News

Director ID application process user-unfriendly

By Darin Tyson-Chan

Trustee feedback supplied to selfmanagedsuper has demonstrated how difficult the application process for a director identification number can be, particularly for elderly SMSF trustees.

The response was received from a subscriber to selfmanagedsuper’s sister publication, smstrusteenews, and revealed a mature-age trustee’s experience in applying for a director ID number that spanned from December 2021 to early March 2022 without a satisfactory resolution.

The trustee admitted they were not very technologically literate, but nevertheless began the process attempting to use the myGovID application. The trustee, unfortunately, could not complete the process using this method and so rang the dedicated helpline, only to be directed back to the online facility.

This prompted the individual to write to the Albury headquarters dealing with director ID number applications, a course of action that did not receive a timely response.

“Two-and-a-half months later I received a reply, enclosing the necessary forms,” the trustee told smstrusteenews.

The next difficulty involved the sources of identification required for the application.

“Three forms of identification are needed. In my case producing a passport and a Medicare card was no problem, but I don’t have a car so don’t have a driver licence. It meant I needed a copy of my birth certificate,” the trustee said.

“I do have one, but it was folded and when I got it out of the box I discovered it had stuck together.”

This resulted in the person having to contact another government department, the Births, Deaths & Marriages Bureau for Victoria, to apply for a new birth certificate, further complicating and delaying the process.

The response from this agency again was not immediate, but was eventually received. At the time of contacting smstrusteenews, the individual was informed the relevant forms had been sent out.

“I didn’t like to ask when that would be, but with a bit of luck I will have that director ID before the November deadline,” the trustee concluded.

ID complications for users.

Investment strategy a source of great angst

By Darin Tyson-Chan

A lack of definitive instruction and poor trustee attitudes regarding the SMSF investment strategy are creating confusion and anxiety among practitioners.

The obligation to formulate and formalise is one aspect of the requirement to have an investment strategy that is still relatively unclear. The majority of practitioners agree formalising the investment strategy in writing is best practice, but there is no direction as to who should be performing this task.

“Who can write it for the trustees, because accountants won’t write them? That’s not their fault because they’re not allowed to do it without considering all of the overall financial position of the client,” Advisers Digest founder Peter Johnson told attendees at the recent SMSF Auditors Association of Australia Conference held in Melbourne.

“Plus if they get something wrong they get sued. Or if it’s a financial adviser that does it, they get sued.”

During the same session, a conference delegate suggested action is required by industry bodies to encourage the ATO to find solutions for these issues.

“I think it would be good Peter Johnson

for [the SMSF Auditors Association of Australia and others like it] to go to the powers that be to say ‘we’re auditing something that the trustees are putting no effort into’,” the practitioner said.

“Also, when you pull the wording [of the investment strategy obligations] apart, they’re really onerous and we don’t really see the point.”

According to Johnson, the risk practitioners expose themselves to with regard to the investment strategy highlights a larger problem the SMSF advisory community is currently facing.

“[You can get sued even if the client says:] ‘I wanted to lend money to my mate, the mate borrowed the money, but you didn’t [prepare] a good enough SOA (statement of advice), you didn’t warn me I wasn’t going to get my money back, even though I still would have lent it to him, so it’s still your fault,’” he pointed out.

“It’s just lunacy.”