Rapid technological change will drive efficiencies in the SMSF space, but the thinking around administration capabilities must be separated from investment opportunities.
SuperIQ chief executive Andrew Bloore said technology was helping to reduce superannuation costs, however, there was a point where it could not push them down any further.
“So what we need to do, especially for SMSFs, is recognise that administration is only one part of that,” Bloore said at an Australian Centre for Financial Studies briefing in Sydney last week.
“To get clients to have access to new and other innovative types of investments means that the SMSF sector needs to be able to interact with things like pooling groups of knowledgeable people together to invest in particular areas and doing it in a much simpler form.
“So this advent of technology driving the sector is about providing better choice, better flexibility and better access to investments, not controlled by the members themselves, but directed by the members themselves, which is fundamentally a different thing.”
While there was an opportunity to provide technological advancements for SMSFs, the rest of the superannuation sector should not be ignored, he said.
“The SMSF space is an area where everyone’s trying to get involved in and find methods to get to the clients and work with the clients,” he said.
“We’re also in that conundrum where it is the fastest-growing area of superannuation, but I do need to remind everyone that it makes up 4 per cent of superannuants.
“I’d hate to see the superannuation system built around providing for SMSFs because then you miss out on 96 per cent of the population, so we have to keep that in mind as we go through this process [of technological change].”
He said he expected the SMSF sector to continue to leapfrog in technology as it had the ability to adapt and change quickly, as it dealt with consumers on an individual level.
“But what we have to do is make sure that the technologies that we’re building are starting to integrate things in a way that makes it easier for people, not more difficult,” he said.
