Despite persistent warnings, professionals are underestimating the potential knock-on effect that changes to the regulatory and licensing regime will have on their clients, a national accounting and advisory firm has warned.
Crowe Horwath superannuation and SMSF expert Samantha Comer said despite the fact that every accountant needs to be adequately licensed to provide SMSF advice and services, many are not.
“They have probably been giving SMSF advice for a long time and will likely keep giving this advice, even though they no longer have the adequate licensing to do so,” she said.
The “widespread lack of proper certification or corner store accountants” will ultimately leave many SMSF trustees at risk, Ms Comer warned.
Many SMSF trustees, she said, do not fully understand the obligations that come with running their own super fund and could now face serious fines is they are not compliant.
“There were changes to the insurance rules for SMSFs which came into play for the 2014/15 year and SMSF trustees might face fines up to $10,800 per trustee if they haven’t complied. There could be a lot of crackdowns leaving individual trustees liable for substantial fines.
“Many people are simply unaware of these changes and thousands of people could be affected. We might see a crackdown on compliance in the coming months.”
The fact that the vast majority of SMSF trustees still have individual trustee structures, rather than corporate trustees, is particularly concerning, as it means penalties are likely to be more significant as they are applied to each member.
“Other changes to the SMSF regulations come from the proposed capping of super fund pension balances eligible for accessing the exemption from income tax, as both the Coalition and Labor have policies intended to attack these concessions,” Ms Comer said.
“SMSFs have undergone a steep growth curve of demand over the past years, so it is still surprising how many people are not aware of the opportunities and limitations when it comes to best utilising this avenue for retirement investments.”
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