It’s a tricky question that the industry had hoped would be answered by the QAR. Many accountants were keen to see some relief in being able to advise SMSF clients on more than just tax without the need for an AFSL. However, that did not eventuate.
QAR offered no relief
The recently released Quality of Advice Review (QAR) final report admitted there was ‘little merit’ in holding a limited AFSL but opted against recommending changes to the advice accountants can give.
Ms Levy said, “Accountants have expertise in tax matters. Tax is a critically important aspect of superannuation, but the matters that are relevant to a decision to establish and maintain an SMSF and to rollover superannuation into an SMSF are much broader than those relating to tax.”
So, how can accountants support their clients’ financial needs going forward?
Establishing an in-house advisory service has proven unviable for many accountants, and those burned by the licensing for SMSF purposes are wary.
Yet the need persists.
SMSF market and unmet advice needs are growing
The SMSF market is growing annually as Australians are more interested in controlling their investments. The Australian Tax Office’s (ATO) latest self-managed super fund statistical report from June 2023 shows the net number of established SMSFs was 24,591. The average assets per SMSF is $1,450,642. The total estimated assets of SMSFs are $889.5 billion.
According to a recent Vanguard report1, 40% of those setting up an SMSF expect to achieve better returns. And despite the bulk of trustees expressing the need for advice, only 27% of trustees indicated they had sought advice in the past year.
The number of SMSFs without a financial adviser and with unmet advice needs rose from 235,000 in 2022 to 270,000 in 20223. That’s a significant amount of wealth that is going unadvised.
Worse still, 31% of trustees under the age of 44 self-assessed their financial literacy as poor to average.
Strong referral relationships with external financial advisers can only go so far. The industry is dwindling, with less than 16,000 financial advisers. Many of whom are not specialised in SMSFs.
In addition, even if accountants have a financial adviser they can refer SMSF clients to, affordability becomes an issue, with single-issue Statements of Advice averaging $2000.2
Digital advice becoming mainstream advice
George Haramis, CEO and co-founder of Fintech moneyGPS, believes that despite the objectives of the QAR to streamline processes and attempts to make advice more affordable and accessible, advice prices will not come down. A view, he says, shared by the advisers and accountants he speaks to daily.
The QAR also recognised that digital advice can form part of the solution to this industry-wide problem. Haramis says their research from developing subscription-based digital advice platforms moneyGPS and accountantsGPS, shows digital advice is becoming viewed as mainstream advice.
“When I talk about digital advice, I mean technology that allows a client to complete a digital fact find in under 15 minutes and a powerful algorithm providing them with a list of personal advice topics that are in their best interest to access. These Super and Non-Super SoAs range from $90-180 and are delivered under the moneyGPS AFSL. Affordable, compliant and accessible to most Australians.””
Accountants can subscribe to a white-labelled version of moneyGPS to support all their clients, SMSF, SME & Individual without needing to employ more people or worry about maintaining an AFSL.
The SMSF market continues to grow, and accountants are struggling to keep up with demand for Super, Non-Super and SMSF advice. The QAR hasn’t delivered a solution. But technology has. Accountants who leverage technology and use digital advice tools can safely scale their business and grow with the market, supporting more clients without impact to operations, cost and risk.
To learn more about accountantsGPS, visit their website here.
 The Vanguard/Investment Trends SMSF Report
 Investment Trends 2022 Financial Advice Report.
accountantsGPS and moneyGPS are run by Fiduciary Financial Services (AFSL: 247344) ABN: 76 003 624 888
It is important to note that while the report provides detailed feedback on the health of the fund, the information contained is factual in nature and nothing should be read to constitute financial advice, nor should the information be acted upon without professional advice.