The latest industry research into the SMSF industry has shown practitioners specialising in providing SMSF advice are generating significantly more revenue from the sector than those financial planners still considered generalists.
The “Vanguard/Investment Trends April 2014 Self Managed Super Fund Report” revealed financial planners who specialised in giving SMSF advice, that is, servicing more than 20 self-managed funds, generated on average 48 per cent of their practice revenue from SMSF clients.
In comparison, SMSF client revenue made up only 15 per cent of the practice revenue of financial planners considered generalists, a proportion that fell from 19 per cent in the previous year.
“You’ll find the SMSF planner space is polarising. The winners are doing better and the losers are doing worse,” Investment Trends senior analyst Recep Peker said.
“The key differences between these two groups is the specialists have really worked out their value proposition.
“So if you ask them why are SMSFs easy for you, they say that it’s because my SMSF clients like to have control and with that control they can do x, y and z.
“Whereas if you look at generalists and ask them why SMSFs are hard for you, they say SMSFs want too much control.”
Along with having a stronger value proposition for those clients, Peker said the specialists also worked more closely with accountants and used a much wider range of investments.
“And because they’re able to deliver more value to their clients, they are able to charge more for their advice,” he said.
The study also showed the number of specialist SMSF advisers was growing.
“While the proportion of planners who provide advice on SMSFs hasn’t changed so much in the past eight years, the mix of planners who service SMSFs has changed,” Peker said.
“What’s really increased in the last few years is that in the mix of SMSF planners there are more specialists.”
The report revealed the proportion of SMSF specialists had risen from 23 per cent in May 2012 to 27 per cent in April 2014. Over the same period, the number of SMSF generalist planners fell from 50 per cent to 46 per cent.
The results were based on a detailed survey of 489 financial planners during March and April.
