The latest Investment Trends industry research conducted on behalf of Vanguard Australia has shown SMSF trustees feel they have an unmet need around investment advice.
The “2016 Self Managed Super Funds Reports” revealed while retirement strategies remained the number one area SMSF members felt they would like to receive advice about but currently were not, the biggest shift in sentiment regarding unmet advice needs had to do with a variety of issues involving investments.
“There are a lot more trustees out there who are now saying I have unmet advice needs relating to investment advice,” Investment Trends head of wealth management research Recep Peker said.
“There are a lot more saying investment strategy or portfolio review [is an unmet advice area], a lot more saying identifying undervalued investments [is an unmet advice area], and a lot more talking about ETFs (exchange-traded funds) as an unmet advice area.”
Peker pointed out that finding was extremely significant for financial planners.
“This is really, really important for financial planners because it’s just saying that there are more potential clients out there that they could be capturing with their investment advice recommendations,” he noted.
Despite this potential opportunity for financial planners to grow their businesses, the research found they still faced a major challenge in attracting advice inquiries in comparison to other practitioners.
“So up to 255,000 trustees have unmet advice needs, but only about one-third are thinking about going to a financial planner,” Peker said.
“What [it means] is that it’s going to be a lot more important for financial planners to work closely with accountants to really capture the demand.”
While 52 per cent of SMSF trustees nominated the accountant as the first source they turned to for their advice needs, the new licensing rules governing the provision of advice had made the situation problematic for their practices as well, he noted.
“That’s been a really big problem for accountants. If you ask SMSF trustees why they stopped using their accountant, one of the most common things they say is they couldn’t provide advice in areas I needed advice on,” he said.
“So accountants and planners alike will benefit from working together because SMSF trustees trust their accountants the most, they already have a relationship there and they’ve been using them for a long time, but when they come for investment advice the accountant will have to refer them onto someone else.”
