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As accountants increasingly lose out to online providers in the provision of superannuation services, one research house has pointed to significant advice gaps that accountants are in a prime position to fill.
Accountants missing ‘huge’ revenue opportunity
23 September 2016
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7 minute read
SMSF set-up and administration has traditionally been the domain of accountants and, broadly speaking, they continue to play a significant role in this space.
However, the number of SMSF trustees choosing to manage their SMSFs without a direct relationship with an accountant continues to grow.
According to Investment Trends' head of research, wealth management, Recep III Peker, 57 per cent of the trustees of SMSFs set up before 2010 said their accountant established the SMSF for them. That number has now decreased to 44 per cent.
A key competitor for accountants in this market is online service providers, with the price point being a crucial attraction for trustees.
On average, trustees who use an accountant to manage their SMSF spend $3,100 per year. Those who use an online SMSF administration firm spend $1,700 per year.
However, there are significant opportunities for accountants to reclaim some lost ground, with trustees continuing to have unmet advice needs.
Trustees are spending more time each month running their SMSFs, especially in relation to ongoing monitoring and reporting, keeping up to date with regulations and necessary paperwork.
“So if an SMSF is in pension phase, it tends to be fine, but those who aren’t in pension phase, a lot of them are saying that these [tasks] are the hardest aspects of running an SMSF. One way accountants can help is make their admin and paperwork easy, and reduce the time trustees have to spend on this,” Mr Peker said.
“Also really important for accountants [is] to use the right technology solutions to give clients easy access to their data, which has been [the] particular appeal of these online solutions, but not something trustees are always getting from accountant,” he said.
“If accountants can do this piece well, and show themselves to be still very relevant in the admin space, the opportunity is huge. Nearly half of SMSFs have unmet admin needs that they would pay for. There’s a really large opportunity for accountants. It’s just that they have to show what their value is relative to these other solutions that are competing with them.”
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- Good one thumps up0
- Not too long ago, everyone thought that accountants can be replaced by software, just like the travel agency. Isn’t accounting easy? It’s math after all and rules! If a software company can develop an algorithm for all the “rules” than it should be easy. After all doesn’t Turbo Tax do this?
However this couldn’t farther them the truth!
Accountants’ value as a value added service today has only increased.
Why?
With the complexity of financial tax laws (Obama Care for example) and intertwined finances an accountant is not just a number cruncher but a financial advisor which can never be replaced by software.
How to do accountants come of age with technology?
Software is great at doing one particular thing- repeating the same task over and over again, similar to a car that was built to drive hundreds of thousands of miles to do one thing “Drive”.
Look internally at your operations and ask yourself what is a necessity but is:
a) Manual
b) Repetitive
c) Boring with almost no brain work
d) Time Consuming
For instance, chasing clients for their financial information on a continuous monthly basis is a great example. It “has” to be done, yet it meets all the criterion listed above. Besides, today clients don’t have much time to dedicate to answering what Check 534 was 6 months ago.
As such, find a simple to use software solution that automates these tasks as much as possible.
No one is asking bookkeepers / accountants to make seismic transformations of their office operations from paper to paperless, or to go from a physical office to virtual, rather take baby steps and cut out the unnecessary waste by automating the jobs/tasks that you can.0
