TBAR spurs wider shift to quarterly reporting for SMSFs
Around one in five SMSF firms plan to implement quarterly reporting for all clients in their firm, regardless of whether their clients are above or below the $1 million threshold, according to a recent poll.
In a recent poll conducted by Smarter SMSF, 18 per cent of the 271 respondents in the survey indicated they will undertake quarterly reporting for all SMSF clients from 1 July 2018, regardless of account balance.
Smarter SMSF chief executive Aaron Dunn said some SMSF firms already have the systems and processes in place to be able to deal with regular reporting with reasonable confidence.
Around 21 per cent of respondents said they plan to segment their clients based on the $1 million total superannuation balance threshold and 22 per cent also plan to segment using the $1 million threshold but include a buffer amount.
SMSF members who are close to the $1 million threshold can tip over very quickly into quarterly reporting if there’s a jump in earnings, so a buffer amount can help practitioners to keep on top of this.
Six per cent of respondents stated that they planned to segment their client base but using other parameters instead of the $1 million threshold.
Mr Dunn said practitioners may choose to split clients into groups based on age or those who are moving closer to retirement, or clients who are only taking the minimum pension versus those that are taking more than the minimum.
“If they’re taking more than the minimum, then there are commutation opportunities with that from an estate planning context, because they can claw back some of that transfer balance cap,” he explained.
“That means we're going to have to meet this ongoing reporting requirement, whether that's annually or quarterly.”
The remaining respondents in the survey hadn’t considered whether they will segment their clients to help manage the new reporting requirements for clients.
Mr Dunn said this was understandable given that practitioners have been busy with a whole range of other issues.