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

  • Vaccination rates as they happen around the world

    A new resource is now available that shows the rates per country of COVID-19 vaccinations. We all suffered in many ways as COVID number increased, now, as expected, let's watch them start to drop.

  • Approaching the dawn

    COVID-19 has completely, and mercilessly, dictated the direction of economies and financial markets through most of this year. So, as we rapidly approach the end of an extremely unpredictable and volatile year, what's in store for 2021?

  • Videos and other resources for our clients

    Making our website into a valuable resource for our clients is very important to us. There are more tools and resources available when compared to almost anywhere else and this month we highlight our educational videos. We hope you enjoy these 'extras' and if you have any question then click on the Contact Us button and ask.

  • Retirement the ‘number one trigger’ for financial advice

    Approaching retirement still remains the top reason for seeking advice from a financial planner, with healthcare costs, outliving their savings and aged care costs some of the biggest concerns, according to a recent research paper.

Read more latest Financial Planning news articles

General Advice Warning

The information provided on this website has been provided as general advice only. We have not considered your financial circumstances, needs or objectives and you should seek the assistance of your adviser before you make any decision regarding any products mentioned in this communication. Whilst all care has been taken in the preparation of this material, no warranty is given in respect of the information provided and accordingly neither Retirewell Financial Planning nor its related entities, employees or agents shall be liable on any ground whatsoever with respect to decisions or actions taken as a result of you acting upon such information.