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Budget will boost strategy opportunities

Advisers with SMSF clients will begin to use new and also better employ existing strategies for their clients as a result of the sweeping changes to superannuation proposed in the budget.

“With complexity comes an opportunity to assist clients, not only to negotiate the complexity of the changes, but to understand the potential strategic opportunities that open up [as a result], and to identify and implement those types of strategy responses,” Colonial First State (CFS) FirstTech executive manager Craig Day told selfmanagedsuper.

“Some of it will already be known, but some of it may not be known until we get the rules in and we actually see the implications.”

Following recent CFS events around the country, Day said a straw poll showed the large majority of Sydney and Melbourne advisers strongly regarded the changes to superannuation as negative rather than positive, whereas the split was close to fifty-fifty with advisers in Perth, Adelaide and Brisbane.

“It’s indicative of how they’re looking at the changes and also which advisers could have a bigger proportion of high-income-earner clients,” he said.

“But when you start to look at these rule changes, it seems to be that every boulder, every rock and every pebble we looked under had implications.

“So when looking at a small strategy issue, suddenly the new non-concessional lifetime cap will have an implication.

“Then also looking at pension strategies and segregation, you start to think that the change around the transfer balance cap will have implications on how you go about doing that.”

He said he expected advisers might also look to current rules in place that trustees might not have paid a lot of attention to in the past, such as spouse contribution splitting, for example.

“So all of these strategies will come into play and how advisers go about doing that,” he said.

“It will be about pulling as many levers as you can.

“It’s still a wait-and-see [due to the upcoming election], but once we know more, we can look to start exploring what strategy options we’ve got.”

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