DBA Lawyers director Daniel Butler said with ongoing developments such as the NALE changes and the proposed 15 per cent tax on member balances above $3 million, advisers must ensure strategies are implemented correctly while keeping their clients’ best interests in mind.

“The evolving legislative environment also poses a significant challenge for advisers. Staying on the right side of the law is of utmost importance,” Mr Butler told SMSF Adviser.

“For advisers with an Australian Financial Services License (AFSL), it is essential to discharge their duties responsibly and ethically. Adhering to the regulations outlined in the Corporations Act 2001 (Cth) is a must for those who operate without an AFSL.

"By providing sound advice within the legal framework, advisers can safeguard their clients’ financial interests and maintain their professional integrity.”

Beyond legislative changes, advisers must also address the myriad of challenges faced by their clients in an uncertain economic climate, according to Mr Butler.

Economic pressures, increased costs of living, and volatile financial, investment, and property markets require astute guidance from SMSF advisers.

“They must help clients develop strategies to adapt to changing circumstances and make informed decisions about their financial futures,” Mr Butler explained.

“One critical area where advisers provide guidance is ensuring sufficient cash flow during difficult times.

“With a deteriorating economy and the possibility of a recession, clients need assistance in maintaining cash flows for essential purposes such as pension payments and repaying borrowings, particularly those associated with limited recourse borrowing arrangements (LRBAs).”

Mr Butler said advisers must consider the impact of significantly increased interest rates and work with clients to develop contingency plans and budgeting strategies.

Advisers also face challenges related to staff retention and recruitment, he said. To deliver timely and competent service to clients, advisers must have the necessary resources at their disposal.

Mr Butler highlighted that given the high demand for experienced financial professionals, retaining talent and attracting new employees becomes crucial. By ensuring a capable team, advisers can maintain a high level of service and meet their clients’ needs effectively.

Meanwhile, technology is another area where advisers must adapt and overcome challenges, Mr Butler said. Cyber crime is becoming a persistent threat, and advisers must implement robust security measures to safeguard their clients’ sensitive financial information.

“Challenges also emerge when making sure efficiencies are gained and maintaining service and quality levels where staff do not become too dependent on the ‘black box’,” he said.