Which technical areas are advisers facing difficulty?

BT bt financial group Superannuation financial advisers intergenerational wealth Bryan Ashenden

24 June 2024
| By Jasmine Siljic |
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Advisers are encountering problems when it comes to navigating the technicalities of superannuation, as well as how to best plan for the intergenerational wealth transfer.

Speaking on a recent webinar, Matt Manning, technical consultant at BT, unpacked the most frequently asked questions by advisers on its technical hotline.

Several of these issues are in regards to super, particularly as clients look to transition from the accumulation to the decumulation phase. One of the key questions advisers ask BT is: “Does my client satisfy the retirement condition of release?”

There are several conditions that determine when a client can access their retirement savings, including whether an individual has reached preservation age, ceased employment on or after age 60, or is turning 65.

According to SuperRatings, two-thirds of members eligible for pension products are retaining an accumulation account. This is likely due to the difficulties around understanding how a member can access their retirement savings.

Other superannuation topics that advisers commonly asked BT about are in regards to the eligibility of claiming a deduction for personal super contributions and super for low income earners.

Bryan Ashenden, BT’s head of financial literacy and advocacy, recently emphasised the value of this strategy as individuals in lower income tax brackets are set to receive potential tax cuts.

Another frequently asked technical question, Manning noted, is in relation to the social security assessment of inheritances as Australia undergoes a trillion-dollar intergenerational wealth transfer.

Advisers have been described as being “in the box seat” of this upcoming intergenerational wealth transfer. Last month, Adviser Ratings highlighted that 14 per cent of clients are planning to transfer $1 million and above.

“Those intending to transfer large sums of money currently are few, suggesting an opportunity for capture in that segment,” the firm stated.

“Quite a frequent question we get is the assessment of inheritances. The rule there is that the inheritance is assessed when it can be or is able to be received. In the vast majority of cases when it’s in the estate, it doesn’t count – it is only when you receive it,” Manning explained.

A critical opportunity for advisers is to address the assessment of an inheritance before a client’s death, especially when passing down assets to children.

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