The SMSF sector is a shining example of how technology can be effectively used to boost efficiency and create better consumer outcomes, particularly in terms of cost savings, the head of an actuarial research firm has said.
According to Rice Warner executive director Michael Rice, the cost of administering an SMSF has been dramatically reduced in recent years as a result of technology-driven processes and this development deserves to be acknowledged.
“[SMSF administration] costs have halved in a very short period of time and in an industry which keeps getting criticised by government for being too expensive, this is really a flagship,” Rice said during a thought leadership session at the recent SMSF Association National Conference 2021.
“I think this is a good demonstration of where technology has worked.”
He pointed out the significant reduction in the cost of SMSF administration had been driven by two distinct factors, one being the price clients are charged to use administration platforms.
“These costs are probably half what they were five or six years ago,” he noted.
“Accounting fees have come down too as the accountants and auditors streamlined their service and accessed the accounts electronically.”
He used his own experience to illustrate how the administration of an SMSF is no longer a costly paper-based exercise.
“Certainly when I do my end-of-year material, I email all my statements to my accountant. He’s [also] got a view of the online trading platform [I use] already so he can keep the records up to date in the system he uses, which is one of the main three,” he said.
This experience makes SMSFs the gold standard of the superannuation industry, he said.
“That efficiency is far ahead of the APRA (Australian Prudential Regulation Authority) [regulated] funds. Partly it’s engagement, partly it’s competition, but it’s surprising.”
During the same roundtable, he predicted SMSFs would continue to be a very popular retirement savings vehicle for spousal couples.
