A strategic specialist has predicted technology currently available in the market could end up having a significant impact on SMSF administration processes, particularly when funds are being wound up.
Speaking during a recent BT SMSF Roundtable event facilitated by selfmanagedsuper, BT Financial Group SMSF strategy national manager Neil Sparks identified blockchain technology as an innovation that will add value to the process of fund wind-ups, especially in situations where assets are transferred to another retirement savings structure instead of being cashed out to facilitate this type of transaction.
“Distributed ledger technology I think could have benefits for self-managed super funds, particularly when it comes to moving assets,” Sparks said.
“It [will allow us to move] away from [traditional forms] of paperwork, such as using an Australian standard transfer form [to acknowledge an asset was] sold by the SMSF and bought by BT, for example, because the transaction on the blockchain would simply recognise that [the asset] has gone from [person A’s] SMSF to BT, [with BT recognised] as the legal owner with [person A] as the beneficial owner.
“I think that kind of blockchain technology could have significant future benefits for financial services administration most definitely.”
According to Sparks, the adoption of this technology is already underway and will likely gain in momentum.
“A lot of managed funds are moving to blockchain technology for settlements. The ASX (Australian Securities Exchange) [similarly] had a program of work to replace CHESS (Clearing House Electronic Subregister System) with a blockchain system,” he said.
Similarly, he identified SuperStream rollovers as another technology-driven process that will make a substantial change to SMSF wind-ups where a trustee sells the assets of the fund and transfers the cash generated by those transactions to another retirement savings vehicle in the form of a lump sum.
“SuperStream rollovers for SMSFs will make a big difference. [It means trustees will not have to hold] an amount via a cheque and then send the cheque to the next super fund, which sometimes sits in an accountant’s trust account,” he said.
“So technology has [already] made some advancements in that space which have been beneficial.”
