This week I attended an early morning session concerning insolvency and what mistakes can and are made by people trying to protect their assets from “going down the tube”.
One line took my interest in particular: The presenter described how a significant transaction was entered into without any advice being sought or given. When the Liquidator asked “why didn’t they get advice from their accountant before doing the deal” – they said “if we did we would have got a bill for it.” Now it is possible they had a poor accountant and getting advice would not have helped, but assuming the accountant was knowledgeable and accessible, the cost of getting advice and stopping the deal being entered into would have saved them tens of thousands of dollars!Later I paused to think… What other areas in a business or investment person’s life should they seek specific advice from a good accountant advisor rather than go it alone?
Some immediately came to mind:
- Setting up a business: Making sure the structure is right (and understandable). If buying with other parties, how will you be able to exit it! And how will the CGT be managed!
- Buying a business: Failure to get good advice will probably cost you $’000 in paying too much. There are not many businesses that are worth anything near what is asked for them – however there are some excellent exceptions!
- Planning your tax affairs: Getting the strategy right and planning long term rather than knee-jerk June reactions.
- Superannuation: Specialist advice on how a Super Fund can save you thousands of dollars and work wonderfully well for your future – and how you can take advantage of seriously good tax concessions.
- Common sense decisions about anything: I have one client who is a sensational business operator, extremely successful, and he won’t make any major decision without ringing up for a chat about what is on his mind. He may or may not take my advice or opinion, but will listen and make his own mind up. A second opinion can be very important in decision making.
- Estate Planning: Crucial to have a clear understanding of what assets you hold and in whose name, what the tax issues are on death or incapacity, what tax savings can you pass on or create for those you leave behind and what asset protection you can provide to your loved ones! Vital stuff – yet so many people won’t consider or look at this!
- Considering all issues before making a big investment: Considering the CGT implications at sale, the tax efficiencies along the way and the ability or otherwise to transfer to family etc.
I struggle to understand why people are happy to spend thousands of dollars – maybe hundreds of thousands – without seeking advice! Some say you should invest 2% of any proposed acquisition with an advisor first. If they show you it is a bad deal – you just saved 98%! Now that IS value!
Hope you’ve found some “value” in the advice above and remember… we’re only a phone call away.