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One on one with…Darren Wynen

Insyt founder Darren Wynen began his SMSF journey working at the National Tax and Accountants’ Association and has progressed his role in the education sphere of the sector. He discusses with Darin Tyson-Chan how difficult the implementation of the CGT relief has been and why he thinks the proposed three-year audit cycle makes no sense.

How did you get started in the SMSF sector?

My initial involvement came about when I was at the National Tax and Accountants’ Association (NTAA) and it started hosting the Super Schools events. They wanted to run the activity internally and I was the person who was charged with assisting with that process. From there I never looked back and became the organisation’s go-to person for superannuation. I love the sector and enjoy presenting on it and over time became involved with UNSW and the SMSF Association and generally assisting people through consulting and the like as well.

Where did you acquire your SMSF knowledge?

I won’t say I’m an academic, but my knowledge has come from having to write about the sector, presenting about the sector and the research associated with these activities. I also gained a lot of knowledge from manning the NTAA hotline and having to deal with 30 queries a day from advisers. Specifically, Dan Butler from DBA Lawyers helped me greatly in learning about SMSFs. He co-presented and co-wrote a lot of the material for the Super Schools initiative and I’m grateful for having had the opportunity to work with him as I learned a lot from that experience.

When did you establish Insyt and what inspired you to do so?

I started Insyt in 2009 and what inspired me to do so was the feeling I could make a difference in terms of providing information to the sector. I’d been at the NTAA for 10 years and I just wanted to take a slightly different direction and set up my own company. I began with wanting to provide a database of information, which probably wasn’t as popular as what I had hoped, and things have evolved over time. I got my taxation licence in 2011 and probably the consulting role over time has grown. This is where people have curly questions about tax or super and they write in to receive my help with them. I’ve also developed a teaching role with UNSW to help them get their CPA Australia and Chartered Accountants Australia and New Zealand specialisation programs off the ground, as well as helping the SMSF Association write some of its trustee knowledge base material and review some of the technical material it provides to its specialist advisers.

So consulting and teaching are now the main services you offer via Insyt?

That’s right. When I left the NTAA I was originally writing about superannuation, but now I’m providing training in the superannuation space, consulting in tax and super, and writing publications as well. I’ve also taken an interest in the trustee space and, while I don’t know how just yet, will be looking to play a part in that segment of the market.

Is there a constant demand for the educational services you provide?

Yes and the continued professional development hours a lot of practitioners have to satisfy is a big driver with that. The changes to the sector are constant, as much as we say they’ve all settled down, particularly with super reforms. There has been a big adjustment because the reforms have been so massive, when you look at things like the capital gains tax (CGT) relief, which is a simple concept but quite difficult technically, so while a lot of those things have been bedded down, there are still practitioners wondering what it all means in the future. So there are a lot of people in the space, but I think the reforms are driving a need for education among advisers and trustees, given how big SMSFs are currently.

With regard to education delivery, are webinars more effective than face-to-face sessions?

I find them equally popular. We’re just starting off with our webinar service, but I had equivalent numbers for my first webinar as I had for my face-to-face sessions. I thought people just wanted to access their educational training online, but I will be conducting more sessions in person later in the year because I think people like that opportunity to network and have the ability to ask you questions directly. I think webinars have a place especially if you’re a practitioner operating in a regional area, such as regional Queensland, and it’s just not practical to get to a seminar held in Melbourne. But for those people who are close by I think they like the opportunity to come in and ask questions. From the presenter’s point of view, webinars are a different beast in that you end up sitting there talking to yourself so I think face-to-face has a place.

You mentioned the CGT relief provisions under the super reforms earlier. How do you think the implementation of that relief has been handled by practitioners to date?

I’ve written two books on that topic now and have presented countless times on it. I think the problem people are having is with the technical complexity of it where they’ve had to go from nought to 100, in terms of knowledge, for one year and then forget it all. It’s literally caused them angst and a lot of them are process-driven people and they’ve obviously got to deal with it, but this was a substantial learning process and the subject matter is not that simple to learn and do well. So I think the CGT relief has been a huge problem. I hear anecdotally that auditors are reporting that people haven’t done it correctly and I’m concerned that these errors will emerge down the track. In a way it’s not the industry’s fault, it’s just that the changes were so technical and we’ve had such a short amount of time to implement them on top of everything else that there are bound to be mistakes made, notwithstanding all of the educational efforts everyone has made.

Do practitioners struggle to keep up with the legislative changes to the sector?

I think practitioners are reasonably good in this regard. In other words, they identify the issue and if they’re not sure, they’ll ask for assistance. I think a lot of the problems are driven by clients making mistakes, for example, over-contributing and then trying to fix it up themselves by taking the money out. Then the accountants and advisers are pulling their hair out trying to correct it all. I think some of the complexity in the rules, particularly with the volume of changes being introduced, have caused problems. For example, the acceptance rules regarding non-concessional contributions are hard to keep up with and hard to interpret, particularly when the rules were different on 30 June 2017 compared to 1 July 2017.

Considering the volume of rule changes the sector is experiencing, does this make now the worst time to propose a three-year audit cycle for some SMSFs?

I’m very, very definite on this, and I have been from day dot, that I think the three-year audit plan is terrible. I don’t agree with it one little bit. I see the problems SMSFs have and you see funds that are fine one year but not the next in terms of financial difficulty and trying to get the money out, so I just don’t agree with it. I think it’s a cheap political stunt to make out the government is saving the sector money when in reality I just can’t identify the cost saving at all. I think the audit system is working well and that the proposed change will compromise a lot of people. It will compromise the auditors, it will compromise the advisers because they’re going to be caught in the middle until the three years is up, so I just can’t see any winner in it.

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

It’s a toss-up between the 2007 and the 2017 reforms. I’d probably say the 2007 reforms were bigger because they were just so sweeping and because of the fundamental changes to the landscape they introduced.

If there is one thing you could change about the SMSF sector, what would it be?

I’d like to change some of the tax penalties that are incurred when people make an honest mistake when they over-contribute to their fund. I just think the system is there, the government will benefit from the money being out of the system when it is exited, so I think they should just give people the ability to rectify the situation without penalty. I don’t agree with the extra charges. I see some big assessments with six figures and I think additional charging on honest mistakes is unfair. I’ve seen situations with people forgetting they contributed a year ago and with the changing scale of the contributions there are so many facets that can go wrong. People can accept they’ve made a mistake and they’re willing to fix it, but to have to wear a monetary penalty on their savings seems ludicrous.

If you cast your mind to the year ahead, what would you say is the biggest challenge facing the sector?

Continuing to bed down the changes will continue to be a challenge. Staying on top of the workflow is a hard one as well. I think the continued complexity with the introduction of the changes and continuing to work out what it all means with estate planning and everything else will be hard. Let’s remember the implementation of some of the reforms are just kicking off so we’re not out of the woods yet.

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