The federal budget has signalled a change in the nature of superannuation from being an attractive and tax-effective investment vehicle, especially for high-net-worth individuals, to being “one part of retirement planning, but not the whole story”, said Sarah Penn, director of Mayflower Consulting.
“Super is now limited in its ability to provide a dream retirement for your clients, which means that they are going to be looking more broadly, rather than just super. For financial planners, this isn’t too bad. Planners already talk about ‘total wealth’ for clients and how to manage that most effectively for retirement. For accountants though, especially those who are planning to operate under a limited license, these changes pose something of an issue,” Ms Penn told SMSF Adviser.
“On the upside, because they see their clients’ full income picture, accountants are very well placed to get a full licence, and give clients full financial advice,” Ms Penn said.
“That’s a great thing that they should be thinking about doing, but it’s a big step from where they are now.”
Ms Penn believes that industry super funds will also find it difficult post-budget with member retention.
“They’re trying to get people interested in super, and trying to set up retirement income solutions, and this is pushing super back to being that next level of safeguard, and not so exciting,” said Ms Penn.
Ms Penn believes full-service planners, who already talk about retirement planning and not just superannuation, will benefit from the budget measures, she said.
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No one should be doing accounting and full financial planning, you just won’t be good enough at both. For the same reason a GP doesn’t do heart transplants, you need to specialise.
There’s no reason an accountant can’t convert to an FP, in order to do it well they need to stop providing tax advice.
It boils down to, what am I good at, what do I enjoy, how is my business structured if you own it and then deciding how to properly look after your clients best interests.
Sarah clearly does not understand the licencing regime. If an accountant is only looking at tax and putting clients in a tax neutral position then they do not require a licence. The limited licence allows the accountant to look at retirement planning and provide strategic advice and they can do this without being comprehensively licensed.
Superannuation is a structure, an investment vehicle.
Accountants understand this better than most.
[It’s just amazing the number of commentators that don’t mind flaunting their ignorance from their respective side of the coin that is Advisory Services.]
It is in the interest if the 2 professions to work out how to work together to help clients through what will always be a shifting regulatory environment.
Let’s stop identifying “winners and losers”.