John Wiseman

Although he welcomes the financial service sector’s education and professional standards introduced into Parliament last year, industry consultant and former planner John Wiseman says the new changes have overlooked a gaping need for similar compulsory academic and professional requirements for SMSF trustees.

Commenting further, John Wiseman said with nearly 30% of Australia’s $2.1trillion of superannuation funds in SMSFs it is incomprehensible that current and potential future trustees are not required to complete appropriate academic courses and maintain an ongoing regime of professional development.

“Trustees should be required to have a minimum level of education to undertake an SMSF and both the government and industry should be concerned by this lack of financial literacy and competency”, said John Wiseman.

“Investing in shares or buying/selling property inside SMSF frameworks is simply not an undertaking for the amateur/unqualified practitioner as the taxation implications and adverse impact on retirement nest eggs can quite literally be catastrophic when mistakes are made”.

‘The cop on the beat’ in relation to non-compliant SMSFs is the ATO who can impose penalties and punish trustees without the prospect of losing half their accumulated retirement savings in penalties.

In many cases, the penalty imposed on a noncompliant trustee is an ‘education directive’ and order to undertake an education course at the trustee’s own expense.

“I liken the current SMSF situation as only requiring an unlicensed car driver to undertake a course to obtain a licence only if they are involved in a road accident”, said John Wiseman.

“Regrettably the real-life casualties when these ‘financial accidents’ occur are invariably the spouse, family members, disabled/financially dependent children, business partners, etc.

All who put their faith, financial wellbeing and prospects for a comfortable retirement in the hands of an individual and system that failed them abysmally.

Citing a recent meeting as an example of his concerns John Wiseman met an individual that started a new SMSF online for a two-member fund. His motivation was lower fees and the misguided belief he could do a better job with the investments.

When asked about the trust deed he had no idea what it was let alone if it was an individual or corporate trust deed.

This situation is far too common and the reality in so many hastily implemented SMSFs that will invariably cost more in lost opportunities – not to mention taxation repercussions affirmed John Wiseman.

“Had this individual been required to successfully complete a compulsory academic course the situation would have been far different”.

“It is therefore imperative that government introduce legislation mandating trustee training courses initially for new SMSFs as soon as possible. The ATO already has such a program in place and working in conjunction with the SMSF Association and other specialist training groups the situation could be addressed quite quickly”.

Additional benefits would be the removal of this education burden from the ATO by giving it to organisations better geared to provide this facility.

A further outcome would be safeguarding the many thousands of vulnerable members in SMSF’s where the trustee skills are simply not up to the task of investing, selecting appropriate insurance cover, etc.

In addition, the complexities around member payments is becoming a huge issue when situations such as death, disablement, retirement, split families, blended families (and many more) occur.

“To have these responsibilities in the hands of someone who is not competent and academically qualified is a disaster waiting to happen and in the end the only winners will the legal fraternity as these situations will invariably end up in the courts”, concluded John Wiseman.

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John Wiseman

Industry consultant John Wiseman predicts that the ‘head in the sand’ approach many accountants and SMSF trustee/members chose to adopt leading up the expiration of the July 2016 exemption is about to come back and bite a number of them very savagely.

For months as the July deadline approached, John Wiseman has been very vocal in his warnings to accountants and trustees that the era of low cost, DIY SMSFs will be unsustainable in the new compliant environment that will demand professionally administered and audited SMSFs.

As a result very much higher fees and charges are going to be inevitable.

The vast majority of accountants will conduct themselves appropriately and professionally in the new advice structure having either obtained an AFSL facility, entered into a partnership/alliance with a financial planner or elected to no longer provide this service and facility for clients.

Regrettably, there are going to be a number of accountants that will fail to heed ASIC’s stern warnings and cautions and intend to continue providing non-compliant advice under the new regime.

Commenting further John Wiseman said, “It has become very obvious that communication by some accountants to trustees/members of SMSFs that they assisted in establishing and running has appallingly been NON EXISTENT for some time and they (clients) don’t know how their SMSFs will be impacted from July 1st”.

Putting the recalcitrant behaviour to one side, John Wiseman strongly urges all accountants that have provided SMSF advice in the past to make contact with their Professional Indemnity insurers to ascertain how they are covered for the provision of pre July 1 advice. Irrespective of ASIC’s recent alert of advice outside an AFSL framework over the last three years – lawyers and PI providers won’t be as lenient if clients suffer considerable financial loss.

“Many accountant clients that undertook SMSFs in the past as low cost savings, investment and retirement vehicles will find themselves with no option but to restructure their SMSF or revert to an industry, retail or corporate fund – at potentially significant cost”, continued John Wiseman.

“If the costs and impact associated are substantial – many clients will question the previous advice or lack of communication and poor pre July 1 service and seek redress through legal action, hence the need to contact PI providers sooner than later.

One example of a situation that could motivate a client to seek compensation could be the need to move from an Individual Trustee to a Corporate Trustee.

Some assets within the fund may have stamp duty obligations – and in the case of property assets the stamp duty can be significant.

Not to mention possible capital gains tax and personal taxation issues in more complex restructures.

Another example could be Small APRA Funds (SAFs) that have not been well understood in the past and not provided as a consideration in the belief that they were more expensive and less flexible alternatives.

A SAF could well prove to be the ideal solution for those considering getting out of their SMSF but who feel they can’t because of tax implications of moving funds and investments.

Furthermore, SAFs would have been the better option for those with blended families; families caring for a relative with an intellectual disability; living overseas/non-residents; and disqualified persons (e.g. bankrupts).

John Wiseman concluded, “Accountants can expect to receive many a request from irate clients about the new increased costs to administer their SMSF or why a corporate trust deed wasn’t recommended in the first instance”.

“Because it was ‘cheaper’ at the time will struggle to stand up to scrutiny today”.

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John Wiseman

Industry consultant John Wiseman firmly believes that in the SMSF sector, little understood superannuation solution small APRA Funds (SAFs) will be considered far more favourably and seriously by planners and investors post July 2016 and their prominence and use will escalate dramatically.

Commenting further John Wiseman said, “SAFs have not been well understood or utilised, even by planners and accountants that are aware of them. Many believing SAFs are just a more expensive and less flexible alternative to an SMSF and in doing so, have overlooked many benefits not found in SMSFs”

For many months as the July accountants exemption approached, John Wiseman has been very vocal in predicting the cost of SMSFs will increase substantially as the era of the amateur DIY has come to an end. As a result of the new reality, many investors and trustees will look to exit their SMSFs in favour of a retail, corporate or industry fund.

John Wiseman continued, “A SAF may well be the ideal solution for those considering getting out of their SMSF but who feel they can’t because of tax implications of moving funds and investments”.

“Furthermore, planners that have not considered SAF’s in the past and failed to mention or recommend them in SOAs as alternative strategies for clients will do so at their peril in the future. This change will benefit clients and the industry and planners would be well advised to familiarise themselves with SAFs as a matter of urgency”, continued John Wiseman.

SMSFs have enjoyed unprecedented popularity over past years as more and more Australians sought to utilise an extremely flexible vehicle that gave them control of their retirement journey and enabled the effective accumulation and management of retirement savings.

SMSFs will not disappear after July 1, however the predictions of a decline in their use will be proven correct affirms John Wiseman.

Monitoring wealth and investment programs on talk back radio and television has reaffirmed many SMSF clients calling in with their concerns are in urgent need of professional advice. “Far too many investors in the past were attracted to SMSFs by low or no fees. This has now come to an end with unstructured unqualified advice in the new era resulting in the severest of penalties”, said John Wiseman.

Another area where John Wiseman foresees a huge increase in the cost of administering a SMSF will be the legal fees associated with having the trust deeds reviewed. There is no doubt that post July 2016 many planners will be recommending this in their SOAs.

Although the outlay for professional legal advice may seem significant at first, it is when disputes arise that the cost will be regarded as a very prudent and wise investment.

Below are some key factors that will underpin SAFs popularity in the future for investors that want to control their superannuation without the complex compliance and administration responsibilities of traditional SMSFs:

• Loss of capacity through dementia or other illnesses is a source of concern for SMSF trustees that does not affect members of a SAF. The prevalence of dementia is projected to increase to nearly 1.13 million people by 2050, so these concerns will continue to grow.
• Trusteeship of a SMSF may cause difficulties for a number of clients including blended families (and those caring for a relative with an intellectual disability) or those facing bankruptcy, non-residents and loss of capacity.

In addition, an undischarged bankrupt is unable to be a trustee and is therefore unable to be a member of a SMSF. There are no legal issues with disqualified persons being members of a SAF:

• SAF fund trusteeship is provided by an APRA-licensed trustee, which will be a professional trustee company.
• The administration of SAFs is generally performed by professional administration organisations appointed by the licensed trustee.
• Record keeping will be timely and complete since the licensed trustee controls custody of all assets and receives all information and transactions directly.

John Wiseman concluded, “Although misunderstood in the past, SAFs are about to become a major force in the SMSF sector as they provide the perfect alternative for clients wanting the flexibility and control of a SMSF, but without all the compliance risk and responsibility of a trustee – or as part of a tax effective exit strategy from a SMSF”.

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John Wiseman

Demand from retired Australians will profoundly change the future of financial advice with planners challenged to provide solutions that capitalise and more effectively utilise the dormant wealth and value locked up in the family home said industry consultant John Wiseman.

Commenting further, John Wiseman said, “For many years it has been very obvious that a great number of Australians approaching or currently in retirement will have to use their family home in some form to assist them address a myriad of financial dilemmas as the result of living longer”.

“Living longer in the twilight years might sound like an exciting prospect but running out of money in retirement is going to be a very real scenario and major concern for retirees – in fact many will find themselves dealing with the ‘perfect storm’ i.e. longer lifespans; insufficient savings, investments and superannuation; low interest rates for up to two decades; and escalating cost of living/health/medical expenses”.

Added to this list of woes will be the need for general upkeep and maintenance of the family home, dealing with any unexpected major repairs and replacing the motor vehicle.

Time has most definitely not been on the side of far too many Baby Boomer Australians to enable them to accumulate sufficient superannuation with the Superannuation Guarantee starting as low as 3% in 1993.

In addition to this already daunting list of challenges, an increasing number of retired and preretirement Australians will find themselves dealing with mature age children returning home as the result of broken marriages, failed business ventures and loss of employment.

“As a result, financial planners will be on the frontline and need to prepare themselves now for a wave of enquiries and requests for assistance and solutions”, said John Wiseman.

“In preparing themselves, financial planners will need to look to the family home as source of untapped wealth to be included in the strategy/solutions they provide”.

For many, it will mean taking out a reverse mortgage or selling the family home, downsizing, renting, moving into a retirement village or building a granny flat on their children’s properties.

Equity release is another option planners will look to in increasing numbers instead of reverse mortgages as a solution said John Wiseman.

“This alternative is currently only provided by Homesafe Equity Release (www.homesafe.com.au) and has removed the uncertain financial outcome of the traditional reverse mortgage, where compound interest can rapidly erode a retiree’s equity in their home”.

“Homesafe is not a loan but a deferred sale of an agreed proportion of the home. The customer retains their percentage of their home, continuing to live in the property making no payments until they die or decide to sell”.

Unfortunately, Homesafe is currently only available in Sydney and Melbourne and it is hoped that they will be able to expand to other major cities as demand grows.

John Wiseman concluded, “With returns from investments forecast to be low for an extended number of years, (even the Future Fund is requesting the federal government to reduce its projections from CPI plus 5% to CPI plus 3%), the financial services sector needs to follow Homesafe’s example and respond with innovative solutions for elderly consumers that will allow them unlock the wealth in their residential property.”

“Financial planners can expect the demand for their services to grow enormously in the coming years and with the relatively low number of practitioners in the industry, many young people should be turning their attention to a career in the advice sector NOW!”

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John Wiseman

Industry consultant John Wiseman warns financial planners are at risk in the current economic environment of interest rates falling to historical lows if they fail to correctly clarify the role of Fixed Income as a defensive asset in a client’s portfolio.

Using an example of a client with risk profile that has identified them as a Balanced Investor with say an account balance of $800,000 the financial planner is required to allocate at least 50% to defensive assets says John Wiseman. In most cases this would comprise Cash / Term Deposits and Fixed Income.

The confusion for many in the advice industry is how the Fixed Income assets work, especially in SMSFs which comprise an estimated 30% of Australia’s total superannuation pool of $2 trillion affirms John Wiseman.

“It’s estimated that only 1.5% of that amount is in Fixed Income assets whilst in other parts of the superannuation pool defensive would hold approximately 25%. Numerous planners will NOT recommend a number of the current products because of confusion of where they sit e.g. Defensive or Growth? – and will allocate the majority of defensive proportion to Cash / Term Deposits”.

So, in the example of the $800,000 Balanced profile investor, their $400,000 would struggle to keep up with inflation. This issue of below inflation level returns is even tougher for a client who is a Conservative / Moderate investor.

For risk profiling and asset allocation in the low interest / return environment, planners and clients will increasingly demand a much clearer and more concise understanding of this asset class. As mentioned above there is a huge gap in the SMSF sector for Fixed Income.

The fund managers who get this right will benefit immensely with unprecedented levels of growth notes John Wiseman.

In John Wiseman’s view several steps need to be taken once the obvious is recognised e.g. the immense need for more REAL defensive products.

1. The insurance companies clarifying under the cover of their PI which of these Fixed Income products on the AFSL’s APL fits the profiling of a Defensive asset and which products should be Growth assets e.g. Hybrids (obvious).

2. ASIC insists the providers of these products when a new investment is being considered make it much clearer and in very simple terminology where they see these investments sit in the asset allocation…Defensive or Growth.

3. The AFSL holder should embark on a thorough investigation and review of all Fixed Income products on their APLs and advise the Authorised Representatives where the products should sit and fit in the risk profile.

4. The AFSL holder would be well advised to start and introduce at their PD days extensive training in this area as it is well documented not just with planners but many in the industry (let alone the clients) have very little knowledge / understanding of this asset class.

There are a myriad of reasons for this, one being both the industry and investor clients have had the luxury for several years of high interest rates and returns for Cash and Term Deposits from banks etc. and this has done the job. Quite a number have not seen the need, particularly within SMSFs, to include them as part of their portfolio.

With low interest rates predicted to be the norm for an extended period of time – something has to be done now.

5. Accountants / planners take the view they need and are willing to learn more about this very important part of a client portfolio, NO longer being able to take the easy way out and recommend and justify for clients to simply invest all their Defensive allocation to Cash and Term Deposits.

6. For fund managers it presents them with incredible potential for growth in this asset class.

To assist in addressing the situation, John Wiseman has provided the following suggestions –

• Change the Fixed Income name as there too many conflicting views.
• Fixed Income products to be assessed and made clearer to which part of the portfolio they apply i.e. Defensive or Growth. In doing so, it will assist both researchers and industry.
• Develop more appropriate training and education programs to assist planners to gain a more comprehensive appreciation of these products and their application – and in turn how best to educate and inform consumers in simple jargon free language.

John Wiseman concluded, “As the result of high interest rates over an extended number of years, Australian investors and fund managers have basically overlooked the retail side of the Fixed Income asset class. Lack of demand, especially from small investors has not required fund managers to design products in this area. However it is pleasing to note that some fund managers have seen the signs are responding.

“A further incentive for fund managers will occur on July 1 when the accountant exemption expires and those that respond accordingly will be the winners”.

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John Wiseman

As the July 1 SMSF accountants’ exemption nears, and the impact the SMSF changes will have on accountants and SMSF trustees and members is revealed, is it any wonder that their level of concern is increasing rapidly as the administrative and advice ramifications are beginning to be understood in their totality said John Wiseman, industry consultant and principal of John Wiseman Consulting.

One such area John Wiseman points to that has gone relatively unnoticed relates to small Australian Prudential Regulation Authority (APRA) funds that should at least be included in a Statement of Advice (SOA) as a recommendation or as an alternative strategy for many SMSF trustees / members who will require advice regarding their options, not only post July 1 but NOW.

“In most cases this is not going to happen unless the AFSL holder / dealer group starts the training / education for the authorised representatives and has the appropriate products on their APLs”, said John Wiseman.

“At the moment this is being ignored by an alarming number of SMSF advice providers and another area that AFSL / dealer groups need to address immediately as this is required to enable them to compliantly service their clients and / or at least present it in the SOA as an alternative strategy”.

Many accountants who have / or are going to obtain their own AFSL to enable them to continue or commence providing SMSF advice are cautioned that Small APRA Funds (SAF) is not an area that should be ignored.

Hopefully, it is known by those who will be giving advice that a SAF is basically an SMSF, but with a professional, licensed trustee, who takes on the duties of compliance, administration, audit and the accounting; and it won’t be a stumbling block for the provision of appropriate / alternative advice said John Wiseman.

When providing industry presentations and workshops on SMSFs, John Wiseman includes the following points that should be considered:

• There is now significant regulatory focus on exit strategies and the ATO has made it clear that they expect this to be considered by the trustees when establishing their super fund.
• John also asks his audience to visualise the reaction and response of a dealer group’s auditor, or the professional auditor in cases where accountants have their own AFSL when he / she is perusing a file and notes how this is covered in the appropriate alternatives which may be a SAF.
• Reasons why an SMSF may need to be wound up that includes, death of a member, divorce of members, a member loss or lack of capacity, members loss of interest in running the fund, member becomes a non-resident, member becomes a disqualified person e.g. bankruptcy, etc.

A SAF will not always be the appropriate solution for a number of trustees / members but John Wiseman does suggest that this option be taken very seriously by those providing SMSF advice.

One of many outcomes of the new SMSF regulatory regime will be the inevitable increase in fees and costs for trustees and members – and these will be substantial as the cheap, DIY days are about to come to an abrupt end. As one of the primary motivators for SMSFs has been fees and charges, the new reality will see many seeking to exit their fund and some options they may need to consider are:

• Rolling over into a retail / industry fund or public offer
• Convert to a Small APRA Fund (SAF)
• Withdraw from the Fund if the Condition of Release conditions are met.

For those that do opt for a SAF, there are many advantages and John Wiseman strongly recommends professional advisers present these to clients as viable considerations when presenting an SOA. SAFs come into their own for situations:

• Where members lack capacity as the result of dementia or Alzheimer’s (that is predicted to affect over 1.3 million Australians by 2050).
• Blended families to protect both the old & new families.
• Protecting children with disabilities.
• For those with assets currently in SMSF converted to SAF – there is the possibility they can be maintained with tax advantages.
• The Superannuation Complaints Tribunal and the Superannuation Compensation Scheme cover Small APRA Funds and this could provide some compensation if losses were caused by theft or fraud. This is not the case with SMSFs.

The need for SAFs to be on APLs as outlined above is yet another example of both the issues and opportunities that is going to bring accountants and financial planners closer together as July 1 approaches.

“I expect to see many more problems arising in this highly charged environment and they are going to keep coming to the fore as the inadequacies and inefficiencies of the past are put under the spotlight.

“However, from disruption comes opportunity and I foresee an SMSF future that will be better for all stakeholders – especially the consumer – but expect to experience much more turbulence ahead of the calm water”, concluded John Wiseman.

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John Wiseman

Reflecting on the tsunami of issues about to engulf accountants and SMSF holders, industry consultant John Wiseman points to the impact it will have on costs and fees – one of the key motivators for setting up and maintaining an SMSF. For those trustees and members, fees and charges are going to be a major and unexpected issue in the post July 1, 2016 era.

Just look at the numbers challenges John Wiseman. “At December 2015 SMSF accounted for nearly 30% of the $2 trillion held in assets in the superannuation accounts of approximately 550,000 members. Over recent years, the industry has seen thousands of new SMSF accounts added every quarter as individuals seek to manage and control their retirement savings/investment journey and destination”.

Apart from the fanciful notion of DIY amateur control, the other significant motivator has been fees and charges said John Wiseman. “Capitalising on this ‘I can do it myself’ attitude and belief has been the number of discounters that seem to be growing in greater numbers daily with advertisements offering inexpensive over the phone or online solutions for trustees and members”.

“I can only see an ocean of trouble for those that have elected the cheap offering over professional qualified advice that is provided by specialist financial planners”.

SMSF discounters may on the surface appear to be a cost effective answer to the burning priority of fees for trustees and members – however there is absolutely no substitute for quality for anyone acting as the trustee for one of the two largest and most important assets of an individual’s life.

John Wiseman’s strongly suggests to anyone acting as a trustee to seriously treat their responsibility with the importance and respect it deserves to ensure the long term protection of the SMSF and the financial futures and wellbeing of the members.

Further evidence that reducing fees is a key motivator is evidenced by the huge number of individual trustees that are still operating as opposed to the corporate trustee that many experts have criticised at industry forums and events such as the SMSF Association conference in Adelaide last month.

Most SMSFs should have a corporate trust deed even though on the surface the individual trust deed may appear to be the cost effective alternative said John Wiseman. Pointing to the exemplary approach of a presenter and industry role model practitioner at a recent seminar that said his planning practice would not contemplate any SMSF unless there was a corporate trust deed.

As the July 1 SMSF exemption deadline looms on the horizon, those accountants who are not addressing this issue as a priority now are going to make it more difficult later for their clients said John Wiseman.

“For those accountants that are avoiding the issue as it’s too hard and do not have a plan / strategy to address these issues for their SMSF clients face potential financial loss through devaluation of their business. I would not be surprised to see prospective buyer’s walk away following a due diligence assessment and identification of this situation”.

But the tsunami of problems doesn’t end here for accountants and SMSF holders as another extremely disturbing wave approaches.

There has been a huge increase in the number of individuals that have been disqualified from acting as a trustee of an SMSF or as a director of the funds corporate trustee. At the end of June 2015 the ATO disqualified 663 individuals, an increase of 13% over the previous year – and a doubling of the number from 2010-11.

Not a great scenario for someone to have the ATO say that they are not a fit and proper person to be a trustee or a responsible officer of a body corporate that is a trustee etc.

While time is on their side, astute accountants, trustees / members have already abandoned their DIY habits and sought the services or an outsourced facility with a specialist SMSF financial planner. They have also accepted that there will be an increase in costs associated with the services of a qualified expert and professional.

However, as July 1 nears, two very disturbing scenarios are emerging as witnessed by the extraordinarily low number of accountants that have applied for their AFSL (just over 200 at November 2015 according to ASIC). Firstly, there is a strong indication that many accountants are in denial and plan to continue (at their immense professional and business peril) to provide unlicensed SMSF advice post July 1.

The other will be a last minute rush to the premises financial planners crying out for help as accountants realise the enormity of the administrative and compliant demands that the provision of proper financial advice requires.

John Wiseman concluded, “The era of the amateur DIY SMSF is rapidly coming to a close as the sheer size of SMSFs as a percentage of Australia’s pool of retirement savings demanded a professional approach to the provision of advice and related services.

“The winners in the new era will be specialist financial planners and professional accounting practices that have reengineered their businesses and service offerings. But in the end, the real winners will be the Australian consumers and national economy”.

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John Wiseman

With time now fast approaching for the July 1st deadline whereby the accountants SMSF Advice exemption will be removed, the big winners will be qualified compliant ready Financial Planners in contrast to a great number of accountants that simply will not be ready or able to transform their practices to capitalise on the business opportunity said industry consultant John Wiseman.

“Far too many members of the accounting profession, especially the public practice accountants are simply not moving fast enough with many practitioners in denial or unable to comprehend the enormity of the administration, operational, legislative and regulatory demands of a full or partial AFSL requirements to provide SMSF advice to clients”, said John Wiseman.

“In contrast, the advice sector is well positioned to capitalise with financial planners who are ready, qualified and SMSF compliant the potential winners after July 1st and will be the beneficiaries of new business growth by positioning and promoting themselves accordingly”.

When the SMSF provisions were first announced, John Wiseman predicted the financial planner / accountant SMSF scenario outcome and after attending many industry seminars, workshops including most recently the 2016 SMSF Association National Conference in Adelaide – it has only reaffirmed this position.

SMSF Trustees/Members have several reasons for setting up their own fund with control of one’s own financial journey and destiny a key motivation and objective amongst many.

“A further prediction is that if many of these individuals that undertook their own SMSF was the reduction of costs – especially fees, then they are going to be in for a real shock post July 1”, said John Wiseman.

Some accountants may be able to keep client SMSF costs down.  Others may think that they will be able to charge at the current rate and perhaps they may succeed in the short-term, but not many affirmed John Wiseman.

“I see fees as a major stumbling block for many accountants as well as an extreme lack of understanding of what they are in for post July 1 and the legal demands required to undertake the provision of professional licensed or partially licensed advice in this new era”.

Another cost John Wiseman foresees impacting SMSF Trustees and Members will be increased audit fees as the result of the ATO cracking down on cheap audits whilst encouraging auditors to substantially increase their productivity and a more rigorous adherence to independency requirements.

A further driver of costs will be the ATO higher entry levels and requirements for new SMSF auditors that includes much tougher exams and industry experience of 300 hours before being able to operate alone as an auditor.  These will surely reduce numbers and drive up charges and fees especially in the drawdown / pension stage.

Already the confusion within the ranks of accountants over advice has been evidenced by the appalling low number of AFSLs sought (204 at the end of November 2015 according to ASIC) and is it any wonder said John Wiseman with over 26 different licences available requiring various levels of training and appropriate competencies.

John Wiseman is adamant that many Trustees / Members will be paying significantly more for their Self-Managed Super Funds to be managed from July 1  except where they are administered through a current compliant advice process and framework with supporting SOA’s, ROA’, diary notes, etc.

When those accountants that have been procrastinating, unable or unwilling to make a decision finally take action, they will encounter a bewildering and overwhelming appreciation and realisation for the full depth of the commitment required to even provide the lowest level of advice.

Furthermore, they will be well advised to engage in a comprehensive dialogue with their PI insurer who will want to know in precise detail their advice provision activities.

John Wiseman concluded, “A very real alternative and option that those accountants that have not yet undertaken the acquisition of their AFSL may be to re-engineer their business model and establish a JV or advice alliance with a financial planner resulting in a win-win-win outcome for the accountant, his / her clients and the financial planner”.

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