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SUMMARY KEYWORDS

client, smsf, dealing, advisor, suppose, solicitor, set, bit, accountant, fund, property, correct, business, accounting, process, people, moved, day, broker, fees

SPEAKERS

Fraser Jack, Allister Sutherland

 

Fraser Jack 

Welcome to the x y advisor podcast, a global community of financial advisors sharing and learning with one another to drive the positive evolution of financial advice. To get involved go to X Y advisor.com or simply download the x y advisor. This series is brought to you by super galleon, a specialists self managed super fund administrator, known for their client centric approach to their full service solution. If you need SMSF support or CPD, check out the Knowledge Center or sign up for Super Guardian updates at Super guardian.com.au Welcome back to the x y advisor podcast. I’m Fraser Jack and we are continuing with our self managed Superfund series. And today I’m joined by Alistair Sutherland, Ellison. How are you? Good. Thanks for having me. Thank you for coming on. It’s been in you’re one of the one of the old time experts that when I talk to people around the traps, especially on the on the platform where they use five people mention your name like you’re some guru and self managed Superfund. I wouldn’t put it that far. But I do love it a fair bit. So physical. Exactly what you do love anila. Tell us tell us about you tell us about where you are at the moment.

 

Allister Sutherland 

So I’m currently at U minor beach and with a firm called player Hall. So we do predominantly accounting work. And then there’s a small financial advisory arm as well.

 

Fraser Jack 

Fantastic. And you are the financial advisor arm of that firm, quite a quite a large fan, though, isn’t it?

 

Allister Sutherland 

Yeah, there’s currently two partners, one of them will be exiting at the end of this financial year. But then there’s two other accounting staff to one bookkeeper one full time, one part time bookkeeper, and then an admin staff. And then Kate, who’s our financial assistant. And yeah, we’re currently looking for more staff, which is the fun and games of the accounting world at the moment. But yeah, that’s us.

 

Fraser Jack 

It seems to be the funding games of not just the accounting world, but a lot of financial planners are also in that same position at the moment where people everyone wants to speak to seems to be looking for stuff.

 

Allister Sutherland 

Yeah, it’s probably not surprising, really, I think COVID has done something quite spectacular in the sense of, it’s allowed more people to work from home and employers realize that people can actually work from home effectively. And it just means that you can work three hours outside of Sydney, for example, and get Sydney prices. So not many people are wanting to move or change from that. So

 

Fraser Jack 

yeah, enough, fair enough. Then tell us about your story. How did you get into into the profession.

 

Allister Sutherland 

So my family’s stock has one still has a public practice. But basically, my dad got the sheets with me when you when I was at school just laying around in bed and dragged me out of my bed and said, right, you’re coming into work for me today. And yeah, that’s the start of it. To start so yeah, that was that was my entry into the accounting world.

 

Fraser Jack 

So your dad’s an accountant with a practice and then just hit note you coming in said there is a calculator pretty forms.

 

Allister Sutherland 

Here’s some he says a depreciation shovel you need to fill out by hand. So yeah, thanks, dad. But

 

Fraser Jack 

but but to be fair, you do actually love it right?

 

Allister Sutherland 

Yeah, after after I got over myself. And a few years went by and I finished high school and stuff. Then I wandered around for a year. Yeah, I fell. I fell in love with it really bad. Three months in or something I just like Yep. This is it.

 

Fraser Jack 

Yep. And so you’re obviously don’t still work for your dad. You’ve moved around a bit.

 

Allister Sutherland 

No, that’s correct. Yes, I moved, moved from there into a firm in Surry Hills, which was absolutely fascinating. I dealt with all the guys you need to tame in industry, actors, producers, editors, VFX artists, everything awesome. And then from there moved into cathode ray street in Surrey in Sydney. And that was high net worth individuals, which was really interesting to see what goes on there. And then finally trips myself up to Gosford because we decided to start a family and my wife’s from up here and Gosford, so hence managed to land a job up here. And then from there moved into you might have beach at play Hall.

 

Fraser Jack 

Fantastic summer a beautiful, beautiful spot of the world. That’s it. And okay, so you’ve you’ve been mostly New South Wales in Sydney and in working on a bit of accounting firms. Tell me about how you you know whether this love for self pension funds come into

 

Allister Sutherland 

probably first kicked off. When I first started really sweet. We had I got chucked into the deep end, essentially, and was sitting in front of clients three times my age at the time. And I just, just for some reason, picked up on the absolute joy of dealing with self managed funds and the sheer accounting bliss of them because all the records are there. It’s like it’s just handed to you in a nice little silver platter. And yes, there’s, you know, complex compliance stuff, too. But yeah, that’s just what I’ve really enjoyed most about them.

 

Fraser Jack 

I love the way you say this year accounting bliss. I’m sorry, it just makes me it makes me not actually. The fact that you add the fact that you love them so much. And Alright, so let’s talk about some of the work that you’re doing. Now. With regards to tap into funds. you specialize in a specific area of his missives?

 

Allister Sutherland 

I would say, yeah, business, real property acquisitions would be where I find the most most joy, and even even utilizing small business CGT concessions to shovel as much money as reasonably possible into the environment.

 

Fraser Jack 

Fair enough. And so so you get a lot of people coming to you with the idea of wanting to purchase real property.

 

Allister Sutherland 

I wouldn’t say a lot of spots. Yeah, the clients that have existing clients that have approached me, usually come and say, right, we’re dealing with landlords, we kind of want to do our own thing. It’s the usual story, even with normal renters, like you just fed up, you want to own your own house. So fair enough. And then it’s just bridging, seeing how we can get them, essentially what they want. Yep. Fair

 

Fraser Jack 

enough. So let’s start with let’s get through that process, then, let’s go through that process that you would you talk to somebody if they you know, maybe before beforehand, you know, the working all the way through the process? Let’s start with sort of that pre engagement space.

 

Allister Sutherland 

Yeah, so that is really notice. So all clients that have really had whisperings of Yeah, I’m thinking I want to do as SMSF with, and I probably want to buy some property, and they are just an SMSF. in general. It’s just enough notice, really, because she can’t, we’ve had it in the past where client, his clients done something, and then next day said, Oh, I just bought this property I wanted in my SMSF. And then we as accountants are just shitting ourselves. Because if the sheer volume of stuff that needs to happen, for this to actually work. So just saying to clients, like if before you even think about executing any documents, like just just give me some heads up, guys.

 

Fraser Jack 

It’s really interesting. Because you’re absolutely right. So defines the property falls in love with it, and all of a sudden, it’s an immediate need.

 

Allister Sutherland 

Yeah, that’s it and which you can kind of understand, right? If you’re driving fast, you see your business real property, and like, yep, that’s it, I want that the for sale signs up, or it’s got auction on it, like you get it, right. So it’s just trying to set the client’s expectations that it’s just not going to happen immediately.

 

Fraser Jack 

Yep. So for somebody that you see that might be in that space, do you sort of drag them aside and say, right, if you if you’re going to do this thing, we need to we need a preparation time?

 

Allister Sutherland 

Yeah, that’s correct. I mean, the minimum preparation time is roughly 28 days, really, which is mainly off the back of the HMO is there they are seriously looking into all ABN applications for smsfs. So if something smells funny to them, or they just want to take their 28 days, you can’t do anything until you have that magical little ABN.

 

Fraser Jack 

I guess that’s a really interesting tip, the very first thing you need to know is, is give yourself at least a month in preparation and notice time is when you when you see the business Real Property settling, though, is it? Is it a bit more like say residential property? In that sense work can happen quite quickly, or does it take a longer time?

 

Allister Sutherland 

No settlement with business or property? Use? There’s roughly the same amount of time as receipts. You can the one I did recently, we did extend out the settlement time, I believe, by two months, just to give just to give us all enough time to sort out funding. So that’d be certainly another recommendation is if you can extend out settlement do so.

 

Fraser Jack 

Yeah. Because it’s not just obviously the setting up of the fund. It’s the setting up of the funding that’s that can take a long time, especially in this environment. That’s it. So talk us through that process. Then the first part is about making sure you got time what’s the next part?

 

Allister Sutherland 

It’s really In engagements with all parties, really so it’s we’re not really talking about the advice document process now. It’s getting all your contacts kind of lined up who you need to speak to. And then the rough and kind of who does what, and then at what time and when things need to actually be actioned. So your communication with all these parties is absolutely critical. upstage, sorry,

 

Fraser Jack 

do you? Do you take on that role of the the, the organizer or the project manager, I guess?

 

Allister Sutherland 

Yeah, I do see myself like that. Just because there’s, from the clients perspective, one centralized person that they’re really dealing with. So if the advisor takes on this role, then we know that everything is going to work reasonably seamlessly. And the clients only dealing with one, you know, two people, really at most, through all this with majority of their questions.

 

Fraser Jack 

Yeah, it’s not exactly it’s not like they do it every day. So it’s it’s generally they’re walking into a, an unknown space.

 

Allister Sutherland 

Yeah, that’s correct. And then it’s just every all the other fun compliance stuff, that they’re not particularly aware of that, you know, as advisors and, and in the accounting world, it’s just, yeah, it’s maybe a bit mind boggling.

 

Fraser Jack 

So do you do you have a process in place that sort of steps in through what’s what’s coming? what’s expected in regards to all of that documentation, all that compliance, all these moving different different moving parts have to take place?

 

Allister Sutherland 

Yeah, I do that in in the engagement process? It’s, you know, yeah, right, you want to move forward with this, here are the things that we need to do. Before you even think about speaking to a broker, speaking to an estate agent, just to again, set expectations and set reasonable timelines as well. Is that a checklist that you have or not a formalized checklist? Like all good accountants and advisors, we hide things in our heads? So over the over time, it’s just materialized. So it’s just an automatic function for me. But yeah, eventually, I’d like to see this kind of a bit more formalized. Because I know, because then at the end of the day, I need to train staff to do my job. And they need to know about this stuff.

 

Fraser Jack 

So yeah, every little every little piece of the jigsaw puzzle that has to be put in place at exactly the right time. Yeah, that’s it. So talk to me about setting them all up. Because obviously, there’s a lot of headaches, I just, I just think about it, and I just go, it’s all seems like it’s too hard basket?

 

Allister Sutherland 

Well, it is I suppose Yeah, for if you take the if you take any approach, what I like to take is just it’s a challenge, but it’s a massive opportunity. So it’s just pushing that forward. And I suppose the set up processes getting the client engaged, too. So what I did to my recent clients was I made them take the SMSF, Trustee education course, just straight off the bat, even before this stuff started to make sure they understood what was really going on. Because at the end of the day, they’re the ones at most risk, followed by the advisor, then followed by the accountant and solicitor.

 

Fraser Jack 

And so that’s the idea, of course.

 

Allister Sutherland 

Yeah, it’s run by a couple other third parties. But essentially, Yes, that’s correct. And so

 

Fraser Jack 

you recommend that anybody that’s setting up a fund should be doing that course, or any advisor advising or fund should be putting the clients through?

 

Allister Sutherland 

Yeah, I believe so. Really, because the experience has told me over the years, that clients see it as a shiny little, shiny little bell, and they kind of set and forget it without realizing that they’re actually required to put a bit of time, effort and energy into this, because it’s they’ve got a fiduciary duty. Not being it’s always knows. But

 

Fraser Jack 

Exactly. That would be an interesting thing, if you if you mentioned that, and they went on, like, I didn’t have time for that, or it’s, it’s pretty telling sign, isn’t it, that they might not want to do all the other stuff that’s required?

 

Allister Sutherland 

Yeah, that’s correct. And the chair, and if you ever put that in writing to the CTO, they’ll immediately knock the ABN application back. So it’s just ensuring that, you know, you’ve probably never reasonably put that in writing to the CIO anyway. But it is a telling sign if they’re not particularly interested in setting it up. Even just saying that to

 

Fraser Jack 

the client, if the API found out that you didn’t want to do it, they would, they wouldn’t let you have it.

 

Allister Sutherland 

Yeah, that’s it. I mean, we had a recent IV an application knocked back because the it was a solicitor. She had a lot of stuff going on, and her husband was going through some pretty serious cancer stuff. And the ACA deemed her to be not a competent trustee. For the sheer fact of the there was just no time to really effectively manage the, the SMSF affairs. So a bit of a gut wrenching thing for her because there was other stuff happening Of course.

 

Fraser Jack 

Never been really important. That would have been a really interesting conversation. It certainly was or would have been loved had been a fly on the wall for that one. Well, yeah, he has, I don’t think anybody likes to be told that they’re not deemed as competent, necessarily, especially when you’re in a in a professional seat. That’s correct, you pride yourself on being competent. So talk us through this process, because I know there’s a lot of moving parts to it. And I also know it can be extremely frustrating and inefficient, talk us through this process, and where you think it can sort of maybe get better, or where, you know, where are the parts that really bottleneck

 

Allister Sutherland 

the while the process really is ensuring all the entities are set up in the correct order that the solicitor and the accountant and use the advisor essentially communicating, probably more than average, really, I did spend a fair amount of time on the on the phone to the solicitor, pre set up, posts set up. And then even after execution of all documents was a couple of hours on the phone. And it’s well worth it. Really, at the end of the day, and even I suppose even engaging an auditor, to if you have an a friend, an auditor, any little circle, it’s to make sure that in my particular case, that the business acquisition, plus the construction of the internal premises still meets all the while still meets the sole purpose test, and doesn’t cross over any other, you know, funny funny sis laws and stuff. So just pre setup is quite critical.

 

Fraser Jack 

It’s interesting, the the when whenever you hear the word auditor, you thinking about a past tense, right, that comes in afterwards, and they do stuff. So you know that, for that pre directive, Lee getting ordered is involved before stuff has set up, as is an interesting point.

 

Allister Sutherland 

It just makes you aware, because as the as your advisor, as the last sorry, the advisor, you know, you’ve got a lot of stuff going on in your head, and you can’t reasonably across all things. So I mean, lucky, probably, hopefully understand the basic concept of SMSF. But it’s just useful to have that, you know, backup off. Yeah, I can go to this guy who knows his stuff. He’s done this before. What are the things I need to be aware of? And then right, off we go.

 

Fraser Jack 

Yep. And, and obviously, the, the setting up of that once it’s all set up and, and executed, like you said, you know, getting things done in the right order, which is the hard part. This is a lot of project management for you. I’m feeling what what’s after that. So once it’s sort of set up and then purchased as heirlooms is taken in how long is your process taking if you mentioned the 28 days to start with. But

 

Allister Sutherland 

yeah, so just as a timeline perspective, I suppose we set up for this particular clients, we set up the SMSF, at the entities on the ninth of September 2020, did the ABN application essentially that day, didn’t get it immediately, was shitting my pants, and then then the process could really start then the the lrba documentation and bear trusted and trusted company was set up the day after because that’s quite timeline specific. And then contracts were essentially exchanged. And settlement was set for the ninth of December. And then in that time, were hardly rolling over existing funds, then speaking to the broker to make to do your pre assessment stuff, and then finally get their act together and essentially approved funding, which did take a lot longer than expected. So that was a big dealing with brokers was was a bit painful. Because they

 

Fraser Jack 

weren’t because they might they’re not even the person that makes the decision, right? Because they’re, they’re dealing with somebody else, they’re dealing with a bank or a lender.

 

Allister Sutherland 

Yeah, that’s correct. And it’s slightly worse for the fact of the big four banks aren’t in the lrba lending space, which kind of makes no sense. But anyway, so we’re dealing with second tier third tier organizations. And this one, the funding we got was through St. George, but it’s funded by perpetual how that massive circle of that works, which is a totally other compensation. But just the sheer amount of time and communication that was I suppose almost wasted with a broker

 

Fraser Jack 

was quite frustrating. So yeah, I’d certainly that was a mistake I had was not engaging their broker probably sooner and getting all the information to them faster. Yeah, so he wasn’t learned in that. It can be tricky thing but from the clients point of view, obviously getting this in place is gonna run through the timeline. It’s, it’s a 28 hour days at the beginning to get the fund set up, you got to roll everything in, you got to get your contracts through, you got to sort out your finance, then you also, I guess at the end of this, once the property’s been purchased, it doesn’t stop there, right?

 

Allister Sutherland 

That’s correct. So after that, then there’s more documents that need to be dealt with and make sure everything’s signed and ready to go. And then the in particularly in New South Wales, the bear trust must be stamped within three months of execution of three months of settlement. So if that’s missed, then you don’t have a legal trust deed. And you can sort it out, don’t get me wrong, it’s just penalties and stuff from asik, which are not something the client really needs to deal with. And then, I suppose further on is making sure the accountants got everything that they need to sort out the back end accounting work. And then the ongoing advice conversation really is like, yes, you just got this big, lumpy asset. What do you do now?

 

Fraser Jack 

Yeah, and you got a mold that they came with the rest of their financial strategies. So tell me about the the different types of business real properties you see being purchased by people in their funds? What would you mean? What would you mean for that? Because it’s as if it feels to me like it needs to be a you know, a particular size or a particular gonna be just a small office? Or is it? Is it generally specialist? showrooms or specialists? factories?

 

Allister Sutherland 

Yeah, in the firm that I’m with at the moment, there are a few that are mainly designed for manufacturing, and warehousing. And then in the past a few years ago, then there’s more retail shop friend space for businesses. And the one particular one recent clients was a Sound Studio. So it can be and then if you then I suppose solicitors as well, their chambers. I’ve seen their chambers inside smss. And then I suppose office spaces as well. I suppose it just comes down to whatever the current industry is, and what do they actually need?

 

Fraser Jack 

Tell me about the Sound Studio. Um, that’s interesting.

 

Allister Sutherland 

Yeah, that’s it. So he’s a sound sound designer, an engineer. And there’s some pretty cool stuff. And works for some pretty interesting clients in the film and TV commercial space. So yeah, he’s he got kicked out of his old studio he was leasing. So and to set up to set up a Sound Studio properly for full on, you know, not podcast II stuff. Proper sound recording for films and TV commercials. It’s rounded anywhere from 100,000. to, to about plus, basically, depending on how many studios you want in there. So this guy is spending pretty sure upwards of 250,000 on these on two studios in this one. business premises?

 

Fraser Jack 

Yeah, it you’re absolutely right. When you get to do a specialist industry like that, and you got to spend a lot of money on a setup of a thing, and then you then your lease runs out, and you’ve got to move it. It’s not ideal.

 

Allister Sutherland 

No, because it’s Yeah, sure, you can rip out the shell and stuff. And then you know, reimported in the next one, but like, you know, how many times do you really want to do that? So the answers, just solve the problem for the client? Yep, fantastic.

 

Fraser Jack 

Any you? Are you mostly local to that area? Or do you even you look after,

 

Allister Sutherland 

look after clients everywhere, we’ve got a fair few people in Sydney. So that one, there seems to be a guy and particularly is in annadale. So I would probably say, most of the clients are sitting in New South Wales space on the east coast.

 

Fraser Jack 

When you are setting these funds up, and obviously you do have to engage with other professionals, it’s a huge part about it. Tell us about that process. Because sometimes people can be a little bit prickly with your first half, I suppose.

 

Allister Sutherland 

Well, of course, it just depends on the angle you’re coming you’re coming at, it’s because I suppose keeping in mind that the overarching goal is you need to get this stuff sorted for your client. So you know, having, having the right people around you from you know, you as the advisor to then dealing with any accountant, and then an auditor and a solicitor and a broker. You know, if you’ve developed good relationships with all these guys, then the process is a lot smoother.

 

Fraser Jack 

Yep. Fair enough. And now, obviously, because you’re working with an accounting firm, and that say that, let’s say the client might have a different account and organic. Is it ever been a problem? Or do you just get the client to introduce you all? Or do you just have to pick up the phone and talk to them?

 

Allister Sutherland 

Sometimes you just have to pick up the phone and just say today, otherwise, if you do have if you have the existing relationships with the with the client, then it’s like, all right, who’s going to see who let’s just go The entire room together introduce ourselves, and let’s just get it done. So and it because it’s hard, because when I was in Surry Hills for an example, like, I was not an advisor at that time, but I was sending as an accountant sending all these financial advisory clients off to this, you know, random dude. You know, and then I’m seeing all the fees he’s charging, I’m like, I need to get a part of this, cuz I’m here charging, you know, just up to 1000 bucks to this client, and they advise us charging upwards of four grand, so I’m like, Oh, damn it. So it’s just, and then just respecting the relationships, you know, have a coffee or a beer together.

 

Fraser Jack 

Cuz, because it’s an interesting because if you’re going to take the lead, and I guess the point I’m trying to make here, you want to take the lead on being the project manager, and I guess somebody’s got a But what happens if somebody comes to you and they think they’re

 

Allister Sutherland 

better may come down to personality clashes, I suppose for me, in particular, if, if I’m seeing someone else is the accountant, saying that the financial advisor knows their stuff, and you know, is dealing with me respectfully, and vice versa, of course, then I’m very happy to handle that over to them. Because that’s, again, one less thing for me to worry about. And I know that they’re going to be dealt with nicely as the client. So more than happy for that to happen. Again, if that doesn’t work, then it’s trying to come to some form of compromise with the client, really, and get the client with just a little bit more involved.

 

Fraser Jack 

So do you act as the advisor and he can

 

Allister Sutherland 

communicate? And second set certain circumstances? Yeah, that’s correct. Just because of how I suppose the client gets the best of both worlds for me.

 

Fraser Jack 

Yeah. And then some circumstances, you’ll act as one but not

 

Allister Sutherland 

both? Yeah, that’s correct. Because it just makes, it’s either there’s already existing relationships are never gonna step on any toes. And it’s sometimes just makes sense that the roll is split? Yep. Fair

 

Fraser Jack 

enough. Fair enough. And and with the communication, tell us about how you do that. Is that just is that just constant emails and phone calls? Or do you have a particular system in place where you can message people?

 

Allister Sutherland 

It mainly revolve around emails and phone calls. So it’s just figuring out who, either who the client wants to deal with? Or are they happy for you to engage, you know, your own circle of professionals? Then just simple heads up phone calls? Basically, I’d like to deal with phone calls. That’s whatever communication methods you have in place, as long as everyone’s at least aware of what’s going on, then it’s pretty streamlined. From there.

 

Fraser Jack 

Yep. Yep. Fair enough. I guess it’s just every way I look at this. It’s just time consuming, isn’t it?

 

Allister Sutherland 

Yeah, that’s, yeah, that is correct. There’s a lot of time that goes into this. And, you know, it’s your, it’s your essentially sweat equity that you’re putting into the client relationship. So why why not trying to make a really good effort for this, because the business real property investment for the client, it’s not like shares and managed funds and stuff that you trade on the market on either a daily, weekly or monthly or annual basis. This is something that’s in place for 30 years. So you know, making sure that all the relationships are set up nicely at the start. And yes, you’re tied work, but wouldn’t have it any other way. Because then, then the client loves you, or the other professional advisors love you, as well. And then you’re usually rewarded.

 

Fraser Jack 

Yep, you’re rewarded with a long term relationship. Talk to me about that. 30 years. I mean, obviously, that, you know, are you purchasing property, there’s a long term loan in place, all those sorts of things. Talk to me about that, and what you say to your clients in that space, if you know, if they’re not prepared to, to put this in place for 30 years, it’s not worth it, or 10 years, or five years, or whatever it might be

 

Allister Sutherland 

usually the premise for clients coming in and wanting business real properties, because they, they want this long term, this long term solution for them, because again, they don’t want to rent anymore. And so they want to take a bit more responsibility and deal with their own. Do other own property stuff. And I suppose 30 years is used, because I’m pretty, they may have changed the rules recently, but they’ve extended out debt on lrvs in timeframe. So it’s usually I think it was usually maxed out at 15. So you know, you’ve got a 15 year, 15 year timeframe where you’re stuck with this thing. So making sure that the businesses essentially solvent and trading well, and got succession planning stuff in the backgrounds, you know, useful to know. So that, like they’re in this for the long haul?

 

Fraser Jack 

Yeah. Do you go into that with them, as in their business, their business plan, and if they’re going to be able to sustain their business and the less or thing?

 

Allister Sutherland 

Well, that’s correct, because again, as as the advisor you you’ve got to think if the best interests the clients and I suppose if we want to write the code of ethics in his standard six. It’s the long term effects of the advice for the client. So as the as the joy of being the accountant as well, I get to put my little hat on and do cash flow projections for these guys and say, you know, is your business doing well? Can it support this? And if it can, let’s go.

 

Fraser Jack 

Yep. Fair enough. Yeah. Tell me about what the I mean, I think I feel like you’ve got a whole lot of stories inside you that things that went wrong, tips that you worked out over time. Things that things that went right things that went wrong, talk to me about tips and traps that you might have lined up there for say, you know, dealing with different departments?

 

Allister Sutherland 

Yeah, I mean, as we’ve mentioned before, the biggest one is dealing with the AGI. That’s your first major hurdle. Because if you can’t, if you can’t jump that one, then you stuck. So lining yourself up, do any SMS or getting the trustees to do the SMSF trustee courses, it’s just a good leading, then I suppose the absolute joy I had out of this was dealing with a solicitor. So this they found this solicitor, and it was a family friend, circle of family friends. And I just call them up and introduce myself took the initiative. And, you know, asked him, Do you understand what’s going on? If you don’t Well, he his five minute spiel as to what’s going on, and I just loved dealing with them from start to finish, because they knew what was going on. They knew what they had to do, and they knew the timeframes of the background.

 

Fraser Jack 

So is this is it is this a, you take this as an opportunity for you to develop a new relationship with a new solicitor, and then be able to say me them, talk to them about other other, you know, or refer other clients to them if they need?

 

Allister Sutherland 

Yeah, that’s it. And I mean, I come with a mindset of First and foremost, it’s dealing with the client, your client at hand, so you do the job for them. And then if you do it correctly, and you’re dealing with these guys in a decent manner, then of course, you’re going to get rewarded, hopefully, at the end of the day by either client referrals, or you can refer clients to them. It’s not. Doesn’t have to be a two way street. Really, that’s how I proceed. Yep. And a couple. Yeah, what else? The biggest fall down for me was dealing with the broker. They weren’t, well, whether or not it was a community, again, fun communication stuff, whether it was a failure on my behalf, or again, a communication and how’s rotting this, it’s just lrba is usually have minimum cash requirements or minimum holding requirements. So I initially framed my question, what are these minimum holding requirements? And it was never really, it was brushed off and never really came back to me with an appropriate answer. Then when I’m finally looking at the loan documents, I’m seeing this, this fee called the lender protection fee, which is, if you’ve never heard of it, it’s like Lenders Mortgage Insurance and pick them up on it and said, Why are you charging this fee? It shouldn’t be there. And then they explained well, because you don’t have less than a percentage requirements. This is why there’s fees charged. And I said, Well, I asked you about this a month ago. And now you’re telling me about this. So

 

Fraser Jack 

that was quite frustrating. It took a bit of time. So do you think that when it comes to talking to clients about finding the lender or finding the broker that you really need to find somebody that’s done this a few times before?

 

Allister Sutherland 

That’s correct. Yeah. Ideally, everyone involved or professionals involved need to have had some level of experience in this. And the brokers not to pick on them. They’ve just got a little bit of stuff to catch up on, I think, from advice, disclosure process, and especially fee disclosure process. So it’s just ensuring that, you know, we all know what’s going on. And what are the what are the actual requirements from the lenders perspective? Because they again, they only usually lend up to 75% or even less. So it’s, and then what are the other fun, fun conditions that they want to impose? So it’s finding out these upfront can be slightly difficult, because until applications in front of a lender, they’re usually not interested in looking at it.

 

Fraser Jack 

So So I guess you could say to your client, find a solicitor or we’ll help you find one that it’s important that when you do interview your solicitor or interview broker interview, or we find an order that we don’t need somebody that’s done several of these.

 

Allister Sutherland 

Yeah, that’s correct. It makes the whole process a lot smoother.

 

Fraser Jack 

I guess it’s a really good that’s a really interesting tip for one of the first things probably that you need to say to a decline that’s looking to purchase the property

 

Allister Sutherland 

is getting air professionals lined up at the start who you as the client who you want to dealing with, who do you want to be dealing with. And then then you’re doing your due diligence to see advisor in check. I’m Adam, just giving them a couple

 

Fraser Jack 

of quick cycles. And as you mentioned, a lot of the big banks aren’t getting involved. What are you seeing? Who are you seeing that’s lending in the space? If it’s if it’s not big banks,

 

Allister Sutherland 

and this usually second tier, second tier organizations, so without going into any particular names, the funding, as I said, before the fundings usually done by perpetual or other other large organizations such as them and latitude. They, yeah, that process is quite complicated on to how they raise raise funds to essentially to service debt. So, yeah, which can be quite a bit of a challenge. Yeah.

 

Fraser Jack 

And do you have any tips or traps around the, the accountant or lawyers?

 

Allister Sutherland 

Yeah, as long as for the accountants perspective, I would say as long as they give enough, given enough time, like all things that were at least aware of what’s up and coming, and then that the accountants are given all the backend documentation to essentially make sure that their year end financial reporting can be done in an appropriate timeframe. And they’re kept reasonably happy. Yeah, I’ve got all the records, as I said, Yeah.

 

Fraser Jack 

Yeah, exactly right, canvass and talk to me about the clients what how do you see them? What What tips or tips do you have for the clients that they need to be aware of?

 

Allister Sutherland 

Well, the critical one is really their understanding about what they’re actually getting their souls into. So their time and responsibility, and the course, their capacity to their capacity to do so as well. So are they are they going to be in this kind of thing for the for the long haul, and then secondary to that is, well, the costs. So I don’t think you’d get too much change out of $20,000 with all this, really, if you break it all down. So it’s setting their expectations at year this to get you what you want. This is a bit of a costly exercise, but it’s your investment over, you know, if you say $20,000, over 15 years, it’s actually not that bad. And then to make sure that they’ve got funding. So as the example for my client recently, it’s they had to they had, they didn’t quite have enough cash inside the fund. So they had to ensure that there was enough cash to essentially shovel into this thing to meet, well, the lenders requirements, at the end of the day, to get this thing over line,

 

Fraser Jack 

plus the green stuff, exactly. It’s a it’s an interesting concept. When you all of a sudden you slap a $20,000 figure on there saying, well, it’s going to cost, you know, 20 to set it up. So as you said over a long term, it would work out, but in the short term, it’s going to be it’s going to be a hit to the fund.

 

Allister Sutherland 

Yeah, that’s it. And then another strange one would be as long as they continue to pay the asset fees for the trustee companies. I came across a trustee company recently, under an LBO arrangements that had paid their fees for some time. And ASIC delisted the company. So when you when I when we came across that after I guess, in the shopping Oh, it’s like, well, nobody actually owns the state actually owns the property now. So we sorted it out and got it back online again. But Sam? Yeah.

 

Fraser Jack 

Exactly. I think that’s obviously, that’s what ordering sort of thing does as well as that I pick up on all that stuff. But it’s, it’s once it’s once it’s done, it’s done. It’s about fixing it. Yeah. active in product, trying to be proactive in a lot of states. A lot of circumstances. Yeah, that’s it. Fantastic. Now, tell us about technology throughout this process, because I kind of feel like technology’s improved some of this reporting stuff in a way, but then, you know, doesn’t has necessarily worked his way through the entire process.

 

Allister Sutherland 

No, we’re still dealing with, we’re still dealing with paper signatures, which again, there’s an ancient history involved with that. Communication has been has been improved in the sense of, yeah, if we’re separated geographically, we can still reasonably speak and see each other’s faces without too many problems. So I’m quite grateful for all the video conferencing systems out there

 

Fraser Jack 

and do elevens still not accept the DocuSign type online digital signatures? Well, it’s

 

Allister Sutherland 

just with trust deeds. There’s funny rules around to that can they can they be executed correctly and legally with DocuSign with an electronic signature, or does it still have to be a physical signature? So there’s trust law is quite ancient in. It’s quite young in Australia, but ancient in the UK. So I think we’re still hanging up on that a little bit. And so not entirely too sure how they’re going to resolve this. One of the other requirements is, for me as a Justice of the Peace is to certify these documents. So I’m not entirely too sure if I can certify a digital signature. Because again, what lens Do I have to go to the check the IP address and make sure that you know the date and time stamp is actually correct. And what’s the process involved in there? Because that’s what the bank wants. They want certified copies of trust deeds. So

 

Fraser Jack 

yeah, interesting, isn’t it and I guess some citing and certifying as one thing and then witnessing signatures as that is the next hard thing is witnessing the online signature. Anyway, that’s probably not for us to solve. Yeah. Fantastic. Thanks so much for coming on and sharing your experiences with dealing with business Real Property insights, self managed super funds and and all the all the little bits and pieces that go along with it because obviously, it’s it’s, it just seems to me like there is a jigsaw puzzle is a good way of putting it there’s just so many different pieces to the puzzle that have to be put in place at the right order. So congratulations on the work that you do. Allister if somebody wants to continue the conversation, what’s the best way for them to get hold of you?

 

Allister Sutherland 

Yeah, come and join me online at x y advisor. There’s certainly a lot of pieces put together and always happy to guide advisors through

 

Fraser Jack 

this. Wonderful, thank you so much for your time. No worries, just speaking with you.

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