Ad-hoc contributions could exceed cap: Deloitte
A common mistake in the client-adviser relationship at end of financial year (EOFY), is that clients forget to tell their advisers of the ad-hoc contributions they made to super, which could tip them over the caps, according to Deloitte.
Deloitte partner, Russell Mason, said people had the tendency to forget how much they contributed to super, and did not inform their adviser, and that was why they accidently exceeded the caps. Perhaps they made a non-concessional contribution to super at the beginning of the year and forgot, or they had a pay rise and their salary sacrifice, as a percentage of their wage increased, he said.
"I wouldn't blame planners, but individuals should hold themselves to account and diarise these things," Mason said.
"But, the important one [at EOFY) in my eyes is for planners to sit down with their clients and review the accuracy of their insurance," he said.
Where possible, exercise the life events coverage option to increase clients insurance, Mason said.
In addition to that, financial planners should review their client's investment options, regardless of their age. If they are 25, their investments options should be reviewed every three or four years. If they are 55, their investments should be reviewed every 12 months.
But Mason said investors should not chop and change investments based on what they produced in the last 12 months. Rather, they should look at the three-to-five-year periods, and examine where else they could attain better value for money.
Recommended for you
It can be extremely hard to realise the gains from financial advice M&A, according to Peloton Partners’ Rob Jones, and more could be gained from firms looking inward at their own practice.
With platforms reporting their quarterly results, there is a clear divide in the adviser markets they are targeting, according to platform specialist Recep Peker, and which would be right for your clients.
The Federal Court has imposed a $10 million penalty on Macquarie Bank for failing to prevent and control unauthorised fee transactions by third parties including financial advisers.
A financial advice firm has seen a weekly decline of 10 advisers, with all moving to a new licensee, while Centrepoint Alliance continues its “growth story”.
