The scale of SMSF businesses will be a key catalyst as to whether their accountants and advisers choose to run annual or daily administration services or both.
Multiport technical service director Philip La Greca said technology was now moving towards a daily capability.
“It’s an interesting dynamic because we are in that flux where we’re starting to see the shift [to daily] and clients’ expectations are getting higher,” La Greca told selfmanagedsuper.
“From a business viewpoint, this is going to come down to your scalability because what’s key is how you actually operate these services, so scale is going to become one of the drivers to be able to run two platforms or technologies or one.
“If you’re an accounting firm and you’ve only got 50 or 60 clients, the question will be whether you can actually afford to have two lots of software or can you find a way to use one lot of software to offer the two different types of services, but with the bulk of SMSFs that are administered in the accounting space, that’s their dilemma and most software is not usually designed for both types of offerings.”
He said many smaller accounting firms tended to provide annual administration for their small client base, but could face bigger challenges.
“That’s the traditional approach, but one of the issues will be driven by whether or not that will still satisfy their clients going forward and at what point do their clients say they need more, so the problem becomes can they deliver more?” he said.
“Is it possible to ramp up their current technology and what other resources are needed, such as staff?
“Accounting practices must decide which administration to do and what it also means is if they can’t or don’t wish to deliver a daily service particularly, how do they then deal with clients who want to transition?”
When it came to pricing between daily and annual administration, there was an expected price difference between the two, he said.
“Pricing is generally going to be higher for a daily service than it will be for an annual service because you’re doing things more frequently, even if the volume is the same,” he said.
“But it’s not just about price; it’s the value question.”
He said there were two key misconceptions surrounding administration services.
“People are still trying to understand what you actually mean by admin and what does appointing an administrator mean – does it mean more than just doing the accounts at the end of the year?” he said.
“Also, reporting versus monitoring.”
