Arguments that the margins of large SMSF administration firms will take a significant hit as more trustees opt to do their own accounting or switch to traditional accountancy services have been dismissed as “nonsense” by one administrator.
“Every time I hear these arguments my blood boils,” Xpress Super and SuperGuardian chief executive Olivia Long said today.
“The simple fact of the matter is that there are several reasons why administrators will continue to flourish, even as the world becomes more automated.
“To my mind, three stand out: lack of time, the value people place on advice and their genuine need for the service they get.”
Long said based on her experience in the industry, many trustees lacked the time to handle their own administration.
“A large portion of an administrator’s client base are professionals who prefer to outsource this function rather than assume the burden of dealing with volumes of paperwork associated with share transactions and running an SMSF,” she explained.
“Automation may mean transactional data is available in software, but trustees still need to keep copies of all source documents to meet the requirements of an SMSF audit – a task many prefer to delegate.”
Trustees also valued advice, she added.
“The age-old saying ‘you don’t know what you don’t know’ applies in all industries, but especially with SMSFs,” she said.
“If trustees handled their own administration, they could end up missing out on taking advantage of some of the better strategies available to SMSFs, for example re-contributions and withdrawal, because they are simply unaware of all their options.
“Some in the industry might be surprised by people who value good old-fashioned service. Many like dealing with an SMSF specialist to leverage off their expertise to give them peace of mind about their superannuation.”
The demise of SMSF administrators was “one of those hoary old chestnuts that get dragged out every now and again” and the merits of the argument did not improve with time, she said.
“After all, bank branches have well and truly survived online banking and I am confident specialist financial advisers will survive the introduction of robo-advice,” she said.
“And why? The same reasons cited above as to why administrators will only not survive but flourish – time, quality advice and service.”
