Convention 2016 - Takeouts

Another conference done and dusted, and surprisingly enough, this one wasn't a junket.  It was full of workshops, guest speakers and idea swapping.  Of course, we had to be fed, luckily to Sydneysider standards, not the country style steak and chips that I'm used to, so there were a few dinners.  But I digress. 

A big focus of convention this year was the need for holistic planning and why this is so important to clients, as well as assisting us as firms. At Achieveit Financial Planning we have always focused on holistic planning, but the emphasis was actually on holistic planning from the client's perspective.  After all, we know what we know, but a client doesn't.  We need to work at communicating this with our client and our prospective clients.  Letting the client know what will be, and has been, considered will demonstrate the value of the advice provided.  As advisers, we are aware of the different ways we can assist in achieving our client's goals, but communication of this to the client involved is key.

Technically, the workshops were great.  We went over current proposed legislation and the effect on Self Managed Superannuation Funds including changes to segregation and CGT and the revised non-concessional caps.

Timing of the Notice of Intent to Claim for concessional contributions and the impact of enduring rollover insurance policies was also covered, as well as the estate equalisation impact of the removal of the anti-detriment payment.

Succession planning for businesses was covered; the right money to the right person at the right time.  So very important if you don't want to end up working with your newly deceased business partner's spouse.

There were also motivational speakers, including Daniel Flynn from Thankyou and Matina Jewell, a best-selling author, leadership expert and former UN Peacekeeper.  The common themes with both of these very inspirational people are that communication and devotion to your mission are the key to your success.  Both Daniel and Matina stumbled with roadblocks, but they picked themselves up and carried on.  Not everything will go to plan, but inaction will often lead to a worse outcome than not getting it quite right.

As a self-confessed geek, I can't wait to experience the learning curve at next years Convention.

Find Erin* at Achieveit Financial Planning or call for an appointment on 07 4638 5011.

*Authorised Representative of Securitor Financial Group Ltd ABN 48 009 189 495 AFSL 240687.
This is general information only and does not consider your personal circumstances.  You should not act on any recommendation without obtaining professional advice specific to your circumstances.  We recommend you speak to a financial adviser before acting on any of the information you read on this website.

BBQs with mates and ladies who lunch

The superannuation space is constantly changing, and there are a lot of resources available for those of us who have industry or retail superannuation funds.  As a matter of fact, now that the Government has dropped its punitive taxation penalties for over contributing, the superannuation space is a lot more user friendly.  Sure, as an average Joe, you might not know all of the ins and outs associated with re-contribution strategies, or spouse splits, but you don't need to be afraid of superannuation.  Unless, of course, you trample blindly into the Self Managed Superannuation Fund (SMSF) space, in which case you should be afraid...very afraid.

As of the 01st of July 2016, your accountant is required to be licensed to recommend the establishment of a SMSF.  The purpose of this new licensing regime is to crack down on the establishment of SMSFs that are inappropriate for the client.  This may mean that the client does not have the funds to make it worth the client's while, or it may mean that the client hasn't got the ability to deal with the compliance issues that surround being a trustee of a SMSF.  Now, I'm not saying that all accountants are shady (and a financial planner is as only as good as their software, says my Uncle Kevin...the accountant), but now the industry has standardised parameters to ensure that the client is well educated before making this decision. And the scenario outlined below will show why it's so important.

A client of mine was at a ladies lunch the other day, and overheard a conversation regarding purchasing jewellery using funds from super.  Luckily, for all that she likes to push the boundaries, she contacted me to confirm that this is actually the case.  Now, a SMSF is on the cards for this particular client, but not for another five or so years, so she was quite excited about this prospect.  After a bit of digging, it was admitted that she had approached the conversing ladies and found out that the jewellery in question was actually the one being worn.  "How old was she?" I asked, "In her 50s" the client replied. "Right", I said, "This is the way it works".

Other than the fact that collectibles (art, jewellery etc.) are in themselves a very speculative asset class (cue disapproving financial planner face), you cannot purchase assets with superannuation funds, which are legally restricted for your retirement, and then wear them before you retire.  As the trustee of a SMSF, you are liable for non-compliance, and one of those many potential breaches is the failure to keep SMSF money separate from personal assets.  This means that the collectibles must be stored away from the personal place of residence (I would suggest a bank vault leased to the SMSF), and cannot be loaned to related parties.  The penalty for this, is 20 penalty units, which at $180 per unit, is $3,600 for each individual breach.

"But, how would they know that you had worn the jewellery?", the client asked, slightly less excited than she was earlier. "The better question", I replied, "is how do they know you have not?"  It is not up to the ATO to prove that you are in breach, it is up to the trustee to prove that they are not.  And, after reviewing your auditor notes, if the ATO suspect that you may be in breach they will take a very close look at what is going on.  If Facebook shows that you have worn the jewels to multiple events, then that is multiple breaches, which means multiple fines.  Which the trustee pays out of their personal pocket, not from the SMSF.

Luckily, this client has a good relationship with her planner and could be put back on the straight and narrow, and, I would assume, her accountant (under the new regime) would have done the same rather than facilitating the client's request.

The moral of the story is, if you are at a BBQ with mates, or happen to overhear some ladies at lunch, please make sure you speak to a qualified professional before acting on it.  After all, we all know what happens in those stories that are too good to be true.

Find Erin* at Achieveit Financial Planning or call for an appointment on 07 4638 5011.

*Authorised Representative of Securitor Financial Group Ltd ABN 48 009 189 495 AFSL 240687.

This is general information only and does not consider your personal circumstances.  You should not act on any recommendation without obtaining professional advice specific to your circumstances.  We recommend you speak to a financial adviser before acting on any of the information you read on this website.