Data feeds are expected to have the most significant impact on the SMSF sector, with automation and volume the keys to creating efficiencies within an SMSF administration business, according to an industry executive.
SuperGuardian and Xpress Super executive director Olivia Long said while the benefits of SMSFs included flexibility, cost and transparency, they all had common features, including bank accounts, investments, trustees and members.
“So therefore we can create processing models that apply across our entire business,” Long told delegates at the SMSF Association National Conference 2018 in Sydney last week.
“Let’s think really big picture now. Imagine if by processing your top 200 investments at a business level, you are able to spend 80 per cent of your time on your annual work.”
She said while it might take a week to reconcile and process the top 200 investments, it could save administrators two hours per fund, which, when multiplied by 2000 funds, would equate to 4000 hours of manpower.
“Translate that into labour costs – it’s huge,” she said.
She said the true benefits of data feeds would manifest in terms of volume and richness of data: the more SMSFs firms administer, the more unique scenarios they would see, which would create opportunities to generate more solutions and models.
“Value now can be created for automation at a business level. So management of strategic change or projects can be done at a business level as opposed to from a fund-by-fund basis,” she noted.
In the past, administrators would produce checklists, which would grow every year depending on the evolution of the SMSF industry.
“Imagine now at a click of a mouse you can access a list of every single member that has the $1.6 million in pension mode. We can run a report on all your clients that have satisfied the pension minimums,” Long said.
SuperGuardian uses Class Super software, which in 2016 received ASAE 3402 assurance from the Auditing and Assurance Standards Board. ASAE 3402 is designed to provide SMSF auditors with reasonable assurance as to the accuracy of the data feeds Class receives.
It provides reasonable assurance the data Class receives is what will be processed in the system, not necessarily that the data provided to Class is always correct or that Class processes it correctly.
“By using ASAE 3402 assurance you no longer need to have a copy of every source document for every single transaction,” Long said.
“Now that’s epic in terms of the way we do year-end work. ASAE 3402 also provides us with a level of assurance that if data does go missing, that the software will identify [it] and you can go through the process of contacting the underlying provider and making sure that you obtain that data.”