ASIC requires all SMSF’s to sign acknowledgement by super funds/Trustees that they are not covered in the event of theft or fraud.

Let’s take a step back first and ask the question why are there now in excess of 470,000 self managed superannuation funds with an average of 1.8 trustees per fund and growing at 25,000 plus funds a year? The answer is basically simply that some clients now wish to drive their own investment strategies and are also looking at investments in direct property and other asset classes that many advisors are not offering. The share markets are volatile along with some other assets classes hence the shift to the self managed super fund arena.

The regulations allowing repairs and maintenance to property held in the Self Managed super funds (conditions apply) will go a long way in encouraging more investments of property via the self managed super funds and this in turn will potentially drive activity in the property market and make more properties available to meet the current housing shortages in some states.

Western nations have and will continue to rely on property to assist with the countries growth and development and no doubt in time there will be the boom and bust cycle here as well, again.

It would also be a very interesting exercise to see how many trustees are actually using advisors for their investment strategies for their SMSF funds and if ASIC’s new requirements will have much effect on the continued growth in this area.

Copy of release sourced from “Wealth Professional”

“The corporate regulator has proposed that SMSF investors should sign a document that acknowledges a warning that their funds won’t be compensated in the event of theft or fraud.

According to the Australian Financial Review, ASIC’s latest SMSF proposal – set out at a Senate estimates committee last night – would require investors to sign the document before setting up their SMSF, and then renew their acknowledgement every two or three years.

“I think it is actually frankly quite important that Australians who have self-managed super clearly acknowledge that they basically don’t have that protection.” ASIC chairman Greg Medcraft told the committee.

What ASIC is doing here is brining to trustees notice that they do not have the same protection that is offered to people using the traditional style Superannuation Funds and yes it’s a good idea to make trustees aware that they are not covered and they can then make the right and informed decisions. A way to also solve this issue is if Self Managed Super Funds trustees paid a levy to be able to access the same compensation arrangements as people in Australian Prudential Regulation Authority(APRA)- regulated funds. This has not been an option in the past anyway and so how would that take effect is also a big question.

“The above is the thoughts of the author only and is not to be taken as advice, please contact your licensed advisor in regards to the correct advice in regards to your own personal situation.”

Putting Education Article into Context

Uneducated brokers not taken seriously

_{By        Adam Smith                    |                    20/04/2012 6:00:00 AM}                   

A trainer has claimed brokers need to better educate themselves if they are to be taken seriously by their referral partners.

The MFAA has faced backlash over its requirement that brokers complete their Diploma, but AAMC general manager Jeff Mazzini has told Australian Broker that brokers will have to increase their educational standards if they are to build referral partnerships.

“I always say to brokers, ‘Who are your referral partners? Do you deal with real estate agents licensees, with accountants or with financial planners? What’s their minimum level of education that they must have to be qualified in their industry?’ It’s a Diploma. How come a broker can walk in with a Cert IV and say they want their business?” he said.

Mazzini claimed that many accountants, financial planners and real estate agents do not take mortgage brokers seriously due to a lack of industry-wide education, and said many are reticent to refer clients to brokers.

“I go to PD days and meetings with them, and they all tell me the same thing: They will not get involved with brokers because of their skill level and education level,” he said.

While many brokers have railed against the industry’s increasing educational imposts, Mazzini claimed the standards would ultimately benefit brokers’ bottom lines.

“The whole thing they’re forgetting is that upskilling and education will actually help them earn more income. People have got the opportunity to gain a minimum of 10% more than a person who’s not educated,” he said.

However, Mazzini said brokers were not alone in fighting against higher educational standards. He claimed this mindset was common across Australia.

“The problem with most industries across Australia is a lot of people have to be forced into study because they don’t want to do it,” Mazzini said.

When this story hit the press I was in India and was able to respond to the many comments  added to this article and perhaps I now need to answer some of them to support what I have said above.

*  I am a member of seven professional organisations and have a very good understanding of issues effecting many of their members and the issues they face in their day-to-day working lives.

* I have previously held a Finance Brokers Licence, Dealers Licence and have qualifications in several areas pertaining to the areas I have placed comments about.

*  Viamy training company deliver training to the professions I have mentioned in the articles and have a good understanding of their educational and operational requirements.

* Above all I have been in the financial Service Industry for more than 40 years and my intent and ongoing intent is to always work with the various industry and its members to support their personal and business growth where ever possible.

“Aso we are all smart enough to know what gets said does not always get written”

Trainers/Teachers/Assessors must maintain currency in Subject matters taught

In today’s world there are many looking for reasons as to why the level of the education is perhaps not to their expectations and or assisting the country with its growth and development?

One of the issues that does not get addressed or strong actions taken in regards to the actual trainers/teachers/assessors being required to maintain currency in the subject matters that they are teaching/assessing and whilst it may be talked about one would ask what measuring and monitoring processes are in place. The world has a shortage of great teachers,trainees and assessors and some command a high price for their service but how up to date are they, so they actually can teach or assess today’s needs and not what may in a book written over a year or so ago.

The world changes daily now, text books get released each year (hopefully at least) for school level and above but constant change requires now that teachers and assessors maintain currency as to teach what happened yesterday when today is different, does not produce the right results for the student and the country overall. One way this will be addressed in time is the removal of the old style paper manuals and then that way the online materials can be also updated regularly as things change but this without teacher/trainer/assessor currency will not produce the overall results.

In my business all trainers are required to obtain a minimum of 20 CPD hours per year in the subject maters being taught, otherwise I can no longer employ them as it is not fair on students to have a teacher training or assessor that is not up-to-date on the subject matters being taught.

So next time you enter a training/class/lecture room or enrol with a training provider ask the question, are your trainers required to meet ongoing education/currency in the said subject matters and is that monitored and controlled. If you get a silence or even a no then move onto another training provider, as maintaining currency in the subject matter is vital to any trainers or assessors roll.

Kolkata Located in India smartly sees the light.

From next year, students enrolled in high schools of West Bengal will have the choice for opting for vocational streams in place of regular subjects.

Today’s schooling should be designed about skiling the student for the workforce and many subjects globally are still taught in line with traditional teaching methods and programmes, when in fact today’s requirements are that the student is skilled and ready to enter the workforce should they leave at the end of year 12. One must understand that traditional methods and subject matters for schooling subject matters do not meet today’s ever changing environment.

Most developed Nations are facing critical workforce requirements in years to come and yet India is sitting in a prime position to capitalise on this position as India has the lowest median population age compared to the 12 other identified nations that will be required to source a workforce from other countries.

India itself will have a population of 1.3 billion by 2020 and have the availability of a work force age between 18 and 56 of 750 million workers and the secret here is to up skill them to meet the pending global workforce shortages that are fast approaching. The higher recognised education qualification any person holds ensures that a higher level of income is earnt and a higher level of funds repatriated back to the workers home country to support the family structures.

Look at Australia today where we see there is a desperate shortage of skilled labour force and already they are required to increase the immigration numbers to support the many unfinished or started projects…

Implementing the Vet pathways as an option in the Indian schooling system is certainly the right move and a smart one as India will then be well placed to meet the demands of the global labour shortages that will arise by 2020.

Please note this article is the opinion of the writer and in no way wishes to offend any readers.

Same talk happens, even when clients needs have changed

Many comments both for and against diversity have been said and read for the past 5 years at least and these same comments will continue to be aired to anyone that cares to spend the time reading them. Let’s look at it from another point of view; the hardest thing for any client in today’s fast moving environment is to find a trusted advisor that can actually give them advice across many areas to meet their needs.

You never weaken your profession or professional standing by being educated and qualified enough to be able to gather all the information form a client and then in turn provide them with solutions to meet all their needs.

The issues we face in Australia is work practices, as many professionals will be lucky to see on an average 1 to 2 clients a day as they are too busy doing the paper stuff. Break it down even more and look at the costs versus income, it costs around $20.00  to $25.00 an hour to do the paper stuff and a true sales person can earn around $120 to $150 and hour, so why are sales people doing the paper stuff.

The future business model will look like this, a client rings their trusted advisor (you) for whatever issue they may have in the financial arena, the trusted advisor will legally discuss matters where qualified and then flick onto others to undertake the paper work and process. ( the stuff)

If you are across what is happening in all the other professions in Australia, then you will also understand the old days of just doing or just being licensed to talk about one area of the clients needs is under threat. Australia is a great country its full of choices and we all have the choice to remain focused on one service to clients or offer ‘Do you want fries with that’, without the paper work.

Throwing money at problems does not solve them. Increasing super employer contributions

Feel everyone is missing the mark here once again as to continue to throw money at issues that occur here in Australia does not solve the real problems that have got many Australians into this situation to start with. It’s just seems to be the Australian way of trying to solve issues as they arise, by throwing money at the problem and yes as a business owner I must also take into consideration many issues and alternative solutions when I am being forced to throw money at problems and hoping the solution sticks.

So what are the issues here, is it that Australians are not educated enough to understand that at an early age the value of money and that they need to ensure they are accountable to look after themselves throughout life until death. Why is it so much hard work to try and implement training and education starting at primary School level and upwards on simple facts that you cannot spend more than you earn.

Look at the many countries around the world where you have to educate and feed yourself, as there are no government handouts to support your life style and speaking of which how long will western governments be able to support the life styles of so many. Is it not cheaper to educate people now, I think so.

Do Financial Institutions give their staff adequate training to enable them to progress through the career/job role changes within their respective organisation?

Lenders tend to focus on providing the compliance and regulatory training to ensure that these areas are being addressed but miss out on the critical up skilling of their workforce. To enable employees to deal with clients that are seeking assistance the staff should have the required qualification and skills in those areas.

Is there the fear of train them and they will leave or is there the misunderstanding that employees need the qualifications to be able to understand the clients situation and to then be able to guide the clients in the right directions.

Can one not even begin to imagine the growth to the bottom line of the business model due to having all employees highly skilled, qualified and focused on providing quality and professional service to meet client’s needs. Every job role in the professional arena today revolves around providing solutions to clients which in turn produces sales.

If you wish to deal with other professionals and seek referrals as well, you need to also understand their business model as well and that can only be achieved via  gaining the required education,  as many professionals will only deal with other qualified professionals.

Without quality Education, there is no food on the table

Government to launch web site MY Skills to rank Vet Training Companies

 

The web site will provide information on training and the quality of the training providers, similar to My Schools and My Hospital website, as a step to try and improve the overall assurance and quality of the vocational training. I personally agree with this site as when press and others talk about poor delivery in the VET system it tarnishes all the good and great training organisations as well, so bring it out into the open.

Some interesting Facts relevant to training and education;

• Average of 30% of all students that undertake Vet training actually complete their studies
• 4.1 million People are not qualified enough to meet the needs of the economy, they earned $10,000 a less each year than their more skilled peers and had an employment rate of less than 60%.

 

The big questions that must be asked are;

 

• Why there are such a low number of completions, is it because training and delivery methods have not evolved to meet 2012 requirements.
• Is life just too good and is the government’s handout system just too generous to make their need for and urgency for individuals to need to up-skill themselves.
• Do we need to have a complete revision of not only the private providers and make all Vet delivery bodies being TAFE and private RTO’s have the same level of accountabilities
• Having a National regulatory body that two states are refusing to join or not wishing to hand over their respective states powers
• Is the standard and the ongoing training requirements of the trainers acceptable and does a more robust and stringent regulatory process need to be introduced into this area. Every profession requires ongoing continual professional development programme, why should trainers and assessors not be monitored and controlled in as well.

Whilst here in Australia we continue to understand the value and power of education our neighbours to the north have grasped the opportunity to grow and develop their people as they realise without education there can be no food on the table, its that’s simple.

If I train or educate them they will leave me?

If I had a dollar for every time I have heard the above comment from large corporations right through to small business owners I would be able to retire. Lets now just look at a few things to disprove this myth and reasons why you should up skill your workforce or they will leave you anyway.

• Educating your work force is one of the main reason why people stay with you, not salary which is ranked about 9^th on the list of why people stay or leave
• With skills shortages and an ageing demographic in many Australian professions it’s vital to up skill all of your work force, or they leave. Australia ranks 4^th world for skilled worker shortages and 54% of employers struggle to fill job vacancies
• It may be surprising to many that China and many other Asian countries also have skill shortages and must draw on each other to fill the gaps. China introduced 1,000,000 robots into some factories to assist with one area of skills shortages and Australian mine sites are also now increasing technology to replace skilled worker shortages
• Employers that focused on people management skills as much as they did on other parts of their business will see a positive impact on their bottom line, basically in the sales industry to cover the cost to educate an employee costs less than one sales deal in many professions.

So the next time you feel that it is better not to train or educate your workforce understand that your employees will leave you and go to another employer that is willing to invest in their employees up skilling and education. Career pathways also are an inducement for an employee to remain with you and training plans and programmes can be designed with this in mind.

Beware placing Investment Property into Self Managed Superannuation Funds

According to the latest ATO statistics for SMSFs, real property makes up 15% of the sector’s assets. This is twice the property weighting for regular super funds where only about 7% in invested into real property.

With residential property already making up one quarter of SMSF real property assets, the ATO said trustees should avoid transferring residential property unless it is income generating and effectively a business asset with proper arms length arrangements in place.

The only real estate you can transfer into your SMSF is business real property. You cannot transfer a residential investment into your SMSF. You also cannot transfer a property that has both business and non-business uses,” warned the ATO in its latest SMSF newsletter

Before you transfer a business real property into your SMSF, make sure you understand and comply with the super laws concerning the property transfer, both before and after the event. The real estate must be business real property both at the time and after it is transferred into the SMSF,” noted the ATO.

According to the ATO, transfers become complicated if the property transfer is done off-market as the onus is on the trustee to ensure the arrangement is on commercial terms.

“You must have a legally binding lease between your SMSF and your business. If you do not have a lease in place you will be breaching the super laws. The lease must be on arm’s length terms at market rent,” said the ATO.

For example, if the rent is below market it could be viewed that the SMSF is giving an advantage to the tenant at the expense of the fund members but if it above the market it could be viewed as being an attempt to circumvent the excess contributions tax, they explained.

Illustrating the ATO’s concern about property investments into SMSFs, they expressly cautioned that capital improvements should not be done.