How to Choose the Right Self Managed Super Fund Accountant Brisbane
10 Tips to Qualify Your SMSF Accountant Brisbane
Self managed super funds or SMSFs, as they are popularly known, are superannuation trust structures set up privately and regulated by the Australian Taxation Office. While there are several rules and regulations governing these SMSFs, their real beauty lies in their ability to let you control your retirement fund. SMSFs put you in the driver’s seat – literally! You are the real investment decision maker here. You can choose to invest in the assets of your choice as opposed to the way the other retail funds work.
However, this also means that you ought to have certain amount of financial expertise to make the right kind of decisions. You need to be abreast of the way the markets are doing. You need to be updated about which assets are doing performing better. The law holds you personally liable for all the decisions made either by you or any other trustee of the fund. And then there is all the record keeping and accounting that needs to be done as per the regulations.
If you need more information on SMSFs, do visit the Money Smart website at https://www.moneysmart.gov.au/superannuation-and- retirement/self-managed- super-fund- smsf or the Australian Taxation office website at https://www.ato.gov.au/super/self-managed- super-funds/.
While SMSFs lend you great amount of control and flexibility they also create an added workload.
So how do you choose the right kind of Brisbane accountant for your SMSF? Here is a checklist of 10 qualifiers to evaluate accountants for your SMSF.
Tip 1: Check the License
From July 1, 2016 onwards only accountants that are licensed by the Australian Financial Services Licensee (AFSL) are eligible to continue advising SMSFs. However, given this stipulation, there are certain what-if scenarios that will have to be considered.
If an accountant is not authorised by AFSL: Under this scenario, the accountant will not be eligible to dispense any kind of investment or strategic advice to the SMSF. However, the accountant can continue providing tax accounting and administrative services.
If an accountant has a limited license: An accountant with limited license can advise clients to establish SMSF. Such an accountant can also provide advice on existing funds and certain classes of products like insurance or investment schemes. However he or she cannot recommend a specific product to the client.
If an accountant has full AFSL license: In this scenario the accountant, in addition to performing all the tasks covered under limited license, will be able to recommend specific products to the client.
If you are looking for a self managed super fund accountant in Brisbane, then it would be a good idea to start with knowing what your would like to do with your SMSF. Once you know the extent of the services you need, you can then choose an accountant with the right kind of license.
Tip 2: Ensure That Your SMSF Accountant Brisbane Gives Only Licensed Advice
Accountants are not allowed to give any kind of investment advice or investment strategies to SMSFs. An accountant doing so is violating the law. In case of SMSFs, almost any kind of advice is deemed to be an investment advice unless it is very specifically related to:
- Accounting or administration of SMSF
- Compliance to the laws and regulations governing SMSFs
To simplify this further, here is a snapshot of a conversation between an SMSF trustee and his self managed super fund accountant in Brisbane.
Trustee: “How much more do I need to invest in my SMSF for the year?”
Accountant: “Sorry, I can’t tell you that. However, what I can tell you is that for someone your age, the concessional contribution cap is at $30,000.”
Trustee: “Can you at least tell me how much I have invested so far?”
Accountant: “Your SMSF accounts show that you have put in $10,000 so far during the financial year.”
Trustee: “Does that mean I need to add $20,000 more?”
Accountant: “Sorry, but I can’t advice you on that.”
Trustee: “Ok I am going to put in $20,000 more. But should I invest in debentures or insurance product?”
Accountant: “I am not licensed to give you that advice.”
This dialogue shows that your accountant can tell you what your investments currently look like and what the tax regulations allow. He or she can advise you on the consequences of the investments you make but cannot tell you where to invest and how much.
Tip 3: Verify the Accountant’s Knowledge of the Superannuation Fund Lifecycle
Managing SMSFs involves more than just putting in money and withdrawing money. There is a whole lot more to an SMSF lifecycle. Your self managed super fund accountant in Brisbane should be well versed with:
- Setting up of a SMSF
- Contributions that can be made to SMSF
- Re-contribution strategy for an SMSF
- Contributions reserving strategy for an SMSF
- Investments and insurance for SMSF
- Transition to a retirement strategy
- Withdrawal of pension from SMSF
- Wind up of an SMSF account
Your accountant should adopt a partnership approach and really nurture you through your super fund lifecycle. Your accountant should give you a personalized handholding from your superfund establishment all the way through to your day to day management, your retirement, your estate planning, and eventual debt management. And this handholding should extend beyond you to your family members as well.
Tip 4: Check the Competency of the Accountant
There is a very large number of professionals working as self managed super fund accountants in Brisbane and there are a large number of SMSF returns lodged every year by them. But the amount of returns is quite low. Why is that? One reason out of many can be the incompetency of the accountants.
Your accountant may have the license but may not be competent enough. This is a possibility that is very real. You don’t want to end up being on the losing end of the bargain due to your accountant’s incompetency.
So as an SMSF trustee, you can check the client references of your accountant. Ask them which other SMSF clients are they working with. Dig a little deeper and try to find out the extent of services that they are providing to these other clients.
Tip 5: Ensure That the Accountant is Updated
The thing with accounting, taxation, and financial regulations is that they can be dynamic. The taxation rates and the exemption ceiling limits can change and are not necessarily the same every year. The code of conduct for the accountants can also undergo a change. You don’t want to end up having an accountant on board who is not updated with the latest and the current. You would rather want your accountant to be fully aware of what the law stipulates, what the taxation regime allows and disallows, and what consequences your decisions will have.
Under SMSF, the trustee is personally liable and responsible for the correct administration and management of the fund. Having an archaic accountant or bad advice is not going to absolve you of that responsibility. You can end up facing penalties for breaches caused due to outdated advice.
Tip 6: Check if the Accountant is Proactive or Not
One common mistake trustees make when choosing an accountant for their SMSF is that they try to get all the services from single point of contact. There are a lot of specialist administrators today who are like your one-stop- shop. They tend to provide all the potential services under one roof. However, we feel that your local accountant is a good enough candidate to act as your self managed super fund accountant in Brisbane.
Although any discussions that you have with your accountant are private and confidential, when it comes to financial matters and accounting services, trust and the quality of relationship matter. Your accountant should make you feel comfortable enough to discuss money matters. You should also be able to trust your accountant to cover you during the accumulation stage, the pension stage, or the transitioning stage between the two. He or she should be ready to dig deeper into your affairs and get to know you better so that they can be proactive accountants to you rather than reactive. Your accountant should make that extra little bit of an effort that helps build a relationship.
Tip 7: Evaluate the Fee Structure
This is another tricky part when it comes to choosing a self managed super fund accountant in Brisbane. There are many different fee structures or pricing models followed by SMSF accountants, the most popular ones being:
- Hourly rate
- Fixed fee
- Base fee
- Percentage of fund value
- Number of transactions
Thus, the one with the lowest number need not necessarily be the best.
However, when you are comparing the fee structures of different accountants or SMSF service providers, make sure that you compare apples to apples and not apples to bananas.
Tip 8: Ensure that Your Accountant is Comfortable with Technology
Although technology doesn’t seem that important, it is not something that should be ignored. The world is moving towards digitalization at a pace faster than ever before. Online systems have come up for doing almost anything using a computer or a handheld device. Government records and documents are getting stored as digital copies on cloud servers. In such times, it is good to have an accountant who is comfortable with technology if not well versed with the nitty gritties.
Tip 9: Dig into the Professional Network of the Accountant
A good accountant will belong to a business community and will have his or her professional network. They will be connected with property specialists, lawyers, financial planners, builders, etc. They would be regularly working together with this network of people, consulting each other, and even sharing ideas.
These are the connects that you can leverage for your SMSF. For example, if you decide to purchase a piece of realty from your SMSF, then the builder and lawyer from your accountant’s network will be able to help you out. A good accountant will come with a long list of connections that you can use for your benefit.
Tip 10: The Accountant Should Not Hesitate to Recommend Hiring a Team
Although SMSFs are more the ‘self managed’ or the ‘DIY’ kind of funds, they are not necessarily that easy to manage. You may realize that having just one accountant on board is not enough and that you actually need to engage a few more professionals.
For example, your SMSF accountant can be an administrator of your fund and a tax agent as well. But he cannot be the auditor of your fund. You would need an independent and registered auditor.
The additional professionals that you might have to engage include:
- Auditor: To audit your fund annually and provide a qualified audit report.
- Financial Planner: To help you with investment advice, wealth planning, and more.
- Actuary: To obtain actuarial certificate under special circumstances.
- Valuation Specialist: To evaluate an asset at market value in certain circumstances.
Choosing the right self managed super fund accountant in Brisbane can really help you in more ways than one. He or she can look into the day to day administration, taxation, and compliance part of your SMSF. But you would still be doing the heavy lifting – making investment decisions. That is not something that you can offload to your accountant. Your accountant will be able to, depending on his or her license, just give you advice on existing fund and certain classes or products. However they would not be dispensing any direct investment advice.
To start your search for a SMSF accountant in Brisbane, here’s an easy way…. Just visit our website www.whichprofessional.com.au and complete the simple form. Tell us what you need and what is the kind of budget that you have. Based on this information you provide us, we can identify the accountants from our network who meet your requirements and give them your contact information. These accountants will then reach out to you. Easy, isn’t it? This will help you save time and effort. Just one click and you will have accountants reaching out to you that suit your needs and budget – no running around!
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