Accountants fail on client targets

accountants SMSF clients

Research into the sector has shown accounting firms are falling well short of the number of SMSF clients they would ideally like to be servicing.

Industry research performed earlier this year has shown the client bases of accountants have consistently fallen well short of the ideal number of SMSFs they would like to have serviced over the past four years.

“While [accounting] firms are generally deriving greater revenue from SMSF clients, they are still a significant distance away from the ideal client book size,” Investment Trends associate director of research Kurt Mayell said during his presentation at the recent Chartered Accountants Australia and New Zealand SMSF Conference 2021.

The study indicated the average number of SMSF clients accounting firms are servicing in 2021 is 131. Further, it was revealed this business book segment had remained fairly stagnant since 2018, when it was recorded at 136 clients, and it hit a peak of 139 clients in 2019.

“Ideally accounting firms say that they would like to grow their overall exposure to SMSF administration significantly, with 180 SMSF clients being the number they would like to service,” Mayell observed.

“This [means] a 37 per cent increase in SMSF client numbers [would be needed to achieve this goal].”

However, he pointed out current client growth trends being experienced by individual accountants means the target number of clients may not be met in the immediate term.

“Breaking this down to the accountant level we can see that in 2020 there was no growth in the number of SMSF clients being serviced, with seven new clients coming on board and seven clients no longer being active … and the average accountant was looking after 49 SMSF clients,” he said.

“In 2021, the average portfolio of clients has increased by four per accountant, so we’ve added seven and we’ve removed three, bringing the [average] number [of SMSF clients] up to 53, representing a 7.5 per cent increase.

“This is still a far cry from the growth in client acquisitions required to hit the desired number of 180 accounts [per firm], which is going to be quite a challenge and may be several years away from actually materialising.”

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