When things are running smoothly for an SMSF, investments doing well, no compliance issues and minimal changes being made it would seem that the only professional help that an SMSF client needs is their Accountant or SMSF Administrator. Things can change quickly with an SMSF though and some changing circumstances can unravel a happy SMSF very fast, so it is important that the accountant and their clients are aware of where to turn for expert help. The following are some examples of why it can take a village of professionals to ensure that an SMSF can achieve desirable member outcomes throughout its lifecycle and beyond.
Lawyers – to get it right first time or to help when you didn’t
It still surprises us when we take over an SMSF that ultimate care is often not taken when it is established. Price (and margin for the accountant) is often the driver rather than ensuring that the legal structure and relevant legal documents are appropriate and validly executed. Lawyers should prepare legal documents rather than being acquired from cheaper online providers. A good SMSF Lawyer should be the first partner your business finds if you are managing a few SMSF clients. What they give you is access to someone that has seen what happens when things go wrong, and they approach an establishment process with documentation that aims to avoid potential problems in the future.
The benefits of this partnership are seen best when an existing SMSF comes into your business with lost or incomplete permanent records. How many times have you been unable to determine if you have the most current deed or you have the chain of deeds, but the SMSF name is different. How can you confidently advise your clients when there is a change in circumstances such as the death of a member without the SMSF records being complete and the chain of deeds being valid. A Chain of Deed review by a Lawyer should be a compulsory exercise in some circumstances. We have seen many occasions where without it, a client literally has to cross their fingers that things will be OK. SMSF Many lawyers will attest that things aren’t always OK, especially when a member dies, and their member balance is up for grabs.
ATO – Voluntary disclosures
Due to the complexity around SMSFs, things do sometimes go wrong, and compliance breaches occur, even if you take a proactive educative approach with your clients. For common breaches you might be able to work with your auditor directly on a rectification pathway. But if you and your auditor haven’t seen the issue before and a pathway to rectification is not clear, the Australian Taxation Office (ATO) can be the best place to turn to. Their SMSF early engagement and voluntary disclosure service provides a single-entry point for SMSF trustees and professionals to engage early in relation to unrectified contraventions and well before the SMSF is sent off for the annual audit. It ensures that the clients can be correctly directed, in conjunction with the SMSF’s auditor, with rectification advice so that by the time the Auditor needs to report the breach, it is rectified, or a plan is in place. This saves time, money, and excess worry for the client.
You can find out more about this service here – https://www.ato.gov.au/Super/Self-managed-super-funds/Administering-and-reporting/How-we-help-and-regulate-SMSFs/SMSF-early-engagement-and-voluntary-disclosure-service/.
SMSF Auditor – Fixing breaches
An independent Auditor is the only professional that an SMSF Trustee is legally required to appoint. They are an important player in managing an SMSF for several reasons:
They are gatekeeper for ATO and ASIC to ensure that SMSFs are managed for the purpose of funding retirement.
They improve the quality of work that accountants produce by ensuring compliance.
They work together with Accountant, client and ATO to fix compliance breaches.
It is sometimes difficult for Trustees to get a good understanding of the importance of the Auditors role as they are usually someone that is seen to be asking for too much information, but it is essential that Accountants and their clients do have an experienced independent auditor on their team.
A proactive auditor will update you about changes to the supporting documents that the ATO expects them to have on file so you can obtain these before the audit and not unnecessarily slow down your workflow.
Financial Adviser – Changing strategies
Whilst not a compulsory team member, a Financial Adviser is necessary in many situations as an unlicensed accountant can’t give much of the advice that an SMSF Trustee might need when coming up against changing circumstances. An SMSF Financial Adviser should be able to guide your client with specific personal advice at any point in their SMSF journey. For those clients with tighter budgets or less complex advice needs, the digital advice option is gaining momentum.
Importantly, a Financial Adviser can assist with the development and implementation of an SMSF Investment Strategy. The SMSF’s Investment strategy is a dynamic document and should change as the member age and requirements change. This may be just simply changing a member’s risk profile as they start a family or head into retirement, or it could be in response to life events such as illness or death. Having access to advice options that are suitable for your SMSF client’s needs can enhance your service offering to them.
Aged Care Expert – reducing complexity
A hot topic of conversation now, and other than death, arguably the most significant change of circumstance for an SMSF member, is when their health start deteriorating, and suitable care options need to be decided upon. The process can be complex, requiring assessments to be made that are beyond the expertise of most Accountants. Finding an Aged Care expert that can help guide your clients through this process will not only assist the client with the numbers and forms but also provide them with the assurance and comfort they need at this stage of life.
Accountants and SMSF Administrators
Traditionally it has been the accountant that a client turns to for guidance when it comes to their money matters. It is important as Accountants and SMSF Administrators that we assist our clients firstly identify when expert help is needed and secondly to build a team of SMSF experts that we can turn to fix things when they go wrong. It works even better if you can get things right from the start and have the right help at every step, so your SMSF client’s journey is smooth and avoids unwanted outcomes.
Keep It Simple Super provides end to end wholesale Administration services to Financial Advisers and Accountants. Over the past 15 years we have built a team of preferred partners that we can easily access to assist our clients manage their SMSF clients. As well as helping our clients grow their SMSF businesses with new clients that are properly looked after from the start, we also specialise in smoothing out the journey for SMSFs that have found themselves in hot water, particularly those with many years of outstanding returns. You can access our SMSF Administration services here.