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
ASIC has released the results of its first adviser exam to be held in 2025, with 241 candidates attempting the test.
Quarterly Wealth Data analysis has uncovered positive improvements in financial adviser numbers compared with losses in the prior corresponding period.
Holding portfolios that are too complex or personalised can be a detractor for acquirers of financial advice firms as they require too much effort to maintain post-acquisition.
As the financial advice profession continues to wait on further DBFO legislation, industry commentators have encouraged advisers to act now in driving practice efficiency.
