ABN 43 564 725 109

Benchmark Media

Site design Red Cloud Digital