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SMSF specialists prepared for disruption

The SMSF Association has acknowledged the sector will be a target for various forms of business disruption but has expressed its confidence specialist practitioners operating in the space are prepared to deal with this challenge.

“SMSFs are in themselves a disrupter, whether it be in terms of fees, returns or administration,” SMSF Association chief executive Andrea Slattery said.

“It’s also a disruptor that is managed well, as highlighted by the Cooper Review in 2010, and is integral to the superannuation system as stated in the final report of the Financial System Inquiry.

“Both reports highlight that the SMSF sector has been able to adapt, and I see no reason why this shouldn’t remain the case.”

Slatery’s comments come in response to warnings from Bravura Solutions director product management and strategy Darren Stevens, made at the recent 2015 SMSF State Technical Conference, that generational change, hyper-personalisation and customer-centricity, the fintech revoloution, cyber security and privacy, and social, mobile analytics, cloud and the internet of things (SMACI) were all things about to have a real impact on the financial services industry and the SMSF sector was not immune to the situation.

To support his claims Stevens cited some of the initiatives already being implemented by industry and retail funds to counter the success of SMSFs.

“Industry and retail funds are establishing their versions of ‘SMSFs’ to halt the hemorrhaging of their larger accounts to the SMSF sector. Although there are mixed reports to date on their success, there is no doubt they are a challenge to the SMSF sector,” he said.

“In a similar way retail and industry funds are putting together alliances with financial planning firms, another threat to the SMSF sector.”

Further Stevens said threats from Robo-advice were also already evident.

“We are also seeing at least one social networking Robo-advice platform actively target the SMSF sector with a strong value proposition that assists self-directed investors to connect with their peers in a community of investors,” he explained.

While pointing out the current and potential challenges to the sector Stevens acknowledge associated opportunities for client base expansion and profitability would also surface for SMSF service providers.

“But to do so they must cater for generational and social change and proactively employ technology to deliver more personalised and holistic offerings,” he said.

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