The shift to having real-time SMSF information, such as up-to-the-minute retirement savings balances, will be driven by member demand and not legislative change, a senior executive in the sector has said.
Class growth general manager Jo Hurley noted developments such as the $3 million soft cap might be interpreted as the element that will accelerate the move to the provision of real-time SMSF information, but feels different factors will lead to this outcome in reality.
“I don’t think it’s going to be legislative change or things like it that drive the industry forward on this. I actually think it’s going to be demand from the new generations of SMSF members coming in,” Hurley told selfmanagedsuper.
“When you’ve got 44 per cent of members being under age 45 and millennials coming into the sector, it means there are an increased number of younger people establishing SMSFs who are doing so online [and] the industry is going to have to ensure it meets their expectations.”
She pointed out these individuals are very savvy about technology and will be expecting the most up-to date superannuation information to enable them to make better strategic decisions about their super.
Further, she suggested these newer entrants to the sector will be very willing to tell service providers the exact type of information they are expecting to be able to access.
According to Hurley, one obstacle that could hamper how fast the industry moves to having real-time member data is the practice of using traditional accounting processes.
“This is where I think SMSFs have lagged other parts of the industry. If I join a retail fund and I log in to my member account, I can just pull up my member balance at any time, whereas with an SMSF we still have this link to a traditional accounting process that really focuses on year end and what a person’s balance is at 30 June,” she said.
“There is an emphasis on ensuring the member balance itself has gone through the proper processes before the trustee can access it.
“So we have to make sure we move towards a process of more continuous accounting and educate trustees so they know this is what to look for.”
This topic will be discussed in more detail at SMSF Professionals Day 2023, commencing in Brisbane tomorrow. To secure your seat, please visit https://web.cvent.com/event/e52ab0af-a2d3-46ef-bd98-4c91b6509c7a/summary?RefId=Summary.