Financial Planning, Regulation

Advice delivers trustee opportunities

specialist financial advice SMSF

Specialist financial advice is providing trustees with better regulatory knowledge that can lead to a material benefit for their SMSF.

The latest research into the SMSF sector has revealed trustees who are receiving specialist financial advice are more likely to be made aware of strategic opportunities for their funds arising from legislative changes.

The “Vanguard/Investment Trends SMSF Report” for 2022 used the recent amendments to the downsizer contributions rules to demonstrate this result.

From 1 July 2022, the eligibility age for an individual to make a downsizer contribution will be lowered from 65 to 60 and the study asked three categories of trustees, those using a financial adviser, those using an accountant for tax advice and those not receiving any advice, whether they were aware this change to the rules was about to take place.

Commenting on the finding, Investment Trends head of research Irene Guiamatsia acknowledged: “What we found is those advised SMSFs are much more likely to have known about the rules and actually more likely to say that the rules apply to them.”

More specifically, 37 per cent of the non-advised group admitted they were unaware of the change, while 29 per cent of members using a financial adviser and 28 per cent of members using an accountant for tax advice answered in a similar fashion.

“Certainly a change in the rules [for downsizer contributions is something] that can have a meaningful and material impact to the financial position of the SMSF trustees if they take advantage of it,” Guiamatsia noted.

“[This shows] certainly those non-advised SMSFs are potentially missing out on knowledge that can really materially help them move their financial position and their retirement outcomes.”

When asked about the impact the amendment to the downsizer contribution rules would have on their SMSF, 4 per cent of those respondents using a financial adviser indicated they planned to sell their home earlier as a result. Less than 1 per cent of non-advised trustees submitted the same response.

The same study identified the ability for advisers to keep their clients up to date with legislative and regulatory changes is one area practitioners are seen to add value for SMSF trustees.

Responses from 2430 SMSFs collated from an online survey conducted in March and April 2022 were analysed in order to compile the “Vanguard/Investment Trends SMSF Report”.

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