Huge opportunity for licensed SMSF accountants
Gavin: The SMSF Association has reported that a new survey that it had undertaken had found that “accountants that take up a full or limited licence under the new licensing regime could be poised for strong revenue growth from the SMSF sector.”
Findings from the survey of 468 SMSF trustees and 532 APRA fund memebers:
- Younger SMSF trustees are increasingly relying on advisers for setting the fund’s investment strategy. In fact, almost two thirds of advisers claim to have seen a growing demand for SMSF services from 32 to 40 year old and more than one in five have experienced an increase in demand from 20 to 30 year olds, suggesting that 20 to 40 year olds could be the next big SMSF opportunity for advisers. The report said that, given ‘the breadth of advice and support servceis that younger trustees are likely to require, a ‘one-stop shop’ professional services relationship that covers all their needs is likely to work best for advisers in attracting these younger generations as SMSF clients”.
- Approximately 60% of trustees were classified as either “coach seekers” (needing advice to help them run their fund) or “outsourcers” (effectively referring management and decision-making to another party). The report stated that this newer breed of coach seekers and outsourcers present a bigger growth opportunity for financial advisers given their amenability to financial advice.
- Currently, just over a quarter of trustees relied on accountants for their investment advice.
- Disturbingly, the report recommends that financial planners further diversify the services they offer, and provide tax advice and compliance services in-house.
Gavin: Clearly, this report illustrates the possible opportunities for those accountants and tax practitioners who are prepared to take up the challenge and support their loyal clients by moving into the advice arena and helping them with their investment strategies and other SMSF decisions. The flip side is the threat that financial planners present if they do decide to provide tax advice and compliance services. Note that, for those practitioners who have relationships with financial planners (or are intending to set up a relationship), we will shortly be producing a free video (available on the home page of our website) to address the possible pitfalls that you should be aware of in relation to these sorts of arrangements. This is particularly so where clients assume that investments which are proposed by the financial planner have the tax practitioner’s tacit approval. That becomes even more dangerous where practitioners “sit in” on their client’s meeting with the financial planner. The question then is: If these investments “go south”, will the practitioner be covered under their PI policy? Without wanting to be too dramatic – if they’re not covered, it’s a good way to lose their house.
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