Andrea Slattery

With our national conference behind us, and as a 2014 unfolds amid several inquiries critical to our industry, I thought it was an important time to remind members of the core values that underpin SPAA. These are the values on which we will never comprise, having been inculcated into our DNA over the past 11 years.

Professionalism, independence, advocacy and thought leadership, and an unwavering commitment to improving educational standards to build a profession that allows trustees to make informed decisions. These things are what we stand for; it can be no less.

Realising the importance of these inquiries to our industry and Australia’s future, both our Patron, the former Chief Justice of the High Court, Sir Anthony Mason, and myself, used our opening addresses to the national conference in February to reiterate the principles underpinning SPAA.

It was Sir Anthony who articulated it best when he told the 1400 delegates that SPAA has vigorously encouraged the rise of a system of SMSF professionals, professionals who are dedicated and committed to providing advice to stakeholders in the sector.

It was a message I reinforced when I reminded delegates that in less than 10 years we will witness the first generation of Australians who will have accumulated sizeable assets under compulsory superannuation. Additional skills, capabilities and competent professionals will be critical to advise on how these assets are managed, as well as all the related services germane to our industry.

As we all know, the SMSF sector is, by its very nature, both disparate and diverse. That’s why it requires an umbrella group that understands all stakeholders’ myriad interests and can represent and service those interests.

SPAA is the only organisation that can make this claim because it is recognised by the Government, Opposition, regulators, and the civil service as the preeminent body in self managed super.

The reason this recognition is bestowed on SPAA is self evident; they all know the values we espouse and who we represent – a membership boasting all the skills required of an SMSF professional and having a combined direct reach to more than two-thirds of the one million SMSF trustees. In short, we are the standard bearer for the SMSF profession, the custodian for members/trustees.

This is why SPAA commits to continually improving professional standards and has created a career pathway for existing professionals and new entrants to build our industry, with the focus we place on education proof positive of this.

SPAA has always valued its independence. It is why we only allow individuals to join, ensuring we truly represent the voice of all SMSF professionals.

It was our commitment to advocacy and thought leadership, underpinned by rigorous research, which allowed a more complete picture of our sector to be embedded in the Cooper report, and, be rest assured, this same commitment will typify how we approach the Financial Systems Inquiry, the review of the tax system, and the inquiry into income streams to examine the payment of superannuation and social security benefits.

Andrea Slattery, CEO, SMSF Professionals’ Association of Australia (SPAA)

The post The values that SPAA espouses appeared first on AdviserVoice.

SPAA CEO Andrea Slattery says: “The SMSF sector is growing exponentially and SPAA has to keep expanding its resources to have the capacity to meet the demand this places on our services and to ensure we fulfil our obligations to members.

“In Richard and Liz, we have hired two proven performers in their respective fields who will bring new skills and experiences to the organisation that can only benefit our members.”

Richard brings to SPAA a varied CV that includes Channel 7, SR7, Credit Suisse, Turner Freeman Lawyers and Orient Capital. At SR7 he was Director, Corporate Development, Asia Pacific, and at Credit Suisse Assistant Vice President, Corporate Development. 

He has a Bachelor of Business Administration with a Major in Marketing Management from the University of Memphis, Tennessee, and has done a Mandarin language course at the University of New South Wales.

Richard says: “The opportunity to join SPAA at this stage in the sector’s growth is both exciting and challenging. The organisation has got so much to offer members, whether it’s educational, professional resources, research, or specialised professional development events, such as workshops and conferences, and that’s the message I will be taking to all professionals working in this field.”

Liz, who has a Bachelor of Business from Monash University, brings to SPAA a long corporate career with AMP as well as working as a consultant for the Financial Services Education Agency Australia.

She also ran her own company that provided outsourcing services and business consultancy to clients that require independent certification of services and education programs, including having a four-year contract to administer and manage the ASIC Training Register that underpinned education for compliance with Regulatory Statement 146.

“I think both my time at AMP, as well as running my own business that included work with ASIC, has equipped me for this role at SPAA. I am acutely conscious of the importance that this organisation places on education, and how it benefits the members across all the professions,” she says.

The post SPAA makes two appointments in marketing and education appeared first on AdviserVoice.

SPAA CEO Andrea Slattery says: “This decision will allow the pension earnings tax exemption to continue after the death of a pensioner until the deceased member’s benefit has been paid out of the fund. This is excellent news for the thousands of SMSFs in the pension phase which could face significant capital gains tax bills on the payment of death benefits. 

“SPAA believed the previous ruling was unjust, and we have been assertive, with other sections of the industry over the past 12 months, to have the law amended. Today’s announcement is warmly welcomed and we thank the Government for taking the time to listen to genuine concerns across the superannuation industry.” 

However, Mrs Slattery says some aspects of the Australian Taxation Office draft ruling TR 2011/D3 which was handed down last year, still need to be clarified. 

“This draft identified a number of other events that might result in the pension exemption ceasing and re-starting for tax purposes.” 

“In these other instances, SPAA assumes the ATO’s interpretation of the law published in the draft ruling will probably  stay in place.  If this is the case, then there are still a number of related technical issues that remain outstanding that of particular importance for the SMSF sector and superannuation sector as a whole.” 

Mrs Slattery also raised the issue as to the timing of the implementation of this amendment. 

“The announcement says these changes will apply from the 2012-13 financial year. But what about funds that are impacted pre 2012-13 as a result of the ATO’s draft ruling – do we assume the ATO’s view prevails? 

“SPAA is aware of a number of SMSF administrators who started taxing death benefits in accordance with the ATO’s interpretation when it first became known a few years back. The answer is uncertain, however, presumably these funds will now be entitled to a tax refund.” 

On a disappointing note, SPAA says the decision to increase the SMSF levy, which equates to around $32 million a year in extra revenue, seems difficult to justify. 

“It has been sold on the basis of cost recovery, but further details of the increased cost to SMSFs are required from the Government to support such a substantial increase.” 

“In addition, the change in the collection of the levy may have important implications for new SMSFs if they have insufficient funds to pay the levy at the time the fund is established,” she says.

The post Government’s pension ruling gets thumbs up from SPAA appeared first on AdviserVoice.

While the report, called The SMSF Generations Report, reveals SMSFs are popular with every generation of Australians, it has highlighted that there is no such thing as a typical SMSF investor. There are significant differences in the attitudes, investment priorities and lifestyle aspirations of each age group.

With SMSFs already the largest and fastest growing sector of the Australian superannuation industry, the report emphasises that advisers need to take into account these generational differences when delivering advice to help better meet the needs of investors.

Macquarie Banking and Financial Services Group Analytics Research Manager, Gary Lembit, said that investors across the generations recognise the value of advice when managing their SMSFs, but that advisers should tailor their approach according to life stage to have the greatest impact.

“It is clear that one of the main reasons investors opt for an SMSF is to have greater control and choice over their investments. However, this does not mean they want to be entirely self-directed,” Mr Lembit said.

“As the insights in this report show, SMSF investors across the generations recognise the role financial advisers have to play in providing valuable guidance on their investments. However, through better understanding their clients’ state of mind, advisers can adapt their advice models and learn to communicate in a way that better meets their needs, while articulating the value they can add.”

Despite investors sharing the common reasons for choosing an SMSF, more control and choice over their investments, there is a significant difference between how receptive each generation is to receiving financial advice.

Generation Y, not surprisingly, is generally highly confident about many aspects of their lives, but when it comes to long-term investment decisions, they are less confident than other generations. They are very receptive to advice, but do not seek it, meaning it is important for advisers to develop ways to proactively communicate with this group and help them understand the value of advice.

Generation X is a lot more sceptical about financial advice, but being extremely time poor, they are willing to pay for advice in certain situations, particularly if it helps save time.

The Baby Boomers are increasingly seeking advice, perhaps because of the higher amount in their funds and being closest to retirement, while the Silent Generation (those in retirement) is by far the most likely generation to seek advice.

Andrea Slattery, CEO of SPAA, said that as the number of investors using SMSFs grows, the industry needs to respond by focusing more on what they can do to best service this distinct group.

“We have found time and time again that investors who use SMSFs are the most engaged people in superannuation. They want to make sure their funds perform well and are interested in understanding what is involved to help make this happen,” Ms Slattery said.

“This includes accessing financial advice, which these investors show a continuing appetite for, but as this report has shown, the advice industry can make their role even more effective by tailoring their approach to the stage of life the investor is in. We think that through reporting insights like these we can continue to support the advice industry in its aim of demonstrating its value to investors and helping investors make the most out of their retirement savings through their SMSF.”

In addition to highlighting the differing attitudes towards advice, the report provides a snapshot of the SMSF asset allocation preferences among the generations. As a general trend, cash/near cash holdings and direct shares in SMSFs have increased in recent years, while managed fund holdings have decreased.

“We have always known that the cash holdings in SMSFs as at 30 June each year is not a true indication of the cash that is held throughout the year. This report highlights what trustees really do when they have control and flexibility and how they choose their assets to hold, including cash/near cash assets.”

Generation Y has lower cash balances and a higher proportion of their portfolios in equities than others, and a greater focus on achieving capital growth. They have been the most active during the past 12 months in changing the asset allocation of their funds.

Reflecting the ‘Great Australian Dream’, Generation X has 30 per cent of their SMSF capital in direct property, but with relatively illiquid portfolios, is less likely to have substantially changed their SMSF’s asset allocation in the past year.

The Baby Boomers have recently taken a more defensive stance towards their SMSF asset allocation. While still largely focused on capital growth, half have sought out franked dividends as a source of regular income. They still have among the highest allocations to direct equities, second only to the Silent Generation. Surprisingly, despite ongoing market volatility and the flight to safety among some investors, the Silent Generation have actually increased their SMSF allocation to direct equities in the past six years.

Summarising the key learning from the report, Mr Lembit said: “The overall message is clear: by tailoring advice to the different investment styles and decision-making processes of each generation, advisers can build stronger and more fruitful client relationships.”

25 July 2012

The post Research from Macquarie and SPAA confirms advisers need to start talkin’ ‘bout your generation appeared first on AdviserVoice.

According to the Federal Treasury website, the proposed ban is now planned to take effect from 1 July 2013. SPAA Technical Director Peter Burgess says the decision to defer the start date is necessary to give Treasury more time to work out a number of serious practical issues that threaten to de-rail the measure.

Burgess, who will address this critical issue for SMSFs at SPAA’s technical conference in Sydney on 24 July, says it is the association’s understanding that the Government’s intention  was to enforce a ban on these transactions by amending subsection 66(2) of the Superannuation Industry (Supervision) Act 1993 (the SIS Act).

“This is the section of the Act that allows fund trustees to acquire listed securities from a related party without breaching the general prohibition on acquiring assets from a related party.

“For SMSFs, the amendment would most likely restrict the exemption available under section 66(2) to listed securities acquired from a related party on-market.

“However, the problem with this approach is that the Corporations Act prohibits investors from selling securities on market with the intention of buying back that security on market – sometimes referred to as a wash trade.

“This is why the transaction is done off-market. If it is done on-market SMSF investors and market participants may face serious penalties for breaching the market integrity rules under the Corporations Act.

“These rules are there to prevent market rigging and the false or misleading appearance of active trading of a security, which clearly is not the intention or motive of an SMSF investor.”

Unless this issue is resolved, banning off-market transfers will have the effect of banning SMSF investors from transferring any listed securities they own to their fund that goes well beyond what was proposed and intended by the Cooper Review, he says. SPAA continues to advocate tighter legislative controls as an alternative to the ban.

This approach would see prescribed timeframes and pricing rules inserted into the law for off-market transfers and a requirement for the fund auditor to confirm that these rules had been adhered to.

16 July2012

The post SPAA welcomes decision to defer off-market transfer ban appeared first on AdviserVoice.

Graeme Colley, SPAA Director – Educational and Professional Standards, who will address this issue at the organisation’s technical conference in Sydney on July 24, says, “It’s important the ATO finalises its draft ruling sent out for public comment last year as it has the potential to impact significantly on members’ benefits. 

“Certainly there is the potential for significant additional income tax to be paid if the trustees get it wrong. 

“SPAA understands a decision was to have been made by last month, but nothing has been forthcoming despite numerous submissions on the issue to the ATO. 

“The link between the income tax law and the SIS legislation has always technically been a tenuous one as the fit has some uneasy aspects at best, and the delay in finalising draft ruling (TR 2011/D3) has not helped matters.” 

The ruling revolves around what constitutes the provision of a pension in a fund and whether the income of the fund supporting that pension is taxed at 15% or tax free. 

Mr Colley says there is also uncertainty around the date from which the ruling would take effect, with the draft ruling stipulating 1 July 2007. 

“Backdating to 1 July 2007 may be fine for funds that have happened to have done it right, according to the Commissioner’s ruling. 

“However, for those who have not met the requirements of the ruling due to other quite valid interpretations of the law, the result could be a very expensive exercise. 

“Larger public offer funds that are in this boat may end up with a larger tax bill to pay.  They may need to amend their systems and reduce the balances of members to pay the additional tax. This may impact unfairly on members who are new to the fund or those who have been in pension phase for a shorter period than the backdating requires,” he says.

10 July 2012

The post SPAA wants ATO to clarify super income streams appeared first on AdviserVoice.

The Self Managed Super Fund Professionals’ Association (SPAA) has today welcomed most elements in the draft Future of Financial Advice (FoFA) legislation describing it as a common sense approach that is consistent with removing market distortions.

“The FoFA reforms are an important initiative for ensuring more Australians benefit from receiving quality advice,” said Andrea Slattery, CEO of SPAA.

“SPAA has been leading the advocacy for the best interest duty requirement to have regard to ‘client’s instructions’ and we are particularly pleased to see that this requirement has now been included. We believe this is paramount if the best interest duty is to achieve the desired outcomes for consumers. 

“SPAA is also pleased to see the Federal Government has reconsidered its decision to ban commissions on individual insurance within superannuation. This measure will remove distortions and will ensure a level playing field for individual insurance policies. This is a positive measure for the SMSF sector.

“While our preference would have been to avoid statutory opt-in obligations, we support the common sense approach announced today to provide greater flexibility in the way these obligations will be enforced, including the ability for advisers to secure their clients’ opt-in through e-commerce arrangements such as the phone or the internet,” she said.

Mrs Slattery said the detail was still pending on a number of critical areas. 

“We understand the Government is still considering a restricted or structured advice licence for accountants who advise self managed super funds.  SPAA has been working hard to ensure the Government understands the importance of a restricted or structured license arrangement, which recognises SMSF accountants may not wish to provide recommendations to clients to purchase specific investment financial products.  We have also been advising on the minimum competencies required to hold such a licence and we look forward to seeing these final details in the second tranche of the legislation,” she said.

“SPAA has been advocating for the removal of the ASIC class order within RG200. We are also advocating for intra fund advice and scaled advice to have the same level of competency and best interest duty requirements as all other advisors.” she said.

The post SPAA mostly pleased with FoFA revisions appeared first on AdviserVoice.

Managing Director of The SMSF Academy, Aaron Dunn, said the topic was decided in response to continuing Australian Taxation Office (ATO) concerns about whether trustees and/or the professionals advising them, are correctly calculating and applying tax exemption on income generated by the fund, as members move from the accumulation fund to retirement.

“With an aging population and a focus on maximising tax exemption within SMSFs, it is critical that advisers have a better understanding of actuarial requirements and strategies to obtain fantastic outcomes for their clients,” Mr Dunn said.

The one-hour interactive webinar, which will run on Wednesday 22 June, 2011 from 12:30pm, will be co-hosted by Mr Dunn and Senior Actuary at Bendzulla Actuarial, Geoff Morley, who will discuss and provide examples on:

• Understanding the unsegregated method for SMSFs
• Common mistakes and tips when using the unsegregated method
• How segregation works within a SMSF

Time will also be made available at the end of the session for questions from the webinar audience, including discussing current ATO issues.
x
Mr Dunn said he is delighted to be joined by someone of Mr Morley’s calibre.
x
“Bendzulla Actuarial specialises in providing practical solutions for SMSF trustees and their professional advisers and has won every BRW Client Choice Award for Best Actuarial Firm since 2007,” he said. “Geoff is an acknowledged expert in his field and has over 19 years experience in actuarial consulting in Australia and the UK.”

The post Maximising tax exemptions on SMSF funds income appeared first on AdviserVoice.

The Self Managed Superannuation Funds Professionals Association (SPAA) has today warmly welcomed the appointment of Mr Bill Shorten MP to the position of Assistant Treasurer and Minister for Superannuation and Financial Services.

“We congratulate Mr Bill Shorten MP on his appointment as Minister for Superannuation and we look forward to working with him to advance the interests of the hundreds of thousands of Australians who choose to manage their own superannuation,” said Andrea Slattery, CEO of SPAA.

“The $390 billion self managed superannuation sector is now the largest sector in the $1.2 trillion superannuation industry by assets and number of funds, and represents the most engaged segment.”

“We note and support Minister Shorten’s comments that improvements to superannuation represent an opportunity to increase the quality of life of all Australians and deliver us a sustainable future. We are confident Mr Shorten’s background as trustee of two superannuation funds will stand him in good stead in his new role developing policies to benefit the broader retirement savings sector.”

“SPAA is keen to progress policies that raise standards of professional advice and help all Australians saving for retirement. We look forward to progressing the Future of Financial Advice Reforms and the implementation of the SPAA/Australian Artists Association guideline on investing in art through self managed super funds.”

“SPAA would like to work with the new government to find a workable solution to the excess superannuation contributions issue, where Australians legitimately trying to save for retirement, often by making catchup contributions later in life, are penalised with tax of up to 93% for making inadvertent errors.”

“SPAA is also keen to consult with the new government on the possibility of restoring the original superannuation contribution caps in full. The caps were halved in the 2009 Federal Budget against the backdrop of the GFC and have only been partially restored. SPAA believes the current caps, at $25,000 for those under 50 and $50,000 for those over 50 (the latter cap applying to those with less than $500,000 in superannuation), prevent large numbers of Australians from being able to save adequately for retirement.”

“SPAA would like to take the opportunity to thank the former Minister for Superannuation Chris Bowen for his very good work and to congratulate him on his new appointment as Minister for Immigration. We also look forward to working with Senator Nick Sherry in his new portfolio of Small Business,” Ms Slattery said.

The post SPAA welcomes new superannuation minister Mr Bill Shorten appeared first on AdviserVoice.