Managing a Self-Managed Super Fund (SMSF) offers the potential for personalised retirement planning but also demands meticulous attention to compliance and performance. Professional expertise in various key areas can make this process more effective and secure. This blog post delves into 16 key areas where the guidance of accounting professionals is instrumental for successful SMSF management.
SMSFs provide a unique opportunity for individuals to have unparalleled control over their retirement funds, yet they come with their own set of complexities. For comprehensive and compliant management, it is often prudent to consult experts such as accountants. This blog will elucidate the specific roles these professionals play in optimising SMSF administration.
Do I Need an Accountant or a Financial Planner?
SMSF’s offer significant benefits but also require knowledge of regulations and trustee responsibilities, as well as involving more accounting and financial management. Understanding the 16 key roles accountants and financial planners assist trustees can help you make informed decisions and ensure the long-term success and smooth operation of your SMSF.
It’s always wise to seek professional advice to navigate the sometimes-complex world of SMSF administration and management. Knowing whether you need an accountant, a financial planner or both, depends on your specific financial situation, experience, goals, and needs. Both professionals play distinct but complementary roles in managing your finances.
16 Key Areas To Seek Professional Assistance for Managing SMSF’
A specialist SMSF Accountant is generally used to guide SMSF trustees with fund compliance and preparing and lodging annual reporting obligations. Financial planners by way of holding a Australian Financial Services Licence (AFSL) generally make tailored recommendations to trustees about such things as the fund’s investment strategy.
Below is a comprehensive table that outlines the distinct roles that accountants and financial planners play in assisting Self-Managed Super Fund (SMSF) trustees. It’s important to note that while these roles may sometimes overlap, they are primarily guided by different regulations, expertise, and responsibilities.
Many of the roles a financial planner can engage in because they are most likely to hold an AFSL. Some accountants may hold this licence or a limited AFSL that would allow them to do all or some of the roles the financial planner can do. It is important to ask the accountant and or financial planner if they hold an AFSL.
|
| ROLE | ACCOUNTANTS | FINANCIAL PLANNER |
| 1 | SMSF Setup Advice | Can provide general information about SMSF’s but cannot recommend setting up a SMSF. | Can provide personalised recommendations about setting up an SMSF. |
| 2 | Setting up an SMSF | Are generally engaged to set up a SMSF based on receiving instruction from member/s. | Can set up a SMSF, but generally left to accountants. |
| 3 | Compliance | Assist and guide legal and regulatory compliance. | Assist and guide legal and regulatory compliance. |
| 4 | Financial Reporting | Prepare various financial statements / reports and discuss with trustees. Including:
| Review financial reports as part of broader financial planning but not responsible for preparation. |
| 5 | Annual Returns | Prepare annually, discuss with trustees their taxation obligations and lodge the annual return to the Australian Taxation Office (ATO). The annual return consists of the tax return and financial information about the SMSF, which the ATO use to gather statistical information. | May refer to the annual return in the process of providing advice. |
| 6 | Audit | The auditor must be independent of the preparation of the financial statements and annual return. Accountant liaises with independent auditor on behalf of the trustee. | May refer to the audit report in the process of providing advice. |
| 7 | GST | Can prepare and lodge Business Activity Statements to the ATO. | Financial Planners do not prepare and lodge Business Activity Statements to the ATO |
| 8 | Corporate trustee management | Generally, accountants liaise with Lawyers to establish a corporate trustee (company). Accountants manage company secretarial requirements such handling the annual ASIC return and preparing annual resolution of solvency. | Generally financial advisers do not liaise with Lawyers to establish a corporate trustee or manage corporate secretarial requirements such as handling the annual ASIC return and preparing annual resolution of solvency. |
| 9 | SMSF Borrowing – Lending and Bare Trusts | Unless appropriately licenced cannot give advice about specific loan products. Generally, a specialist SMSF finance broker is engaged to arrange SMSF loans associated with Limited Recourse Borrowing Arrangements. Accountants can upon receiving instruction from trustees, liaise with lawyers on the trustees behalf to set up the Bare Trust and corporate trustee. | Unless appropriately licenced cannot give advice about specific loan products. Generally, a specialist SMSF finance broker is engaged to arrange SMSF loans associated with Limited Recourse Borrowing Arrangements. |
| 10 | Taxation Planning | Provide expert advice on tax-related matters, minimising tax liabilities within the legal framework. | May provide taxation advice but typically consult with accountants on tax matters, focusing more on overall financial planning. |
| 11 | Investment Strategy | May advise on the tax implications of various investment strategies but not the investments themselves. | Design and implement investment strategies in line with clients’ financial goals, risk tolerance, and regulations. |
| 12 | Retirement Planning | Assist with understanding tax implications and compliance for retirement planning but not the overall strategy. Prepares SMSF documentation associated with pensions, lump sum withdrawals, annual minimum pension calculations. | Develop comprehensive retirement strategies, including pension planning, wealth management, and estate planning. |
| 13 | Risk Management | Evaluate the financial risks related to taxation and compliance but not investment or broader financial risks. | Identify, evaluate, and manage investment and broader financial risks, implementing strategies to mitigate them. |
| 14 | Estate Planning | May assist with the tax aspects of estate planning but not the overall plan. | Provide comprehensive estate planning, including wills, trusts, and wealth transfer strategies. |
| 15 | Ongoing Monitoring & Support | Regularly review and manage accounting and compliance matters. | Continuously monitor and adjust financial plans, investments and coordinating with accountants as needed. |
| 16 | Fund Windup | Can provide general information and taxation aspects about SMSF’s wind ups and withdrawals but cannot recommend members withdrawing their superannuation or windup the SMSF. However, the accountant helps plan the steps involved, does the accounting, preparation of documents, rollover forms, and the final annual return. | Can give personalised recommendations about withdrawing superannuation or winding up the SMSF. |
Conclusion
These distinctions illustrate the nuanced yet complementary roles that accountants and financial planners have in assisting SMSF trustees. While financial planners usually concentrate on investment, retirement, risk management, and estate planning, accounting roles mainly focus on setup, compliance, taxation, reporting and windup. Both professionals are vital in guiding SMSF trustees, often working together to provide comprehensive support.
As a CPA accounting firm in Caloundra, QLD, Australia, Wardle Partners Accountants and Advisors have been specialising in these common SMSF set-ups, along with administration, processing, compliance advice, accounting, taxation, and wind-ups for over 40 years. Wardle Partners does not hold an Australian Financial Services Licence (AFSL) and our company nor any of our employees or directors are not authorised representatives of an AFSL. We do not provide financial product advice or recommend any financial products either expressly or implied.
Through this article, we aim to assist in helping understand the important financial planning and accounting roles that play in helping trustees navigate SMSF compliance, and fulfil their obligations all whilst focusing on maximising their superannuation for and during retirement. Further details on related topics are available in our other blogs, forming a well-rounded resource for SMSF considerations. Should you require professional assistance or have any questions, please do not hesitate to contact us or schedule a complimentary consultation with one of our experts.
Did You Know?
Up until 30 June 2016, all accountants were able to recommend the establishment or winding up of an SMSF.
