One on one with…Charity Bru

Charity Bru

Having surprised her manager by choosing to work in the SMSF sector as a young accounting professional, Rivkin Super manager Charity Bru has established herself in the administration area. She tells Darin Tyson-Chan how she’d like trustees to be better informed and have more confidence in themselves.

How did your involvement with SMSFs come about?

I was an accounting cadet working in business services and one Friday afternoon my manager came up and told me to use the weekend to think about what area of accounting I liked best and come back on Monday and provide him with the answer. At that stage I’d been in accounting for about four years so I’d done a little bit of everything, but I was really drawn to superannuation and SMSFs in particular, of which we worked on a few. So on the Monday he asked me again and I told him SMSFs.

What was his reaction and why did you choose the SMSF sector?

He was very pleased I’d thought about it and could give him an answer. I chose to work with SMSFs because I found them really challenging and fun. Also, I felt there was more scope to help people with their overall financial situation rather than offering them an additional tax deduction here or there. With super you can implement more strategic moves like increasing contributions and to me that adds more value.

What’s the most challenging thing about working in the sector?

Easily it’s trying to keep up with all of the legal changes. Sometimes these changes are really good because they are for the betterment of the system, but other changes that aren’t that beneficial are a little harder to deal with. The other challenging thing is trying to keep the trustees up to date with the latest information.

So how do you keep up to date on all of the regulatory changes?

First and foremost I attend seminars. Things like that are key. The seminars or conferences I always attend are the ones hosted by SPAA (SMSF Professionals’ Association of Australia) because they are tailored towards our industry. The Institute of Chartered Accountants in Australia has also put on some really good SMSF-focused seminars recently. I’m a member of that body and I try to attend those sessions if I can. I also participate in tax webinars the Australian Taxation Office (ATO) presents.

What SMSF services does Rivkin Super provide?

We offer all the administrative functions for SMSFs, including the financial accounts, tax returns and audits. But one of the great things about Rivkin is we also provide general investment advice. So if you’re a new trustee setting up an SMSF, you might not know what to do once the fund is established. Rivkin can help them construct a suitable portfolio by drawing upon its stockbroking arm. Another thing we do, which sets us apart from other administration services, is an educational piece I’ll publish on our website every now and again about super.

How do you find the knowledge levels of your SMSF clients?

Because a lot of our clients are already confident share traders, they like to be active in the market, [and] their intelligence and their level of knowledge is quite high and I think it’s actually improving. For instance, as part of the area where I publish my articles on our website there is a forum that allows people to post questions or comments and we do get a lot of responses about the current issues.

So investment knowledge is quite strong, but how educated are they about compliance and strategy?

It varies across trustees. Some are really into shares, but hate the paperwork of their SMSF and that’s what I’m here to help them with. Others know a lot about the law and their responsibility as trustees, but don’t really know how to invest their money. So it really is a broad spectrum.

Your role requires you to interact with the ATO regularly. How do you find that and how helpful is the regulator?

For the most part the ATO is really helpful. I remember when I started in accounting they didn’t have a taxation portal where you could log in and find out account details. Now we have that facility I don’t have to call them as often and I can do most things online, so it is more convenient. But when I do need to call them, as long as I have all of the relevant information in front of me they’re very helpful.

The SMSF administration space is becoming increasingly competitive. How do you keep ahead?

We try to concentrate on providing what our clients would consider more personal service through items such as a regular newsletter. That’s compared to maybe some of the bigger players in the market where people wouldn’t get that personal service. The provision of general investment advice also sets us apart. A lot of administration providers don’t offer this aspect, meaning SMSF trustees will have to do it themselves or look elsewhere for this service.

Is the rapid advancement of technology a threat to your business?

I think technology works in our favour. When technology gets better, things like the taxation portal and the ability to lodge compliance documents online makes the whole process more efficient. It means we have more time to help clients with other issues they really need assistance with.

How sensitive is price point in the SMSF administration space?

There will always be SMSF trustees who are price sensitive. If that’s really the most important thing to them, you’ll never be able to change that. And there are some things you can’t always compete on in terms of price. We try to concentrate on the high-quality service aspect, so while we’re not the cheapest you do get what you pay for. So it’s more about value and quality rather than minimum price for us.

Are there any trends you’re witnessing in the SMSF space?

I am actually seeing a larger number of younger people making enquiries about SMSFs and establishing them. Previously these people wouldn’t want to look at their super until they were around 50 because they wouldn’t be able to get their hands on it until years later. But the reality is you still need to manage your wealth even if you can’t withdraw it straight away.

Is there any particular factor driving this development?

A couple of years back I would have said it was the global financial crisis, with people who were watching their super balances go down thinking they could do it themselves. Now that we’re a little further down the track, I’d say the increased coverage in the news has got people thinking more about what they can do with their money. Our clients are slightly different because they’re already comfortable with managing their money, so when you ask them whether they have an SMSF and they don’t, what they really haven’t realised is this is something they can do. When they find out they can control their own super, they’re very keen to do so.

What’s the biggest change you’ve seen in the sector?

It would be the superannuation changes from the 2007 year, so the Simpler Super changes. This not only includes the $1 million opportunity, but also other rule changes like making components taxable and non-taxable as opposed to dealing with pre and post-1985 items. There were also no more super surcharge and no more reasonable benefit limits. I loved that year because it made things so much simpler. The super surcharge itself was a nightmare, involving pages of calculations to try to work out how much to pay, and it was nice not to have to do that anymore. When they simplify things like this, people also get more confidence in the system so there was a massive uptake in SMSFs that year.

If you could change one thing about the SMSF space, what would it be?

It would be nice if people would stop politicising superannuation and made overseeing the industry more about what was good for it rather than what was good for a particular election year. I’d like to see more trustee education as well. I think it’s really important because it would make SMSF trustees more comfortable with the constant changes and improve people’s confidence. That’s not confidence in the government, but confidence in themselves because if they have more confidence in their own ability, they’ll be better equipped to manage their money and increase their wealth and that’s the whole point of the exercise.

What’s the biggest challenge facing the sector in the coming year?

The potential changes to the legislation. In that time frame we’ve got the federal election so we don’t know if the announced budget changes are going to be approved. The industry consultation process here will be quite interesting. My personal challenge will be to improve trustee education with the provision of more information around superannuation and death benefits.

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