The changes to superannuation included in the 2016 federal budget were no cause for panic among SMSF members, according to an accounting firm senior executive.
“Let’s not panic. It’s not like superannuation is over; it’s just there’s a cap now for pensions and we’ll see what the rules are,” HLB Mann Judd managing partner Tony Fittler said at a Pritchitt Partners financial services roundtable discussion.
“It just might mean there are more funds to invest outside of super funds.”
Fittler revealed most of his accounting firm’s SMSF clients were already using family trusts as investment vehicles and said he expected those structures to increase in popularity post-budget.
“Quite often people are pretty well set up. Superannuation perhaps might have been the dominant vehicle and there are obviously caps on that now, but people have always been using family trusts,” he explained.
“So I think the family trust will become more of a focus with their flexibility for investments and direct investments.
“There might be need perhaps for a bit of restructuring and a lot of investors already have family trusts.”
In matters outside of superannuation, he pointed out investment in innovation might present a compelling opportunity due to the associated rebate now available.
However, he stressed caution was still needed.
“When you look at it, the reason you’d put your money in an innovation fund, rather than BHP or a listed stock, is you’d be expecting to make big money, but the reality is you could lose it,” he explained.
“The reason there is a 20 per cent rebate available is the real risk of doing it.”''