Financial advisers need to communicate the value they can add in a more effective manner in order to service a larger number of SMSF clients, according to ING Direct business and savings manager Tim Hewson.
Referring to research conducted by CoreData earlier in the year, Hewson told delegates at the 2014 Association of Financial Advisers National Advisers Conference in Cairns last week: “Only one in three of those trustees surveyed actually feel as though their advice needs are actually being met and therein lies the problem.
“They don’t see the value that’s being added from the advice process and they’re not going to come back.
“Obviously word of mouth is one of the biggest new business generators for you and they’re obviously not going to be telling their friends about it.”
He said other contributing factors as to why SMSF trustees had a poor perception of financial planners were the fact they did not trust them and they were unhappy with the fees being charged for the delivery of advice.
On a slightly more positive note, he pointed out SMSF trustees were not influenced by practice ownership and placed a lot of importance on whether an adviser was a specialist.
“Trustees themselves don’t necessarily mind whether or not you’re aligned or independent, but they do want advice from a specialist,” he said.
“And of course the more sophisticated the SMSF trustee, the more sophisticated the advice they’re expecting from you.”
Despite those challenges, he said the SMSF sector still presented a great opportunity for financial planners.
“Only 27 per cent of adviser revenue derived from SMSFs comes from financial advice,” he said.
“The rest of it is coming from ancillary services such as accounting and administration, so there is obviously an opportunity there.
“[In addition] the majority of advisers forecast that revenue from SMSFs is going to grow by about 10 per cent over the course of the next couple of years, so it’s a great opportunity.”
