The onerous and time-consuming nature of implementing key SMSF strategies and tasks means advisers need to look at maximising the use of automation to alleviate this burden and ensure efficient execution of these elements, according to a sector expert.
“I understand why advisers don’t implement anti-detriment strategies or LRBAs (limited recourse borrowing arrangements) because there are so many associated tasks,” NowInfinity principal Grant Abbott told delegates at the selfmanagedsuper NowInfinity SMSF Strategies Day in Sydney on Friday.
“Why is it not possible to work out all those tasks and automate them, because essentially they can be automated?
“The way the cloud is working now means things can be automated and you can do chains and chains of things that are going to be completely automated.”
Abbott highlighted the process of getting a tax file number (TFN) for an SMSF as an inefficiency linked to the set-up of a fund and the implementation of an LRBA, and said it could have an adverse effect on an advisory business.
“It might take you 25 to 28 days, which then puts you in a holding pattern with the banks because the banks won’t let you set up an account until you’ve got an ABN (Australian business number) or TFN,” he said.
“It’s frustrating because advisers tell their clients about these brilliant strategies, the clients get enthused, but then it all starts to peter out because you’ve got different signing points and you’ve got different tasks.”
The process could result in having to leave the task for a while and then picking it back up at a later stage, he said.
“It means eventually you have to go right back to the start again to refresh your mind and unfortunately you don’t make any money out of that,” he said.