Topdocs cautions on SMSF documentation
Financial advisers and others providing services to self-managed superannuation funds (SMSFs) need to better understand the documentation required around the provision of income streams, according to specialist SMSF documentation provider Topdocs.
The company's national manager, training and advice, Michael Harkin warned this week that not having the right documents could well impact a new income stream recipient by denying them payments and adversely affecting the taxable income of both the SMSF and the individual in question.
Harkin emphasised the need for the SMSF trust deed to be reviewed to ensure the trustee had the authority to start paying a pension and that the rules of the deed met superannuation regulation requirements.
As well, he said the fund member needed to formally request that the trustee pay an income stream from the SMSF, and a trustee resolution needed to be appropriately recorded in the minutes of the fund.
Harkin said this then had to be backed by a formal agreement which set out the terms of the pension; legislative restrictions and information such as the regularity of payments; and the minimum — and if applicable the maximum — pension payment amounts for the first year.
He said a product disclosure statement was also required.
Recommended for you
A financial advice firm has been penalised $11 million in the Federal Court for providing ‘cookie cutter advice’ to its clients and breaching conflicted remuneration rules.
Insignia Financial has experienced total quarterly net outflows of $1.8 billion as a result of client rebalancing, while its multi-asset flows halved from the prior quarter.
Prime Financial is looking to shed its “sleeping giant” reputation with larger M&A transactions going forward, having agreed to acquire research firm Lincoln Indicators.
An affiliate of Pinnacle Investment Management has expanded its reach with a London office as the fund manager seeks to grow its overseas distribution into the UK and Europe.
