The largest and most affluent group of self-managed superannuation fund investors is still more likely to turn to accountants for help, with many trustees struggling to find specialist advisers to meet their precise needs, a survey has found.
The expiry of the accountants’ exemption last year has resulted in a smaller pool of accountants licensed to help members set up or wind up SMSFs, which means the two SMSF segments accountants primarily serve – self-directed investors and so-called ‘controllers’ – present an opportunity for advisers, outgoing Self-Managed Superannuation Fund Association (SMSFA) chief executive Andrea Slattery says.
“As we know, there haven’t been as many [accountants] becoming licensed as we expected…So that trusted adviser mix is being affected,” Slattery says. “Trustees are perhaps going to have to rethink where they are getting their advice from.”
About a third (34 per cent) of trustees set up their SMSF on the advice of their accountant, slightly more than the proportion who did so on the advice of their adviser (29 per cent), the CommBank/SMSFA SMSF survey found.
Those who would still turn to an accountant – primarily self-directed investors and controllers – are also the most affluent of the SMSF segments, with about a third in each group on household incomes above $150,000, says Slattery, who presented the findings in Sydney with CommBank head of SMSF customers Marcus Evans.
These investors are typically looking for a ‘one-stop’ model of advice, in contrast to other SMSF trustees, who may turn to accountants, brokers, bankers and multiple advisers for different needs.
With almost half of the surveyed trustees reporting an unmet advice need, the market is ripe for the entry of SMSF specialist advisers, Slattery says. However, self-directed investors and controllers are well-equipped to take advantage of cost-effective services and information and would turn to advisers primarily for more complicated matters.
The top unmet advice needs were pension strategy, retirement planning and estate planning, as 42 per cent of SMSFs are without a retirement plan.
“People are wanting to go to someone who can competently provide value-added services, not information services classified as advice, but genuine, complex tax and strategic advice services,” Slattery says.
Evans stresses the SMSF market is rapidly changing, especially in terms of gender make-up and age, which means there will be a need for the advice market to adapt, too.
“At the moment, if you want advice around the changes that are happening before the end of June, there’s just not enough capacity,” he says.
Among trustees who cede to advisers, the vast majority prefer independent financial advisers to bank-aligned ones.