The changes to the superannuation system could be increasing the risk levels involved for financial advisers due to their restrictive nature and the increasing need to put strategies in place as early as possible to facilitate the best possible client outcome, according to a technical expert.
Speaking at the annual selfmanagedsuper SMSF roundtable, Colonial First State FirstTech executive manager Craig Day said: “It’s actually quite interesting. From a compliance perspective, sometimes advisers can get in trouble for what they’ve done, but I think going forward there will be potential issues around what you haven’t done.”
Day specified the situation where a husband and wife in an SMSF have a significant disparity in their super balances as one where advisers may be exposed to risk in the future by their immediate actions.
A circumstance where a husband had a retirement savings balance of $3 million and his wife a balance of $200,000 would be a classic case in point, he said.
“So you might end up with a client that is now limited by the new transfer balance cap in terms of the amount that they put into the retirement phase just because they haven’t been equalising balances on the way through,” he noted.
“If that’s because an adviser just hasn’t addressed the situation on the way through, then you can clearly show a loss to the client.
“There’s going to be a lot of work in terms of compliance, and it will not only be about what you’re doing, but it’s also what you haven’t done that’s going to cause a problem,” he warned.
Prosperity Advisers financial services director Gavin Fernando agreed the new parameters would add some additional professional risk, but thought it would not cause any substantial angst.
“I guess it adds to the risk factor, but it’s just all part of the job,” Fernando said.
“If you’re giving financial advice, you’ve got to be across the elements of which you’re giving the advice.”
