What are the major traits currently being displayed by our economy? I would go for low interest rates and a flourishing property market (too heated in certain parts!). This makes blue chip shares a very welcome idea, especially for Self-managed Super funds.
Licensing options can be broadly classified into two categories. The first is the limited license and the second is a full Australian Financial Services License (AFSL). The former, the limited license, does allow practitioners to talk about setting up or winding an SMSF. With a limited license, accountants can also talk about a product class. But, they do not have the go ahead to discuss a specific product belonging to that class.
The SMSF sector welcomed the most furious market sell-off as a buying opportunity. They traded with double vigour and beat the other retail investors by a fair margin, if the analysis of nearly 100,000 fund holders proves anything.
In the year leading to March 2015, the SMSF sector grew to a market value of $595 billion. This was 10% growth and followed an even robust 13%, registered by SMSF in the year-to-March 2014.
In absence of prudential regulations and a host of unregulated financial products floating in the sector, the SMSF industry has been rather volatile. This, however, is expected from a new industry. This said, their toehold in the financial sector has only strengthened with time.
Unless you plan your estate carefully, your inheritors may feel the pinch with death benefit taxes on a later day. Officially, Australia abolished inheritance taxes in the 70s but unofficially, they have been existing, just as stoutly, ever since. The government has changed the name from “death duties” to “death benefit taxes” but they aren’t fooling anyone here.
Few things in our lives are both crucial and complex. The business decision, whether to shift the SMSF interest to a trust or a company falls in this category and how well the professional you have hired plans it for you will determine the strength of your fund.
SMSF practitioners are not very comfortable with the idea of non-arm’s length income or NALI. This said, NALI can pan out rather well for the SMSF trustees and arguments can be given in favour of such a statement.
In a large number of cases, the process of setting up an SMSF does not include a Product Disclosure Agreement (PDS). Allow me to reflect on this statement. A public offer fund (or a retail offer fund) comes with a PDS which pre-stipulates the rules that the members of the fund will need to follow. This same can hardly be followed by SMSF members because in effect, it would mean a member providing himself with a document that showcases how to run his own fund.