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Key robo opportunities for accountants

There are significant prospects for SMSF accountants that choose to embrace robo-advice for their clients as well as financial technology, or fintech, more broadly.

“Despite the fact that a lot of the largest organisations in the world from traditional banking are not being supportive of robo-advice and a lot of them actively against it, it’s actually the fastest growing area of wealth management globally,” Stockspot founder Chris Brycki told the Chartered Accountants Australia and New Zealand National SMSF Conference in Sydney yesterday.

“By 2020, this industry that didn’t exist back in 2010 is expected to manage about 5 per cent of the whole world’s assets, which is quite phenomenal, especially given that it’s an industry that doesn’t have the support of incumbent businesses.

“So I think there are quite a few opportunities for SMSF trustees and accountants.”

Brycki referred to “2017 Investment Trends Self-Managed Super Fund Report” which identified that one of the biggest gaps for SMSFs was receiving advice around investments.

“This is understandable as a lot of SMSFs have decided to manage their own finances because they don’t want advice, however many do want advice and need advice but they’re just not able to access it because of the size of their investments,” he explained.

“So one of the great advantages of low cost, automated investment services is that it’s going to give SMSFs, and especially smaller SMSFs, access to professional quality investment advice and help them build much smarter strategies that are much better diversified, that have much better alignment to their long term goals and have much lower costs so they’re able to achieve better outcomes.

“Robo-advice is going to give SMSFs the flexibility that they want but actually help them improve outcomes on the other end.”

The report also found a key trustee pain point was the time wasted on managing paperwork and statements, and administration.

“There’s already a lot of change going on in the industry from administration software providers to help improve that process,” Brycki said.

“And robo-advice adds another layer on that, so for example Stockspot has integrated with Class so that we can generate a set of accounts for an SMSF and rather than taking hours, it can be done in two minutes, and all of the tax calculations are processed automatically as we have built algorithms to do that.

“That means accountants have more time to spend on higher value activities and areas where they can spend more time on SMSFs.”

Brycki highlighted there were additional benefits for accountants using robo-advice and fintech more broadly.

“The most exciting part about fintech is that because your businesses aren’t battling against legacy businesses and you don’t have those sorts of conflicts, you can embrace a lot of these new products whether it’s in lending or advice or investments, and use them as tools to build better relationships with clients,” he said.

“You can give them access to things they may not know about and therefore strengthen your value proposition with them while not being worried about how it cannibalises other parts of your business.

“My vision is that over the next 10 years, accountants’ power within the lives of their clients will start to increase because they can become curators of a lot of these new technologies and use them to help their clients, and the power will shift from traditional banks and traditional advisers back to accountants.”

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