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Can’t be ‘half pregnant’ with SMSFs, says former Macquarie director
One consultant and former Macquarie director said practitioners should be either “in or out” when advising on SMSFs, expressing concerns about the long-term implications of advisers and accountants only advising a handful of SMSF clients.
Speaking to SMSF Adviser, Sarah Penn, owner of Mayflower Consulting and former division director for SMSFs at Macquarie, said small operators who have fewer than 20 SMSFs are more likely to miss vital steps in setting up or managing an SMSF for the client.
“The main issue with self-managed super is you can’t afford to be half pregnant. It’s a complicated area; you either need to be in it or out. The group that concerns me are the advisers and accountants who only have a handful of SMSF clients,” Ms Penn said.
“What worries me is not that they’re going to recommend anything wrong, but more that the clients are going to miss out on opportunities and that there might be longer term ramifications,” she added.
“[When] SMSFs are set up in the first place, trust deeds especially, they need to be in tip top shape. They need to be set up and personalised for the client’s needs and if you don’t do that, then 30 or 40 years later, when one or more of the clients eventually dies, that’s when it all tends to go pear-shaped. I think when you’re a small operator and you only have 15 or 20 super funds, that’s the sort of thing that you’re likely to miss,” she said.
Ms Penn said those firms that are SMSF specialists, where SMSFs are essentially their “bread and butter”, are generally performing well.
“The issue is really people who’ve only got a handful because I think there’s a higher likelihood that their clients are missing out on high-quality advice,” she said.
I cant agree. More platitudes about "big is better"
Seriously? That sounds like you are saying the big banks would do a better job of advising on super... ie they have specialised people. BUT history shows that it doesnt necessarily work out better for the client.
In fact, I reckon that a better argument would be made for a general accountant (who is properly informed on superannuation)to do a better job than a specialist, as he knows far more about the background of the client, and can therefore better tailor the advice.
Sure, we all see the mistakes being made by previous accountants and advisers, but those mistakes come from both specialised and other advisers.
Then there is the cost issue. Specialists usually cost more.... And frankly, advising on super is not brain surgery..In spite of many people exclaiming how only they know enough.0- I agree completely.
I identified 15 years ago that specialisation was key to having an in-depth knowledge of what is a complicated area.
Due to our large Forensic Accounting presents here at Vincents, every month or so, I am asked to prepare a report or errors made by other Accountants or Advisors that just didn't know enough.0
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