There is a lot of information online when it comes to SMSFs – so how do you know who to trust? Where should you seek SMSF advice from?
This article will help you separate the ‘fact’ from the ‘crap’ online. There are 3 key things you have to look at to be able to judge whether the author is worthy of your trust:
- Their underlying motivation
- Their experience
- Their qualifications
Firstly you need to look at their underlying motivation – what is this person’s reason for writing this article, blog post, reference guide or forum contribution?
One way to find out is to click on the ‘about us’ or ‘about me’ section of their website or blog. This should tell you who the person is, whether they are a business owner and what type of business they are in. You need to understand why they are providing SMSF advice to people.
If for example the article is about how to buy a positively geared property in a SMSF and they are a mortgage broker, chances are their underlying motivation is to sell you a loan – that is how they make their money.
There is nothing wrong with having profit motive behind an article published online – that is the whole idea of publishing and businesses need to promote themselves, so what you then need to do is look at their experience to ensure they are going to give you SMSF advice that is of high quality.
Advisors and people who write often articles always state their experience in terms of years or even decades. The reason it is always highlighted is that it helps build credibility.
However this can be misleading as you can have 25 years experience as an accountant or an adviser, but still have limited knowledge of SMSFs. It comes down to the type and more importantly the quality of the experience – and unfortunately this is almost impossible to judge.
Although I might have 18 years of experience in accounting and financial services, how much was SMSF related? In my case, and as you can determine by my professional history, the vast majority has been SMSF related. This means the quality of my SMSF advice will be better than most (Note: I am NOT licensed to provide personal financial advice – refer to my advice disclaimer. The ‘advice’ I can provide is limited to taxation advice and SMSF advice on compliance related matters).
Next you need to look at their qualifications.
SMSF Advice Qualifications
In my opinion there is only one qualification that truly matters – the SMSF Specialist Advisor qualification issued by the SMSF Association. Now be careful – this qualification is not to be confused with being a member of the SMSF Association – which is simply that – a membership and not a qualification.
You can view my SMSF Association Specialist Profile here: SMSF Association
Another aspect when judging an author’s qualifications is what they are actually qualified to do. An accountant for example should have great knowledge when it comes to tax matters, whereas when it comes to putting together a suitable investment strategy a financial planner would be more competent for that kind of SMSF advice.
Likewise a lawyer might be fantastic when it comes to setting up an SMSF structure and advice on general legal issues – but typically lawyers a generalists so don’t have specialist SMSF knowledge and may struggle with the intricacies of SMSF advice unless that is their dedicated area of expertise.
Auditors need to have an in depth understanding of SMSF laws and regulations. It is their job to tell you what you can’t do with your SMSF and to report you to the ATO if you get it wrong. So you need to find someone who can find strategies that you can do!
One final point I want to make is about opinions. All professionals are busy trying to keep ahead of all the changes in all the areas they deal with – whether it is changes to laws, guidelines or strategies.
Unfortunately this means a lot of advisers are guilty of simply accepting somebody else’s opinion or interpretation as gospel. If possible, you need to find someone who is not afraid to form their own opinions based on the relevant laws – not someone else’s interpretation.
SMSF Advice Checklist
To help you determine whether the author or adviser has got your best interests at heart and knows what they are talking about use this quick checklist:
– What kind of product or service are they trying to sell?
– Do they have quality experience in SMSFs (quality not quantity)?
– Are they an SMSF Association Specialist Advisor?
– Do they have the ability to form their own opinions or do they blindly follow someone else?