Monica Rule resigned from her executive position at the ATO to establish her own SMSF consultancy and education business. She tells Krystine Lumanta about her journey from public servant to SMSF specialist.
When did you first become involved in superannuation and SMSFs?
I must be honest, before I starting working in superannuation in 1997, I had absolutely no interest in it. I thought of superannuation as something that I would take an interest in when in my fifties and needing to plan for my retirement. Like most people, I had other priorities, such as buying my first car, paying a deposit for a property, going on an overseas holiday.
I started working at the ATO in 1985 in the income tax processing area. Then, in 1997, the ATO restructured its income tax area and my position was made redundant. I had a choice either to find a position in another area of the ATO, accept any position they give me in another area of the ATO, or accept a lump sum redundancy payout. As much as a lump sum payout was tempting, I knew it wouldn’t last long. As I had a mortgage at the time, I chose to look for another position in the ATO.
Due to the restructuring, the superannuation guarantee (SG) area of the ATO expanded by four new positions. I applied and was surprised I was selected, considering I did not have any knowledge of superannuation at the time. I found out six months later, the reason I was offered a position was because only four people applied and I was one of them.
How did you find that new role?
I hated my first three months in my new area. The SG area was renamed “superannuation” due to taking on additional new work, such as handling income tax deduction claims on superannuation payments and eligible termination payments. Not only did I not know what I was doing in my new position, no one could assist me as the old SG staff had not performed any of the new work before. As a result, I decided to enrol in a university course on superannuation. I absolutely loved the course and it completely changed my attitude to super. Within three months of my study I became fascinated with superannuation and I soon became the subject matter expert in my area. I willingly shared my newly acquired knowledge with the ATO staff that sought my assistance.
In 2000, when the ATO became the regulator of SMSFs, I was asked by my manager to accept the new position of technical training officer. I worked in this role for five years and trained the ATO staff on superannuation and SMSFs.
I have always believed that things happen for a reason. I thought my income tax position being made redundant was terrible at the time, but it resulted in me gaining my passion for superannuation.
Why then did you leave the ATO?
My original plan was to work at the ATO until I reached the age of 54 years and 11 months. You see, my superannuation savings are in the Commonwealth Super Scheme, which is an unfunded defined benefit fund. My retirement benefit is more favourably calculated if you retire just before you turn 55. However, I ended up resigning from the ATO at the age of 51 in 2013 because my love for super was so strong.
You see, in 2005 the superannuation area restructured and my technical trainer position was transferred to Sydney. As I wanted to remain in Perth, where my family lives, I had to move into a new senior compliance officer position. I didn’t mind this as I wanted experience in auditing SMSFs. I discovered from conducting audits that many trustees were making mistakes because they did not understand the superannuation law. My job was to impose appropriate penalties on trustees and SMSFs for contravening the law.
Then in early 2007 I discussed with a senior manager the possibility of conducting education courses on superannuation for taxpayers. I showed him my written plans and suggested topics to present. The senior officer said he would consider it for the following year’s budget. Nothing eventuated.
I obtained permission from the ATO to run SMSF education courses to the West Australian public as a private individual, funding the courses myself. By then I had obtained a Diploma in Superannuation via the Macquarie University, so I was qualified to present general superannuation information. The courses were conducted on Thursday evenings and Saturday mornings at TAFE campuses in my own time using my own materials.
In 2009, one of the course participants suggested that I publish a book on superannuation as she had found my 52-page course handout most useful. I managed to obtain permission from the ATO to publish my book, “The Self Managed Super Handbook – Superannuation Law for SMSFs in plain English”, in October 2010. Self-publishing the book was one thing, but selling it was another. At the time I did not have the funding to advertise my book on a regular basis.
In 2011, I approached The West Australian and The Australian newspapers about writing articles for them as I thought this might help to promote my book. I sent both newspapers an article I wrote on a superannuation topic that I thought would benefit their readers. They liked the article and offered me a columnist position. I have been writing articles for them ever since. The articles have been a big help in selling my book.
In July 2013, the senior management team in the superannuation area changed and my permission to continue publishing my book and writing columns for the newspapers was withdrawn. I had to make a decision either to continue working for the ATO or to resign so that I could continue publishing my book. I resigned from the ATO in August 2013.
I have no regrets in resigning from the ATO. In hindsight it was the right time for me to join the superannuation industry as a specialist.
How have you found working in the SMSF sector?
I am passionate about helping people understand the superannuation law. I’m not interested in preparing income tax returns for trustees or auditing SMSFs. As I am not an accountant or a financial adviser, I originally thought I would have problems finding clients, but my profile and credibility have received a significant boost from having a book and appearing regularly in the newspapers. The first couple of years were hard though, starting a business from scratch with no client base. I believe that because I don’t sell or promote any financial products, or give any financial advice, people trust me to give them an unbiased, independent opinion. Some of my clients actually come to me after they have sought advice from their adviser to confirm their understanding.
So what services do you offer?
What I do is explain the superannuation law in simple terms so that my clients can understand the law, make their own decisions and implement their plans. With the government showing a willingness to make changes to super, I believe there is plenty of work for everyone. I have been fortunate to obtain regular clients and to be able to conduct seminars privately as well as for other organisations.
Do you assist people with non-compliance issues?
Yes. Some of my clients come to see me because they have made mistakes. Because I’m a former ATO employee, I am aware of how the ATO operates and makes decisions. I have been successful in obtaining favourable decisions for many of my clients involving issues such as their disqualification status being waived so that they can become a trustee of their SMSF; receiving a tax refund from an excess non-concessional contribution tax assessment; and avoiding a non-compliance notice being issued by the ATO.
How has the licensing requirement to provide financial advice affected your business?
It actually doesn’t affect what I do. You see, I explain the superannuation law to my clients, but I don’t assist them in establishing an SMSF or winding up an SMSF. I also do not provide any financial advice. I only provide factual information. All my face-to-face consultations are recorded and clients are provided with a copy of the recording. This way there is no miscommunication on what is being discussed. My goal is to educate my clients on the superannuation law. I do not recommend any particular action. Once clients understand how the law operates, it is up to them as to what action they take.
If you could change one thing about the SMSF sector, what would it be and why?
My interest is in educating the trustees of SMSFs on the superannuation law so they can understand what they can and cannot do with their SMSF. I would like to see mandatory education for trustees on superannuation prior to being able to establish an SMSF. I know the ATO has an online SMSF course, but unless it is mandatory, most people will not willingly sign up for it.