SMSF fund trustees who use the services of accountants need to ask them what licensing arrangements they will have in place from 1 July. From 1 July the door shuts on the “accountants’ exemption”; the exemption that allows accountants to start and close a fund without a financial services licence. From this point your accountant will need to hold a limited financial services licence to provide services for SMSF trustees outside of the provision of just accounting services.
With a limited license your accountant will be able to:
- Assist setting up and closing a SMSF
- Advise on the asset allocation of funds, but not recommend specific investments
- Advise on whether you can contribute to super but not whether it is appropriate to do so.
As a trustee you are solely responsible for the day-to-day operation of your fund. You can seek professional advice – for example, on administration, taxation, investing, legal, actuarial and audit matters – but if you break the superannuation rules, the “buck stops with you”, the trustee. Getting it wrong whether by accident or carelessness can have serious ramifications. It can mean loss of concessional tax status for your fund, fines, or civil and even criminal penalties for the trustee. It could even mean you are banned from acting as director of a company.
It will be more important than ever as a SMSF trustee to seek the advice of a financial adviser in relation to the following:
- Starting and stopping pensions from your SMSF
- The type and amount that is appropriate to contribute to superannuation
- Reviewing and documenting your investment strategy
- Recommending the most appropriate investments based on your appetite for risk
- Establishing a transition to retirement strategy
- Purchasing direct property through your SMSF
- The appropriateness of using a limited recourse arrangement
- Making lump sum withdrawals
A properly planned and operated fund should significantly increase retirement benefits. Using the services of a financial planner alongside your accountant will ensure you are taking advantage of strategies available to you plus ensuring your hard earning money is properly invested. Do it right and do it well and you will be the one who wins in the end.