The director of an accounting firm has stressed practitioners need to read all relevant SMSF documents pertaining to the super fund and not just the ones that are convenient when looking to service a new client.
Cooper Partners head of superannuation and succession Jemma Sanderson explained this exercise should be undertaken to identify any compliance issues or strategic opportunities available to members at the time the new account is established.
“[For example, you need to determine] what assets are [in the SMSF and] these days [when using administrative] software, you can see in the investment schedule the dates of acquisition. So if it was a long time ago, perhaps asking for the upfront contracts [would be a good idea]. Hopefully someone has got the offer and acceptance or sales contract still on file somewhere,” Sanderson told delegates at the recent ASF Audits Technical Seminar 2024.
“[It will allow you to get] a complete file and background and history for the fund when you’re taking it over.”
Similarly, she pointed out reviewing an SMSF document such as the fund’s deed when bringing a new client on board is essential because if it is determined to be invalid, any subsequent strategy, such as putting in place a binding death benefit nomination, will be invalid as well.”
With regard to opportunities, she stipulated the client’s personal situation needs to be taken into account as well.
“[For instance, you might be able to say:] ‘You just stopped working. Let’s start you a pension and [you can save] a significant amount of tax,’” she said.
“So in identifying [these things] and taking that little bit of time upfront, you can identify and head off these issues at the pass and identify these opportunities.”
She reiterated the client education process must be an ongoing exercise for practitioners to ensure they understand superannuation is the most tax-effective savings vehicle and as such there will always be intense regulator scrutiny of all retirement savings arrangements.
