Budget super outcomes “a disgrace”: planners

Midwinter managing director Julian Plummer.

05-May-2016

By Kristen Crawford

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Financial planners have given the federal budget a dismal reception in relation to some of the superannuation measures, according to a survey carried out by software provider Midwinter.

“Insane and unfair”, “immoral and a disgrace”, “disappointing”, “ridiculous” and “dumb, dumb, dumb” were just some of the sentiments shared by financial planners yesterday when asked to comment on the outcomes for superannuation as part of a survey that tallied the responses of 103 advice practitioners.

Advisers were bleak in their outlook for clients following Tuesday’s announcements, with 57.4 per cent of those surveyed saying they believed the budget would have an overall negative impact on their clients.

Only 6.7 per cent of planners surveyed were of the opinion the budget would impact on their clients positively.

However, when asked if they believed the budget would impact on their own businesses positively, 25.5 per cent believed it would.

Advisers were strongly against the proposed lifetime cap for non-concessional contributions, with 87.3 per cent of respondents saying they felt negative about that measure.

Further, 86.4 per cent said they felt negative toward the proposed lowering of the concessional contributions cap to $25,000, while 75.3 per cent expressed their dissatisfaction with the removal of the tax exemption for fund earnings on transition-to-retirement pensions.

Of those surveyed, 70.9 per cent said they intended to initiate client reviews for those clients immediately affected by the $1.6 million cap and 51 per cent thought there would be a small increase in customers seeking financial advice because of the proposed changes.

Midwinter managing director Julian Plummer said the progressive dismantling of benefits of super strategies would now more than ever make planners’ digital strategies vital.

“We have now started to analyse the impact of the legislative changes to [the Midwinter system] AdviceOS, and we will look to pre-empt the changes. If Labor offers their support for these changes, we won’t wait for royal assent to implement them into AdviceOS,” Plummer said.

“We will certainly prioritise the contribution cap reduction, but may wait and see what happens with the rolling concessional contribution cap and the lifetime non concessional contribution limit.”

Meanwhile, Association of Financial Advisers chief executive Brad Fox also expressed the group’s disappointment with a number of the changes, including reducing the amount of contributions that could be made at the 15 per cent concessional tax rate.

“The removal of anti-detriment payments will also have a profound effect for spouses who lose a loved one, particularly of working age,” Fox said.

“Changes to transition-to-retirement pensions will also require a considerable number of Australians to reconsider the value of this strategy alongside partial retirement.”

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