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Hundreds of thousands of SMSF trustees would pay their accountant or adviser for additional services related to their fund, but new research finds prospective clients are increasingly looking to online products for basic services.
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115,000 SMSFs cheaper, online admin over accountants
06 June 2018
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The 2018 Vanguard and Investment Trends SMSF report found the proliferation of online service providers for establishment and administration of an SMSF has seen new clients favour cheaper options over engaging with an accountant.
“Overall, the number of SMSFs who do not use an accountant has doubled by nearly two and a half times in the last 10 years,” said Investment Trends research director Recep III Peker at an event in Sydney.
“Part of it is because of digital disruption — 115,000 SMSFs now say they use online admin firms to administer their SMSF hence they don't need to use an accountant and there are a number of challenges,” he said.
“Planners are doing as well as they were 10 years ago in the SMSF market but overall, their penetration to the broader SMSF market hasn't increased over the years,” he added.
Despite the shift, up to 276,000 SMSFs indicate that they have unmet advice needs which they would be willing to pay a professional adviser for, out from a total pool of 593,000.
Tax and SMSF strategies continued to drive the biggest demand for advice, with 136,000 saying that they had unmet advice in areas such as tax planning, SMSF pension strategies, and SMSF contribution strategies.
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However, of the unmet advice needs, inheritance and estate planning advice demand saw the biggest jump across all areas of advice in the last 12 months, with up to 77,000 indicating their appetite, up from 59,000 in 2017.
Satisfaction levels with accountants remain strong for SMSFs at 77 per cent, the research also found.
SMSF advice has been a struggle in recent years for accountants, with the clunky rollout of the limited licensing regime and now new education considerations posing as barriers to cost-effective advice for end clients.
Research indicates accountants are keen to continue providing SMSF advice to new and existing clients, but they are frustrated by the red tape and mounting compliance work necessary to stay above board.
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