Small businesses have been warned to stay on top of their self-managed super funds, and check with their managers that everything is up to scratch ahead of a raft of legal changes coming this year.
Michael Grochowski, in his weekly commentary to private investors, says that SMSF owners need to be on top of the new changes, which will affect everyone who has opted to use this superannuation investing method to better control their retirement funds.
The industry association, the SPAA, is reporting that new auditing requirements, regulations on transfers made out of the country and new penalties are just a few of the changes businesses need to be aware of.
Grochowski notes that these licensing changes will affect everyone involved in SMSF’s in 2013. This means specialist advisors – including those who maintain and operate SMSFs – will need to be registered as of July 1. Registration for this begins after January 30.
If administrators decide they want to keep managing SMSFs, they need to have their applications in by April. There are some requirements for this, such as auditing at least 20 funds and meeting some educational requirements.
In addition, accountants who provide advice for SMSFs also need new approval, in the form of a limited licence which takes effect from July 1. This will provides an avenue for accountants who want to work on SMSFs without having to get a full licence.
Grochowski warns, “Financial planners who also provide tax advice will need to be licensed under the new structure. As part of this change, financial planners who provide tax advice will need to meet education and experience requirements; satisfy a fitness and propriety test; and follow an approved code of conduct.”
Further changes include a requirement for SMSF owners to now consider insurance as part of the investment strategy, says Grochowski. This will involve some careful analysis of the insurance requirements for each individual SMSF owner, who will need to decide if insurance is appropriate for them and their circumstances.
Grochowski also notes that there are more changes coming, such as mandatory trustee education and the introduction of new administrative penalties.
Grochowski says the industry association is recommending that SMSF operators need not worry about the details of these changes, but says they should be speaking with their auditors and accountants to find out what their plans are. If an accountant isn’t considering getting registered, then it may be time to find someone who is, he says. “They just need to check their auditor is registered under the new system.”