Midwinter gauges adviser sentiment post Budget
Over half of advisers surveyed have neutral feelings towards the Federal Budget announcements, with only 24 per cent positive and 18 per cent negative, stated Midwinter.
The providers of financial planning software conducted the survey of 172 planners, representing more than 25 licensees, following Treasurer Wayne Swan’s (pictured) announcements on Tuesday.
“Considering the relatively low impact of the budget to financial planners, the high neutral percentage was expected,” said Midwinter executive director strategy and technical services Matthew Esler.
The survey revealed that there was some disillusionment with the political nature of the Budget, said Esler, referring to an adviser comment that described the relief from inadvertent excess concessional contributions as “token at best”. Nearly half (46 per cent) of advisers felt that the excess contributions tax refund would have no effect on their clients, 34 per cent stated it was unlikely and only 6 per cent believed their clients would have any excess tax refunded.
“This is a case of the train already having left the station – clients caught unaware will have limited or no recourse to rectify,” said Esler.
When asked if the Budget announcements would mean that advisers would need to contact their clients to review their financial plans, 85 per cent said no, although 62 per cent stated that the changes to the low income tax offset (LITO) rules for minors would have some sort of impact on their trust advice businesses.
When asked what percentage of their clients would be impacted by the phasing out of the minimum pension drawdown relief, advisers stated that 35 per cent of clients were taking advantage of the reduction.
“It is interesting to note that this percentage was higher for clients with a transition to retirement pension, as they can keep more money in the superannuation environment while they are still working,” said Esler.
Only 12 per cent of advisers thought that the majority of their clients would be impacted.
Adviser sentiment before the Budget announcements was that 58 per cent thought the Transition to Retirement strategy would remain unchanged. However, Esler noted that 16 per cent had been unsure and 19 per cent felt it would be abolished, highlighting the need for Government to reassure planners and their clients of ongoing support for this legislation, Esler stated.
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