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Non-concession caps top of advisers’ minds

The proposed change to the non-concessional contributions caps is the issue financial planners are most concerned about, according to the BT advice technical team’s September quarter round-up.

The 2016 federal budget had originally proposed the introduction of a lifetime non-concessional contribution cap of $500,000, but the proposed rule now is for a yearly cap of $100,000 for any individual with a super balance under $1.6 million.

BT Head of financial literacy and advocacy Bryan Ashenden said financial planners were inquiring about certain consequences for their clients as a result of the change, such as the amount they could still contribute and how the new rules would affect clients who were in the process of using the bring-forward provision under the existing framework.

Apart from the proposed new non-concessional contributions cap, advisers are also asking questions about the alterations to the rules governing pensions.

“The reality is that many clients will likely see some change in their pension entitlements. Advisers are acutely aware of this and quite rightly so,” Ashenden noted.

“We’re seeing advisers getting on the front foot and taking the lead to ensure a ‘no surprises’ approach with their clients.

“We know having those discussions earlier on can make a big difference to clients feeling comfortable with any legislative change.”

The round-up showed the rebalancing of the assets test limits was of specific concern, in particular the adjustment to the assets tax-free threshold and an increase to the taper rate set to be implemented from 1 January 2017.

“It’s important to note that there is a silver lining. If there are changes to your client’s pension, they will likely be eligible for a low-income care card, and if they’re of retirement age, they will receive the commonwealth seniors health card,” Ashenden said.

He added financial advisers should engage with their clients as soon as possible so appropriate planning for the changes could happen immediately.

In other news BT Financial Group (BTFG) confirmed at the Westpac results announcement that it had 2764 registered advisers and over 2000 SMSF accounts on its Panorama administration and investment platform with further growth in clients expected.

The status of Panorama’s development was also announced.

“This financial year we have finished significant builds for our intelligent and intuitive wealth management platform BT Panorama, with all assets now complete on the advised investment platform and delivered our advised SMSF offer which provides a full end to end solution for all customers including trustees, advisers and accountants,” BTFG chief executive Brad Cooper said.

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