SMSF trustees are looking forward to a long and happy retirement and there’s a lot their advisers can do to help them find that sweet spot.
By Julianne Cammaroto
Time-poor trustees value the concept of a one-stop shop and are looking to their advisers for more than just crucial tax and compliance advice, research shows.
According to the Commonwealth Bank’s 2017 SMSF Report, “investors … have become major users of advice services. The vast majority rely on at least one professional adviser, while one in three seek advice from multiple sources”.
While the CommBank report cites a few types of SMSF trustee, there are two real differences to be found in those investors who have SMSFs: those that seek advice and those who are self-directed and like to take control of their asset allocation.
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Regardless of what trustees require, as the report points out, there is scope for advisers to assist with coaching and direction so their clients are able to meet their future goals.
6 services for advisers of SMSF trustees
A common fear amongst self-managed superannuation fund (SMSF) trustees is that they may outlive their retirement savings. Strategic advice is critical to assisting with peace of mind in this area.
Trustees don’t expect retirement planning to be a one-off discussion, and once the adviser and client have agreed on some goals there is generally a mutual expectation that there will be some sort of ongoing follow-up to check in on progress.
Estate planning can be a vexed area, especially where family is involved. Trustees expect advisers to be able to provide broad information in this area without crossing the line into legal advice.
They will also expect their adviser to guide them to where they can obtain legal advice, such as an introduction to a suitably qualified legal professional who holds an estate planning qualification.
The insurance needs of trustee and SMSF members must be considered annually. The scope will cover how much insurance and what type, and whether the cover be inside or outside superannuation, or both.
The consequences of each decision should be examined, including possible tax implications. Depending on your type of licence, advice on specific products may need to be referred to a financial planner with expertise in this area.
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Some trustees will expect you to provide advice on investment strategy. This will involve educating your clients on the different risks, including diversification and single asset portfolios.
Most importantly, as an adviser, you need to understand your client’s attitude and tolerance for risk.
Providing advice is not set and forget. In addition to legislative and market events, there are numerous life events (divorce, death, unemployment) that can disrupt the best-laid plans.
Trustees expect that you will let them know if there are changes that may affect them adversely or that may necessitate a review of their overall plan.
Service delivery and timely information
Even though the SMSF’s sole purpose is to fund retirement, many trustees, particularly those who are self-directed, will want access to their real-time data and balances. Online, smartphone and tablet access are highly desirable for trustees.
For more financial planning resources visit CPA Australia’s financial planning portal.
Julianne Cammaroto is CPA Australia’s Financial Planning Pathways Adviser
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