Arguments that the margins of large SMSF administration firms “may take a significant hit” as more trustees do their own accounting, or opt for traditional accountancy services, have been dismissed as “nonsense” by Olivia Long, chief executive officer of the SMSF administrators Xpress Super and SuperGuardian.
“Every time I hear these arguments my blood boils. The simple fact of the matter is that there are several reasons why administrators will continue to flourish, even as the world becomes more automated.
“To my mind three stand out – lack of time, the value people place on advice and their genuine need for the service they get.
“From my long experience in this industry, many SMSF trustees lack the time to handle their own administration.
“A large portion of an administrator’s client base are professionals who prefer to outsource this function rather than assume the burden of dealing with volumes of paperwork associated with share transactions and running an SMSF.
“Automation may mean transactional data is available in software. But trustees still need to keep copies of all source documents to meet the requirements of an SMSF audit – a task many prefer to delegate.
“People value advice. The age-old saying ‘you don’t know what you don’t know’ applies in all industries, but especially with SMSFs.
“If trustees handled their own administration, they could end up missing out on taking advantage of some of the better strategies available to SMSFs (e.g. re-contributions and withdrawal) because they are simply unaware of all their options.
“Some in the industry might be surprised, but people value good old-fashioned service. Many like dealing with an SMSF specialist to leverage off their expertise to give them peace of mind about their superannuation.
“After all, for many superannuation forms their second largest asset after the family home, and they have no intention of taking the risk of being non-compliant.”
Long says the demise of the SMSF administrator is one of those hoary old chestnuts that gets dragged out every now and again – and the merits of the argument don’t improve with time.
“After all, bank branches have well and truly survived online banking, and I am confident specialist financial advisers will survive the introduction of robo advice. And why? The same reasons cited above as to why administrators will not only survive but flourish – time, quality advice and service.”
Source: Xpress Super, SuperGuardian
