Last week’s announcement of the third round of preliminary recommendations of the Cooper Review into Self Managed Superannuation in Australia contains relevant considerations for all Sage Advisers’ clients.
Chief among the recommendations are:
- prohibiting investment in collectables and personal-use assets (such as artworks, stamp collections, wine collections, exotic cars, racehorses and yachts);
- making the ATO's penalty regime more flexible to enable more effective and equitable regulation; and
- reducing the potential to benefit illegally from related party transactions by prohibiting the acquisition of in-house assets and imposing restrictions on the way in which an SMSF can transact with related parties.
It is also proposed that there be an online SMSF resource centre to help SMSF trustees build skills and make better decisions. We will keep you up to date with any legislative changes which result.
Treasury has announced a report indicating the future direction of the financial advisory sector: The Future of Financial Advice, Sen Chris Bowen, 26 April 2010 which aims to abolish commission based remuneration for financial advisers.
Sage Advisers’ clients should feel reassured to know that in all areas of proposed legislative and policy reform in relation to commissions (e.g. trailing commissions) payment structures, professional qualifications and regulations we are already compliant. Indeed, we are “ahead of the pack” in terms of our “fee for service” structure and our independence philosophy. We established our firm in the belief that a financial advisory firm in the 21st Century cannot operate under the commission based structure of remuneration with its inherent conflicts of interest.
We go further by benchmarking our portfolios against industry sector averages.
Sage Advisers welcomes the proposed government changes due for commencement in July 2012 based on what has been mooted to date. It will be interesting to see if the government has the courage to change the life and general insurance industry commission based structures as well?
