Peter Burgess

The SMSF Association has lauded the Federal Government’s decision to fast track the implementation of a legacy pension amnesty.

SMSF Association CEO Peter Burgess says this is an early Christmas gift for over 17,000 SMSF legacy pension accounts that now have five years to commute their pension and take advantage of a flexible pathway to allocate associated reserve amounts.

“These newly registered regulations – Treasury Laws Amendment (Legacy Retirement Product Commutations and Reserves) Regulations 2024 – provide much-needed reform to retirees trapped in non-commutable legacy pensions, including legacy lifetime, life expectancy and market-linked income stream products.

“Considering the age of these superannuants, they now have a genuine opportunity to restructure their retirement savings effectively.”

Burgess says the decision to grant this amnesty is a tribute to the Association’s persistent lobbying on this issue over the past five years.

“These regulations represent a big win for the sector and the Association’s advocacy team, especially the decision to be make it a standalone policy priority and not be linked to other tax policies such as the proposed Division 296 tax.”

He says that while these regulations are a welcomed development, there is a lingering sense that some opportunities to further enhance the regulatory framework surrounding this measure may have been missed.

“In our submission on the draft regulations, we noted it was common practice for legacy pensions to cease rather than be commuted on the death of the primary beneficiary or on the completion of the payment term.

“We encouraged Treasury to consider the inclusion of an additional cap-free pathway to allow a pension reserve to be exited from the system where the pension recipient(s) has died.

“Unfortunately, this was not heeded so it appears an opportunity has been lost to quickly and efficiently eliminate these potentially large reserves.”

He adds that the Association also flagged the potential social security ramifications emanating from the regulatory changes.

“Notwithstanding industry’s recommendations for Treasury to work with the Department of Social Services to ensure these concerns were addressed, at this stage we’re not aware of any social security legislative instruments, or other supporting materials, that serve to alleviate any of these concerns.

“While we understand a legislative instrument to remove the social security ramifications is likely, without further clarification or developments on this front, concerns still linger that social security sensitive members may be negatively impacted by this recent development.”

These regulations, along with all other key legislative changes from 2024 impacting SMSFs, will be a feature of the SMSF Association National Conference 2025 next February. Held at the Melbourne Convention & Exhibition Centre from 19 – 21 February, attendees will hear the latest updates in depth from the experts.

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Peter Burgess

The SMSF Association says the framework outlined in the second tranche of the Government’s Delivering Better Financial Outcomes (DBFO) reform package lays the groundwork for reducing the cost and improving access to advice, but as is often the case, the devil will be in the detail.

The Minister for Financial Services, Stephen Jones, announced the package yesterday, stating it would ensure more Australians would have access to quality and affordable financial advice.

SMSF Association CEO, Peter Burgess, said there can be no argument reforms are needed to reduce the cost of advice and to open up new channels of professional advice to support the 15,500 existing financial advisers servicing the community’s financial advice needs.

“We have consistently argued that these new channels are urgently needed to enable more individuals to access quality advice to improve both their financial and mental well-being.

“Meeting this need has become even more evident when the growing number of baby boomers entering retirement is considered – many of whom cannot currently afford to get advice.”

Burgess said that considering the Government’s focus on creating a new class of adviser to provide safe and simple advice, it remains a mystery to us why the role other professional advisers, such as accountants, could play was still being overlooked.

“It was our contention that the Quality of Advice Review neglected the significant role accountants can play in addressing the growing advice gap, and the Government is perpetuating this oversight.

“By giving accountants a defined advice role, it will further support consumers to access the advice they need when they want it from their choice of trusted adviser.”

He said new educational pathways were needed to not only ensure the sustainability of the financial planning sector, but to ensure the future financial advice needs of all Australians could be met.

“The success of this model will depend on ensuring that the education requirements for the new class of adviser truly provides a pathway to becoming a financial adviser.

“We welcome the opportunity for all AFS licensees to employ the ‘new class’ of adviser and support more individuals on their pathway into a rewarding and fulfilling career.”

He added that many consumers needed point in time advice, often driven by life events, so modernising the best interest duty provided certainty to the sector that they could meet this need by providing advice on a single topic or limited scope of advice.

Burgess said the professionalism that now characterised the advice sector was a credit to its practitioners, providing the foundation for the sector to now expand so that it could meet the advice needs of a growing number of Australians in an affordable way.

“The Association looks forward to working with the Government to ensure the right balance between opening up advice to more Australians is achieved without surrendering important consumer protections.”

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Peter Burgess

The self managed super fund (SMSF) sector has notched up a significant milestone following the release of the Australian Taxation Office’s (ATO) September 2024 quarter SMSF statistics which show total SMSFs assets have surpassed $1 trillion for the first time.

SMSF Association CEO Peter Burgess hailed the ATO’s quarterly statistics as a landmark achievement for the sector, noting that while the figures are estimates, they underscore the confidence Australians place in SMSFs. As at 30 September 2024, Australians have entrusted approximately $1.02 trillion of their retirement savings to SMSFs – a powerful testament to the value of “choice” and the benefits of SMSFs.

“SMSFs can provide the ultimate level of control and flexibility which in-turn empowers and encourages greater level of engagement.”

“This extra flexibility and control can manifest itself in many ways including investment flexibility, estate planning flexibility and the ability to structure the fund in a way which best suits the needs of fund members.”

“It’s always been the Association’s mantra that SMSFs are not for everyone. But for those individuals who want to take direct control of their retirement savings, whether in the accumulation or decumulation phase of superannuation, they have proved a very effective vehicle.

Burgess said the sector had thrived despite a long-running campaign that asserted SMSFs were costly, complicated, and delivered lower investment returns compared with their APRA-regulated counterparts.

“These were criticisms that the sector – and the Association – took extremely seriously, so it was gratifying when research commissioned by the SMSF Association showed that an SMSF with net assets of $200,000 can be competitive in terms of costs and investment returns compared with APRA funds.”

Burgess said the Association was proud of the sector’s remarkable evolution, noting the concept of small, member-controlled superannuation funds emerged in 1985 under the term ‘excluded funds’ before SMSFs were introduced in 1999 alongside a more comprehensive regulatory framework.

“Over nearly four decades we have seen the emergence of a dedicated cohort of advisers who have played a critical role in guiding SMSF members through their own unique superannuation journey. The fact that every inquiry into superannuation has given our sector a clean bill of health is testimony to the professionalism they bring when advising their clients.”

This significant milestone will be celebrated at the SMSF Association’s 2025 National Conference, being held at the Melbourne Convention and Exhibition Centre from February 19 -21, where the theme, ‘Collaboration: Unleashing Collective Potential,’ will highlight the importance of working together to explore and shape what the future holds for the sector.

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Mr. Beattie will lead the overall delivery of international capital markets financing for clients in Australia and New Zealand. Mr. Connellan will focus on expanding further the coverage of financial sponsors, infrastructure funds and corporate clients delivering leveraged finance, acquisition finance and structured financing solutions.

“Duncan Beattie and Duncan Connellan are outstanding additions to our Investment Banking team. Their deep industry relationships and extensive transactional experience will generate tremendous value for our corporate and institutional clients in Australia and New Zealand,” says Richard Satchwell, Country CEO and Head of Investment Banking, Australia. “After obtaining our foreign authorised deposit-taking institution (ADI) license last month, I’m really excited to have Mr. Beattie and Mr. Connellan joining the bank, which further strengthens our commitment to our growth initiatives in Australia and more broadly in Asia.”

Mr. Beattie joins Barclays with 30 years of capital markets experience, having a deep understanding of Australia’s banking landscape. He is also a qualified chartered accountant. Based in Sydney, Mr. Beattie was most recently J.P. Morgan’s Head of Financial Institutions Group (FIG) and had been Co-Head of Debt Capital Markets for 16 years where he managed debt origination and execution for a wide range of borrowers. Before that, he spent 10 years with Nomura in London covering equity capital markets and three years with KPMG in Glasgow.

With over 20 years of investment and commercial banking experience in Australia, Asia and Europe, Mr. Connellan rejoins Barclays from Mitsubishi UFJ Financial Group, Inc. where he was Head of Strategic and Acquisition Finance, Australia and New Zealand for over four years, providing financing solutions for private equity, infrastructure and corporate clients. Prior to that, he worked at Barclays for six years, including his role as Head of Loan Capital Markets & Leveraged Finance, Australia and New Zealand. He also worked for The Royal Bank of Scotland in London, National Australia Bank in Melbourne and London, as well as Bankers Trust in Sydney.

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Jack Inglis

Investors increasingly are striking partnerships with hedge funds, underlining the closer collaboration taking place between the hedge fund industry and its investor base, according to a new survey by the Alternative Investment Management Association (AIMA), the global hedge fund industry association, and Barclays.

According to the new survey of investors and managers, called ‘The Extra Mile: Partnerships between Hedge Funds and Investors’, partnerships of varying forms between hedge funds and their investors are becoming increasingly common.

More than three-quarters of managers and two-thirds of investors who took part in the survey said they had entered into partnerships.

The survey found five key elements of partnerships: access to expertise and resources; customised products and solutions; co-investment; product seeding; and equity stakes.

The survey revealed a number of benefits to investors, including improved knowledge and understanding, better alignment of interest with managers, and better value for money.

Both larger and smaller managers and hedge funds of all strategies were found to be striking partnerships. Benefits to managers included “stickier” or more loyal investors, support for new product development, cross-selling opportunities and the offer of investor references.

The investors surveyed manage a combined $2 trillion in assets, of which approximately $260 billion is allocated to hedge funds. They include pension funds, endowments, foundations, sovereign wealth funds and family offices globally. The managers surveyed manage approximately $200 billion in assets.

Jack Inglis, AIMA’s CEO, said: “It is encouraging that so many hedge funds and their investors are striking such deep and wide-ranging partnerships. These arrangements represent a win-win for both sides, with significant benefits for both the manager and the investor.

“What the survey shows is that managers are truly going ‘the extra mile’ in terms of sharing knowledge and resources and providing customised products and services to their investor partners. These partnerships are also providing further evidence of very high levels of satisfaction among investors in their hedge fund investments.”

“The publication of this paper comes at an important time in the evolution of the hedge fund industry. Amidst the on-going process of institutionalisation, investors are actively pursuing a more direct engagement with the underlying hedge funds in which they are invested,” said Michelle McGregor-Smith, the Chief Executive of British Airways Pension Investment Management Ltd and the Chair of the AIMA Investor Steering Committee, which helped to direct the survey.

Lou Molinari, Managing Director, Global Head of Capital Solutions, Barclays, said: “The growth of partnerships represents an exciting new direction for the hedge fund industry as it continues to evolve. Successfully building partnerships with investors can allow managers to grow their business whilst increasing the stability of their assets under management, and cater to the specific needs of an increasingly-sophisticated investor base.

“Managers who are interested in pursuing partnerships should put in place a strategy to do so, identifying those investors they want to partner with, and deciding which of the elements of partnership they are best-placed to deliver.”

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