Revitalise SMSF strategy every few years

Wooden blocks.

Advisers should tweak SMSF strategies every few years to keep pace with change.

SMSF advisers should refresh their clients’ strategies every two to three years to keep pace with changing superannuation laws, regulations and ATO/court interpretations, according to an SMSF expert.

I Love SMSF chief executive Grant Abbott said while SMSF administration was a repetitive task that did not require a strategic mind, that was not the case for advisers.

“A simple set of client facts would be best served by a different SMSF strategy every two or three years,” Abbott said.

“In fact, the case study that I first used at my SMSF specialist course in the year 2000 requires completely different tax, super and estate planning strategies today than it did in 2000, 2004, 2007, 2010 and 2013.”

Changing SMSF strategies meant advisers and clients could stay on the positive side of changes to superannuation laws and regulations, as well as any recent ATO/court interpretations, he said.

He also said since SMSFs were a family vehicle, relationship changes, death, divorce, dementia or a shift in family or financial circumstances would necessitate a review of the SMSF’s strategy.

Furthermore, SMSFs should be “bespoke” since they consisted of members in different demographics with different investment outcomes and segregated investment strategies – for example, while parents headed into retirement with a transition-to-retirement income stream, younger members might be seeking to invest in start-ups and global technology, he noted.

“An accountant or financial planner with little to do with SMSFs can obtain their RG 146 in three days and get licensed to provide SMSF advice. What a scary proposition,” he said.

“But once again, sitting a test that does not see how strategic advice is created, built and applied from an in-depth client interview process is not where a SMSF strategist is at.”

As for SMSF administration, he predicted the ATO could eventually prepare SMSF compliance and returns for clients.

“For simple funds with SG (super guarantee) contributions, shares, managed funds and cash, the ATO data feeds will eventually be able to compile a basic return in quick time and for nothing,” he said.

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