All you need to know about SoA s. Webinar. thesmsfexpertcom.au

Transcription

1 All you need to know about SoA s Webinar

2 Survey Are you: Authorised Representative of the SMSF Expert Accountant with their own limited license Authorised Representative of another licensee Not licensed at all but looking Not licensed with no intention of being licensed

3 Objectives for today Legal Requirements for SoA s SoA s in General Specifically for SMSF licensed accountants The Process The SMSF Expert offer

4 Legal Requirements Requirement to give an SoA - Corporations Act section 946 Maximum penalty 2 years for non compliance All financial product advice must be in writing in the form of a Statement of Advice ASIC guidance in RG 175 Sample SoA in RG90

5 Exemptions from providing an SoA Corporations Act sections 946AA & 946B 946AA Small Investments up to $20,000 Not for derivates, general insurance, life insurance or superannuation Record of small investment advice An SoA has previously been given Client s circumstances haven t changed and You provide a Record of Advice Basic Deposit Products Advice does not recommend any products Plus no income received directly or indirectly Must give an RoA

6 The Process of Giving Advice You must provide a Financial Services Guide Before you give any advice Automatic fail from ASIC Get client to engage you (recommended) Collect all relevant data (Corps Act requirement) Usually through a detailed fact find Prepare and then present your SoA Implement accepted recommendations Review regularly RoA s

7 Preparing you SoA Records the advice that has been given Explains the basis for the advice Broadly contains The title Statement of Advice on the cover Name, contact details and license number of Adviser Statement setting out the advice Information about the basis on which the advice is given Remuneration received by the adviser Conflicts of interest Warning if the advice is based on incomplete or inaccurate information Switching advice where one product is being replaced by another

8 RG 175 requires: Cover Letter Cover Page Table of Contents Executive Summary Clients Present Position Goals & Objectives Attitude to Investment Risk Assumptions used in the SoA Recommendations

9 RG 175 requires (cont.): Cash Flow Taxation Issues Disclaimers Specific requirements Statement that the planner must act in the best interests of the clients That there is a 14 day cooling off period That you believe the advice is in the best interests of the clients Statement that the client can seek further advice

10 Specifically for Accountants Circumstances you need an SoA All superannuation advice is retail advice. Advice to set up an SMSF Advice to wind up an SMSF Advice to alter their investment in an SMSF (commence or cease a pension, change investments, make a withdrawal) Advice to contribute to superannuation Advice to start a pension

11 Options for preparing an SoA Write it from scratch on a word processor Free plus your time (lots) High probability of non compliance Write it using a provided template Free plus your time (lots) Still high probability of non compliance (ASIC versus Interprac) Buy a software package (e.g. Midwinter) and use that At least $3,000 per annum minimum. Still a lot of time Outsource to an external paraplanning service Less time but costs per SoA

12 Examples Mike & Cathy have been existing SMSF clients for 20 years. Mike has just turned 65 but is still working. Cathy is 63. Mike has a balance of $2.1 million in his SMSF and Cathy has a balance of $860,000 Mike needs to withdraw and contribute to Cathy s account and also commence a pension. You have never provided licensed advice to Mike or Cathy and have always relied on the accountants exemption.

13 Examples Denis is a barrister and comes to see you in late May for interims and tax advice. You determine that he will earn around $400,000. You wish to advise him about ways to minimise his tax including: Deferring billing for work Making capital purchases up to $20,000 Prepaying expenses such as interest or rent Maximising superannuation contributions Part 2 he then asks how much he should contribute to super

14 Examples Peter & Mary have had an SMSF under your advice for many years now. Peter has just turned 60. For years you have been telling him that when he turns 60 you will commence an account based pension. Of course, this age has now moved to 65. Part 2. Peter has now just turned 63 and has retired and needs to take some of his superannuation. You prepared an SoA two years earlier that talked about Peter starting a pension either when he retires or age 65.

15 The SMSF Expert offer Authorised Reps of the SMSF Expert From $330 each Accountants with their own limited license From $440 each Accountants with no license From $660 each in our name

16 Simplest Process in Australia 10 minute Client Questionnaire for existing SMSFs For new set-ups a specific questionnaire for accountants in this space 80% returned within 48 hours (most take weeks) Most SoA s under 20 pages Full advice available to compliment your limited advice All bespoke. Not computer generated. Comes with the best SMSF technical back up

17 Where to from here?

18 5 7 July Uluru

19 How to find out more Peter s Contact Details Mobile: peter@cst.com.au Peter Johnson Founder, The SMSF Expert Web:

20 Thankyou The information contained in this document provides a general guide to our services only. Changes in circumstances may occur at any time and may impact on the accuracy, reliability or completeness of the information and we exclude liability for any decision taken on the basis of the information shown in or omitted from this presentation. SMSF Advice Limited has taken reasonable care in producing the information found in this presentation at the time of writing