SMSF Association Media Release
A key challenge for financial advisers when servicing their self-managed super fund (SMSF) clients related to difficulties encountered with the ATO, Dr Irene Guiamatsia, Head of Research at the research and analytics house Investment Trends, told the SMSF Association Technical Summit in Sydney today.
Dr Guiamatsia, who examined the evolving landscape of SMSF establishments, intentions and wind-ups from the perspectives of trustees, advisers and accountants in her session, said that ongoing changes to ATO processes were presenting challenges to trustees, and the professional advisers supporting them.
“Compliance with the ATO’s event-based reporting is emerging as a new challenge, cited as the No1 reason for windups and mentioned by a growing chorus of advisers and accountants as well.”
Dr Guiamatsia also proffered that the average adviser now manages more client money compared with a year ago, but that number must be seen in the context of a smaller number of SMSF specialists. [Investment Trends defines an SMSF specialist as an adviser with more than 20 SMSF clients and an SMSF generalist with one to 20 SMSF clients.]
“Our Investment Trends 2024 SMSF Adviser and Accountant Report showed a significant proportion of SMSF specialist advisers reported an increase in year-over-year revenue from SMSF clients.
“They have also raised their upfront fees slightly and have broadened their client mix through accelerated technological transformation. In addition, advising on property and longevity protection have become a bigger part of the SMSF advisory package.”
Regarding trustees, Dr Guiamatsia said they were increasingly influenced by internet research and word of mouth in the decision to set up their SMSF, especially seeking access to specific asset classes such as property.
“The 2024 Vanguard/Investment Trends SMSF Investor Report highlighted the use of investment advisers among SMSFs has declined to a record low, with pension strategies and estate planning being the top two areas where trustee advice needs are unmet.”
She added that administration and compliance however formed the largest cluster of difficulties faced by SMSFs, ahead of investment selection.
Dr Guiamatsia said that more than half of SMSF accountants had reported increased year-on-year revenue, with ‘best practice’ accountants consistently raising their fees over the past three years.
“Technological adoption and proactive engagement with the ATO are top priorities for SMSF accountants, with those classified as being ‘best practice’ spending more time on administration tasks, potentially indicating a sharper focus on higher quality output.”
On the issue of cyber risk, she said nearly half of the ‘best-practice’ accountants planned to reduce the use of emails for sensitive information.