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7 things your financial adviser wishes your accountant knew

By Helen Baker
  • May 25 2021
  • Share

Earn

7 things your financial adviser wishes your accountant knew

By Helen Baker
May 25 2021

From overlooked tax deductions to costly superannuation mistakes, here are some important factors financial advisers want your accountant to know which can significantly affect your financial position, writes Helen Baker. 

7 things your financial adviser wishes your accountant knew

7 things your financial adviser wishes your accountant knew

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By Helen Baker
  • May 25 2021
  • Share

From overlooked tax deductions to costly superannuation mistakes, here are some important factors financial advisers want your accountant to know which can significantly affect your financial position, writes Helen Baker. 

7 things your financial adviser wishes your accountant knew

While accountants aren’t accredited to provide financial advice, there are things your accountant can do to better assist you with financial planning, superannuation and investments.

As a practicing financial adviser, here are some things I would love to see more accountants be proactive with to help you build the best financial future possible:

1. Suggest investment advice earlier

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By their very nature, accountants have great visibility over our finances: they know our incomes, our taxable assets and our businesses’ real numbers.

Even with such visibility, though, many accountants don’t suggest their clients seek independent investment advice – at least not until they are approaching retirement.

That’s a big surprise to most people. They feel that if financial advice was something they needed, their accountant would have suggested it to them sooner. The potential lost earnings can be huge.

A little prompt from someone who knows our numbers is a powerful incentive to think more broadly about our finances.

2. Unclaimed tax deductions

It’s surprisingly common for people to not claim eligible tax deductions for financial advice fees. The same goes for income protection insurance premiums.

Clients often forget to mention they incurred these expenses; some people don’t know they can be tax deducted. Yet many accountants forget to ask, so the deductions go unclaimed.

Why pay a cent more in tax than you need to?

3. Fee-free consultations

Many people, accountants included, aren’t aware that most financial advisers don’t charge for an initial consultation.

Generally, the first appointment is free and is designed to give you the chance to ask any burning questions you have, meet multiple advisers to see who you prefer to deal with, understand the adviser’s experience in areas relevant to you before you commit to fees. This also removes risk on the accountant because it’s your choice.

As such, it costs nothing to see if financial advice who could improve your current circumstances.

4. Super contributions and structures

Superannuation is sometimes the source of conflicting advice.

For instance, some accountants spruik self-managed super funds (SMSFs). However, SMSFs aren’t suitable for everyone and have considerable establishment costs, ongoing expenses and compliance requirements to weigh up.

Separately, carry forward concessional contribution rules allow you to “catch up” on super contributions without paying extra tax. But there are strict eligibility criteria, which your accountant may be unfamiliar with. You could be missing out or making a mistake.

5. Superannuation consolidation mistakes

Many accountants, just like the wider community, have been led to believe that consolidating multiple super accounts saves money. But that’s not always the case.

Firstly, if you roll low-fee funds into a fund with higher fees, it actually costs more.

Meanwhile, if all your funds charge the same fees, the cost is the same regardless: 1 per cent of $200,000 in a single fund is the same as 1 per cent of two funds with $100,000 each.

The biggest problem though pertains to insurances. Life, disability and income protection policies can be taken out of your super. By closing an account when rolling everything into one, you automatically cancel the attached insurance policies.

Recent law changes also require super accounts to be automatically closed if they don’t meet minimum balance requirements or receive regular contributions, and insurances are now opt-in. There are issues with active contribution requirements and minimum balances to consider also.

Once gone, it may not be possible to get the same insurance terms back again, because every provider has different policy terms.

Or you may lose coverage altogether. I’ve seen many people only discover their insurance was gone when they needed to make a claim.

6. You don’t need to be rich to benefit from advice

There is a perception – including among some accountants and the wider community – that financial advice is only for the wealthy. Getting financial advice should help you to be wealthier over time.

Strategic planning has enabled some to secure the aged pension they were not receiving without advice.

Everyone’s circumstances are different, and in most cases, advisers can help to improve those circumstances.

7. Work with us

While financial advisers and accountants have our respective focus areas, the best outcomes for you, the client, come from when we work together.

Both sides see elements of your finances that the other may only get partial or zero visibility over: business and superannuation structures, trusts, taxes, outstanding debts and investment equity. By working together, we can ensure you receive advice that is relevant, holistic and consistent – the way advice on money matters should be!

Helen Baker is a licensed Australian financial adviser.

7 things your financial adviser wishes your accountant knew
7 things your financial adviser wishes your accountant knew
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