Employee entitlements, ‘wage theft’ and Fair Work: Why it’s time to be proactive

The Press Club. Tokyo Sushi. Ezard. These three restaurants are just a few of the big names widely reported to be embroiled in the Fair Work Ombudsman’s crackdown on underpayment of staff.

Its investigations have uncovered serious breaches of Fair Work legislation, affecting businesses across the hospitality, retail and dining sectors as well as many other industries.

In the case of George Colombaris, the celebrity chef has admitted to underpaying his workers by $7.83 million, and has been ordered to pay a $200,000 fine. With heightened media attention and a new focus from employees on whether they are getting a fair deal, it’s likely that many other high-profile names will soon feel the heat from Fair Work. And it’s not just monetary risks that these businesses face. The media has coined the new term “wage theft” — and the reputational damage for anyone accused of this is going to be significant.

We ask the question, why do businesses in these industries, as well as other industries that typically employ large numbers of shift or casual staff outside of the regular nine-to-five, find it so hard to pay their employees correctly, and what can they do to remedy this?

Paying workers fairly: What are the challenges?

Employers often don’t understand their obligations under Australia’s highly complex industry awards systems. For example, the Hospitality Industry (General) Award 2010 allows companies to work out how much an employee would be paid for a 38-hour week. They can then uplift that by 25 per cent to recognise overtime, and pay this amount to the employee on an annual basis, as long as actual pay and total hours worked are reconciled annually, to ensure that the employee has been fully compensated for the time they actually worked.

However, the problem comes because staff in industries such as hospitality work long hours that can change frequently. If a business doesn’t have an effective way of recording hours worked, or never goes back and checks how much overtime a staff member has completed, it is unlikely that it will be paying employees correctly. As such, while employers may take care to roster employees appropriately, employees could end up working 60-plus hours per week and not get paid correctly for this if a reconciliation is never performed by the employer. The media attention given to this issue is prompting staff to check their own wages, and when they find a breach, go to the unions, Fair Work Ombudsman and the press.

The issue is made more challenging because many businesses in these industries don’t have a large or sophisticated HR department or payroll function — this may reduce the capability of the business to correctly review contracts, awards and rates of pay or perform annual reconciliations for those on annualised salaries.

What are the risks to businesses in this area?

There is no doubt that businesses are obliged to pay their employees correctly, fully and appropriately, and should do so in a timely manner. To do anything else is grossly unfair to employees as well as to competitors who are doing the right thing and are disadvantaged as a result.

Fair Work has recognised that there’s an endemic problem with hospitality-related businesses, and is directing its investigations towards these industries. This poses significant risks for any business found to be breaching of their obligations, including:

Reputational damage: “Wage theft” is not a term you want associated with your business, and the risk to business reputation is significant. The business’s ability to attract new customers and high-quality staff in the future will be impacted.
Financial impact: Companies found to be breaching their obligations may have to pay fines as well as compensation to employees, which may grow as the press becomes even more negative. This is in addition to the clear requirement that they make good any historical underpayments to employees. Many hospitality businesses don’t operate on high margins at the best of times, so unexpected employee costs, together with monetary penalties, could have the potential to end operations altogether.
Immigration restrictions: Many employees in the hospitality and retail industries (and many other industries) are in Australia on work visas. Any Fair Work investigation is likely to be referred to the Department of Immigration and Border Force, and vice versa. These bodies will conduct their own investigations into how a company is paying workers from abroad. This may lead to restrictions or bans on employing people from overseas as well as separate fines and additional adverse press coverage for breaching immigration law. Data sharing has become much more efficient among government organisations, meaning the Australian Taxation Office and other government departments may also become interested.
Criminalisation: There has been genuine political interest in criminalising Fair Work Act breaches, and the government has indicated that it is considering drafting further legislation around this. If passed, business owners and directors may face criminal charges and potential prison time if they are found to be underpaying workers.

How can businesses stay compliant with Fair Work?

Firstly, if a business believes it may have underpaid workers or otherwise be in breach of the Fair Work Act, it must deal with the issue quickly and honestly. The owners must work out how much they’ve underpaid their staff and start to remediate. This is essentially their only choice — if Fair Work doesn’t believe the company is trying to remedy the situation, the case is likely to go to court.

Moving forward, the business may need to reshape its workforce or business model. The problem is that many such businesses operate on such low margins that, had they been paying their workers correctly, their viability may be called into question. For companies that have not yet discovered a breach but would like to be more proactive in this area, there are several steps they can take:

Develop a thorough understanding of the awards: There are complicated rules around roster patterns, rates for grades of employees, part-time versus full-time, number of shifts a staff member can work, how many days off they can have, and length of time given between shifts. Support from professionals, including employment lawyers, will likely be a good idea in this regard.

Create policies and procedures around time and attendance records: This is one of the most common errors we see at BDO. In retail there are often very basic paper timesheets, prone to manipulation and error, and without good sign-off and approval protocols. Even if a business has a digital solution, if there aren’t thorough procedures around when an employee says they’ve started their shift (versus when they simply arrive at the workplace), it’s hard to keep track of who’s working what hours and when.

Offer training: Make sure frontline employees and staff understand these formal policies and procedures to ensure compliance.

Check that annual salaries actually match up to time worked: Another common error we see is that businesses will calculate someone’s annual salary based on estimated hours under an award, but won’t go back and check it correlates with the time an employee has actually worked. This is made even more difficult when shifts are incorrectly recorded or an employer offers alternative arrangements such as time in lieu.

Audit periodically: Regular sample testing and independent checks are a must. This will ensure that employees are following time-recording processes correctly and that payroll teams are checking annual salaries against the hours staff members have actually worked.

Ben Renshaw, partner, BDO
27 September 2019
accountantsdaily.com.au

Employee or independent contractor: What happens when it goes wrong?

The perennial question has reared its head and it was just a matter of time given the burgeoning gig economy.

The new working arrangements provide flexibility for workers, arrangers and customers. But what are the tax and other economic implications for those involved?

The changing working arrangements have put a spotlight on the traditional dichotomy between an independent contractor and an employee. The new arrangements suggest a further category, as yet undefined, that has characteristics of both.

A recent decision by the Fair Work Commission in Joshua Klooger v Foodora Australia Pty Ltd [2018] FWC 6836 demonstrates what can go wrong when the critical concept of engagement is misinterpreted.

Foodora was involved in the delivery of restaurant meals, food and drink and other items to homes and offices. Joshua Klooger entered into an “Independent Contractor Agreement” with Foodora that stipulated he was an independent contractor and not an employee.

In considering the “totality of the relationship” (a common line in such cases), the commission found that Joshua was, in fact, an employee. He was found to have been unfairly dismissed and Foodora was ordered to pay him compensation. Given that arrangements were the same for all its workers, the logical application of this decision is that it would apply to all of Foodora’s workforce.

Significantly, tax authorities circled during the heading and moved in once the decision was handed down.

Not only would payroll tax obligations seem to exist, but other employment tax obligations such as pay-as-you-go withholding (PAYGW), superannuation and personal services income (PSI) as well.

Two tax investigations were conducted into the Foodora business; one by Revenue NSW in relation to potential payroll tax liability and a separate investigation by the ATO looking at millions of dollars in potentially unpaid withholding taxes and superannuation.

The cumulative impact of this decision was that the German-founded food delivery business had to leave Australia.

As if these impacts were not enough, the decision of the Fair Work Commission effectively changes the flow of income and expenses for both Foodora and the worker.

Instead of the independent contractor receiving all the income and paying an amount to the digital platform provider, the result is now that the digital platform provider receives all the income and pays some of that to its employees. While this may not change the bottom line for either, the implications across a range of stakeholders including banks, government departments and auditors are significant.

Tax authorities in Australia have been grappling with the murky line between employees and independent contractors for many years. While there have been some attempts to solve the problem, none have been effective.

The commission’s decision, and in turn the ATO’s view of employees/contractors, can also be considered using a medical practitioner example. A medical practitioner is often not an “employee” of the medical practice, but an independent contractor. This generally sees the medical contractor issue the practice an invoice for their services. Under this scenario, the medical practitioner is responsible for paying their own superannuation, income tax instalments and liability insurance.

This is a very common example of a work arrangement between a medical practitioner and practice, which has generally been accepted by the ATO. However, the abovementioned Klooger v Foodora decision may provide precedence for some further investigation by the ATO.

With the above case in mind, the ATO may seek to further focus on contractor relationships such as this. If the ATO was to take the view that these practitioner/practice relationships are in fact an employee relationship, there would be a large number of medical practitioners and medical practices that would need to reconsider their tax structures and affairs.

From the view of the medical practice, this may involve more out-of-pocket expenses as not only would the practice have to pay the practitioners wage as an employee, they would also need to pay superannuation guarantee charge (SCG), allow for leave entitlements and ensure their insurances cover the employee.

From the view of the medical practitioner, this would likely simplify their tax affairs; however, as they are no longer carrying on a contracting business, certain tax deductions may no longer be available and the possibility of splitting income through certain tax structures would also be unachievable.

Alternatively, the practitioner and practice may elect to continue with their current arrangement; however, the ATO seeks to review the arrangement with the following outcomes:

Request the practice pay an applicable outstanding SGC to the practitioner’s superannuation fund. As this would be late paid superannuation, no tax deduction would be allowed for the payment.
Charge a 10 per cent interest rate and quarterly administration fees on the unpaid SGC amounts.
Amend the practitioner’s income tax return under the personal services income (PSI) provisions to disallow certain deductions and income splitting.

It is critical that any business, not just gig economy businesses engaging independent contractors, understand the issues and take all steps to ensure that their business model works; otherwise, the consequences can be catastrophic.

Tony Ince, senior analyst, RSM Australia
20 September 2019
accountantsdaily.com.au

Client Alert – September 2019

Warning to watch out for myGov and ATO tax scams

The government’s Stay Smart Online website warns there has been a surge in scammers impersonating myGov and the ATO to trick people into giving them money or personal details. These scams can take the form of emails, text messages and fake myGov login pages.

In June 2019, the ATO received 6,444 reports of tax-time scams impersonating the ATO. Emails with links to fake myGov login pages were the most widespread email scam.

The myGov system will never send texts, emails or attachments with links or web addresses that ask for your login or personal details. Never click on links in emails or text messages claiming to be from myGov.

Always log into your official myGov account to lodge your return and check if you owe a debt or are due a refund. You can do this by typing https://my.gov.au/ into your internet browser’s address bar.

Unfortunately, ATO and other scams continue well beyond the 30 October deadline for tax returns, as scammers know many people are waiting for a refund or information about debts. It’s important to watch out for scams throughout the year.

Tip: More information is available online at www.staysmartonline.gov.au/. If you’re unsure about a tax-related message or phone call, you can phone the ATO’s Scam Hotline on 1800 008 540.

Tax time updates

ATO has refunded $10 billion so far

The ATO says that $10 billion has been refunded to Australian taxpayers so far this tax time, an increase of over $2 billion from the same time last year, with most returns processed in under two weeks. The ATO aims
to process returns as soon as possible, and has announced that over four million refunds have already been sent out, compared to over three million refunds issued this time last year.

TIP: If you haven’t lodged your tax return yet, or you’re waiting on information about a refund or tax debt, we can help – contact us to find out more.

ATO watching for undisclosed foreign income

The ATO has reminded Australians who receive any foreign income from investments, family members or working overseas to make sure they have reported it this tax time.

New international data-sharing agreements allow the ATO to track money across borders and identify people who aren’t meeting their obligations. Under the new Common Reporting Standard (CRS), the ATO has shared data on financial account information with over 65 tax jurisdictions across the globe. This includes information on account holders, balances, interest and dividend payments, proceeds from the sale of assets, and other income.

Tip: If you’re an Australian resident for tax purposes, you are taxed on your worldwide income, so you must declare all of your foreign income no matter how small the amount.

Unusual claims disallowed

The ATO has published information about some of the most unusual claims it has disallowed. Around 700,000 Australians have claimed almost $2 billion of “other” expenses, including non-allowable items such as child care and even Lego sets.

Assistant Commissioner Karen Foat says a systematic review of claims found and disallowed some very unusual expenses. “A couple of taxpayers claimed dental expenses, believing a nice smile was essential to finding a job, and was therefore deductible. It isn’t!”

Tip: The “other” deductions section of your tax return is for expenses incurred in earning income that don’t appear elsewhere on the return – such as income protection and sickness insurance premiums.

ATO contacting small employers about Single Touch Payroll

From 1 July 2018, employers with more than 20 employees have been required to provide real-time reports to the ATO of salary and wage payments, super guarantee contributions, ordinary time earnings of employees and PAYG withholding amounts.

From 1 July 2019, this Single Touch Payroll (STP) reporting system has extended to all employers.

The ATO is now writing to small employers who haven’t yet started reporting or applied for a deferral, to remind them of their STP obligations.

Tip: Small employers have until 30 September 2019 to start reporting or apply for extra time to get ready.

There will be no penalties for mistakes, or missed or late reports, for the first year, and employers experiencing hardship or who are in areas with intermittent or no internet connection will be able to access exemptions.

Disclosing business tax debt information: ATO consultation

In its Mid-Year Economic and Fiscal Outlook in 2016–2017, the government announced it would change the law to let the ATO report business tax debt information to credit reporting bureaus (CRBs) where a business consistently avoids engaging with the ATO to manage a tax debt.

Tip: The ATO can’t currently pass on this sort of information because Australian law contains strict confidentiality requirements for ATO-held taxpayer information.

The ATO has said it “recognises the important role businesses play in the Australian economy [but] when an entity avoids paying its tax debts it can have a significant impact on other businesses, employees, contractors and the wider community.” It has released a consultation paper to facilitate consultation between the ATO, businesses and CRBs.

If passed in its current form, the amended law would allow taxation officers to disclose information about business tax debts when certain conditions are met. A business would need to have debts of at least $100,000 overdue by more than 90 days, and have not effectively engaged with the ATO to manage that debt.

Cross-border recovery of tax debts

The ATO has also reissued Practice Statement Law Administration PS LA 2011/13 Cross border recovery of taxation debts. This statement outlines options available for the ATO to recover a tax debt where the debtor is outside Australia, and sets out how the ATO deals with requests from other countries for assistance in recovering tax debts owing to the other country.

ATO superannuation focus areas

Lost super

As at July 2019, the ATO held 5.39 million super accounts worth $3.98 billion. It will aim to reunite $473 million with 485,000 fund members using the new Protecting Your Super measures.

Tip: You can find out about your lost or unclaimed super through ATO Online via myGov.

Pension cap indexation

The pension transfer balance cap (TBC) of $1.6 million could increase on 1 July 2020 or 1 July 2021, depending on movement in the consumer price index (CPI). The general TBC is indexed in increments of $100,000 when the indexation rate reaches prescribed figures (calculated using a formula set out in Australian tax law). Once indexation happens, there will no longer be a single TBC that applies to all super members with a retirement phase income stream. Instead, there could be a personal TBC for each member, depending on their individual situation and arrangements.

Compassionate release of super only available in limited cases

The ATO has recently seen a significant increase in queries about compassionate release of super (CRS). In most cases, the people concerned were ineligible because they were looking to use their super to pay for general expenses.

CRS is an option only for very specific unpaid expenses such as medical treatment and transport costs, palliative care costs, loan payments to prevent the loss of your home, the costs of home or vehicle modifications related to a severe disability and expenses associated a dependant’s death.

Tip: Any amounts released early on compassionate grounds are paid and taxed as normal super lump sums.

Personal services income rules: unrelated clients test

The Federal Court has set aside an Administrative Appeal Tribunal decision that income a business analyst derived through a company was subject to the personal services income (PSI) rules.

According to the Court, simply because an individual or personal services entity is able to provide services through an intermediary, such as a recruitment or similar agency, this does not constitute the making of an offer or invitation for the purposes of the relevant legislation. More than that is required for the purposes of the unrelated clients test.

Changes to the Private Health Insurance Statement

Most taxpayers know that if they do not have adequate private health insurance, that there can be a charge or a surcharge on the tax assessment.

The taxable income also impacts the government rebate received by the health insurer, which effects the net premium.

The law has recently changed in regards to the way health insurers give you information about your private health insurance premiums. Previously, your health insurer was required to send a private insurance statement to each adult covered by the policy by 15 July each year. It is now optional for them to send you this information. The health insurer may send the statement by email, email, or a link to an online version.

If you do not receive a statement and your tax agent does not, you will need to contact your health insurer. We have observed that most insurers have provided a statement this tax year, but no one can predict what will happen next tax year.

The Australian Taxation Office will income test your share of the policy, regardless of who paid the premiums and how many other people are covered on the policy.

A few taxpayers may be interested in the reason for two lines on the statement. Premium and rebate calculations are based on a year ending 31^st March and one line is a code for premiums, before that date and the other code is after that date.

The most significant item is that your policy confirms an adequate level of private health hospital cover throughout the year. If not, you may be liable for Medicare Levy.

AcctWeb

Common STP set-up mistakes – ATO

Authorisation failures and software set-up issues are among some of the top mistakes accountants and their business clients are making with the new Single Touch Payroll regime, with one in 10 failing their first submission.

With the Single Touch Payroll regime now over a month old for employers with 19 or fewer employees, ATO assistant commissioner Jason Lucchese has shed light on some of the common mistakes he continues to see with the initial set-up of STP.

The first involves authorisations to allow the registered tax or BAS agents to act on behalf of the client for STP lodgement.

“One of the most common mistakes we’re seeing is that some employers and tax professionals don’t have internal authorisations in place before they commence or commence reporting,” Mr Lucchese told Accountants Daily.

“That’s where the person who will be sending the STP report may not be the business owner or the public officer, and they need to make sure they’ve made appropriate delegations or they’ve put appropriate delegation.

“For example, the payroll manager, they may need to be added as an authorised contact if they’re interacting with the ATO about STP matters.

“Similarly, if you are a registered tax or BAS agent, to lodge STP reports on a client’s behalf, they obviously must authorise that agent and they’ll need to make sure that they are linked to their business in ATO systems as part of that initial set-up.”

The other most common mistake involves connecting to the ATO using a software service ID (SSID).

Mr Lucchese noted that STP reports will not be received unless the correct SSID is provided — usually done by calling the ATO or through a one-off notification through access manager.

“For tax agents, with single clients or themselves, they can phone us to provide that SSID or they can also complete a one-off notification through access manager as well,” he said.

“For agents that have multiple clients, they can also do that through a bulk request form through the tax or BAS agent portals through the ATO website.”

These mistakes are still leading to a 10 per cent failure rate on first submission, an early learning first raised in June when about 65,000 small business employers were reporting through STP.

That number has now jumped to over 300,000 out of the total 750,000 small business population, with just over a month out before the 30 September transition deadline.

Jotham Lian
13 August 2019
accountantsdaily.com.au

September 2019 – vital statistics for Australia

One great source of data about Australia. Become better acquainted with the country we love.

An up-to-date snapshot of Australia's vital statistics.

Please click on the following link to see all this interesting information. The areas covered are:

Overview
Markets
GDP
Labour
Prices
Money
Trade
Government
Business
Consumer
Housing
Taxes
Climate

Access all this data here.

tradingeconomics.com/australia

Tax Commissioner wants to turn black economy to ‘lighter shade of grey’

ATO Commissioner Chris Jordan believes the agency’s local business visits are helping to change community behaviour, while reassuring small businesses that their tax performance fares well on an international scale.

Seeking to provide some context over the ATO’s recently released tax gap findings, Commissioner Chris Jordan said that despite small business taxes paid coming in 12.5 per cent below what was owed — a higher percentage than either large corporations or individual taxpayers — the sector is doing well in terms of tax compliance.

“Internationally, we are performing really well in terms of our small business tax performance,” he said while speaking at the National Small Business Summit in Melbourne.

According to Mr Jordan, “the small business economy is paying about 95 per cent of the tax that it should” when you take out the black economy. That figure drops just below 90 per cent when black economy activity is included.

In other countries, that figure is “substantially less”, he said.

“I think that is a solid achievement… the vast majority of the small businesses there are doing their best to comply.”

However, Mr Jordan noted that with the tax gap research showing an $11.1 billion shortfall in taxes actually paid versus what was owed, “there is still work to be done”.

“We will hold to account those who do try to cheat the system so that we can continue to protect the people who are doing the right thing,” he said.

“Our role as regulators of small business is really about fairness, about protecting against inequity… and making it as easy as possible for people to comply with the regulations.”

This, he suggested, is why the government and the ATO are so aggressively targeting the black economy.

“We’re hoping to see the black economy change from black to at least a lighter shade of grey over time.”

ATO visits ‘have an impact’

Mr Jordan also spoke about the ATO’s plans to visit up to 10,000 SMEs across the country each year.

The commissioner said that media coverage of where ATO inspectors will visit next attracts considerable attention.

“People do sort of pay attention to it, it does have an impact,” he said.

“I was only talking to someone last night who was saying that the local baker that they go to has gone from a cash-only sign to EFTPOS now.”

Adam Zuchetti
02 September 2019
accountantsdaily.com.au

Proposal to hold directors liable for GST set to pierce corporate veil

The proposed extension of the director penalty regime to GST liabilities could spell the end of the corporate veil for small to medium enterprise directors, says an insolvency specialist.

With the reintroduction of Treasury Laws Amendment (Combating Illegal Phoenixing) Bill 2019 last month, the commissioner could soon be allowed to collect estimates of anticipated GST liabilities and make company directors personally liable for their company’s GST liabilities.

This follows on from the current director penalty regime which makes directors personally liable for PAYG withholding amounts and SGC obligations.

Speaking with Accountants Daily, Worrells Solvency and Forensic Accountants partner Stephen Hundy said that with many SME directors providing personal guarantees for a company’s obligations, the latest proposal to extend director penalty notices to GST could potentially see the end of the corporate veil.

“With a large number of SME companies we deal with, the directors have exposed themselves personally for their company’s debts due to the large number of personal guarantees provided,” Mr Hundy said.

“Together with the ATO’s power to issue DPNs in respect of unpaid PAYG withholding tax and superannuation guarantee charge (SGC), this can mean in some cases that an SME director may be personally exposed for a large majority of the debts of their company.

“In many cases, the directors have no choice but to provide personal guarantees in order to obtain credit from financiers and suppliers. In a lot of cases, however, we find that directors do not know what they have personally guaranteed and also they are unaware that they are personally liable for PAYG withholding tax and SGC,” he added.

“With tax debts, we see the majority of debt owed to the ATO comprising PAYG withholding tax and GST. At present, a DPN cannot be issued in respect of unpaid GST; however, if the director penalty regime is extended as proposed to include GST, this will increase the extent to which directors’ assets may be at risk in the event of an insolvency.”

While the bill has not yet passed, Mr Hundy believes accountants should remind their clients of their various obligations and the prospect of having GST added to that list of liabilities.

“Advisers and accountants should ensure that their director clients are aware of what they are guaranteeing and also that they are liable for PAYG withholding tax and SGC. In respect of taxation lodgements, it is advisable to lodge these with the ATO even if the associated debt cannot be paid, as this may offer some protection in the future if things go awry,” Mr Hundy said.

“New company directors should always conduct some due diligence in respect of a company’s unpaid statutory obligations before consenting to be appointed; otherwise, they may find themselves personally liable for past company debts. Conversely, exiting directors should ensure that they are released from any personal guarantees which they may have provided for a company’s obligations.

“As always, seeking advice early is the key when things get tough. This not only applies to directors but to advisers and accountants, who should seek out specialist advice at the earliest opportunity to enhance the prospects of their client avoiding insolvency.”

Jotham Lian
14 August 2019
accountantsdaily.com.au

Taxpayers confused by Scott Morrison’s $1,080 tax refund

The excitement over the tax sweetener is quickly turning to confusion, as many Aussies wait for a handout that will never arrive.

The refund is actually a tax offset, which is calculated when you lodge your income tax return

The tax offset reduces your overall tax bill, so you might end up having to pay less if you receive a tax bill.

The low and middle income tax offset is a non-refundable offset, which means any unused offset amount itself cannot be refunded or reduce the Medicare Levy.

Taxpayers with a taxable income that does not exceed $37,000 will receive a low and middle income tax offset up to $255. People with a taxable income that exceeds $37,000, but is not more than $48,000 will receive $255, plus an amount equal to 7.5% to the maximum offset of $1,080.

Quick Guide

Taxable Income Rebate

0 to $37,000 255

37,000 to 48,000 255 + 7.5%

48,000 to 90,000 1,080

90,000 to 126,000 1,080 – 3%

126,000 plus 0

AcctWeb

SMSF advice appetite strong, says ASIC

A new ASIC report has highlighted demand for further advice on the specifics of SMSFs among the Australian population, particularly among those who have a financial planner.

The report, titled Financial advice: What consumers really think, found that 25 per cent of consumers who had recently received financial advice wanted more guidance around SMSFs.

Around 50 per cent of financial advice customers also wanted advice on retirement income planning, while around 45 per cent wanted guidance on growing their superannuation, highlighting the potential value for accountants in establishing a referral partnership with advice businesses to tap into this demand.

Within this group of consumers who had seen a financial adviser, 45 per cent chose their adviser based on their level of experience, while about 43 per cent chose them based on their ability to understand the consumer’s personal goals.

An additional 43 per cent selected their adviser as they were someone the consumer was comfortable talking to.

However, demand for SMSF advice was not limited to those who had seen a financial planner, with 15 per cent of the broader consumer population also indicating a desire for guidance around self-managed funds.

This broader group selected their adviser based primarily on their reputation (38 per cent), their experience (41 per cent) and their ability to talk to the consumer in a way they could understand (36 per cent).

Across all respondent groups, the majority indicated that the adviser would need at least five to 10 years in the industry to be trustworthy, the report said.

Sarah Kendell
28 August 2019
accountantsdaily.com.au