Compliance, tax advice in strongest demand from SMSFs

While investment advice is the most valued by SMSF clients, compliance and tax are still the areas that SMSF trustees required the most assistance with, according to recent research.

         

 

A report compiled by the SMSF Association and OpenInvest using data from an Investment Trends’ survey of SMSF investors indicates that most SMSFs tend to engage two different types of advisers each.

The results from the survey indicate that in the last 12 months, over 45 per cent of SMSFs had used an accountant for tax advice.

The second most common professional was financial planners with around a quarter of SMSFs in the survey having received advice from a planner in the past year.

The survey also showed that compliance is the area members require the most help with, closely followed by tax.

The report pointed out that members and trustees that do not understand their obligations could incur severe penalties and sanctions or significant financial detriment.

Investment advice was the most valued area of advice.

The four main areas which SMSFs said they require more advice were superannuation tax planning, investment selection, post-retirement planning and retirement strategies.

When asked what holds them back from seeking their unmet advice needs, SMSF clients said the cost, followed closely by the lack of trust.

SMSF Association chief executive John Maroney said it was surprising that one in five SMSFs have not used any financial advisers in the last 12 months, particularly when regulatory and market volatility is increasing.

“Investing in an SMSF means you’ve taken control of your retirement savings, it does not qualify you as an expert investor, and one of the most effective ways to achieve a secure and dignified retirement is with expert assistance,” said Mr Maroney.

The research report also revealed that some SMSFs were lacking in diversification with half of SMSFs holding 50 per cent or more of their assets in a single asset type.

The report said that confusion around what diversification means is still prevalent among SMSF trustees.

“SMSF trustees say they primarily invest in shares to achieve diversification in their SMSF, while just a quarter say they invest in at least four asset classes to achieve this,” it said.

“When you look at the allocation to shares, the majority of SMSFs believe they can achieve adequate diversification using only a range of shares, with two-thirds of SMSFs considering a portfolio invested in 20 individual shares to be a well-diversified portfolio.”

 

Miranda Brownlee
19 November 2018
smsfadviser.com

More Articles

Why crypto treads an uncertain path through tax minefield

The taxation of digital assets used for lending and borrowing would benefit from clear-sighted...

Read full article

Wheat Production by Country

Check out the countries that produce the most...

Read full article

Labor tweaks stage 3 tax cuts to make room for ‘middle Australia’

Following years of mixed messaging, Labor has bowed to economic pressure and announced changes to its stage...

Read full article

Investment and economic outlook, January 2024

Region-by-region economic outlook and latest forecasts for investment returns. . What might shipping...

Read full article

Quarterly reporting regime means communication now paramount: expert

Communication between SMSF trustees, accountants and advisers is more crucial than ever with the quarterly...

Read full article

Four timeless principles for investing success

Investing success can mean different things to different people. Being clear on what success means for you is...

Read full article

Plan now to take advantage of 5-year carry forward rule: expert

This is the last year that the five-year catch-up contribution rules for concessional contributions can be...

Read full article

Super literacy low for cash-strapped

Financial literacy around superannuation is poor for many lower-income people, who still question why they...

Read full article

Sofie Korac is an Authorised Representative (No. 400164) of Prudentia Financial Planning Pty Ltd, AFSL 544118 and a member of the Association of Financial Advisers.

Financial Advice Sydney and the North Shore Office based in Gordon NSW

Financial Services Guide - Disclaimer & Privacy Policy

^