The threat of automated processes eliminating accountants and smaller administrators from the SMSF administration space is not as big or immediate as is being made out, according to an industry executive.
SuperGuardian/Xpress Super chief executive Olivia Long argued neither the price of technology nor the data feeds currently available in the market were at a level that would enable automated SMSF administration services to completely dominate the sector.
“Technology still has a long way to go before it can put pressure on the pricing for the services provided by accountants and administrators on the basis of automation,” Long said.
“It’s just not that simple.”
To emphasise her point, she indicated the cost of using software to achieve automation had increased from $8 per fund to $250 per fund.
This price rise would mean other cost efficiencies would have to be found before providers of these automated SMSF administration services could consider passing any perceived cost savings on to clients.
In regard to data feeds, Long said an audit SuperGuardian/Xpress Super performed recently showed half were still unsupported.
“This essentially means we are still manually processing 50 per cent of transactions off the source documents,” she said.
“To achieve 100 per cent automation at this stage of the game would involve limiting the platforms and products trustees use in order to achieve 100 per cent data feeds.
“Given one of the appealing factors of SMSFs is the flexibility of products/platform/investment, I don’t think we’re going to achieve the perfect automated model anytime soon.
“So although other industry practitioners may be keen to apply the pricing pressure, they might be unpleasantly surprised about how far we have to go before this can be truly achieved.”