Industry insights compiled over the past few years have revealed an expectation gap exists in the SMSF administration space as to the efficiency savings the adoption of technology should be delivering to service providers.
Speaking during the Thought Leadership Breakfast at last week’s SMSF Association National Conference 2022 in Adelaide, Investment Trends head of research Irene Guiamatsia told delegates fund administration efficiency gains had not been evident over the past couple of years and were well short of the desired outcome.
“We asked specifically SMSF administrators [how much time] they spend per client per year in doing various administrative tasks and the total on average is 6.9 hours,” Guiamatsia said.
“It may seem small, but if you multiply that by some 60 to 200 clients, that becomes substantial.”
Further, she noted the average time administrators spent on each client of 6.9 hours was exactly the same in 2021 as it was in 2019.
“Some people would actually take that as a win because of all the disruption that we’ve seen [over this period of time]. However, when we asked them how much time they think they should be able to save with further enhancement to the automation [being used], that number has actually increased,” she said.
“[It’s gone from] three hours to 3.3 hours that [administrators] think they should be saving.
“So that does reflect the fact that people are a lot more demanding when it comes to what they expect technology to deliver for them.”
According to Guiamatsia, areas in which practitioners are looking to enjoy efficiency improvements from the use of technology span several different activities.
“These include front-office engagement [which is the area where expected savings are the lowest]. When [we examine] the repetitive back-office tasks, then you have a substantial [expected] amount of savings, [and] then again when [you’re looking at] specialist tasks like filing tax returns and so on, then you have a substantial [expected] amount of savings that can be derived from [technology],” she said.
