The evolution of the financial planning professional: SuperConcepts' Graeme Colley December 2019

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Graeme Colley is executive manager, SMSF Technical & Private Wealth at SuperConcepts. He was one of the original board members of the SMSF Association and is widely respected in the industry for his technical knowledge on all things related to DIY super. He speaks to Industry Moves about some of the biggest changes to have hit SMSFs in the last five years and what he thinks will be the next big thing for financial planning professionals in the space.

What are some of the biggest changes for SMSFs you’ve noticed over the past few years?

The changes in 2017, especially on high income earners and the return of more complex technical rules for super. From a government perspective it is the continuing ebb and flow between trying to make the legislation as simple as possible, changes to government policy on superannuation and the cost of superannuation to the government budget.

These changes include:
- Non-arms-length expenditure (NALE) changes – the potential breadth of the rules
- The watering down of Super Guarantee compliance to get employers to at least contribute
- A tightening up of compliance issues with the ATO, such as the investment strategy and super fund lookup
- Auditors taking a much more detailed look at the operation of SMSFs
- The opening up of the deductibility of personal contributions
- The changes to limited recourse borrowing arrangements (LRBAs). This includes the transfer balance cap, total superannuation balance and the major banks pulling out of super fund lending.

How are advisers going with supporting SMSFs understand and deal with the new transfer balance cap and associated rules?

From an administrator’s point of view this looked OK in the initial stages, but as we get further into things it has turned out to be more complex than expected. Now we are faced with the indexation issues and how they will be dealt with. That could get the administration of the transfer balance cap (TBC) closer to the reasonable benefit limit (RBL) system which was highly complex but abandoned in 2007. You wonder whether the TBC system will end up going the same way.

Are advisers to SMSFs getting enough education around these kinds of changes?

I don’t think anything has changed with advisers learning about the new systems. Some get it and some never will, however hard they try. With some things it the members and trustees of SMSFs who learn the fastest as they have a passionate interest in their super benefits, especially if they could be faced with extra tax. I suppose that goes without saying.

What kind of help do advisers that work with SMSFs need?

I think the kind of help required by advisers is the understanding that if they are going to provide advice on super and SMSFs that they understand the strategic issues involved, which includes which type of fund is suited to the client at different times in their life.

Is this need being met?

I don’t think it is with many advisers as they seem to favour a particular space in the industry without looking objectively at how each type of fund can provide the best outcome for the client.

What do you think will be the ‘next big thing’ in this space?

If you mean the next big thing in financial planning, I think it will be the evolution of the financial planning professional. It will come from the involvement of the next generation of financial planners who see financial planning as a career option. We are already seeing it with the interest they have in undertaking financial planning courses at uni.

If you mean the next big thing in SMSFs, it’s a great question. SMSFs continue to grow and I would like to see that growth is for the right reason - ie that the client is suited to having an SMSF. This is starting to occur as we are seeing a younger generation getting involved in them.

What do you love about working with SMSFs?

The constant change in superannuation generally and the complexity of the technical issues that arise. Every day a new variation on something to do with an SMSF crops up which means you are always learning.

How did you get into financial advice and SMSFs?

I ended up working in superannuation and then SMSFs in the work I did in the ATO and the Insurance and Superannuation Commission. The financial planning side of things was something that I got involved with at ING as we were dealing directly with financial planners and some direct client work. The advice side of things has been complimented by the technical knowledge I gained from my experience in the public sector. This has continued with my involvement at the SMSF Association and now with SuperConcepts.

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