Take outs

• Strategies for small business owners to streamline their transition to retirement
• Housing, insurance and politics are key areas and will present opportunities and challenges in the coming months
• It is time to look at how advisers can add ever-increasing value to their wide range of clients

Netwealth’s last two roadshows were designed to help advisers implement the most significant super changes in a decade. This year, we’re thinking outside the super square and exploring four new technical strategies.

Last year was an exceptional year for the financial planning industry, not just because of the royal commission, but also because of the enormous superannuation changes the government introduced in 2017. Most of those began on 1 July 2017 and were complex: they had tax implications and impacted contributions, retirement planning and estate planning. It was the greatest upheaval in a decade and it took several months to understand and implement the reforms.

Understandably, we channelled significant resources into interpreting these changes. Our previous two national roadshows focused on the new super transfer balance caps and their tax implications, as well as dealing with the super death benefits regime and its tax and estate planning implications.

The Netwealth ‘Outside the Super Square’ roadshow in March will take a different angle, reminding the industry that there is a lot more to super than just implementing the recent changes. Now is the time to look for super opportunities and to highlight practical strategies that make the most of them.

Register now in your state to learn alternative super strategies

Helping the small business community transition to super

According to the Australian Bureau of Statistics, there are around 2.1 million small businesses in Australia¹, and those businesses employ 44% of our workforce² and contribute 20% of our GDP¹. Advisers have clients in this sector, and those clients often spend their whole life building their business, not their super nest egg.

When the time comes for them to sell the business, there are many tax concessions that will not only help them deal with capital gain, but will also ensure they get significant amounts into super outside the restrictive new caps. Many of these clients say that their business is their super and they need strategies to transition its value into their super in the most effective way.

Sorting through the tax labyrinth is typically an accountant’s job but getting the money into super, understanding the interactions between the various concessions, and preparing the client for the next chapter of their life should be the job of a financial planner. In the ‘Outside the Super Square’ roadshow, Netwealth will give advisers practical and effective strategies, explained simply, to help small business owners plot their retirement pathway.

Housing, insurance, and politics

Housing affordability is a real problem, particularly for first home buyers. Advisers often overlook the new First Home Super Saver Scheme and in response, we have come up with some very exciting and innovative strategies that could result in a real boost for first home buyers. But we didn’t stop there — we have also analysed how the scheme could be used to benefit the client’s next generation, and we’d like to share this strategy with our advisers.

We also want to explore new ideas around insurance. Insurance is often a reluctant purchase, mainly because of the cost. In order to make it more affordable, it is frequently arranged through super. But it can become complicated. Should the time come to call on a policy, the last thing an adviser wants to discover is that a big tax bill needs to be paid to get the money out of super and into the beneficiary’s hands. There are various strategies to consider, both in terms of how the insurance is built into super and how best to exit the money from super.

It is going to be an interesting year in federal politics and the Labor Party has indicated that it intends to make changes that will impact superannuation. We are hearing about clients who are concerned by the proposed franking credit changes and how they will affect their super arrangements, particularly super pension funds. It is important to understand that the impact of the proposed changes will differ depending on the client’s structure and the operations of the fund. Advisers need to be proactive in this area to ensure that clients don’t make unnecessary and potentially regressive decisions.

It’s time to look outside the square

Over the past 18 months, the industry has been focused on thinking inside the square: in order to keep pace with the government’s changes and to comply with the requirements, many advisers have sidelined valuable business opportunities and strategies. 

It is now time to be strategic — to think outside the super square in the interests of clients. The four areas outlined above are ones that we believe advisers can pursue with their clients to good effect. We hope that exploring these four strategies will set off a chain reaction, prompting financial planners to come up with many more great ideas and strategies that are tailored to their clients’ needs this year.

Register for the ‘Outside the Super Square’ roadshow or access further information, including venues, times, and guest speakers.

¹ https://www.kochiesbusinessbuilders.com.au/small-businesses-big-economic-impact/

² https://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/rp/rp1819/SmallBusinessSector

Views expressed are of the interviewee and may not be the opinion of Netwealth or its related companies.