Here’s a checklist for advisers getting ready for super reform

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March 29, 2017

Our industry is full of acronyms. SoA, FoFA, SIS etc, etc. The one that stands out most to me at the moment is KYC – know your client. Whilst the acronym was always meant to represent a deeper understanding of a client’s affairs, it has never been more imperative to get this right than now.

Superannuation reform comes into full swing on July 1, 2017. Compared with the simple super reform in 2007, the new measures are big, scary and complex in some aspects. When speaking to other advisers around the country, there is a general dis-ease and sense of confusion around understanding the rules and being able to communicate the changes and their effects to clients in order to provide valuable advice before June 30, 2017.

There are some key points all advisers should consider in terms of getting the right mindset around the reform:

  • Advisers need to grasp the idea that there will not be a one-size-fits-all option out there and if you do take on such a philosophy, you will do so to the detriment of the client and your business. These reforms should be used as an opportunity to reset and re-engage with clients. There absolutely needs to be a holistic approach to the super changes. In this re-engagement process, advisers need to have open discussions about all aspects of their clients’ financial affairs. Many of the super changes will have a cascading effect on other areas of advice.
  • Be mindful that sentiment around these changes for trustees can be on the negative side, due to a feeling of injustice and lack of control and clarity around the new rules and, therefore, about their future. As an adviser, it is our job to recognise the challenges, demonstrate we have a way forward and provide that level of comfort so our clients can sleep easy knowing their affairs are handled. This is not a new concept. Good advisers have been doing this forever. The super reform should be seen as a chance to reset, re-engage and make a difference.
  • Education is key. The saying ‘with knowledge comes power’ is a true reflection of where the focus needs to be now and for the few months we have left before we enter a new superannuation world. Education for your clients, your team and yourself is imperative. So ask yourself: Do you feel like you understand the changes afoot and are you positioned to educate your clients on the impact of the reforms and communicate the alternative approaches to providing a positive outcome?
  • Be conscious of how you deliver the message about the changes. Be sensitive to the impact this will have on people and use a medium that will be both informative and relevant to their personal circumstances. Remember, some of these topics, such as the capital gains tax relief, can be complex and overwhelming to someone who isn’t living and breathing this.
  • Understand that you are the relationship manager for your client. It doesn’t always mean you do absolutely everything for them yourself; in fact, drawing on the expertise of other professionals to complete certain aspects of the overall plan will not only produce a high-quality outcome, but also free you up to engage with clients on a deeper level and cement that ‘trusted adviser’ title.
  • Make sure you are acting and advising on real-time figures. You cannot even begin to recommend action without knowing all the facts as they are today, not 12 months ago. Also, have you got the tools needed to advise and implement key strategies with these changes? Can you efficiently and effectively carry them out within the timeframes?

Whilst compliance with the super reform measures is a given, consideration of the impact of these rule changes on a client’s overall wealth plan could potentially open avenues to strengthen relationships and provide more services. Advisers need to be prepared for this and take on the opportunity to grow. If you haven’t begun to have these meetings – do so NOW!


TOPICS:  reformsuperannuation reform



About The Author /

Chloe Ward is self-managed superannuation fund manager at Superfund Wholesale.