Self-Managed Superannuation Funds (‘SMSFs’) have come a long way over the years, becoming the structure of choice for a significant portion of all superannuation fund members. The growth and changes of the SMSF industry present a number of challenges to all industry participants. One of those challenges was the 2017 Super Reforms and two years on we are seeing a change to the approach to how accountants and administrators of SMSFs attend to the fund’s administration and annual compliance requirements. And with the advancement in technology, this change is being made easier, with benefits to both those you attend to SMSF administration and those who rely on the information produced from administration.
By leveraging technology, you:
- can focus more on compliance monitoring and strategic advice;
- will spend less time on document gathering and manual processing;
- will have up to date information and figures to help you assist clients make better decisions;
- will have a better chance of avoiding any SMSF penalty for breaches of the super rules;
- will have better access to the total super balance at 30 June of the prior financial year which is important when it comes to contribution caps and other super tax offsets;
- will provide a better service to your SMSF clients, which is turn will grow your firm, your revenue and your profit.
Let’s briefly look at just two aspects of the reforms and why progressive processing is really the only choice.
1. Total Super Balance – a need to know
An individual’s total superannuation balance (TSB) is relevant for determining eligibility to several concessions. Top of the list is the amount of a person’s non-concessional cap and application of the catch-up concessional contribution rule.
The critical date for determining a member’s Total Super Balance (TSB) is 30 June of the previous financial year. Consequently, before a member can make a decision about any of the above entitlements or concessions, they will need to know what their TSB is at 30 June of the prior financial year.
For this current 2019/20 financial year, members and their advisers, need to know their TSB as at 30 June 2019 or at least have a good idea of the amount – Do your SMSF clients and their advisers have access to their 30 June 2019 TSB?
2. Events Based Reporting – obligations to report to the ATO
Events based reporting requires superannuation funds, including SMSFs, to report certain events which impact on a person’s Transfer Balance Cap (TBC) from 1 July 2017.
One common TBC strategy, already being applied by members who only have a retirement phase pension account, is to treat any withdrawal from a pension account above the required minimum, as a partial commutation of that pension as the commutation reduces the member’s transfer balance account – creates TBC space.
Where this strategy is implemented, regular processing of fund data will enable the required reporting to be done in a timely manner, providing a better outcome for strategic TBC planning.
Don’t let legislation be the driver
It’s just not the changes to legislation and plethora of rulings, interpretative decisions and ATO website updates that is forcing SMSF accountants and administrators to rethink how they approach SMSF administration and compliance, it’s also the demands of the customer that uses their services – the SMSF trustee/member and the adviser to SMSFs.
We are seeing an increase in demand for a daily service so that SMSF clients have access to up to date information, when they want it and access from the device of their choice. Offering a daily service to SMSF clients provides an opportunity to engage with them on a regular basis and ensure that your firm’s name is constantly in front on them. This reinforces client loyalty and encourages referrals.
Use technology platforms to drive growth, efficiency and profit
With a competitive market, technology can provide your firm with the edge to not only attract new SMSF clients, but importantly, retain existing clients. Using technology can enable you to either provide a more comprehensive service, like daily processing with online access, for not much more in price, or even the same, but still retain or even improve profitability.
Where you reduce time on administration by leveraging technology, you have the opportunity to talk to your client on a more regular basis as you now have something to talk about that your client is interested in – up to date figures. This allows you to provide insight into the future, rather than telling them what happened in the past.
Partner with SuperConcepts
SuperConcepts can partner with your firm to help you grow your SMSF business. We can provide assistance with:
- Technology – our leading SMSF specialised admin and compliance platform, SuperMate;
- Technical Advice – we have an award-winning team of SMSF Technical Experts who can help out with compliance issues, including our stand alone SMSF Tech Assist service;
- Education – Our SMSF Technical Experts provide SMSF education and training, both face to face and online, including our 30 module SMSF online course;
- Admin – Need help with that backlog of SMSF admin work? We can take care of that for you using one of our SMSF admin services that best suits you.
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