What’s on the table?
There are many qualifications and specialisations an SMSF practitioner might consider, based on emerging industry trends, what the client base of the business looks like, and where some of the service gaps lie.
Some form of SMSF specialist accreditation is perhaps one of the most obvious qualifications for accountants and advisers who operate in the SMSF space, available from accounting bodies like Chartered Accountants Australia and New Zealand and the SMSF Association.
Mr Morcom – who holds specialist accreditation with the SMSF Association – says it is useful for practitioners to undertake a formal unit in an SMSF accreditation course to ensure they have the required knowledge. Mr Dunn agrees that the “ability to hang your hat on being an SMSF-accredited specialist” is certainly an advantage to practitioners who operate in the space.
“Businesses that take on board specialisation are getting better results than those that operate in SMSFs in general practice – we’ve seen that in our Future of SMSF survey results again this year,” he says.
Staying abreast of emerging issues and changes within the SMSF space through ongoing education is also vital for practitioners who are serious about specialisation. It helps them remain aware of the sector’s changing intricacies and can be a further demonstration of expertise to a client.
Mr Burgess says that once a practitioner has completed an SMSF accreditation course through an association, institution or some other education provider to gain competency or a grounding across the key areas of SMSF advice, they may consider doing courses of a shorter duration that focus on a specific issue or type of SMSF service.
“There are update sessions or technical sessions which are designed to deal with one specific area,” he says.
Also within the SMSF space, there are often hot topics that relate to strategies or changes in the law that will be covered through online training, workshops, conferences or professional development days, says Mr Dunn. Some emerging areas of specialisation include:
$1- Estate planning
There is a wide array of opportunities for practitioners when it comes to deciding which kind of area of SMSF advice they might want to specialise in so as to differentiate their services.
Estate planning is certainly one of the stand-out opportunities, says Mr Docherty – particularly given the ageing population and the growing demand for these services. “Getting really good advice on estate planning is critical for a lot of baby boomers looking at retirement and there are some great courses on estate planning,” he says.
Many of the professional associations offer estate planning courses that give practitioners the chance to build on their specialist estate planning offering, he adds.
$1- Aged care services
Aged care services is another area that is increasingly in demand, both among older SMSF members and their children. “Over the last few years, like many professionals, I’ve had to deal with ageing parents, nursing home options and what are the best options for managing the finances of an ageing population,” says Mr Docherty.
“Consumers are looking at, well, who is going to help [them] in the future and what kind of advice an they provide me in order to demystify things like social welfare systems, the pros and cons of aged care facilities or retirement villages,” he says.
“That type of advice will become more and more important and a real opportunity for advisers to extend their services in the future.”
Mr Docherty says there are several courses available on understanding the different components of the aged care system and the social welfare system. “I think that’s a really good opportunity for an adviser to focus on where they might have a lack of knowledge, where they can actually build on that knowledge,” he says.
Accountants in particular may also want to increase specialisation by studying or a master’s degree at a university or other educational institution, says Mr Colley. However, SMSF practitioners need to carefully consider the level of the course and should also be aware that some courses may be biased toward other professions, he adds.
“For example, the Master of Applied Taxation course offered by the University of New South Wales is heavily directed at lawyers and people practising law,” says Mr Colley.
While there is no doubt this could be a handy qualification to have, practitioners should really think about what kind of advice they want to offer clients before they take it on.
“Accountants may want to do it because it’s a much more technical approach to things,” he says.
Registration as a tax (financial) adviser
Financial advisers who offer SMSF advice may also want to consider registering as a tax (financial) adviser. Financial advisers who advise on tax for a fee should already be registered, says Mr Colley.
It makes sense for financial advisers who deal with SMSFs to do this, adds Mr Burgess, since SMSF advice is often centred extensively around tax. “Whether you’re talking to clients about how to properly structure a pension and whether it should be segregated or not, how to correctly apply tax losses or so forth, all those areas require tax knowledge,” he says.
“[Tax knowledge] is also an important part of providing comprehensive advice around SMSFs given there is a very strong tax element to it.”
Mortgage or finance broking Financial advisers who have a large number of SMSF clients interested in borrowing through their SMSF may find it worth gaining a qualification and licence in mortgage or finance broking.
“The [Mortgage & Finance Association of Australia] offers an SMSF specialist lending course, so we’re seeing a lot more mortgage brokers in that area that are going through an accredited course like that, not just for the skill set but for their credit licence,” says Mr Dunn.
Mr Burgess says there are also a number of classes or courses focused on the borrowing rules designed for financial advisers who don’t want to go as far as obtaining their own credit licence but who want to increase their knowledge of limited recourse borrowing arrangements and the related-party rules.
What should you look for in a course?
Regardless of the type of education program SMSF practitioners take on, Mr Burgess says it is important that the education has a practical element to it. “Providing SMSF advice does cover some of the more complex areas of the SMSF legislation, so whether it’s the in-house asset rules, the definition of who is a related party, the residency rules or so forth, it’s important therefore that the training they receive provides a practical application of those concepts rather than just a definition,” says Mr Burgess.
“Most advisers I know, for example, would be able to recite the sole purpose test in their sleep but applying it in practice is a completely different thing.”
According to Mr Dunn, it is vital for practitioners, when looking at education providers, to ensure they are reputable ones that work within the SMSF industry, understand widely the superannuation and taxation laws, and can work through any practical issues.
“I think it’s quite important to make sure you get the maximum outcome from the investment in your education because ticking a box may be fine but it may not be the best way to manage some of the business risk going forward,” he says.
GEARING UP FOR LICENSING
WITH THE accountant’s exemption ending in mid-2016, it is vital that accountants seriously consider – sooner rather than later – what they plan to do about licensing. One of the main reasons is that the education requirements to become licensed may be significant.
ASIC continues to see low numbers applying to be licensed, says Ms Westover – something that she believes is becoming a worry. “Having said that, we are aware of a lot of members who are undertaking training at the moment, and you cannot apply for your licence until you’ve completed your training and that can take time,” she says.
“So even someone who made all the decisions, commenced their training, say, six months ago, we wouldn’t have expected them to have applied for their licence yet.”
Ms Westover says she is expecting a “significant increase in licence applications” at the beginning of next year. However, there is still a considerable amount of misinformation and confusing information about, and accountants should ensure they are getting their licensing information and guidance from a credible, reliable source, she adds.
CPA also believes accountants are being misled in some cases, with some of the less reputable training providers promoting the idea that accountants can complete their training in just two days.
“Any professional needs to be wary of a course that can provide you with a diploma of financial planning in two days. It just doesn’t make sense, it’s just not possible,” says Mr Docherty.
“[Accountants] that think they can do a short, two-day course and then apply for the limited licence are set for a rude awakening.”
The IPA’s Ms Stylianou says accountants should ensure the education course they are considering completing for their licence – like the RG 146 course – is being delivered by a reputable provider, accredited by ASIC.
They also need the course to provide “what they need it to deliver in terms of the growth of their business – that it’s relevant to clients and that it’s up to date”, she says.