The latest research into the SMSF sector has shown the super reforms handed down in the 2016 federal budget are beginning to have a significant impact on trustees’ financial advice priorities.
The “2018 Vanguard/Investment Trends Self-Managed Super Fund Reports” revealed 77,000 of the SMSFs surveyed for the research said inheritance and estate planning was an area their trustees would like to be receiving advice on but were not currently doing so.
“[One] factor I’d say on the regulation change, which might have partly explained the interest in estate planning, is while the $1.6 million cap only affects 14 or 15 per cent of SMSFs, is because [generally] you have two [trustees] but if one person dies and suddenly they’ve got $3 million, they’ve got a problem,” Vanguard Australia head of corporate affairs Robin Bowerman said.
“That’s where a lot of advisers with the SMSF Association are getting queries and concerns around what that might mean.”
Investment Trends chief executive Michael Blomfield said the underlying data was indicating the transitioning of wealth held within an SMSF was something trustees were becoming increasingly concerned about.
With regard to whether the result was an indication the new transfer balance cap rules were starting to have a real effect, Blomfield said: “We don’t like to add two data points and say well it means that a third thing is true, but we can talk about the underlyings and what we are seeing is a series of data points that are moving in a way that you know I think [would allow] intelligent people who connect those dots to form a view that that is what it is.”
According to Bowerman, dealing with issues such as estate planning is where financial advisers can add real value for their SMSF clients, irrespective of the investments they are making within their funds.
The research was compiled from a survey that was conducted online between February and March.