SMSF opportunity for financial planners


By Darin Tyson-Chan

Email Article Print Article

Related Articles: | |

The opportunity for financial planners to provide advice to self-managed superannuation fund (SMSF) clients is stronger than it has ever been, according to the latest industry research.

The “2014 Self Managed Super Fund Planner Report”, conducted by Investment Trends in conjunction with Vanguard, revealed 54 per cent of SMSF trustees categorised as either validators or delegators, the two groups most likely to seek advice to run their funds, were now willing to use a financial planner for their expertise.

“That’s at the highest level we have seen since we’ve been asking this question and since the GFC (global financial crisis) their propensity to use a financial adviser is at its highest point,” Investment Trends senior analyst Recep Peker said.

“This is a huge opportunity for financial planners in general.”

The changing attitude of SMSF trustees toward financial planners was reinforced by a further statistic showing 41 per cent of them used a financial planner in the past year, which was the same percentage as in 2013.

“The proportion using a financial planner fell by more than 20 per cent between 2009 and 2013, so there have been a lot fewer people saying they used a financial planner in the last year, but this has bottomed out now,” Peker said.

“Considering there are more SMSFs out there now, it means the number of SMSFs that have used a financial planner in the last year increased in numeric terms.”

On a less positive note, the study showed SMSF trustee satisfaction with and attitudes toward financial planners were directly correlated to the performance of the local All Ordinaries Index, meaning the current positive sentiment had probably been driven by the recent rallying of equity markets.

“This is actually tragic for financial planners because it just says that SMSF trustees, where they use a financial planner, they associate the value they get with performance,” Peker said.

“Whereas if you look at accountants [being used] for investment advice … what you’ll find is because their value proposition is broader, it’s not just about performance, it’s about more than that, you see that during the bad times satisfaction with them is uninterrupted and is steady.

“Financial planners in their value proposition, they’re still too performance orientated when servicing SMSFs.”

Vanguard head of adviser distribution Michael Lovett said the situation presented a challenge for advisers wanting to service the largest superannuation sector.

“The challenge for advisers is to demonstrate that the value of good financial advice is much broader than investment selection,” Lovett said.

“The analysis from SMSF investors found multiple elements that contribute to their satisfaction with advisers – outside of investment selection.

"These include technical expertise, tax expertise, quality of support staff and clarity of fees and charges.”

One of the standout issues that SMSF trustees said they would like more advice on was protecting their assets and income against market falls.

The survey was conducted in April, with 489 financial planners taking part.

« Back to Articles