Q: I have a Self-Managed Superannuation Fund (SMSF) and when I moved away from a public offer fund to an SMSF, I realised that by moving away from the fund I effectively fired the accountant, investment manager, auditor, compliance department and administration team. My friend said he has created a board of advice and I am interested in doing the same. What do I need to consider and who should be in it?
A: For many people who commence a SMSF, it does become apparent that they have fired a team of professionals, and are going it alone. The opportunity now exists to re-employ some of those professionals by creating a board of advice.
Your friend is ahead of the curve when it comes to engaging the range of professional advisers and service providers for his/her fund. The concept of a board of advice has been used by different charities, organisations and education provider’s over time. The professionals that you require on your board of advice will be dependent upon your circumstances and the list can include an accountant, financial adviser, stock broker, mortgage broker, property adviser, auditor, administrator and solicitor.
Each and every trustee should consider how they can get the most of the relationship with each professional adviser. Working with them on a fee for service basis can ensure that your arrangement is transparent and the services delivered are value for money.
Mind you, many trustees have a small number of professionals on their board of advice. They choose to only engage an accountant and auditor as these professionals are mandatory. The fact remains the only mandatory professional required by a SMSF is an auditor. All other aspects can be completed by the trustees of the fund however many seek to engage other professionals to access certain skills, knowledge, services and advice.
When engaging the services of such professionals, it is important to determine their qualifications, accreditations, professional memberships with associations, what areas of advice they are licensed to provide, how they are remunerated etc. Seeking a referral from a friend or a trusted professional can be a good place to start. When meeting with a prospective member of your board of advice, tell them you are interviewing them as you want to have the best members available on your board.
As a financial adviser who is a specialist in SMSF’s, working with other members of your board of advice can be enjoyable, productive and most importantly a positive impact on your fund. Having a strong working relationship between members of the board is important and a financial adviser can provide you with a range of services and advice when it comes to your SMSF.
So what is next?
Determine the advice and services that you need. Seek a referral from a trusted professional such as your accountant or financial adviser as a starting point. Don’t be afraid to have an initial discussion over the phone and complete some research before committing time to a face-to-face meeting.
Remember your board of advice should provide you with services and advice that places your interests first and be prepared to work with other professionals outside of their current network. Most importantly, make sure all of the professionals talk to each other.
Having a board of advice can provide you with the peace of mind that you (and your loved ones should anything occur) can access the right advice, that you can fulfil your role as a trustee and ensure ongoing compliance to the relevant laws and regulations.