Research conducted into the views and operations of accountants has shown their adoption of automated systems in SMSF administration has increased significantly in the past 12 months.
“Over the last year the number of firms that have got their entire [SMSF] client base administered using software has increased to an all-time high and now sits at 70 per cent,” Investment Trends associate director of research Kurt Mayell told delegates who attended the recent Chartered Accountants Australia and New Zealand SMSF Conference 2021.
“Those [firms that] don’t have any clients administered through accounting software has almost halved in the last 12 months as well, falling from 12 per cent to 7 per cent.”
The results of the study indicate this trend is likely to continue in the coming years, he added.
“By the time we reach 2024, 74 per cent of accounting firms believe that 100 per cent of their clients will be administered through software and the number of firms that don’t use any software to administer [SMSF] client accounts will be down to 5 per cent,” he said.
According to Mayell, the acceleration in the adoption of SMSF administration software among accountants is in response to trustee preferences toward service provision for their funds.
“Around 15 per cent of SMSF trustees currently use online administrative firms to handle their requirements,” he revealed.
“The five main reasons that we found [as to why] trustees are using an online SMSF admin firm is because of their low fees, the fact that their annual tax reporting and audits are all taken care of, because all documentation is available online, because of their ease of use and because of the online functionality made available.”
While the move for many accountants to the use of administrative software has been in response to consumer demand, the survey showed these practitioners are already acknowledging the benefits of this change in their operations.
“Using software as part of the administrative process for SMSFs has had many positive impacts for accountants and the firms that they work for. Accountants strongly agree that the software used in their practice makes them more efficient, helps them [enable] clients to meet their financial goals, is a good way to demonstrate value to clients and is strategically important to the success of their business,” Mayell said.
Further to this point, respondents indicated they would be reluctant to use an inferior or more basic software product if it was free.