SMSF business owners must ensure they refined their ideal client, as a single value proposition for SMSF services and advice was no longer viable, according to an industry expert.
“Having SMSFs as a strategy is not a strategy because there is so much within the sector that you need to start clearly defining,” The SMSF Academy managing director Aaron Dunn said during a special interest pre-session on successful SMSF practitioners at the SMSF Association National Conference in Melbourne recently.
“You’ve only got to look at statistics today that show four in every 10 [SMSF trustees] are under the age of 45 and we also have for the first time the median age of the SMSF member, which is under 50.
“If you think about that in the context of an ageing population, the dynamic is clearly changing and what that means in both the delivery of services to your clients and how you deal with the different age groups – because we do have a large amount of clients in post-retirement now – is that their requirements are going to be substantially different to someone our age, who is now getting into the journey of SMSFs.”
Therefore those separate client categories, in terms of value proposition, were becoming more and more important, Dunn said.
“You would struggle to have a single offering that would be able to deal with both of those [SMSF client types],” he said.
“So you’ve made a choice in your business, I would presume, in how you would target maybe a post-retirement trustee versus a younger trustee.”
Quantum Financial Services principal and head of strategy Tim McKay echoed Dunn’s sentiment and said refining the SMSF value proposition would become problematic for businesses the longer they left it.
“Don’t try and get to the whole pool – work out which of those clients suits your particular parameters,” McKay said.
“We weren’t able to do that on day one; it was only by making mistakes over a couple of years that we realised this is the perfect client.
“You need to identify them by looking at the clients that you’ve got and figure out what is it about their characteristics that you want, so when you bring on potential new clients who don’t have those characteristics, [you know they don’t] fit that mould. Otherwise, you’re not building a scalable business.”
