One on one with…Shirley Schaefer

Shirley Schaefer headshot

Starting in fund audits in 1994, the growing work for regulated super funds resulted in BDO Australia superannuation partner Shirley Schaefer establishing a specialist division. She reveals to Krystine Lumanta why estate planning has abruptly become a greater focus for her and why the shift to real-time reporting is a top SMSF industry challenge.

How did you come to work in the SMSF sector?

I started at BDO Australia in 1994 in the audit team. Based on where I had come from – BDO was my third job, I had worked for an accounting firm for six years and I had also worked for the Law Society of South Australia – the partner decided I was good at compliance work so I should do the super fund audits. Back in the day they were regulated super funds, they weren’t SMSFs, but it became obvious to me fairly quickly that we needed to do something about this because the people in our business services section would do the accounting and then send it across to me to do the audit. I would send it back because it was wrong. The team do one or two super funds a year, whereas I would look at 50 super funds. After about 12 to 18 months I made a proposal to the partners at the time for a specialist division to handle this work as it was inefficient. From there, I established a superannuation division within BDO in 1996. I started with one staff member and myself as a part-time manager. What piqued my interest in the first place was the compliance side of things and all of the Superannuation Industry (Supervision) regulations.

How has your role evolved at BDO Australia?

It has changed quite a bit since having one staff member and being an audit manager, and I wasn’t a superannuation person per se. As the team grew, I shared the responsibility of the SMSF audit clients and the regular audit clients. When I became a partner it was for both super and audit, and it was really only in the last five years that I was able to then concentrate entirely on SMSFs across tax, accounting, audit and workshops. BDO in Adelaide had a merger with a firm of a similar size in 2013, so because of the bigger firm I was able to hand over the last of my audit clients, and he handed a number of SMSF audit clients over to me. Now we have a core team of six in super and it flips between the different jobs. I’m responsible for the tax and accounting for a parcel of BDO super funds, about 300, where my team prepares the financial statements and tax returns, and we provide support services as well as limited strategic advice. I also sign off on SMSF audits for other accountants, about 20, but not BDO ones, as that’s a conflict of interest. The role here involves providing technical support and answering queries. I also work with BDO trustee clients directly and I work with some advisers and I’d say most of them are SMSF specialists in their own right.

Are you getting more technical queries?

I’m getting more, but it’s a broad mix. I call myself a professional wet blanket because people come to me with great ideas of what they’re going to do or what their clients are going to do with their SMSF and my first answer is usually: ‘No, and let me tell you why.’ The other thing I’ve seen recently is more advice around in-house asset issues. This is because a lot more super funds are vanilla and there’s nothing particularly interconnected with related businesses so a lot of accountants and even some auditors find that because they’re not coming across these issues on a regular basis, they need help when they do to make sure they know what the rules are, how they apply and if there’s a problem. Back when I started, pretty much every SMSF had some sort of connection to a business entity or something like that because it was pre-1999 and you could do a lot of these things, whereas now it’s very rare to find these structures in place.

What do you enjoy about presenting and running SMSF training workshops?

It’s the part of my job that I love the most. It’s the sharing of knowledge and education. I like sharing my knowledge with others and having them better informed. The other thing is it keeps me at the forefront and on top of my game. It means when there are changes I read all the legislation and exposure drafts. And it’s not just important for me but for my clients and colleagues, as well as the education workshops I present on the changes. I don’t pretend to know everything, so I do like learning at other conferences or from someone else as well. Learning about the new changes is certainly complex, but what makes it easier for me is that it’s all I do every day and repetition does make it easier because each time you do it, you’re learning and you do it a bit better.

What issues are taking up most of your time currently?

We’re knee-deep in the cost base resets and the CGT (capital gains tax) relief since we’re doing 2017 compliance work, but up until June it was all about transfer balance caps and commutations. Another one – which is not an industry-wide thing – is that I’ve had five clients die since June so the way the new super rules impact estate planning means it’s an extra layer we need to worry about. People should be going back to check if they have been impacted by the new rules, what it means for their estate plan. A number of our clients, if they’re not talking to us directly, are absolutely talking to lawyers to make sure it’s been set up correctly. One of our clients who passed recently has had challenges to his estate and while the superannuation shouldn’t be impacted by that, we want to make sure we’ve protected the client and the surviving spouse’s interests so we’ve engaged a solicitor to make sure it does work.

Do you think estate plans are getting better and has there been a decrease in legal cases?

I don’t know that we’re seeing less, but I’d say about in 95 per cent of cases the money will go where it’s supposed to go and there won’t be any problems. But whenever there’s a decent chunk of money involved, it’s always going to be an issue that families all of a sudden don’t trust each other and they think someone’s diddling them out of their share. I don’t even know that it’s necessarily an issue specifically with blended families or large families, even two siblings won’t trust each other, see eye to eye, or agree. The same can be said for marriages; things might be fine now but it can all change in three years.

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

Since setting up the division in 1996, the recognition that super, from an accounting perspective in particular, is a specialist area. There is absolutely the recognition now that it is a specialist area and even where smaller firms do their own accounting work and service funds, while they don’t have to outsource it to specialists, they are making sure that they know somebody who is a specialist. That’s largely what I want to do with the accountants I work with – I don’t want to take over their clients, I want to help practitioners get it right so they can better service their clients.

Is there anything you’d change about the industry?

The one thing I would change is the accountants and limited advice piece. Accountants shouldn’t be giving investment advice unless they’re appropriately qualified. But when it comes to providing advice around the application and interpretation of the super rules, and the impact that has on an individual’s super fund or personal circumstances, the fact that we now can’t talk about that when we have in the past, I’d go back in time and not have that change go through. And I still think accountants are getting the line in the sand wrong.

What do you think the biggest challenge will be in the next 12 months?

Making sure that our clients are ready for all of the new reporting requirements, not that everyone will be impacted, but the challenge of getting all our clients in that real-time, real information, direct data environment. A lot of my clients are older so I see a lot more resistance. We need to ensure we get these people up to speed and that they have the appropriate information at their fingertips so we can service them the best way we can, and keep them on the straight and narrow to avoid issues with the ATO.

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