Each year in July/August I start doing tax returns and the momentum grows through to October at which time the workload reduces as we head into christmas and the new year. It then starts up again in February and workload climbs into June. Then it starts all over again.
Well thats what used to happen. I am noticing a trend occuring.
To understand the trend, I will quote a few statistics. In my practice about 25% of the tax returns submitted relate to business. i.e. Companies, Sole Traders, Trading trusts. 75% of the returns are for individuals. This is a good ratio for practice profitability because the business clients require a lot more professional assistance than tax return lodgement. ATO compliance with PAYG, STP, Activity Statements and correspondence is important to business continuity. And then there is ASIC compliance for Companies. This all adds up to a lot more work. Businesses comprise about 40% of my total revenue.
But there is a trend happening that kind of reflects the complexities of modern living and that is that individuals are seeking out professional advice more than they have done in the past. I am not complaining because I enjoy helping people get more out of their lives. Thats why I wrote Lifes Equation - Decide For A Better Outcome (Cox 2021). You see all of us are finding new challenges to deal with, in pursuit of financial happiness.
I subscribe to the ‘barefoot investor’, Scott Papes column (get it for free, its a good read). Scott hosts a ‘dear scott’ newsletter service that answers emails about wealth management. Some of the emails are horrifying, as subscribers recount their losses from scamming, poor advice, and just hard luck. There are not many good fortune stories and those that are, have occurred because the subscriber received good advice, then acted on it. Scott hands out good advice for free, and his books continue on the top seller list in Australia.
Now back to the trend.
Individuals are seeking more professional advice than ever. This advice includes, Will updates, tax savings, asset purchases, childrens education, superannuation considerations, wealth management structures, business structures, Family law issues, and a raft of queries that come under the heading ‘what should I do now’.
One of the scary realities that we face today is scamming. It comes under this heading and, it has become more devious as it promulgates our daily lives in clandescent ways that impact our bank balance before it is too late. The solution is not with regulation, it lies with us. We should check our actions before they get swept up in the speed of life. I mean a sanity check when we make decisions. I will give you an example.
There was a couple who were buying a home and they had saved around $200,000 as a deposit. They had an email from their solicitor asking that they make payment to a nominated account. The email was supported by the relevant property sale documentation and they had every reason to believe in its validity. They made the payment and celebrated the purchase of their new home.
They made a big mistake in not calling the solicitor to verify the validity of the transaction. If they had they would have been informed that the email was in fact a scam, and it had not come from the solicitor. They lost their $200,000.
Another common mistake is to click on an embedded URL in an email received from a creditable vendor. You dont know what’s under the URL so right click on it and a trail will be revealed. Many people have been caught by hastily clicking and inadvertedly dealing with a different source. Slow down people and do a sanity check before you click away your savings.
Financial damage from scams can generally be avoided if you st
ay vigilent and wary.
As an accountant I am a counseler on many topics, some of which are tax related but an ever increasing trend is advice on life related matters that affect financial stability.
Before you get back on your bike, think about seeking professional advice that goes way beyond your tax return.
All the best
Peter