Repeat buyers are one of the strongest measures of confidence in any apartment development.

At <a href="https://www.apartments.com.au/new-apartments/era-newcastle-west-124-126-bull-street-newcastle-west-nsw-2302">ERA</a> in Newcastle West, some purchasers are returning to <a href="https://www.apartments.com.au/developers/gwh">GWH</a> after living at the developer's One Apartments. Their decision to purchase again was driven by the quality of life they found after moving into their first GWH home.

Keith Wilton had spent years living in a house in East Maitland before deciding it was time for a change. Apartment living had always been on his radar, but he was selective about what he wanted.

<iframe allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen="" frameborder="0" height="315" referrerpolicy="strict-origin-when-cross-origin" src="https://www.youtube.com/embed/FH_1EzB-1vs?si=XScVlP1ERsTDJoME" title="YouTube video player" width="560"></iframe>

"I had some boxes I wanted to tick," he says.

Keith points to the open-plan design, generous outdoor areas and considered inclusions as key reasons One Apartments worked for him.

“One of those things was a nice indoor open plan area, but also I wanted a nice outdoor open area that I could entertain on in summer or Christmases or birthdays,” he says.

He also found value in the smaller details, from integrated appliances to shared resident spaces including the pool, cinema and rooftop areas.

[smartcode_project:default project_id=135096 project_image_fid=356818]

After comparing several developments, he chose One Apartments because of GWH's longstanding local reputation and his own experience working with the developer on a commercial project more than a decade earlier.

"I knew that they were local, that the quality of the build was going to be up there. I'd looked at other apartment complexes around and close by, and I just knew that here was a better decision location wise."

Today, Keith says the move has completely changed how he experiences Newcastle.

"I enjoy living in this location because it's more of a lifestyle change. That Newcastle city living where you can walk to restaurants and bars and even beaches and parks and even shopping across the road."

[smartcode_project:default project_id=135096 project_image_fid=356828]

Beyond the location, he says it's the sense of community that has surprised him most.

"Everyone loves living here because they chose to live here, but everyone looks out for each other. It's a real great community feel here."

For Aimee and Lyle Goodman, the journey started almost by chance.

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The couple happened to be having coffee in Newcastle when they noticed the site where One Apartments was about to begin construction.

"We were aware GWH was planning a development," Aimee says. "We made one phone call and things moved pretty quickly after that."

As busy business owners, they initially thought apartment living would simply reduce the maintenance that came with larger homes. Instead, it fundamentally changed how they spent time together.

"We actually catch up more as a family now," Aimee says.

"We've had homes with big yards and lots of space, but everyone ended up in different rooms. Here we'll have dinner together, the kids can play, and we spend far more quality time together."

[smartcode_project:default project_id=135096 project_image_fid=356829]

Lyle says their confidence came from GWH's reputation within Newcastle's building industry.

"I know people who've worked across different apartment projects, and whenever GWH came up the feedback was always the same. They're rock solid. They're quality."

That confidence only grew throughout the buying process.

"One of the things that really impressed us with GWH was the whole process, was the communication," Lyle says. "It was consistent, it was regular, there was no problem if we had some weird questions, there was no problems in getting answers."

[smartcode_project:default project_id=135096 project_image_fid=351104]

Aimee says one moment stood out.

"The project actually finished on time. We realised we needed to hurry up and sell our house because everything was happening exactly when they said it would."

The positive experience at One Apartments ultimately gave all three buyers the confidence to purchase again with GWH, this time at ERA.

Their confidence reflects what many buyers are seeking in today's apartment market. Location remains important, but so too does certainty around delivery, quality and long-term liveability.

[smartcode_project:default project_id=135096 project_image_fid=356822]

ERA builds on those foundations with 280 one, two and three-bedroom apartments across two landmark towers in <a href="https://www.apartments.com.au/developments/newcastle-west-nsw-2302">Newcastle West</a>.&nbsp;

Designed by <a href="https://www.apartments.com.au/architects/fk-australia">Fender Katsalidis</a>, the project will include more than 2,000 square metres of resident amenities, including a resort-style pool, gym, sauna, private cinema and rooftop entertaining spaces overlooking the harbour and coastline.&nbsp;

The development is also within walking distance of the Newcastle Interchange, Honeysuckle, Darby Street, the harbour foreshore, restaurants, retail and the city’s beaches, continuing the walkable lifestyle that existing GWH buyers say has transformed how they live.

[smartcode_project:default project_id=135096 project_image_fid=356826]

For Keith, the appeal remains straightforward.

"You feel at home even before you've moved into your home."

For Aimee, the change is measured in time.

“I just felt like I had more time,” she says.

[smartcode_project:default project_id=135096 project_image_fid=351102]

Construction at ERA is now underway, with more than half of the residences already sold and limited two and three-bedroom apartments remaining in the East Tower release. Priced from $980,000 for two-bedroom residences and $1.46 million for three-bedroom residences, buyers can secure an apartment with a 10 per cent deposit, with premium homes offering ocean views from Level 8 and harbour views from Level 10.

ERA is also backed by Resilience Insurance's 10-year Latent Defects Insurance policy, providing protection against structural or waterproofing defects for 10 years after completion. The project is anticipated to be completed in early 2028.

[smartcode_project_cta:default project_id=135096]

Joel Robinson

From ONE to ERA: Why buyers are choosing GWH again in Newcastle West

Virgate Property Group is preparing to commence construction of Verdé, its new apartment development in Melbourne's Arts Precinct at Southbank, following a strong run of sales that has seen more than half of the project's 173 apartments secured.

Verdé has attracted a broad mix of first home buyers, owner-occupiers upgrading from nearby inner-city suburbs and investors, with younger owner-occupier couples aged between 28 and 45 accounting for the strongest enquiry. Many are already living in Southbank, South Melbourne, Albert Park, Port Melbourne, South Yarra and the CBD.

"Verdé is located in one of the most desirable pockets of southern Melbourne," Blair Property Group Director Darren Blair, who is managing sales at Verdé, said.

"It's within walking distance of the Arts Centre, Royal Botanic Gardens, Albert Park Lake, and Southbank's restaurants and retail. It's a great lifestyle location with strong amenity and liveability, which made it a very attractive choice for the project."

[smartcode_project:default project_id=4661 project_image_fid=372549]

Virgate was already familiar with the precinct, having previously delivered the successful Domain House development in neighbouring South Melbourne. That experience gave the developer confidence to acquire the Coventry Street site and continue expanding its presence in Melbourne's inner south.

"We had been keeping an eye on the site and the broader precinct for a few months before deciding to move forward with the acquisition," Virgate said.

The project was ultimately secured in 2020 following feasibility studies, planning assessments and due diligence, with the brief centred on delivering "a high-quality, considered design that feels both refined and fit for purpose."

[smartcode_project:default project_id=4661 project_image_fid=314259]

Designed by <a href="https://www.apartments.com.au/architects/bruce-henderson-architects">Bruce Henderson Architects</a>, Verdé comprises 173 one, two and three-bedroom apartments priced from $599,000. The architecture is distinguished by a faceted glass façade that responds to both the site's outlook and Melbourne's changing light conditions.

According to Bruce Henderson Architects, the coloured glazing gives the building a distinctive identity while also providing privacy and solar shading, with residences oriented to capture views across the bay, city skyline and surrounding parklands.

Inside, <a href="https://www.apartments.com.au/interior-designers/designoffice">DesignOffice</a> has created interiors focused on natural light, efficient planning and enduring materials. Apartments feature engineered oak flooring, natural stone benchtops, floor-to-ceiling glazing and SMEG appliances, while a restrained material palette aims to complement the expansive outlooks rather than compete with them.

[smartcode_project:default project_id=4661 project_image_fid=372550]

Resident amenity has also been designed around everyday functionality rather than occasional use. Facilities include a concierge-serviced lobby, residents' lounge with fireplace, library and co-working space, gym, terrace garden with barbecue facilities, ground-floor café, and package delivery management.

The project's location continues to be one of its strongest drawcards. Positioned on Coventry Street, Verdé sits within walking distance of the National Gallery of Victoria, Arts Centre Melbourne, Royal Botanic Gardens and Albert Park Lake, while Southbank's dining precinct, Sturt Street trams and the new ANZAC Station are all nearby. The surrounding education catchment also includes Melbourne Grammar, Melbourne Girls Grammar, Mac.Robertson Girls' High School and several major university campuses.

The sales team says buyers have responded particularly well to the combination of location, design quality and long-term liveability.

"They're responding really positively to the quality of the design, premium resident amenities and the uninterrupted views. Many also appreciate the location and how connected it is to everything they need."

The ability to secure stamp duty savings before completion has also been a key factor for purchasers, alongside the opportunity to personalise finishes ahead of settlement.

With construction set to commence soon and more than half the apartments already sold, Verdé enters its next phase as one of the Arts Precinct's more established apartment developments, offering remaining buyers an opportunity to secure a residence before construction advances further. Expected completion is scheduled for late 2027.

[smartcode_project_cta:default project_id=4661]

Virgate's Verdé Southbank moves toward construction as sales fly past halfway stage

Downsizer-focused apartment development Kooyongkoot in Hawthorn has been recognised at the 2026 Better Future Melbourne Design Awards, taking home Gold and Silver awards in two categories.

<a href="https://www.apartments.com.au/new-apartments/kooyongkoot-hawthorn-1-kooyongkoot-road-hawthorn-vic-3122">Kooyongkoot</a>, currently being delivered by developer PQD and designed by Cera Stribley, received Gold in the Interior Design – Proposed category and Silver in the Architecture – Proposed category.

The dual recognition reflects the design approach behind the boutique development on prestigious Kooyongkoot Road, where the focus has been on creating homes for downsizers seeking the space, quality and functionality of a detached house within a low-rise apartment building.

Rather than maximising apartment numbers, <a href="https://www.apartments.com.au/developers/pqd">PQD</a> and <a href="https://www.apartments.com.au/architects/cera-stribley-architects">Cera Stribley</a> limited the development to just 18 residences, allowing for larger floorplans, greater privacy, generous landscaping and expansive communal spaces.&nbsp;The majority of the apartments also benefit from corner aspects, allowing for dual sources of natural light.

Now around 70 per cent complete and on track for completion in November 2026, Kooyongkoot will comprise a mix of garden residences, ter​race apartments, sub-penthouses, and is crowned by two half-floor penthouses with direct lift access and private rooftop terraces.

[smartcode_project:default project_id=102717 project_image_fid=355297]

The Silver Award for Architecture recognised the way the building responds to its prominent corner position at the ent​rance to Hawthorn's Scotch Hill precinct, one of Melbourne's most established residential neighbourhoods.

Rather than competing with the grand homes that line Kooyongkoot Road, the architectural approach focused on restraint and longevity, using curved brickwork, generous landscaping and carefully considered proportions to integrate with the existing streetscape.

"The form feels fluid and timeless, as though shaped by the landscape itself – architecture that belongs, rather than competes," said Chris Stribley, Co-Founder and Managing Principal of Cera Stribley.

The judging submission also highlighted practical innovations throughout the building, including lift cores servicing only nine homes each, a central landscaped lightcourt designed to bring daylight and ventilation into the building, and fully enclosed private storage rooms with lighting, power and shelving to better accommodate residents transitioning from larger family homes.

[smartcode_project:default project_id=102717 project_image_fid=355293]

The Gold Award for Interior Design recognised the project's focus on long-term liveability rather than display-home aesthetics.

According to the awards submission, the interiors were designed from the inside out, prioritising how homes would function over decades of daily use through generous proportions, practical storage, durable natural materials and flexible layouts.

The specification includes natural stone throughout, upgraded acoustic glazing, V-ZUG appliances and fully enclosed storage rooms, alongside an amenity offering focused on wellness, entertainment and everyday convenience.&nbsp;

Residents will have access to a gym and yoga studio, a wellness centre featuring traditional and infrared saunas, a cold therapy shower and treatment room, as well as a residents' lounge and golf simulator/cinema room for entertainment.&nbsp;Kooyongkoot has also considered the everyday convenience of its residents by offering a private carwash and pet wash facilities on site as well as dedicated parcel lockers and oversized fully enclosed storage rooms.&nbsp;

[smartcode_project:default project_id=102717 project_image_fid=355303]

The project's attention to detail has already resonated with buyers. Earlier this year, Kooyongkoot recorded one of Boroondara's highest apartment sales when an $8 million penthouse was purchased by a Melbourne CEO downsizing from a nearby family home.

"Every detail feels deliberate, from the overall design down to the smallest touches," the purchaser said.

"The level of quality and refinement is exceptional, but what really sold it was how liveable it felt... It felt like a place where everything had been considered, not just a luxury building."

[smartcode_project:default project_id=102717 project_image_fid=355304]

Sustainability also formed a key part of both award submissions. Kooyongkoot is targeting a minimum 7.5-star NatHERS rating across all residences, supported by passive design principles, high-performance glazing, EV charging infrastructure, water reuse systems and a wellness model focused on lower-energy dry facilities rather than pools and large wet areas.

Located within walking distance of Scotch College, Methodist Ladies' College, Koo​yong Lawn Tennis Club, Aubur​n Village and Camberwell Junction, Kooyongkoot continues to target owner-occupiers looking to remain in Melbourne's inner east without compromising on space or quality. A limited selection of two, three and four-bedroom residences remains available, with prices starting from $1.9 million.

[smartcode_project_cta:default project_id=102717]

Kooyongkoot wins Gold and Silver at Better Future Melbourne Design Awards

New apartment supply has become increasingly constrained across <a href="https://www.apartments.com.au/developments/parramatta-nsw-2150">Parramatta</a> in recent years, with fewer projects progressing through to completion as development conditions have become more challenging.

It makes <a href="https://www.apartments.com.au/developers/novm">NOVM</a>'s 2021-completed <a href="https://www.apartments.com.au/buildings/the-lennox-parramatta-12-phillip-street-parramatta-nsw-2150">The Lennox</a> one of the most recently completed residential towers on the Parramatta River, and among the newest apartment developments in Sydney's second CBD.

With the project largely completed before the sharp escalation in construction costs and inflation following the pandemic, The Lennox is now offering pricing that would be difficult to replicate in a comparable new development in Parramatta today, or across much of Western Sydney.

The majority of the 413 apartments at The Lennox sold before and shortly after completion. A limited release of the remaining apartments has recently been brought to market by capital partner <a href="https://www.apartments.com.au/project-marketer/equitifund-group">Equitifund</a>, with entry-level pricing from $700,000 and two-bedroom apartments available from under $1 million.

Rising above the Parramatta River at 12 Phillip Street, The Lennox comprises one, two, three and four-bedroom apartments, appealing to first home buyers, young professionals, families, downsizers and interstate investors seeking a completed apartment in one of Australia's fastest-growing economic centres.

[smartcode_project:default project_id=5743 project_image_fid=372394]

Rather than positioning Parramatta as an alternative to Sydney's CBD, Equitifund believes the city has reached a point where it stands on its own merits.

"Parramatta is no longer simply an alternative to Sydney CBD, it's becoming a destination in its own right," Equitifund Executive Chairman Greg Huxley said.

"The Lennox captures that evolution with a level of quality and amenity that's difficult to match at its price point."

[smartcode_project:default project_id=5743 project_image_fid=953]

Designed by <a href="https://www.apartments.com.au/architects/marchese-partners">Marchese Partners</a>, the tower responds directly to its riverfront setting through expansive glazing and open-plan layouts that maximise views across the Parramatta River and city skyline. Interiors feature engineered timber flooring, stone benchtops, stainless steel appliances and floor-to-ceiling glazing, while generous balconies extend the living spaces outdoors.

Marchese Partners says the project was conceived to balance high-quality apartment living with practical, long-term functionality, pairing larger, efficient floorplans with amenities more commonly associated with five-star hotels.

That emphasis continues through the resident facilities, which include a 20-metre rooftop swimming pool, fully equipped gym and wellness spaces, full-time concierge, a residents' lounge, function room, private lifts, secure basement parking and rooftop communal areas overlooking the Parramatta River. Ground-floor boardwalk retail and dining further activate the riverfront and integrate the building into the surrounding public realm.

[smartcode_project:default project_id=5743 project_image_fid=925]

Australian housing and finance group Equitifund has secured the remaining apartments, believing there are few completed apartment opportunities in Parramatta that offer the same combination of location, amenity and pricing.

Equitifund National Sales Director Ben Hamblett says buyers are increasingly recognising that premium apartment living no longer needs to come with Sydney CBD pricing.

"The Lennox is where aspirational living becomes attainable," Hamblett said.

"Wake to river and mountain views, step into Sydney's Second CBD, and arrive home to resort-calibre amenities, all without the harbour price tag."

Hamblett says owner-occupiers are also attracted by the convenience of having Westfield Parramatta, Church Street's dining precinct, Parramatta Park, Riverside Theatres, Western Sydney University and major transport connections all within walking distance.

"At The Lennox, lifestyle is not an afterthought, it is the foundation."

[smartcode_project:default project_id=5743 project_image_fid=5374]

The Lennox places residents within walking distance of Parramatta Square, Westfield Parramatta, Church Street Eat Street, Parramatta Station, the ferry wharf, Light Rail, the future Sydney Metro West, Parramatta Park and CommBank Stadium, reinforcing Parramatta's position as one of Australia's most connected metropolitan centres outside Sydney's CBD.

Equitifund says buyers visiting the display suite consistently comment on the quality of the finishes, generous floorplans, river and skyline views, and the walkability of the location. The project has attracted a broad mix of local professionals, upsizers, downsizers, buyers relocating from Sydney's inner suburbs and interstate investors seeking long-term growth opportunities.

That demand aligns with Parramatta's continued evolution as an economic powerhouse. Equitifund Research and Market Insights specialist John Bekiaris says sustained population growth, infrastructure investment and expanding employment opportunities continue to support long-term housing demand across the city.

"Parramatta has evolved from a satellite city into one of Australia's most important economic centres. Population growth, infrastructure investment and employment are all supporting sustained long-term housing demand."

[smartcode_project_cta:default project_id=5743]

The apartment price gap drawing Sydney buyers west

A luxury beachfront apartment at Rainbow Bay has more than doubled in value since it sold off the plan six years ago, setting a new local apartment record in the process.

The three-bedroom apartment in the Flow development on Petrie Street, the first of four new projects locally by Paul Gedoun's S&amp;S Projects, has sold for $7.4 million, after originally selling for $3.27 million when the project launched in 2020.

The seventh-floor apartment, comprising 187 sqm of internal living space and a 54 sqm balcony overlooking Froggies Beach and Snapper Rocks, was purchased by a local family.

The transaction was negotiated by Pezet Matheson director Kerry Pezet and equates to more than $30,000 per sqm.

Pezet said the sale reflected the limited opportunities to buy into the boutique beachfront development.

"The sale highlights the rarity of opportunities within the boutique beachfront development, where residences seldom become available," Pezet said.

"Flow is one of the Gold Coast's most tightly held buildings. Buyers from our database move quickly when residences become available, and achieving an off-market sale at $7.4 million demonstrates the depth of demand for property of this calibre."

<img alt="Flow" data-entity-type="file" data-entity-uuid="c585b206-2130-4eee-a50c-3f27c51a7c70" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-06%20at%208.33.25%E2%80%AFPM.png?VersionId=m3pHRDV62Y3fvN.XQuQHq.52ilTWpRLf" />

Flow was the first of four luxury apartment developments delivered by Paul Gedoun's S&amp;S Projects at Rainbow Bay and was completed in 2023.

Positioned on the beachfront overlooking Snapper Rocks, the residence includes three bedrooms, three bathrooms, a powder room and views stretching north along the coastline towards Surfers Paradise.

Pezet Matheson Residential principal Mitchell Lambert said buyers continued to prioritise quality beachfront apartments in tightly held locations.

"Flow Residences offers a rare combination of elevated beachfront positioning, architectural excellence, comprehensive resident amenity and premium finishes, which is exactly what discerning purchasers are seeking," Lambert said.

"The transaction further reinforces Rainbow Bay's reputation as one of Australia's premier coastal lifestyle destinations, where limited supply and growing demand continue to support strong market performance."

Pezet Matheson originally marketed and sold out Flow off the plan, making the latest transaction a return to one of the project's original buyers.

Paul Gedoun is selling his third project, <a href="https://www.apartments.com.au/new-apartments/radia-rainbow-bay-271-boundary-street-coolangatta-qld-4225">Radia Rainbow Bay</a>, after recently completing, and selling out, <a href="https://www.apartments.com.au/buildings/esprit-217-227-boundary-street-coolangatta-qld-4225">Esprit</a>. He has plans for a <a href="https://www.apartments.com.au/news/qld/first-look-s-s-projects-proposes-88-apartment-wellness-tower-at-coolangattas-boundary-street">fourth building</a>, 88 apartments on <a href="https://www.apartments.com.au/new-apartments/209-213-boundary-street-coolangatta-qld-4225">Boundary Street</a>.

Rainbow Bay apartment doubles in price since off the plan sale during pandemic

Smsfs

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GUEST OBSERVER
The premise of superannuation relies on trust in the system and trust in the government to protect Australia’s primary savings vehicle. Stability of legislation and consistency of policy. This is why we strongly support enshrining the objectives of superannuation in law, and why we are so adamant that the objectives must strive for dignified and secure retirement. Also, consumers need to be able to trust that the advice they receive from their advisors is accurate and in their best interest.
Today I want to focus on three main points.
First, I will briefly reflect on our significant achievements as an Association since establishment in 2003. Second, I will discuss ‘professionalism’ and last, I will touch on the tremendous opportunities that we have at this time.
Fourteen years ago, very few understood the SMSF sector, let alone its role in our nation’s future prosperity. Its survival was hanging in the balance and desperately in need of a ‘leader’.
It is now the largest sector in the superannuation industry. Since those dark days in 2003 when SMSFs were under real threat, the sector has had six-fold growth in funds under management and more than doubled in the number of funds. These are phenomenal statistics and something which each of you should be immensely proud. It is your doing.
Predictions by Rice Warner in fifteen years’ time have SMSFs continuing to be a standout leader in Australian superannuation doubling again in size and numbers.
As a direct result of the SMSF Association’s contribution to that growth:
ˇ      There is public recognition of the SMSF specialist and the SMSF profession. Others tried and failed, but we continue to grow.
ˇ      Career pathways from high school to PhDs exist through the Association’s specialisation programs and we now have our first graduates from the University post-graduate SMSF specialist programs.
ˇ      Our strong advocacy programs have improved access to superannuation and advice. We punch well above our weight.
Today, SMSFs are now integral to our superannuation system and national prosperity. They are too big to ignore.
The growth, and the importance of SMSFs and their communities can be tracked directly to your Association and your input.
Despite at time significant headwinds, we have never wavered from our Vision “to enable Australians to take greater control of their own destiny through a sustainable SMSF community”.
Our Mission has always been to ‘lead the professionalism, integrity and sustainability of the SMSF sector’. These enabled us to navigate the constantly changing environment in which we exist professionally.
There is no better example of this than last year’s far-reaching changes to superannuation in the May Budget.
Our strong advocacy ensured that concessional and non-concessional caps were not further reduced.
We maximised the benefits of the new rules, particularly for women, and SMSFs are now the best placed to adjust to new laws such as the $1.6 million transfer balance cap and flexible contribution rules.
And this leads to my second point.
The word “profession”, at its core, it’s an indicator of trust and expertise.
A ‘professional’ is someone who is independently qualified by a recognised body, governed by a code of ethics, committed to excellence, integrity, professional development and the promotion of the public good within their expert domain.
While we have advocated strongly and you have personally committed as a professional, we have left it to others and government to determine what our profession really looks like. Too often in the past, parts of our industry preferred to pull back towards the lowest common denominator instead of making the tough decisions to move forward into a new professional era.
Often fear, costs and efficient systems design were reasons for the focus on products instead of people and the building of a profession.
It is time to take control.
Research shows trustees number one motivation for being an SMSF trustee is control.
Our members are early adopters. But now as role models you must demand your peers and others in your supply chain join in the journey. Help them commit to their learning journey and membership.
I challenge you now to take control of your profession. I challenge you to be a leader.
It is your responsibility to continue building the profession by bringing everyone in the supply chain into your professional community, whether it be at the entry administration level or the elite strategic advice level. You should maximise and leverage opportunities at every level of your business.
Don’t settle for mediocrity because it is safe or what the government sets a baseline for you – be the cornerstone in creating your future profession. Take a good honest look at the opportunities before you.
You need to want co-regulation. Create a professional legacy for others to follow.
Raising competency and knowledge is not easy, nor is it quick, but it is necessary. To create trust, you, as advisors, accountants, auditors and administrators, must maintain standards expected and demanded of professionals.
It is absolutely necessary. To think otherwise is delusional. Truly professional advice will create trust with your clients. It will help them make better decisions.
It will lead to a better outcome for you and the SMSF industry.
It will set you apart in a crowded market.
To my last point, the future is in our hands and the opportunities held within that future are enormous.
Your clients have never been in greater need of your trusted professional advice.
As I mentioned, last year’s budget changes have provided the SMSF sector with unexpected but significant advantages, which if understood, can add such significant value to your clients. There has never been a better time to engage and build trust and confidence.
I know that due to the complexity of SMSFs, you as advisors will have opportunities to add meaningful value well into the future.
Technology and digital innovation will create new tools to assist those who commit to their own future professional development and help them stand out.
I also believe future advice will be part technology and part human. If you look to the US market you see the growing need for advice in retirement implementing a hybrid advice solution.
You and your peers are absolutely necessary to the SMSF industry, but the future will not again tolerate a product story.
You can be leaders.
In fifteen years’ time, just imagine what the industry will look like to efficiently advise, service and invest in the predicted $1.2T of funds under management in SMSFs. 
We must all continue to demonstrate that SMSFs can be a vehicle for people to take control of their destiny.
Others in our super sector are threatened by the power of SMSFs.
They continue to oppose us.
Others claim to be run for the benefit of members. SMSFs are run BY the members.
As your representative Association, we will continue to engender integrity and trust for consumers and government in this sector. It is critically important that we maintain and further develop a highly competent, well-regulated, competitive SMSF sector.
I am confident you will meet these challenges and opportunities in all their different forms. You have done so in the past and will continue to so, knowing 1.1m people have already placed their faith in us and knowing that this figure will also double.
We cannot let the future SMSF Trustees down.
John F. Kennedy said in 1962 about why it matters to go to the moon: "We choose now, not because it is easy but because it is hard…..this challenge is one that we are willing to accept, one we are unwilling to postpone, and one which we intend to win.”
We are ‘flying to the moon’ to achieve our future as professionals who are trusted by Australians.
I have trust in you.
I know you will accept this challenge and I know you will win.
Be proud of where we sit as an industry but be vigilant to ensure the SMSF industry fulfils its potential and its place in the Australian economy.
Andrea Slattery is managing director and chief executive officer, SMSF Association, and can be contacted <a href="https://www.smsfassociation.com" target="_blank">here</a>.
This is an excerpt of the speech given to the 2017 SMSF Association National Conference.
 
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jchancellor-FAypfDUnLy

SMSFs integral to our superannuation system: Andrea Slattery

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Dear Margaret,
My husband and I would like to build granny flat through an SMSF at our own home – is this possible to do?
Lyn
 
Dear Lyn,
This one is a tricky one. I consulted Property Success team member Ian Rodrigues to get his thoughts and talk it through.
I’m not sure what it is that you are hoping to see as an outcome for doing this. Presumably, you are thinking that you can either get rental income from the granny flat into the super and it will be an inexpensive project since you won’t need to pay for the land, or that you can ‘rent’ some of your land to the super fund for the purposes of building the flat.
The issue is, once a building is built on a piece of land, that building becomes the property of the owner of the land.  And so the super rules would prohibit this, as the asset would no longer be owned by that super fund.
In talking this through with Ian, we considered what may happen if the granny flat was one of the mobile varieties, such as those often erected in holiday or mobile home parks. In this case, the super fund would be buying the flat as ‘plant’ and you would be allowing that piece of plant to be housed on your land. Technically speaking, if this piece of plant was fully mobile and could be shifted from place to place, it may be allowed, as the super fund can retain the ownership of this piece of plant, and receive any rent it attracted.   
Keep in mind that this granny flat would not be able to be rented out to any parties related in any way to the super fund, so if you’re thinking it could be a good way to get a place for the kids or a relative, then you won’t be allowed to do this. You may be able to personally receive rent on the land you provide to park the mobile home on. I say this because if you were, say, a plumber by trade, and your super fund rental property needed a plumber, you can carry out the work and be paid for that work.  I can’t see a lot of difference between that and receiving rent for land you provide.
The best way to check if any of this is allowable is to have a lawyer experienced in super fund law to check it out for you, or get a ruling from the tax office. As with all questions of this nature, pass it by your accountant to see what they think.
Regards,
Margaret
Have a property question?   <a href="mailto:admin@propertyobserver.com.au" target="_blank">Ask Margaret!</a>
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mlomas-KC9MUPZ6Ca

A granny flat with your SMSF? Ask Margaret Lomas

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ASIC has issued an information sheet for accountants who provide services in relation to self-managed superannuation funds (SMSFs).
Information Sheet 216 AFS licensing requirements for accountants who provide SMSF services (<a href="https://asic.gov.au/for-finance-professionals/afs-licensees/applying-for-and-managing-an-afs-licence/limited-financial-services/afs-licensing-requirements-for-accountants-who-provide-smsf-services/" target="_blank">INFO 216</a>) covers how the Australian Financial Services (AFS) licensing regime applies to SMSF services provided by accountants. It sets out the various SMSF services an accountant might provide and whether a licensing exemption applies to them or whether an accountant must be covered by an AFS licence for those services.
Peter Kell. ASIC deputy chairman said ASICs primary role in relation to SMSFs is to regulate the gatekeepers – the accountants, financial advisers and SMSF auditors. 
"We think that accountants and financial advisers have a critically important role to ensure that only those investors for whom an SMSF is suitable go into the SMSF sector and, in doing so are fully informed," he said.
The exemption which allowed recognised accountants to give financial advice about acquiring or disposing of an interest in an SMSF was repealed on 1 July 2016 and accountants need to be clear about which services must be covered by a licence and which remain exempt. INFO 216 will assist accountants in understanding which services do and not require them to be covered by an AFS licence.
ASIC has also modified Corporations Regulation 7.1.29(4)(c)(ii) to ensure that accountants can continue to provide taxation advice on financial products not covered by their licence in <a href="https://www.asic.gov.au/regulatory-resources/find-a-document/class-orders/2016-legislative-instruments/" target="_blank">ASIC Corporations (Recognised Accountants: Exempt Services) Instrument 2016/1151</a>. 
The Instrument modifies reg 7.1.29(4)(c)(ii) so that a limited AFS licensee can rely on the exemption to provide tax advice to a retail client on a financial product which is not covered by an authorisation in their licence. 
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jonathanchancellor-7SQnKwU6yx

Property 101: ASIC update for SMSF accountants

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GUEST OBSERVER
In October 2016, Treasury released the third tranche of draft legislation to implement the announcements in the Federal Budget. The principal component of this tranche was the new non-concessional contribution rules.
Hidden in the legislation is a very important concession.
I envisage that advisers will only need to apply it a handful of times in their careers. However, when they do apply it, it will be some of the most important and helpful advice that can be provided.
(Note that this article must be read subject to the discussion regarding the AFSL regime at the end.)
This hidden gem relates to structured settlement contributions. More specially, it relates to contributions covered by s 292‑95 of the Income Tax Assessment Act 1997 (Cth).
In this article, when I refer to a ‘structured settlement contribution’, I will refer to a contribution covered by s 292‑95. The full official version of s 292‑95 is currently available <a href="https://www.legislation.gov.au/Details/C2016C00916" target="_blank">here</a>.
However, for the purposes of this article, it is suffice to say that s 292‑95 covers the following contributions (however, I stress that there are other types of contributions that it covers too):
<ul>
<li>the contribution arises from the settlement of a claim that is for compensation or damages for personal injury suffered by the fund member</li>
<li>the contribution is made by the fund member</li>
<li>the claim is based on the commission of a wrong, or on a right created by statute</li>
<li>the settlement takes the form of a written agreement between the parties to the claim (whether or not that agreement is approved by an order of a court, or is embodied in a consent order made by a court)</li>
<li>two legally qualified medical practitioners have certified that, because of the personal injury, it is unlikely that the fund member can ever be gainfully employed in a capacity for which the member is reasonably qualified because of education, experience or training</li>
<li>no later than the time the contribution is made to a superannuation plan, the member notifies the trustee, in the approved form, that s 292‑95 is to apply to the contribution and</li>
<li>the contribution is made within 90 days of the day of receipt of the payment from which the contribution is made.</li>
</ul>
I want to stress two aspects: Firstly, the above is not the only combination of facts that can be covered by s 292‑95 (ie, be a structured settlement contribution).
Again, advisers should read s 292‑95 in full. Secondly, the clock ticks very quickly.
To be covered by s 292‑95 — and thus to get the benefit of the ‘hidden gems’ that I will discuss in this article — broadly the contribution must be made within 90 days of receipt of the payment.
Clients might not tell advisers promptly when they receive a compensation payment.
Accordingly, advisers should be pro-active about this and upon the first ‘whiff’ that a client might receive a compensation or similar payment, should start alerting clients to these rules.
There are two key concessions for structured settlement contributions.
The first is contained in the proposed s 307‑230(2). Broadly, this provides that, when determining how much money a person has in superannuation (ie, their ‘total superannuation balance’), ignore any money that came from a structured settlement contribution.
Naturally, this important because, under the new non-concessional contribution rules contained in the third tranche of draft legislation, if immediately before the start of the year, a person’s ‘total superannuation balance equals or exceeds the general transfer balance cap for the year’ (which will start at $1.6 million on 1 July 2017), then the person has a nil non-concessional contributions cap for the year.
In short, a person will be able to make structured settlement contributions to superannuation regardless of how large the contribution is or how much money the person already has in superannuation.
(For legal completeness, I note that structured settlement contributions do not constitute non-concessional contributions and so are irrelevant to the non-concessional contributions cap, however, it was a relief to see that the third tranche of legislation did not impact upon this and indeed expressly retained this position.)
The second key concession is contained in the second tranche of legislation that was released in late September.
At the risk of oversimplification, it provides that a structured settlement contribution is a debit to a person’s transfer balance account (see item 2 in the table in the proposed s 294‑70). Effectively, this means that the $1.6 million cap on how much can be used to commence a pension (and thus how much can be covered by the pension income tax exemption) does not apply to pensions funded by structured settlement contributions.
Consider the following example from the draft explanatory memorandum that accompanied the third tranche:
Masayo is self-employed and has been making contributions to her account in her self-managed superannuation fund Couture Super, which is her only superannuation interest. At 30 June 2017 Masayo had not yet commenced any superannuation income streams and the total of her accumulation phase value is $1 million.
In the 2017-18 financial year Masayo is involved in an accident that results in her receiving a structured settlement of $2 million which she contributes to Couture Super on 15 May 2018.
To determine whether she is eligible to make non-concessional contributions in the 2018-19 financial year, Masayo calculates her total superannuation balance at 30 June 2018 as; accumulation phase value ($3 million) less the structured settlement contribution in accumulation ($2 million), equalling $1 million. As Masayo’s total superannuation balance is below $1.6 million Masayo is eligible to make non-concessional contributions in the 2018-19 financial year.
In the above example, Masayo could also then:
<ul>
<li>make a further $600,000 of non-concessional contributions and</li>
<li>commence a pension funded by a total of $3.6 million of capital (assuming of course she had satisfied a relevant condition of release, which she almost certainly would have).</li>
</ul>
The new draft rules contain very important concessions for those who are able to make structured settlement contributions.
Accordingly, advisers need to be very proactive when there is a possibility to make a structured settlement contribution, especially given that there is generally only a narrow 90 day window when such a contribution can be made.
Naturally, advisers must remember all of the usual requirements when advising on contributions, pensions and the like.
One very timely aspect is the AFSL regime. Naturally, I will not discuss this aspect ‘chapter and verse’, however, those advisers who have entered the AFSL regime, may well need to provide a statement of advice and those who have not entered the regime need to think very carefully about how appropriate information can be provided to their client while complying with all relevant laws.
For accountants in the second category, they might consider something along the lines of a letter to their client setting out certain objectively ascertainable facts (eg, the structured settlement contribution rules detailed in this article) along with a recommendation to seek advice from an appropriately licensed adviser and the appropriate disclaimers.
Bryce Figot is a lawyer at DBA Lawyers and <a href="https://www.dbalawyers.com.au/" target="_blank">can be contacted here</a>.
 
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Property 101: Key concessions for structured settlement contributions

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GUEST OBSERVER
The Australian Taxation Office (‘ATO’) released Taxation Determination TD 2016/16 — Income tax: will the ordinary or statutory income of a self-managed superannuation fund be non-arm’s length income under subsection 295-550(1) of the Income Tax Assessment Act 1997 (ITAA 1997) when the parties to a scheme have entered into a limited recourse borrowing arrangement on terms which are not at arm’s length.
TD 2016/16 confirms the ATO’s view that where an SMSF trustee enters into a limited recourse borrowing arrangement (‘LRBA’) on non-arm’s length terms, it is necessary to consider whether the self managed superannuation fund (‘SMSF’) has derived more ordinary or statutory income under the scheme than it might have been expected to derive had the parties been dealing with each other at arm’s length in relation to the scheme.
Non-arm’s length income (NALI) will only arise in those cases where the answer to this question is affirmative.
In answering this question, it is necessary to identify both the steps and the parties in relation to the scheme.
This also requires an analysis of what the arm’s length borrowing terms would have been (‘hypothetical borrowing arrangement’).
It is then necessary to analyse whether it is reasonable to conclude that the SMSF trustee could have and would have entered into the hypothetical borrowing arrangement.
The ATO view is that where it is reasonable to conclude that the SMSF trustee could not or would not have entered into the hypothetical borrowing arrangement, the SMSF will have derived more ordinary or statutory income under the scheme, and this income will be treated as NALI.
Accordingly, where s 295-550(1) applies, the total amount received by an SMSF trustee from the arrangement, after any applicable deductions to the extent they are attributable to that income, is taxed at the highest marginal tax rate plus the temporary budget repair levy (currently 47%), instead of the concessional tax rate that typically applies to SMSFs.
This rate applies even if the SMSF is in pension phase (subject to the proposed $1.6 million balance cap).
TD 2016/16 states at [22] that:
where the SMSF can objectively establish with evidence that it could have and would have entered into the hypothetical borrowing arrangement, a comparison can then be made of the SMSF’s ordinary or statutory income from the scheme (where the parties have not been dealing with each other at arm’s length and have entered into an LRBA on terms which are not at arm’s length) and the income under the hypothetical borrowing arrangement.
The example provided in TD 2016/16 represents an extreme loan arrangement that provides limited practical guidance for the vast majority of related party LRBAs that may be almost but not quite in line with the safe harbour provisions set out in <a href="https://www.dbalawyers.com.au/announcements/ato-releases-safe-harbours-non-bank-smsf-limited-recourse-borrowing-arrangements/">PCG 2016/5</a>. The example in TD 2016/16 includes the following facts:
<ul>
<li>the loan to value ratio (‘LVR’) is 100%;</li>
<li>the interest rate is nil;</li>
<li>the loan term is 25 years, with no repayments required until the cessation of the loan term; and</li>
<li>a mortgage is provided in respect of the property.</li>
</ul>
These facts are clearly not consistent with an arm’s length loan arrangement. The facts from this example are then compared with a hypothetical borrowing arrangement example (which reflects the ATO’s safe harbour guidelines for real estate in PCG 2016/5, ie, 70% LVR, 15-year term, interest at 5.75% p.a. for the 2016 financial year, monthly repayments and security over the property).
Therefore, when determining what is an arm’s length hypothetical borrowing arrangement, the ATO is likely to refer to the safe harbour terms set out in PCG 2016/5 as a starting point (as per the example in TD 2016/16).
Alternatively, an SMSF trustee can obtain and maintain written evidence that demonstrates that the LRBA terms are consistent with an arm’s length dealing in the same factual circumstances.
In TD 2016/16, the ATO states that the rent of $1,000 per week derived from the property is not sufficient to make monthly principal and interest repayments at the rate determined under PCG 2016/5 of $5,800 per month.
The ATO then goes on to conclude that the SMSF trustee could not and would not have entered into the hypothetical borrowing arrangement for a number of reasons, including because once the weekly rental and any future capital gains are taken into account, the property would not be earnings accretive. (‘Accretive’ is commonly defined as growth or increase by gradual addition over time.)
The ATO’s methodology, however, for determining that the property would not generate sufficient future earnings or capital gains is not outlined in TD 2016/16.
The requirement that a property be earnings accretive from the outset of an LRBA requires further consideration and analysis.
The determination of the future capital growth of a particular property would, for instance, involve an analysis of property prices in the area over the proposed ownership period and forward projections of capital appreciation and net income flows.
An SMSF trustee must formulate and implement an investment strategy under s 52B of the Superannuation Industry (Supervision) Act 1993 (Cth) (‘SISA’) that considers the:
<ul>
<li>risk and likely return from the SMSF’s investments having regard to its objectives;</li>
<li>diversification of the SMSF’s investments and the risks of inadequate diversification;</li>
<li>liquidity of the SMSF’s investments and cash flow requirements; and</li>
<li>ability of the SMSF trustee to discharge any existing and prospective liabilities.</li>
</ul>
Furthermore, the earnings and growth from the asset acquired using an LRBA may not necessarily be the main funding source to repay borrowings.
Contributions, rollovers and the admission of further members can also provide the necessary funding.
On the basis that an SMSF trustee has given due consideration to the investment strategy factors outlined above, and has a plan to repay the borrowing on arm’s length terms (as well as meeting any other existing and prospective liabilities), the SMSF trustee is investing in a manner that is consistent with the SISA requirements.
Furthermore, if the LRBA was on arm’s length terms and this could be clearly substantiated, the fact that a property was negatively geared would not, by itself, be sufficient to give rise to NALI.
There is no basis under superannuation or tax law for the position that a borrowing must be repaid from income or gains derived from the asset acquired with that borrowing for the parties to be dealing on arm’s length terms; albeit this may in fact occur in many conservatively leveraged LRBAs.
TD 2016/16 also states that the ATO will consider whether an LRBA is ‘an optimal use’ of the SMSF’s assets. Again, this statement does not reflect the obligations placed on SMSF trustees under superannuation or tax law.
An SMSF trustee is certainly required to invest in a prudent manner and in the best financial interests of members.
Determining, however, what is an ‘optimal use’ of the SMSF’s assets is a subjective exercise that is difficult to quantify or enforce, and that goes beyond the duty to exercise the same degree of care, skill and diligence as an ordinary prudent person would exercise in dealing with the property of another for whom the person felt morally bound to provide for under s 52B of the SISA.
While the legislation provides certain prohibitions or limitations on particular forms of investments, eg, the 5% limit on in-house assets in pt 8 of the SISA, the legislation does not seek to influence a trustee’s choice of investment.
If the ATO views SMSF trustee investment decisions through a prism that requires optimal positively geared investments that generate an accretive return from the date the particular asset is acquired, SMSF trustees will be held to a standard above that required by superannuation and trust law and will find it increasingly difficult to identify asset classes in which to invest, given the risk of a negative return inherent in all but the most conservative of investments.
Fortunately, the ATO’s view expressed in TD 2016/16 regarding optimal positively geared investments, appears to be limited to related party LRBAs at this time.
Parties to an LRBA who are dealing on arm’s length terms can substantiate their position by retaining sufficient evidence to demonstrate that each aspect of the LRBA as a whole has been benchmarked to commercial terms in substantially the same circumstances.
In particular, an SMSF trustee must ensure that the interest rate, LVR, loan term and security provided as well as the other terms of the borrowing are consistent with an arm’s length dealing.
In forming its view, an SMSF trustee must take into consideration all these factors to ensure it can support the position that the LRBA terms have been continually maintained on an arm’s length basis.
Importantly, a written loan agreement and related documents should be prepared and should reflect the arm’s length terms.
The parties must also act in accordance with the terms of that agreement, eg, ensure regular monthly repayments are being made (at least from 31 January 2017).
SMSF trustees should also obtain quotes from banks, mortgage brokers and from other sources to support the arm’s length terms.
As a result of the latest ATO views expressed in TD 2016/16, SMSF trustees undertaking related party LRBAs should also seek to document cash flow projections in respect of any proposed acquisition that reflects a positive cash flow and capital appreciation wherever possible to minimise any NALI risk.
TD 2016/16 replaces the ATO view outlined in ATO ID 2015/27 and 2015/28, which have been withdrawn. PCG 2016/5 has also been revised following the release of TD 2016/16.
Broadly, the key change is the ATO’s clarification in TD 2016/16 regarding the need to establish a hypothetical arm’s length borrowing arrangement in determining whether NALI applies.
TD 2016/16 is a public ruling that can be relied on by taxpayers and is binding on the Commissioner.
SMSF trustees with related party LRBAs have until 31 January 2017 to ensure that each LRBA is either benchmarked to the LRBA guidelines provided by the ATO in PCG 2016/5 or arm’s length benchmark evidence has been obtained to support the terms of their arrangement.
This benchmark evidence should demonstrate that the parties are dealing on arm’s length terms and preferably moving forward should be accompanied by cash flow projections.
Daniel Butler is director and Rebecca James SMSF lawyers, DBA Lawyers. They can be contacted <a href="https://www.dbalawyers.com.au" target="_blank">here</a>.
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j.ballantyne1990-6AQqhLzZaK

ATO’s revised view on LRBAs and the NALI risk

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GUEST OBSERVER
The Government recently released for public consultation the third round of exposure draft legislation and explanatory material to lower the annual non-concessional contributions (‘NCCs’) cap to $100,000 and restrict eligibility to make NCCs to individuals with superannuation balances below $1.6 million from 1 July 2017.
While this legislation is in exposure draft form only (and has not yet been introduced in Parliament as a Bill) it’s important for advisers and those hoping to get some more money into super by way of NCCs to become familiar with the latest proposals. If the latest proposals get finalised as law, they may be effective from 1 July 2017, leaving a small window of opportunity for people to act.
Perhaps the most time sensitive change is the lowering of the annual NCC cap to $100,000 (down from $180,000) for FY2017 and the corresponding reduction in the amount allowed to be contributed under the three year bring forward rule (the current amount is $540,000 – this is to be lowered to $300,000 from 1 July 2017 subject to transitional rules).
The other key change is the requirement that an individual must have a total superannuation balance (‘TSB’) immediately before the start of each financial year (‘FY’) of less than the general transfer balance cap which is $1.6 million for FY2018 - to be indexed in increments of $100,000 - to be eligible to make further NCCs.
From 1 July 2017, if a member has a TSB of more than $1.6 million on the prior 30 June they will be precluded from making further NCCs.
The practical implication of this, simply put, is that a lot of people may want to make contributions prior to 1 July 2017. However, the complexity of the new proposals means that expert advice and, in particular, appropriate advice – bearing in mind the Australian financial services licence (‘AFSL’) rules – needs to be provided.
The importance of timing is probably best illustrated by a practical example.
First, let’s compare the current position with the proposed changes.
Under the current law, we have an annual NCCs cap of $180,000. Under the current bring forward rule, the total NCCs cap for the current FY and the next two FYs of $540,000, provided that:
· NCCs in that first FY exceeded $180,000
· the member did not trigger the bring forward rule in any of the two prior FYs and
· the member is under age 65 at any time during the first FY.
However, the following changes are proposed from 1 July 2017:
· The three year bring forward rule is retained but the annual $180,000 NCCs cap is to be reduced to an annual $100,000 NCCs cap.
· Individuals with total super balances of greater than $1.6 million on each prior 30 June are unable to make NCCs in next FY.
· Transitional rules apply, meaning that if an individual has triggered the bring forward rule and has not fully used their NCCs bring forward amount before 1 July 2017, the remaining bring forward amount will be reduced on 1 July 2017 to reflect the new annual caps.
 So, how does this work in practice?
Take Jane. Jane is under 65, and has not triggered the bring forward rule in FY2015 or FY2016. She had $100,000 in super on 1 July 2016, and made a NCC of $200,000 on 25 October 2016. She now wants to (and is in a position to do so) make further NCCs.
If Jane makes another NCC before 1 July 2017, she can contribute a further $340,000 (as she gets the benefit of the full $540,000 bring forward cap).
But if Jane waits until 1 July 2017 to make a further NCC, the maximum amount she can contribute is a further $180,000. Why? Because as Jane did not fully use her NCC bring forward amount before 1 July 2017, the remaining bring forward amount is reduced on 1 July 2017 to reflect the new caps. The bring forward cap on 1 July 2017 is $380,000, so $380,000 - $200,000 (her NCC made on 16 September 2016) = $180,000.
What if Jane triggered the bring forward rule in FY2016? Let’s say that Jane makes an NCC of $200,000 in FY2016. If she waits until 1 July 2017 to make another NCC, the transitional cap of $460,000 will apply. That means that Jane can only contribute a further $260,000 ($460,000 -$200,000).
You can see how the timing can result in NCCs of $540,000 versus NCCs of $460,000 or $380,000 depending on whether Jane invoked her bring forward rule in FY2016 or FY2017. What a difference a day or a year can make!
You can see from the above figures that many clients will appreciate being contacted by their advisers to give them a heads-up about this limited window of opportunity, and some clients will almost certainly want to make contributions prior to 1 July 2017.
But in light of the new AFSL regime, advisers will have to be careful in terms of how they convey this information to clients. It’s really important that advisers make themselves familiar with the relevant provisions of the Corporations Act 2001 (Cth) and the Corporations Regulations 2001 (Cth) relating to financial services and financial product advice.
Broadly, if you make a recommendation or provide an opinion that is intended to influence a person in relation to a financial product, or could reasonably be regarded as being intended to have such an influence, then you are providing financial product advice. An SMSF is considered a financial product under these rules.
So how can you keep clients updated on the proposed superannuation reforms if you don’t hold an AFSL, or you hold an AFSL but don’t want to provide a Statement of Advice?
Remember that you don’t need to be within the AFSL regime if you provide factual advice only. Factual advice, according to ASIC, is objective and factual information that is not intended to influence a person’s decision on a financial product. For example, providing a client with a government factsheet on the superannuation reforms (you can find a list of these on the budget website) would be factual advice. But what if a client presses you for further information, like ‘ok, I’ve read the factsheet, but what do the new NCC rules mean for me?’ ASIC RG 244 contains a template for dealing with these sorts of questions, with a handy introduction:
I can give you some factual information about making extra contributions to your superannuation this financial year, but I’m unable to provide you with any advice about contributing to your superannuation fund. If you would like personal advice about contributing to superannuation, I can set up a meeting for you with someone from our financial advice team. [Naturally, this wording could be varied to suit the circumstances as many accountants will need to refer such matters to an adviser who has an AFSL.]
Providing this factual information may then equip the client to make a decision on their own, and the client might then instruct you to assist them to facilitate the contribution to super. If this is indeed execution only (ie, the client has already made up their mind, and simply wants you to make it happen), then an AFSL is not required, but remember to be aware of the necessary disclaimers.
If you’re unsure of what should be included in the disclaimer, the <a href="https://www.dbalawyers.com.au/strategy-compliance-kits/non-licensed-afsl-smsf-advisers-kit/" target="_blank">DBA Lawyers non-licensed (AFSL) SMSF Advisers Kit</a> contains templates of various execution only services, including a range of disclaimers that can be used.
Alternatively, the client may press you for a recommendation tailored to their personal circumstances. Making such a recommendation would fall within the AFSL regime and would therefore need to be handled by an appropriately licensed adviser.
For detailed coverage of this topic, you might also want to watch this <a href="https://www.dbanetwork.com.au/dbalawyers/seminars3/6106/Special-SMSF-Training" target="_blank">webinar</a>.
DBA Lawyers can be contacted <a href="https://www.dbalawyers.com.au" target="_blank">here</a>.
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Property 101: The new NCC rules and the new AFSL regime

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As a general guide, SMSF trust deeds should be updated every 4–5 years, or sooner in the case of major legislative change.
The last major legislative change to superannuation that warranted a blanket update for all SMSF trust deeds occurred in mid-2007, and the Federal Government’s proposed superannuation reforms are of similar magnitude, particularly in respect of the $1.6 million transfer balance cap measure.
Once these reforms are finalised (expected by mid 2017), then all SMSFs should be considering an SMSF deed update.
Some clients do not like to rely on the above general guidance, and to answer their concerns properly, it would be necessary to undertake a full review of the fund’s current governing rules.
Unfortunately, such a review may not be a cost effective exercise, as a proper legal review process itself is likely to be more costly than simply updating the deed.
This situation can create something of a dilemma for advisers with SMSF clients, as they may be unable to furnish the evidence that their clients would ideally like to have before them for the purposes of making an informed decision about updating their SMSF trust deed.
In any event, as discussed above, following the finalisation of the current reforms, most SMSF deeds will need updating. Following the update for the mid-2017 reform proposals, we would then expect the general guide of a 4–5 year update to be applicable.
For those advisers with clients using an existing DBA Lawyers’ deed, we provide periodic email updates outlining the superannuation law changes and other enhancements that have been implemented in our current SMSF trust deed since the fund’s deed was last updated.
However, to address this issue more broadly for others clients, DBA Lawyers has developed a checklist to help advisers and their staff assess whether an SMSF trust deed should be updated so they can better communicate with their SMSF clients about the appropriateness of their existing SMSF trust deeds.
The checklist can be combined with other informational tools, such as a chronological summary of major superannuation changes, to help provide more concrete guidance on the factors to consider in weighing up whether an SMSF trust deed is outdated or inappropriate.
The checklist provides general guidance only and is not a substitute for considered advice. Further, the checklist will be updated once the current reforms are finalised.
Click <a href="https://www.dbalawyers.com.au/wp-content/uploads/2016/10/SMSF-deed-checklist.pdf" target="_blank">here</a> to download the checklist from DBA Lawyers.
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Property 101: SMSF deed update checklist

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GUEST OBSERVER
SMSF trustees are still consistently investing in assets they understand and can trade easily.
Australian Taxation Office (ATO) figures show that although there might be a bias towards Australian investments, a lack of diversification across asset classes is typically not an issue. 
When critics of SMSF trustees’ asset allocation point to a lack of diversification, they often highlight the absence or low allocation to assets such as international equities, forgetting SMSFs are still getting exposure to these assets via ETF’s, listed and unlisted trusts and managed funds. 
The investment returns that SMSFs have consistently generated over the years speak volumes for the capacity of trustees to manage their investment portfolios. 
Based on ATO statistics, for example, for the eight years from the 2007 financial year to the 2014 year, SMSF returns outperformed all other alternative superannuation arrangements for four of those years. 
Although in recent times, the predominant asset allocation of SMSF trustees has not performed as well compared to alternative funds, it is still within reach. APRA statistics for the 2015 financial year, for example, show the return for SMSFs after expenses (excluding contributions) to be 5.7 percent. This compares with non-SMSF returns of 8.5% for the same period. 
These returns do not support the suggestion that SMSF trustees are dangerously out of their depth or incompetent in investing their members’ superannuation balances. It also has to be noted that many SMSFs are in pension phase and therefore have more defensive investment portfolios to suit their needs. 
The asset allocation of SMSFs has remained largely consistent over the years, rejecting the suggestions that they continue to load up on bank stocks or residential property. 
As the two tables below show, residential property has only inched up half a percentage point in that five-year period (2011-16), while Australian equities have dropped one percentage point. 
All the evidence suggests SMSF trustees are prudent, investing in asset classes where they have knowledge, or giving the responsibility to a manager where they lack expertise. It’s hardly surprising really – it is their money. 
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For the year to 30 June 2016, SMSF assets totalled $622 billion. The percentage break-up of the same asset classes were:
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  Australian listed shares – 30% 
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  Australian residential property – 4% 
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  Australian commercial property – 11% 
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  Cash &amp; term deposits – 26% 
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  Overseas investments in total – 1% 
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  Listed &amp; unlisted trusts &amp; other managed investments – 19% 
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  Debts &amp; loans – 2% 
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  Other investments – 7% 
The year to 30 June 2011 told a similar story. Assets totalled $402 billion in the SMSF sector. The percentage break-up of the same asset classes were: 
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  Australian listed shares – 31% 
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  Australian residential property – 3.5% 
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  Australian commercial property – 11.5% 
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  Cash &amp; term deposits – 28% 
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  Overseas investments in total – 1% 
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  Listed &amp; unlisted trusts &amp; other managed investments – 18% 
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  Debts &amp; loans – 1.5% 
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<li>  Other investments – 5.5%</li>
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Peter Hogan is head of technical at the SMSF Association and can be contacted <a href="https://www.smsfassociation.com" target="_blank">here</a>.
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SMSFs continue to invest in assets they understand

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The idea the SMSF sector is largely unregulated is a myth according to SMSF Association head of policy Jordan George, who said the fact self-managed super funds (SMSFs) don’t come under APRA’s regulatory umbrella often gives this false impression.
He said the SMSF sector is rigorously regulated by two key Government agencies: the Australian Taxation Office (ATO), which administers the relevant superannuation laws for SMSFs, and the Australian Securities &amp; Investments Commission (ASIC), which regulates financial services to protect consumers and registers SMSF auditors. 
The ATO is the key regulator for the SMSF sector. Its role includes: 
·       Verifying that a fund’s primary purpose is to pay retirement benefits to members;
·       Providing information and forms to assist trustees set up and manage a fund;
·       Checking that funds are compliant with the superannuation laws;
·       Taking enforcement action when the laws are breached;
·       Ensuring SMSF auditors perform their duties to the required standard.
"The ATO has proved a highly effective regulator," he said. 
"The evidence for this is the high compliance rate among SMSFs, with 98 percent of funds annually meeting their obligations under the superannuation laws.
"ASIC’s prime responsibility is to ensure that all SMSFauditors are registered, as well as meeting other eligibility requirements, including holding a tertiary accounting qualification or equivalent, meeting a fit and proper test, and holding professional indemnity insurance.
"The “unregulated or lack of regulation” myth that continues to pervade SMSFs flies in the face of the findings of the Cooper and Murray inquiries, both of which gave the sector a clean bill of health.
“Leaving aside Murray’s recommendation to ban LRBAs, neither inquiry found there was any systemic issue threatening the viability of the SMSF sector – further evidence that the regulatory regime is working effectively.”
 
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Property 101: SMSFs and APRA’s regulatory umbrella

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The University of Melbourne will run a subject focusing heavily on SMSFs.
‘This is a great opportunity for the SMSF industry’, said DBA Lawyers’ director Bryce Figot, who is also a senior fellow at the University of Melbourne and is the subject’s coordinator. ‘Practitioners can now spend an intensive five days studying the latest developments, rules, policies and strategies relevant for SMSFs and receive University recognition,’ said Mr Figot.
The subject, titled Taxation of Superannuation, will run on 22, 23, 24, 27 and 28 February 2017. ‘Given the magnitude of recent changes to superannuation, which hopefully should be finalised and legislated by February for a 1 July 2017 start date, I feel the timing of the subject could not be better,’ said Mr Figot.
‘I believe Taxation of Superannuation is the first time a Victorian University has had a subject so relevant for those in the SMSF industry’ added Mr Figot.
Although run via the University's law school, the subject is also part of the Master of Taxation and the Graduate Diploma in Tax programs and is designed to be of tremendous use for accountants and financial planners.
The subject has a quota of 30 students.
For more information:
<a href="https://handbook.unimelb.edu.au/view/2017/laws70267" target="_blank">https://handbook.unimelb.edu.au/view/2017/laws70267</a>
<a href="https://www.law.unimelb.edu.au/study/masters" target="_blank">www.law.unimelb.edu.au/study/masters</a>
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