Helping make your client’s SMSF Simple

There is no question that successive governments have made superannuation increasingly complex. Sadly, that’s not set to change with Division 296 and Payday Super soon to add to the mountain of legislation governing super.

Despite this, SMSFs continue to grow in popularity, not only because of the innate lure of control but because of the trust client’s put in the professionals they engage to look after their SMSFs.

For many SMSFs, year on year, Trustee’s dutifully sign off their financials and tax return without really understanding the complex rules. Yes, the Australian Taxation Office has videos, and Dr Google has been there and now we have AI but is that really where clients go to understand their SMSF.

And don’t get me started on whether they’d piece together the right answers online anyway…

Of course, unless you’re a licenced financial adviser, trying to guide them with factual information can be tricky.

We are constantly surprised by the misconceptions clients have about their super and that’s where you can straighten out their understanding, with the facts, making the complex, simple.

Here’s just a few of the misconceptions and the ways you can help your client better understand their retirement and beyond:

Isn’t our SMSF like a joint bank account?

It’s taken us several divorcing couples to realise that some Trustees see their SMSF like a joint bank account (ie.,it doesn’t matter who puts the money in, the money all mixes together and become “ours”).

Despite the yearly Member Statements to the contrary, it has been quite the reality check for some Trustees to learn that the SMSF is not “ours” and you can’t simply roll out half of the balance if your relationship goes south.

Would your clients do things differently with their super if they better understood that they each have their own Member Account that is theirs, not “ours” – like evening up their balances?

I’ve got a pension, can’t I just take money when I want to?

Lots of Trustee who have reached pension age, just take money out when they want and narrate everything as pension, not realising how benefit payments can be treated differently depending on what paperwork is put in place.

Would your clients get a better result if they asked you first before taking that extra benefit payment? Could it be treated as a lump sum or pension commutation getting them a different Centrelink or Transfer Balance Cap outcome?

I can’t take all the money, can I?

Then you have Trustees who are so used to seeing their SMSF as a savings vehicle that they don’t fully comprehend that once they’ve reached a condition of release, the money can be all theirs.

Would your clients be taking that holiday, doing that renovation or getting that expensive medical procedure if they understood the true access they have to their superannuation once they’ve met a condition of release?

Doesn’t the SMSF have to wind up?

One of biggest misconceptions we see is on the death of an SMSF client, when everyone seems to rush to wind up the SMSF. But even the death of a single member SMSF doesn’t mean the SMSF has to wind up.

Could your client’s children benefit from keeping the SMSF? Does it hold CGT losses they could utilise?

Next time you speak with your SMSF Clients maybe they’ll surprise you with some misconceptions of their own.

One thing is certain, it is up to us as SMSF Professionals to help iron out these misconceptions so our clients have a better retirement and beyond.

  At Keep It Simple Super we have spent over 15 years helping Financial Advisers and Accountant deliver exceptional SMSF services to their clients. Keeping your clients happy and coming back each year is our goal. Book a discovery call with one of our team to see if we can help you create the perfect SMSF service for your business - Click here