One on one with…Kate Anderson

Kate Anderson


By Krystine Lumanta

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IOOF national manager of technical service Kate Anderson held an appreciation for superannuation from her very first role and has since shifted her focus to the SMSF side to unearth strategic opportunities. She tells Krystine Lumanta what she thinks about the new super measures and why she enjoys the technical side.

ow did you become involved in the SMSF sector?

My first role in the financial services industry was with Bankers Trust in 1997 where I completed its graduate program. It was there I first took an interest in superannuation. My first technical role was when I commenced employment with AM Corporation in 1999 as a technical analyst. From AM Corporation I moved to another technical role with Zurich before commencing employment with Mariner Financial in 2004 as a superannuation and retirement strategist. At Mariner I was responsible for establishing the technical superannuation and retirement area, reporting directly to managing director Bill Ireland. During that time I was also responsible for supporting the retail, product, marketing and national sales teams by analysing tax, superannuation and social security legislation and translating that into financial planning strategies and product enhancements. It was during my time at Mariner and working with Bill Ireland we recognised the increasing number of SMSFs being established and the opportunities that were available through these types of funds. As a result of the global financial crisis (GFC) we were also seeing large numbers of individuals with retail and industry funds leave and set up their own SMSFs, deciding they could get better returns themselves by running their own funds. During this time, legislation enabling SMSFs to borrow through limited recourse borrowing arrangements was also introduced, thus increasing the interest in SMSFs and leading to the eventual increase in the number being established coupled also with the control and flexibility they offered.

You furthered your career elsewhere didn’t you?

In May 2011, I commenced employment at SuperIQ to establish its technical superannuation and retirement area, reporting directly to chief executive Andrew Bloore. During that time I was responsible for the analysis and interpretation of legislation across the areas of taxation, superannuation, with a particular emphasis on SMSFs, income streams, social security, aged care, estate planning and life insurance, as they related to personal financial planning strategies. I was also in charge of the strategic understanding of adviser needs to enable the use of legislation to develop competitive strategies and client communication tools that focus on business opportunities for advisers and for the SuperIQ SMSF administration business. My role during this time also included introducing appropriate recommendations to the executive team regarding super legislative changes and product development opportunities for SuperIQ’s continuous business improvement.

Why do you like the SMSF space?

The growth of SMSFs since the GFC shows the appeal of an investment where investors have control over their own investment decisions. The investment opportunities are usually more unique than what is available in retail funds, such as collectables, and this diversity is interesting. For someone who loves tech, I also find the rules and regulations on SMSFs fascinating. Of course, SMSFs may not be suitable for many, such as those with balances under $200,000. SMSFs are also a flexible and adaptable retirement savings structure, which can be tailored to suit the specific needs of all its members. It can also be designed to last many lifetimes and future generations. You’re currently national manager of technical services at IOOF. 

What attracted you to this role?

I joined IOOF as head of technical services in August 2014, directly from SuperIQ. What attracted me to the role was the technical team. Collectively, the team has more than 140 years’ experience – our senior team have on average over 30 years’ experience in the industry and are some of the pioneers of the industry. My role at IOOF includes the management of the technical team and providing information and advice opportunities on financial planning issues. I also identify strategic opportunities arising out of government legislation for the IOOF financial planning network and the business.

What do you find most enjoyable about the technical aspect of SMSFs?

What I enjoy most about the technical side of things is that it is forever changing. I enjoy creating strategies for financial advisers to use with their clients. We continually analyse changing legislation and government initiatives to create new financial strategies and optimise existing tactics for financial advisers and the IOOF business. Providing this information to advisers and tips on how to use it can make a real difference to a client’s retirement savings.

What issues seem to be taking up most of your time?

At present the super and planning issues that seem to be taking up most of my time is of course the 2016 federal budget superannuation measures, what they are and what they mean for financial advisers and their clients. Outside of superannuation, with an ageing population my team are taking an increasing number of questions about aged care and understanding the current rules on the pros and cons of keeping or selling the family home. 

What do you think about the surprise backflip on the $500,000 lifetime non-concessional contributions (NCC) cap?

This change will remove the contentious provisions that would look back and take into account contributions made since 2007. Neither the coalition backbench nor the ALP opposition were ever persuaded the lifetime cap proposal as announced in the 2016 budget was not retrospective. Dropping the retrospective $500,000 lifetime cap is likely to create a one-off opportunity for clients to contribute this year under the current NCC cap of $180,000 or $540,000 using the current bring-forward rules. The proposed new NCC cap will apply from 1 July 2017. Under the current rules, a client under age 65 who has not already triggered the bring-forward rules can contribute up to $540,000 in this financial year without breaching the NCC cap. This is $240,000 more NCC than will be permitted from 1 July 2017. Also, the Treasurer’s new changes will prohibit a client from making NCC after 1 July 2017 where their account balance is over $1.6 million. If a client already has $1.6 million in superannuation and had intended to make further NCC, he/she can make NCC this financial year, before the commencement of the new rules. These opportunities will depend on how the new legislation is drafted. If the government, as expected, takes a simple approach to amending the current tax legislation, clients will be able to contribute this year under more generous rules.

What are your thoughts on specialisation in the SMSF sector?

Financial advisers who specialise in servicing the SMSF sector are more successful than those practitioners choosing to remain in generalist advice. However, these advisers are also challenged by some of the more technical matters, keeping up with compliance issues and maintaining a competitive fee structure. There continues to be a large and growing opportunity for advisers servicing the SMSF space. Those advisers that are specialising their businesses, demonstrating clear value propositions for clients and working well with accountants and other SMSF influencers seem to be the clear contenders in this sector.

What’s the biggest change you’ve seen in the industry?

The introduction of best interest duties and the safe harbour provisions are important developments. Overall, the spotlight on the industry and reforms post-GFC, while causing some challenges for advisers in the short term, will ultimately benefit our industry and improve the professional standards of all participants.

If you could change one thing about the SMSF sector, what would it be?

When setting up a SMSF you must sign a SMSF trustee declaration that confirms you understand the responsibilities and duties involved in running a SMSF. At present all new SMSF trustees must sign this declaration within 21 days of becoming a trustee. This requirement applies to all new SMSF trustees, irrespective of whether you are an individual trustee or a director of a corporate trustee. The declaration is a curious document because its purpose is simply to confirm that you understand your responsibilities as fund trustee, including your role as a director of a corporate trustee if your SMSF has a corporate trustee. As trustee, you’re still subject to these responsibilities even when you don’t sign the document. If you don’t sign the trustee declaration, however, you may be subject to penalties. If there is one thing I would change, it would be that this declaration should be signed before becoming a trustee.

What’s the key challenge facing the sector over the next 12 months?

Right now, no measures announced in the May federal budget have been passed. The proposed reforms meanwhile have been themselves chopped and changed. Hopefully we are at the end of the budget tinkering and some measures will soon become law. Without certainty, providing advice can be difficult and presents an unnecessary challenge for advisers trying to provide quality financial advice. Treasury has also recently released the exposure draft of the bill that would introduce the $1.6 million transfer balance cap. The government announced in the May budget that from 1 July 2017, it will introduce a $1.6 million cap on the total amount of superannuation that can be transferred into a tax-free retirement account. The transfer balance cap, if legislated in its current form, will introduce additional complexity in managing a client’s retirement income streams. There is a lot of detail within these amendments and as these are draft legislation, submissions and adjustments may yet be made before the final legislation is passed. While it is likely it won’t be in the next 12 months, I also look forward to the potential shake-up the Financial System Inquiry recommendations will have on the superannuation industry. These include giving workers under industrial awards more choice in super.

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