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Nadine Connell, co-founder of Smart Business Plans, told SMSF Adviser that most common by a wide margin is that clients believe their SMSF will be under the $3 million threshold and believe they are safe from any tax impact.

She added the other two misconceptions are that the cost-base election will take care of it and that SMSF borrowing was almost banned.

“The ‘I’m under $3 million so I don’t need to do anything’ response is the most common,” she said.

“But the TSB calculation routinely misses industry super from earlier employment, or doesn’t account for what a planned commercial property purchase does to their position at the first assessment date.

“In regard to the cost base election response, clients assume it’s automatic when it’s not. It’s a decision the trustees have to actively make. What they’re often missing is the valuation behind it which has to reflect conditions at 30 June 2026, and commercial valuations are already running four to six weeks in some areas.

“Finally, with the belief that SMSF borrowing was almost banned a meaningful number of clients paused plans through 2025 on that belief. The Treasurer ruled it out, but the decision hasn’t been revisited.”

Connell said confusion is becoming more apparent as the deadline for the start of the new legislation gets closer.

“However, the clients you should worry most about aren’t the confused ones. They’re the quiet ones. They’ve read a headline, done a back-of-envelope calculation, and filed the issue away,” she said.

“Those are the clients making decisions now, or deliberately not making them, based on an incomplete picture. From an adviser perspective, those are the clients least likely to call you between now and 30 June.”

She continued that for clients approaching $3 million, the backwards calculation method can be used whereby you start with the target property price, work out likely market rent, calculate loan repayments, identify the gap.

“That gap is what needs to be closed with voluntary contributions, planned against the caps and documented. If the gap is too big for the caps, the property target comes down or the structure gets rethought,” she said.

“The discipline matters for Div 296 reasons, too. The bigger the contributions needed to make a property work, the faster the fund’s balance grows, and the sooner the $3 million threshold becomes their problem.

Connell said for clients already above the thresholds of $3 million and $10 million, the strategies shift.

“I see spouse balance splitting and re-contribution come up in conversations with their accountant. From our side, the question is liquidity. Does the fund have the cash flow to meet whatever assessment comes, without having to sell a property to fund it. That has to be planned in, not figured out when the bill arrives,” she said.

Although the decision whether to use the cost-base reset election sits with the accountant and the trustees, Connell said the timing of doing that is of importance.

“Whatever they decide, they need a 30 June 2026 valuation, and commercial valuation lead times can be up to six weeks in some areas of our network. The mistake we see is clients waiting for the accountant to tell them what to do, when by then the valuer’s booked out,” she said.

“Get the valuation commissioned now, then let the accountant run the numbers when they’re ready. The valuation is the ingredient, so don’t run out of it while you’re deciding on the recipe.”

Despite the threat of a large Div 296 bill, property owners aren’t getting rid of real estate from their SMSF portfolios, Connell said.

“If anything, it’s the opposite. Clients are directing their next investment toward commercial property in an SMSF rather than residential outside super. I think this trend will accelerate if the CGT and negative gearing changes expected in the upcoming May federal budget come to fruition,” she said.

“The structure still stacks up for balances comfortably under $3 million, and for business owners buying their own premises the fundamentals haven’t changed.”

In the lead up to the start of Div 296 legislation coming into force, Connell said advisers should be doing three things.

“Explain what’s actually in the final law, because a lot of client framing is still stuck on the 2023 version,” she said.

“Then flag the 2026-27 liquidity question: clients with property-heavy SMSFs need cash flow inside the fund to meet a possible Div 296 assessment, on top of normal expenses. That’s planning, not improvising on the day.

“And finally, reach out to the clients least likely to call you. The ones who’ve gone quiet since March because, from their perspective, they’ve already worked it out. Those are the ones who haven’t.”

by Keeli Cambourne
April 27, 2026
smsfadviser.com

The post SMSF commercial property owners and Div 296 ‘misconceptions’ appeared first on Professional Wealth Services.

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Bluestone head of specialised distribution Richard Chesworth said in dealing with mortgage brokers, accountants and financial advisers he has emphasised official numbers demonstrate the settled nature of SMSF borrowing.

“When you look at the ATO statistics, the size of the market, as in assets secured by LRBAs, has generally been between 6.5 and 7.5 per cent [of the total value of all SMSF assets] since about 2020, so it’s consistent,” Chesworth said.

“In regards to the debt, there are about 11 per cent of SMSFs with exposure to LRBAs, and at June 2024 there were $67 billion of assets under LRBAs with about $27 billion worth of debt against them.

“So the real message I like to drive home is this market is established. It’s been around for 19 years, which means we have SMSF loans that have been repaid. We have SMSF loans where the property has been sold.

“I don’t see it as a new safe haven that everyone is looking into, which is where some commentators with a vested interest in the lending for property are going down the path.”

He added these statistics countered criticism of the SMSF sector using LRBAs, noting they were relatively safer, in terms of failure rates, than other forms of lending.

“The LRBA market is mature, is operating well and is low risk because we’re looking at about a 33 per cent gearing of the overall portfolio,” he said.

“I was in a S&P presentation last year and figures they put forward showed that residential mortgage-backed securities had a 30-plus-day default rate of just over 1 per cent, but the SMSF residential mortgage-backed securities had a default rate of over 30 days of 0.1 per cent.

“That default can often be as simple as someone has set up their loan, but haven’t got their direct debit set up properly, so they miss their first payment and it’s reported on that basis.”

April 23, 2026
Jason Spits
smsmagazine.com.au

The post LRBA stability has been understated appeared first on Professional Wealth Services.

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• Shares – by buying shares, investors become part owners in companies and can benefit if the company increases in value or pays dividends. 
• Bonds – when governments or corporations want to borrow money, they can issue bonds, which are securities that usually pay investors a fixed interest rate.
• Cash – a low-risk, short-term financial instrument that typically provides stable and regular income through interest payments.
• Managed funds – an investment where your money is pooled together with other investors and managed by a professional.
• ETFs – an ETF is a pooled investment vehicle that you can buy or sell on an exchange, like the Australian Securities Exchange. In Australia, most ETFs — including many of Vanguard’s — are low-cost, index-tracking investments.

The post 7 simple steps to get on the investment ladder appeared first on Professional Wealth Services.

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The PBR (1052509195315) highlighted the stringent conditions that are placed on the definition of a close personal relationship.

The ruling involved the beneficiary who was a parent of the deceased. Upon their death, the trustee of the deceased estate received a death benefit payment from the deceased’s superannuation fund, and no tax was withheld from this payment.

The beneficiary applied for a private ruling on whether they were a death benefits dependant of the deceased, due to being in an interdependency relationship with him prior to his death.

The facts presented to the hearing showed that the deceased was in receipt of Centrelink Carer Payment and/or Carer Allowance Medical Report (SA332a), after the deceased was diagnosed with an illness which immobilised him and made him dependent on daily physical care for all personal needs before he died.

The beneficiary had moved into the deceased’s home to care for him and lived at the deceased’s home until his passing and continued to live there until it was sold.

Prior to his passing the deceased had received an income protection insurance payout and a TPD insurance payout. The beneficiary paid for food and some household bills prior to the deceased’s insurance payments and continued to pay for all food while the deceased paid all household bills.

The deceased provided free accommodation to the beneficiary who did all of the housework, provided most of the daily physical care required by the deceased as well as the two providing emotional support to each other.

The ruling stated that the definition of death benefits dependant does not stipulate the nature or degree of dependency required to be a dependant of the deceased person in paragraph 302-195(1)(d) of the ITAA 1997.

It stated that the beneficiary was not financially dependent on the deceased person and therefore, paragraph 302-195(1)(d) of the ITAA 1997 is not applicable and to meet the definition of a death benefits dependant, the beneficiary must have been in an interdependency relationship with the deceased, in accordance with paragraph 302-195(1)(c) of the ITAA 1997.

The first test of interdependency to be met is a close personal relationship and the ruling stated that where unusual and exceptional circumstances exist, a relationship between a parent and an adult child may be treated as an interdependency relationship for the purposes of subsection 302-200(1) of the ITAA 1997.

However, it continued that while it is accepted that the beneficiary had a close relationship with the deceased, the relationship was not over and above a normal family relationship between a parent and an adult child.

“The fact the beneficiary and the deceased lived together for a period of time and were living together at the time of the deceased’s passing, and that the beneficiary provided daily personal care to the deceased does not mean that they had a mutual commitment to a shared life,” the ruling stated.

“In this case, the beneficiary moved into the deceased’s home in order to provide personal care for him. The evidence does not show that the beneficiary and the deceased shared a ‘close personal relationship’.

“As a close personal relationship did not exist between the beneficiary and the deceased, the first requirement specified in paragraph 302-200(1)(a) of the ITAA 1997 has not been satisfied in this case.”

In regard to the condition of financial support, the ruling stated that bank statements provided for the deceased show he made mortgage payments, and paid household expenses such as rates, power, internet and utilities (water) as well as several cash transfers to the beneficiary.

However, it stated that it is not considered that the deceased or the beneficiary were financially dependent on the other as they both had sufficient income from pensions to support themselves.

“However, the test here is one of financial support, not dependency. It is considered that the beneficiary and the deceased provided each other with a level of financial support during the period in which they lived together: the deceased paid for the majority of household expenses, and the beneficiary contributed towards expenses by paying for groceries. Consequently, paragraph 302-200(1)(c) of the ITAA 1997 has been satisfied,” it added.

“As all of the requirements in section 302-200 of the ITAA 1997 have not been satisfied, the deceased and beneficiary were not in an interdependency relationship in the period just before the deceased’s death. As the beneficiary was not in an interdependency relationship with the deceased, the beneficiary is not a death benefits dependant as defined under section 302-195 of the ITAA 1997.”

Keeli Cambourne
April 23, 2026
smsfadviser.com

The post Carer responsibilities don’t meet interdependency criteria: PBR appeared first on Professional Wealth Services.

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For many Australians, superannuation will be their most significant source of long‑term savings.

Yet, despite being a crucial part of the nation’s retirement income system since the introduction of compulsory super payments in the early 1990s, confusion still reigns for many people over when they can access super, or if they can get it early.

Broadly speaking, anyone can access their super when they turn 65, regardless of whether they are still working or not. From age 60, if you are retired or leave a job, you can also get full access to your super. For more information about release conditions, visit the ATO’s website.

Transition to retirement

One option is to open a Transition to Retirement (TTR) account, which allows you to access part of your super while you are still working. This can help supplement your income if you choose to reduce your working hours. You can start a TTR once you reach your preservation age, which is the minimum age at which you can generally access your super and is currently 60. Preservation age is different from the Age Pension age, which is 67.

Under TTR rules, your super must be paid as a regular income stream rather than as a lump sum. Withdrawals are capped at 10% of your account balance each year. Once you turn 65, this cap is removed and your TTR automatically becomes a Retirement Income account, giving you full access to your super. To decide what is best for you, it’s important to speak with your super fund or a financial adviser before making any decisions.

Beware of false promises

If you have been on social media platforms recently, you may have been targeted with reels about accessing your super early. The sales pitch is that you can withdraw funds early from super to pay for expensive medical and dental treatments, or even to invest in property. But if it sounds too good to be true, it probably is.

There are limited circumstances allowing you to get your super before retirement under a compassionate grounds scheme. If approved, you can use the retirement funds to meet certain medical, palliative care, disability, death and home foreclosure expenses. However, be conscious that the Australian Taxation Office (ATO) manages such applications, imposing strict eligibility conditions and requiring a raft of relevant documents to support claims. 

Some other rare approvals may be granted that allow early access to super. For example, under the First Home Super Saver Scheme, investors may be eligible to withdraw voluntary contributions they have made to super to help save for their first home. 

Don’t waste your super

The primary reason the government and the ATO are reluctant to endorse the early release of super is that they want you to have sufficient finances for a healthy and happy post-work life.

Early withdrawals can minimise the magic of compound interest, and potentially leave Australian retirees short of money at a vulnerable point of their life.

Vanguard
08/04/26

The post Can I access my super early? appeared first on Professional Wealth Services.

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Liam Shorte, director of SONAS Wealth, said while an SMSF is “right for the right person”, the approach, advice and cost disclosure must all check out first.

“Too often, what looks like helpful advice is really a cleverly disguised sales pitch designed to get you to move your super so the promoter can sell you their product, charge high fees, or worse, put your retirement savings at risk,” Shorte said.

“The ATO is watching this space more closely than ever, and the consequences for getting it wrong as a trustee are serious and personal.”

Shorte said that legitimate SMSF advice starts with a person’s situation not the adviser’s product and a proper adviser asks about retirement goals, risk tolerance, existing super balance, insurance needs, available time, and whether an SMSF even makes sense for your circumstances.

“Only then do they make a recommendation. The product-led approach works the other way around,” Shorte said.

“The SMSF is not the goal, it is the vehicle. Someone wants to sell you a property, a managed fund, an unlisted investment, or a crypto platform. The SMSF is simply how they access your superannuation balance.”

Shorte continued that there are warning signs that should alert SMSF trustees about unscrupulous operators and it starts from the way in which trustees are approached.

Care should be taken, he said, if it is unsolicited contact such cold calls, emails, social media ads, or “free seminars” promising to “unlock the power of your super”.

Additionally, the pressure to act fast with phrases like “limited time offer”, “EOFY special”, or “get your money out before the rules change” should also raise an alert.

So should promises that sound too good to be true such as guaranteed returns, easy access to your super before retirement, or “we’ll handle everything so you don’t have to lift a finger”.

“There should not be a focus on a single product like a specific property deal, crypto scheme, or investment the promoter (or their related parties) controls,” he said.

“Nor should there be a referral chain where the adviser, accountant, mortgage broker and property manager all recommend each other and all earn from the same transaction. If the conversation quickly moves to rolling your super into a new SMSF so they can ‘invest it for you’ or ‘help you buy that investment property’ — stop. That is usually the gateway to selling their product, not acting in your best interest.”

Shorte said there are some precautions SMSF trustees can take to ensure they do not become victims to dodgy schemes, and a quick licence check is a must before doing anything.

“Anyone who recommends you set up an SMSF must hold an Australian Financial Services LIcence, or be an authorised representative of a licensee. This is not optional — it is the law,” he said.

“You can check for licences on the ASIC Financial Advisers Register (moneysmart.gov.au) or on the Tax Practitioners Board register (if they are advising on tax matters). If there is no licence, walk away immediately and consider reporting them to ASIC.”

The next thing to consider is whether the operator provides genuine education or just “hype”, said Shorte, adding that real SMSF education explains the responsibilities, not just the glamour.

“Any adviser worth trusting will make sure you understand what you are signing up for before you commit to anything,” he said.

“Proper education must cover the sole purpose test, arm’s length rules, annual audit obligations, investment strategy requirements, record keeping and valuation duties and your personal liability as an SMSF trustee.”

Furthermore, Shorte said, it is best to demand a written fee disclosure before proceeding with any decisions.

“Total fees should be expressed in dollars and as a percentage of your fund balance. A side-by-side comparison between the SMSF and your current super fund, after all fees and tax should be given,” he said.

“Also, a full disclosure of any referral fees, commissions or benefits the adviser or their network receives and confirmation that ATO administrative penalties are your personal liability — not payable from fund assets.”

He said if a trustee is approached unsolicited and the conversation starts with a product, the starting position is one of conflict of interest. 

“Understand the full annual cost (typically $3,500–$6,000+) and compare it to your current fund before deciding. The most common contraventions are member loans, in-house asset breaches and non-lodgement — all carry personal penalties,” Shorte said. 

“Always verify licences, demand a written SOA, and get an independent second opinion. The ATO will find non-compliance. Trustees cannot hide behind their accountant or adviser.”

Keeli Cambourne
April 28, 2026
smsfadviser.com

The post Look for the red flags that signal unscrupulous advice appeared first on Professional Wealth Services.

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The “Magnificent Seven.” It’s an understandable, memorable, and concise term, but its simplicity masks important distinctions. With the backdrop of strong U.S. stock market performance attributed to a handful of technology companies, the group’s run has fuelled questions about market concentration. When we look more closely, we see a clutch of U.S. stock market leaders that are more diversified than some may think.

The Magnificent Seven goes well beyond AI

Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla offer a wide range of products and services, with some areas of overlap. Certainly, their activities extend well beyond AI. The companies have a diverse footprint across industries, variously functioning as global marketplaces, cloud computing providers, and even automobile manufacturers and physical grocery store operators.

The Magnificent Seven business models span how we work, play, and consume

Sources of the companies' combined 2025 revenues of $2.2 trillion

^{Notes: Weighted revenue breakdown is the proportion of combined revenues attributed to a given source. It is determined by aggregating the revenue from each source across companies and then dividing this figure by the total revenue from all companies combined. Revenues are based on the company’s reported annual fiscal year total revenue for 2025. Sum may not total 100% due to rounding.} 

^{Sources: Vanguard calculations, based on data from FactSet, as of January 2026.} 

Consider a few examples: 

• Amazon: Nearly two-thirds of its revenue comes from digital mall operations, approximately one-quarter from cloud services, and the remainder from online marketing and advertising services. 
• Apple: Half its revenue comes from smartphone sales, one-quarter from media downloads and content streaming, and one-quarter from a mix of computer hardware, cloud storage, and wearable consumer electronics.
• Microsoft: Forty percent of its revenue comes from end-user home and office software, approximately one-third from back-end office infrastructure software, and the remainder from a mix of internet and data services, electronic gaming, and enterprise technology consulting.

While all three companies serve both consumers and commercial clients, their revenue exposures vary meaningfully across and within each company. 

“The diverse revenue sources matter because they show that the Magnificent Seven’s business models span different end-users and markets,” said Erich Pingel, an analyst in Vanguard Investment Strategy Group. “Differences in business models also mean differences in risk-factor exposures, which helps explain why their stock prices do not move entirely in lockstep.”

The Magnificent Seven stocks have not moved in lockstep

Quarterly total returns of common stocks, Q4 2020-Q4 2025

^{Sources: Vanguard calculations, based on data from FactSet, as of December 31, 2025.}

Seven stocks: Neither narrow nor self-contained

“The Magnificent Seven currently represents around 30% of the U.S. stock market. The companies are often portrayed as a monolith, but their business models tell a different story,” said Rodney Comegys, chief investment officer, Vanguard Capital Management, and head of Global Equity. “Their commercial and equity market success coexists with meaningful differentiation at the company level—making it unlikely that all of them will disappear or experience significant drawdowns at the same time. They share a label, not a business model.”  

For investors with long time horizons, it’s worth considering how creative destruction—the process by which innovation disrupts products, technologies, and companies—recasts market leadership. 

Comegys said that those inclined to consider the market’s evolution over short periods should recognize that market leadership often changes—and that the human tendency to expect trends to persist is just one factor that makes it hard to predict who the new winners or laggards will be or when the transition happens.

The world is more interconnected and interdependent than ever, due in no small part to technological progress. Although the Magnificent Seven share common elements, the companies and their stocks are not interchangeable. Their business models, strategies, and consumer bases vary—and so has the performance of their stock prices. 

Vanguard
15/04/2026
vanguard.com.au

The post Magnificent Seven: More diverse than they may appear appeared first on Professional Wealth Services.

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The 2026 Mercer Shaping Super report also stated that this trend could affect the competitive dynamics between SMSFs (which are ATO-regulated) and APRA-regulated funds.

The report serves as a wake-up call to super funds as they lose retirement accounts to platforms and uncovers that while adviser-focused platforms hold 6 per cent of super accounts, they are winning 42 per cent of all retirement account flows.

Mega funds (funds with assets of more than $100 billion), on the other hand, are attracting just 31 per cent of retirement account flows, despite holding 61 per cent of all super accounts. 

The report warns that the industry is going through a huge transformation and the battle between mega funds and platforms is becoming the nuanced version of the traditional “retail versus industry fund” debates. 

Additionally, the report revealed that Australia’s superannuation assets will reach $15 trillion by 2050, rising to approximately 170 per cent of GDP and consolidation is accelerating, with the number of funds forecast to decline from 75 in 2025 to 30 in 2035.

By 2035, the average fund is expected to quadruple to $161 billion under management, relative to its size today.

The report states that Australia was an early global adopter of Defined Contribution (DC) retirement system benefit desig

ns. DC arrangements now represent 91 per cent of the Australian system, with 66 per cent of total system assets held in APRA-regulated DC arrangements and the remaining 25 per cent in self-managed superannuation funds

By 2050, the report stated it expects defined benefit assets to account for only two per cent of system assets as these plans continue to “run off” with virtually no new entrants.

Long term, the report projected that  APRA-regulated DC funds to account for 85 per cent of assets, driven by the segment’s strong growth, with contributions expected to continue exceeding benefit payments until the late 2040s (for the system as a whole, this point is reached in the mid-to-late-2030s).

It also projected that SMSFs will account for 15 per cent of assets, reflecting increased benefit payment levels from SMSFs and the growth of the platform segment which shares a similar “target market” demographic.

Platform funds are expected to grow, driven by strong adviser-led inflows, from 10 per cent to 14 per cent in 2035, likely becoming the “sector of choice” for individuals who feel inadequately served in retirement by traditional superannuation funds, or prefer the platform structure over an SMSF.

Keeli Cambourne
March 27, 2026
smsfadviser.com

The post Rise in SMSF inflows indicate more people are moving into the sector appeared first on Professional Wealth Services.

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As widely expected, the Reserve Bank of Australia (RBA) lifted the cash rate by 25 basis points to 4.1% at March’s meeting. This marks the second consecutive rate hike, signalling that the RBA is becoming more concerned about inflation picking up again and is prepared to move policy into more restrictive territory.

The decision reflects renewed inflation pressures, partly driven by higher oil prices linked to ongoing conflict in the Middle East. Rising energy costs are flowing through supply chains and adding to broader price pressures at a time when the Australian economy is still operating close to capacity.

“The RBA appears intent on pushing policy into restrictive territory to curb aggregate demand and re‑anchor inflation expectations.” says Vanguard Senior Economist, Grant Feng

Feng said inflation continues to run well above the RBA’s 2–3 per cent target band, with the Middle East conflict likely to add further upside risk to inflation via higher oil and fuel costs. At the same time, labour market conditions remain tight. Compared with other major economies — many of which now have unemployment rates at or above their estimated neutral levels — Australia stands out as having a particularly tight labour market. This adds to wage and cost pressures and complicates the path back to lower inflation.

“Against this backdrop, today’s rate hike appears warranted. The RBA is deliberately seeking to slow economic growth and, if necessary, allow some softening in labour market conditions in the second half of the year to ensure inflation is brought back within target,” he said.

Feng says we should expect inflation to remain above target in the near term “Given the balance of risks, the RBA is likely to prioritise price stability and maintain a “higher‑for‑longer” stance. Our base case is for one further 25bp rate hike later this year, taking the cash rate to 4.35% by year‑end.” Feng said.

What this means for investors

For investors, the key takeaway is that interest rates are likely to stay higher for longer, as the RBA focuses on bringing inflation back under control. While further rate rises may create short‑term market volatility, they also reinforce the importance of staying focused on long‑term investment goals rather than reacting to short‑term policy moves.

Higher interest rates tend to weigh on interest‑sensitive sectors, such as housing and parts of the equity market, while providing more attractive yields across cash and high‑quality fixed income than investors have seen in many years. For diversified portfolios, this environment can improve income potential and restore the role of bonds as a stabilising force over time.

Importantly, rate hikes are a response to an economy that remains relatively resilient. While growth is expected to slow, the RBA is aiming for moderation rather than a sharp downturn. For long‑term investors, periods of economic change are part of the normal cycle and can offer opportunities to invest at lower prices.

By Vanguard
25/3/26
vanguard.com.au/

The post Interest rates likely to stay higher for longer appeared first on Professional Wealth Services.