I was interested but not necessarily surprised to read two articles this week relating to financial fortunes of the general Australian population. The first article talked about financial literacy, where a study by Zurich and Oxford University found that Australia ranked near the bottom of the tables. In the second article, a study by the Actuaries Institute found that almost a third of Australians are in danger of running out of money because they are drawing too much out of superannuation.
With the percentage of Australians that do not currently seek any ongoing financial advice sitting at close to 80%, these reports should not be surprising to anyone. The risk of not achieving any long term goal without some form of coaching, mentoring or external direction is extremely high and it makes sense that those with a trainer, coach or in this case an adviser, have a far better chance of maintaining discipline and achieving their goals.
Why is it that so few Australians reach out for financial advice to help improve their financial literacy?
We all understand that sometimes it’s, well, annoying to be asked for a document you didn’t think you would have to provide. Numero uno… the bank statement request when we already had you sign the data feed authorisation to allow Superfund Partners to download the bank transactions.
So, what we will address today is when we will request copies of bank statements, and when we will not.
The 2 Types of Data Feeds
There are two types of data feeds available to us; the Class data feed, and Banklink. While Class has a large number of banks agreeing to the data feeds, some data feeds are not available, however, they may be accessible on Banklink. Other banking institutions, such as some credit unions, are not yet available on either Class or Banklink.
The Rule of Thumb
Generally, for bank statements, the rule of thumb is:
- If we can access Class data feeds and we have had the data feed with no interruptions for the full financial year = no request for bank statements!
We would like to congratulate our fellow work colleagues Superfund Wholesale on their latest recognition – SMSF Administration Provider of the Year by SMSF Adviser.
The SMSF Awards recognise excellence and innovation, and receiving the coveted award is a milestone for any business, demonstrating its level of commitment to the superannuation industry.
The team are super excited to see that all their hard work and dedication has been recognised. Check out their thank you video below.
One of the key concepts with having an SMSF, is that as trustee you must preserve the assets of the SMSF for your retirement. With that in mind, the ATO is exceptionally clear that as trustee you must not treat the assets or income of the SMSF as your own – it’s not, it belongs to your future self in the form of retirement income.
With that in mind, it’s important to remember that when the SMSF owns a commercial property and you in your capacity of operating a business, lease the property, it must be treated as though you were in fact leasing the premises from someone else. This is what is referred to as Arms Length transactions.
Arms length transactions are the type of transaction where two independent strangers are making an agreement, neither one wants to get the worse end of the deal. These type of transactions are generally determined by the current market situations. Take Rent for example, if you were in an area that had surplus office spaces which high levels of vacant offices,
The end of the financial year is the perfect time to give your SMSF some love. The following are our top 10 pre-30 June items we believe every SMSF trustee should look at.
- Take your minimum pension!
- Maximise contributions
- Review your SMSF investments
- Pay any outstanding taxes or fees
- Valuations for EVERYTHING
- Update your SMSF trust deed
- Is it time for an SMSF trustee company?
Take your minimum pension!
If you are taking a pension from your SMSF, you need to make sure you’ve taken the minimum required amount before 30 June to enjoy all that juicy tax free income and refunds of franking credits!
Chloe Ward chats about the budget, non-concessional contribution caps and wraps up the month as we all prepare for the election that is just around the corner.
Well, I can’t say that this year’s budget was my favourite, which I’m sure is a shared sentiment among a lot of our clients. Whilst I still believe that Superannuation is a great space and retains a high degree of tax advantages, there are some changes on the table that will affect quite a few people.
For simplicity’s sake, let’s break it down into the good and the bad:
- The work test has effectively been done away with. Up until now if you were over 65 and wanted to contribute you had to meet this test. From 1 July 2017, this will be no more. One less thing to provide at audit time as well.
- Low-income spouse rebate. This has been introduced as a measure to equalise spouse super accounts – namely women. It’s a $540 offset that phases out once the recipient’s income is $40,000.
- Another initiative for the low-income earner is the rebate on contributions tax if you are earning less than $37,000.
Are you on the monthly bill cycle for Superfund Partners? If that is the case, you are part of the monthly processing system. As the name suggests, this means that each month your superfund is reconciled up to the end of the previous month. This is made possible by our ability to utilise data feeds that port transactional data into our software Class Super (For more details see Chloe Ward’s blog on Data Feeds).
There are many advantages to this system as it allows us to reduce the amount of queries at year end and to capture any potential compliance issues that may arise (For example Contribution Caps). This also allows you to make informed decisions on the direction you would like to take your fund as you are working with real time data instead of the last financial year’s history. Class actually allows a login to the software system for trustees called Fundweb. Once you have been sent an invitation you will be able to see a consolidated view of your fund that details Bank Accounts (statements and unmatched Cash),
Chloe talks about a successful month, looking at opportunities and getting ready for the budget announcement.
Chloe interviews Mark Beveridge from Quill Group and gets his insight on the difficulties investors are facing and what opportunities they should be looking out for.