Self funded retirees could see their savings targeted by future Federal Governments as the nation struggles to raise sufficient tax revenue from traditional sources, a leading adviser has warned.
According to Centrestone Wealth Advisers chief executive Rob Keavney, such a development could see financial planners drawn into a litigation battle with clients over claims that advisers failed to inform them of the implications of potential legislative changes.
Speaking at the Financial Planning Association (FPA) conference in Sydney yesterday Keavney said if not enough taxes were generated from the workforce, then retirees and their super savings could be the only other revenue cash cow.
“I mean, I’m sure you can tax kids’ pocket money anyway you like but you can’t run a country on it,” Keavney said.
In particular, Keavney pointed to high net wealth clients and the possible implications on their retirement savings, should changes be made retrospectively to the way their funds are taxed.
“When we realised what some of these issues were that were being discussed in Canberra, a couple of our representatives went down to the Senate Select Committee, arguing the case for self-funded retirees,” Keavney said.
But despite lobbying, Keavney admitted that big bank balances do not equate to political pulling power.
“People with hundreds of thousands of dollars are seen as, and in fact are an irrelevant voting minority, and they will have minimum influence on political outcomes.
“We are now in a situation where we have a controlled Senate, which has actually put these intentions in writing,” he said.
But Keavney said planners were still failing to warn clients about the potential political risks to superannuation savings.
“That strikes me as something that could be charged to material negligence, not mentioning to clients that this could occur.
“I don’t believe our industry is protecting itself against possible liability claims by putting reasonable warnings about legislative changes in the face of our clients,” Keavney said.
