“Insane and unfair”, “Immoral and a disgrace” “Disappointing”, “Ridiculous” and “Dumb, dumb, dumb” – these are just some of the sentiments shared by financial planners this morning when asked to comment on some of the the superannuation components of latest Federal Budget.
Midwinter surveyed a total of 103 Australian advice practitioners in order to gain the most comprehensive understanding of the planning industry’s initial response to this year’s budget and how they believe their clients will be affected.
The response was overwhelming; with 57.4% of the individuals surveyed believing that 2016’s federal budget would have an overall negative impact on their clients. Only 6.7% of planners surveyed were of the opinion that the budget would impact their clients positively. Interestingly however, when asked if they whether they believed the budget would impact their own businesses positively 25.5% believed it would.
The results also revealed resounding majority views towards some topics in particular, for example:
•87.3% of planners surveyed said they felt negative toward the proposed lifetime cap for non-concessional contributions of $500,000.
• 86.4% said they felt negative toward the proposed the lowering of the concessional contributions cap to $25,000.
• The removal of tax exemption for fund earnings on TTR pensions achieved a 73.5% negative response.
• 70.9% said they intend to initiate client reviews for those clients immediately impacted by the 1.6m cap
• 51% think there will be a small increase in financial advice because of these proposed legislative changes.
Speaking of the 2016 Federal Budget’s proposed changes, Managing Director of Midwinter, Julian Plummer said “With the progressive dismantling of benefits of super strategies, this will make your digital strategy even more important.”
“We have now started to analyse the impact of the legislative changes to AdviceOS, and we will look to pre-empt the changes. If Labour offers their support for these changes, we won’t wait for Royal Assent to implement into AdviceOS.”
“We will certainly prioritise the contribution cap reduction, but may look to “wait and see” what happens with the rolling concessional contribution cap and the lifetime non concessional contribution limit.”