In this article, Co-Founder and CEO of accountantsGPS, George Haramis, shares his view.
Recent murmurs that SMSFs may be included in the Retirement Income Covenant have sparked vibrant discussion on its pros and cons. I believe carefully constructed legislation could provide an opportunity for SMSFs and lead to more positive outcomes for members.
RIC: A recap
Broadly speaking, the Retirement Income Strategy Covenant (RIC) requires trustees to develop a retirement income strategy and plan that meets the needs of retired fund members or those approaching retirement.
A one-size-fits-all approach is not appropriate, and each fund’s retirement strategy will need to be suitable for its members based on the evidence available.
Trustees must also identify how they plan to achieve three main objectives for members:
Maximise their retirement income, including allowance for the Age Pension, where appropriate.
Manage risks relating to the sustainability and stability of their retirement income.
Have some flexible access to their savings during retirement.
An opportunity for Trustees, members and accountants
The SMSF market is approximately 37% of the total superannuation assets, with the average assets per SMSF being $1,472,106. Much of the lifecycle of an SMSF is focused on growing wealth and ensuring succession plans or estate planning is in place.
Of course, many SMSF Accountants actively help their clients plan and prepare for retirement well ahead of time.
However, without the need to adhere to RIC, retirement planning can and does come too late for many—resulting in potentially missed opportunities to maximise retirement income and placing extra pressure on Trustees, members and their accountants.
One of the most significant issues I’ve seen in my decades working closely with accountants is their lack of time to do activities and analysis over and above the standard tasks required for SMSFs to be compliant.
We know that developing a sound strategy to meet lifestyle income needs in retirement requires time and planning well in advance. This is time that very few accountants have. Members can do their own planning, but without specific industry knowledge, it’s challenging.
SMSF Check-Up Report: weeks of analysis completed in minutes
This is why I designed accountantsGPS. We deeply understand the burdens and developed the SMSF Check-Up Report to address them. Available to accountants who use BGL’s Simple Fund 360, it creates a fully tailored strategic analysis for any SMSF in under 5 minutes.
The factual report helps accountants get behind the numbers and understand a fund’s financial health. It also provides easy-to-understand, actionable insights, including trustee strategy, member contributions and retirement planning. Because it is a fact-based report, there is no risk of overstepping the advice line.
Using this report as a base, trustees, members, and their accountants can start to make informed, appropriate decisions that will have them comfortably ahead, whether or not SMSFs are integrated into RIC.
Come along to Booth 12 at the SMSF Association Conference for a demonstration
Join us in Brisbane between 21-23 February 2024 and see for yourself how easy (and cost-neutral) it is to start running SMSF Check-Up Reports for your SMSFs.
accountantsGPS and moneyGPS are SaaS products that provide affordable, compliant digital advice and SMSF services, to Australians through; Institutions, Accountants, Financial Advisers, Superfunds and Employers.
Fiduciary is an Australian Fintech and owner of accountantsGPS and moneyGPS—SaaS products that provide affordable, compliant digital advice and SMSF services, to Australians through; Institutions, Accountants, Financial Advisers, Superfunds and Employers.
Designed by finance industry stalwarts George Haramis and Drew Fenton and created by a team of tech heads, it combines all the brilliant parts of the financial services world in a simplified, user-friendly way.
accountantsGPS integrates with BGL’s API extracting data from BGL’s Simple Fund 360 SMSF administration software to produce a digital SMSF Check-Up report.
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