More SMSFs use admin specialists

28-Aug-2014

By Wouter Klijn

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The number of self-managed super funds (SMSF) that are administered through a specialist SMSF administration service instead of through in-house accountancy services increased by 35,000 or 30 per cent to 150,000 in the 12 months to April 2014.

Those that used a specialist service mainly cited ease of use and administrative efficiency as key drivers in their decision, according to the OneVue-sponsored “Investment Trends 2014 SMSF Accountant Report”.

The report said 265,000 SMSFs still were administered by in-house accountants, but the pace in the take-up of administration solutions seemed to be changing.

“What is really interesting is that of the 27,000 new SMSFs that have been established in the last year, half of them use an admin solution,” Investment Trends senior analyst Recep Peker said at the launch of the report yesterday.

Of the 35,000 SMSFs that started using administration specialists last year, 10,000 came from accountants.

“So there has been a lot of use of admin services by new SMSFs, but also the accountants are using it more,” Peker said.

“Some of them are saying: ‘Look, the way I have been doing it is too clunky; I’ll start using it.’”

Investment Trends estimated there were about 38,000 accountants in public service in Australia, of which 33,000 were providing advice to SMSFs.

The research, which was based on a survey of 1300 accountants in March and April, found 19 per cent of accountants said they were likely to switch software providers, an increase from the 16 per cent who planned to do so in 2013.

Accountants who indicated they would switch providers said they would consider it because they believed better products had become available.

“In the accounting space, 19 per cent are using an admin solution, but … the trend is towards more accountants using an admin solution, as they become more aware of the benefits of using these services,” Peker said.

Of those accountants who did not view investment platforms as appropriate for their SMSF clients, the majority cited costs and fees as the main barrier to using them.

“They see it as doubling up on fees,” Peker said.

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