SMSF financial planners who had a relationship with an accountant were more successful with clients and were likely to be specialists, according to a new industry study.
The “2015 April Vanguard/Investment Trends Self-Managed Super Fund Report” revealed two distinct groups of planners were servicing the market, SMSF specialists and SMSF generalists.
“When you dive into the numbers, not all financial planners are the same,” Investment Trends head of wealth management research Recep Peker said during a media briefing last week.
“With specialists, SMSFs make up 50 per cent of their planning practice revenue and they have different ways of servicing these clients, but they’re very different to generalists, who are struggling when it comes to servicing SMSFs.
“What’s really interesting is the key difference between the two groups of SMSF planners was those who win with SMSFs work a lot closer with accountants.”
The report found 22 per cent of generalists named dealing with clients’ accountants as their biggest challenge in servicing the SMSF market, compared to only 11 per cent of specialists.
This had the biggest net difference, 10 per cent, out of the other challenges identified.
“With generalists, they’re a lot more likely to say the biggest challenge they faced was dealing with their clients’ accountants, so they may still see accountants as the enemy, find it hard to work with them and maybe they aren’t so happy with what the accountants are doing,” Peker said.
“Whereas looking at the other camp, those who are succeeding with SMSFs worked really well with accountants.
“However, the biggest challenge for specialists was having the right systems to allow them to collaborate with their accounting partners.
“So it’s very different worlds – one group works really well with accountants and the other doesn’t and struggles with SMSFs, but working with accountants essentially opens the door to a lot more opportunities.”
The report said financial planners’ collective revenue from SMSF clients had remained steady at 21 per cent of total practice revenue, which was well short of the 30 per cent they were expecting three years ago.
“From the financial planner perspective, those who have an SMSF relationship, the typical SMSF planner gets 21 per cent of their practice revenue from their SMSF clients,” Peker said.
“In 2012, the average planner [expected] that by 2015, their business revenue from SMSFs will be 30 per cent of our practice revenue, so they were expecting a lot of growth, but it has remained static at 21 per cent.
“Planners really want to grow their SMSF business, but there are challenges that hold them back and the key things that came through were in the administration being hard, compliance involved, educating clients about responsibilities as trustees, et cetera.”
The report was based on a survey of almost 4000 SMSF investors and 660 financial advisers.
Of the trustees advised in the survey, 36 per cent used a financial planner, while 81 per cent stated they used some form of adviser.
