A large majority of professional advisers expect their business’s SMSF revenue will grow by more than 10 per cent in the next three years, the latest industry research from CoreData has shown.
The “SMSF Professionals Report” revealed financial planners were slightly more bullish than accountants on SMSF revenue growth, with 76.7 per cent of respondents indicating they expected revenue growth of more than 10 per cent, compared to 72.8 per cent of accountants.
In addition, just over half of the planners that expected revenue growth anticipated growth of up to 25 per cent.
The report highlighted strategic advice as the greatest source of future SMSF revenue growth, as cited by 55.3 per cent of accountants and 40.4 per cent of advisers, while client referrals were viewed as the top channel for new SMSF clients in the next three years by both advisers and accountants, the report said.
Referrals from external accountants were indicated by 55 per cent of advisers as a future source of SMSF clients.
“This suggests a need for planners to start building strong referral partner relationships with those accounting businesses that are not interested in becoming licensed to provide SMSF advice,” CoreData head of financial services Kristen Turnbull said.
“Our research on this sector tells us that a substantial portion of the accountant market has no intention of obtaining a licence to provide SMSF services, which means that by 2016, they will need to find alternative arrangements to deal with existing and future clients with SMSF establishment or advice needs.
“Planners should be building these key relationships today as a foundation for future growth.”
The report revealed legislative change was currently the greatest challenge for advisers’ and accountants’ businesses in dealing with SMSFs.
Fixed annual fees and time-cost fees were the preferred methods for charging SMSF clients, however, there was a marked difference between planners and accountants, it said.
Planners preferred fixed annual fees, while accountants favoured time-cost (annual) fees.
Of those charging a fixed fee, 39.7 per cent of intermediaries servicing SMSFs used scales with add-on calculations, with this more common among accountants than planners.
The report found transition-to-retirement income stream strategies were the leading strategy provided by both planners, 83.4 per cent, and accountants, 79.6 per cent.
This was followed by limited recourse borrowing arrangements and re-contribution strategies.
The report represented findings from online research conducted between March and May, with 326 respondents participating.
