New research showing the growing opportunity for planners who can adapt to the needs of the SMSF market


The Vanguard/Investment Trends Self Managed Super Fund Planner Report – which examines how Australian financial planners interact with SMSF investors – was released last week.

The survey shows that SMSFs are an irrefutable growth opportunity for advisers – particularly those that specialise in this area. While SMSFs account for 19 per cent of planners’ funds under advice (FUA), down from 23 per cent in 2011, those who are classified as SMSF specialists increased the proportion of their FUA from 46 per cent to 50 per cent of their total FUA.

Furthermore, the report shows that overall planners still expect their SMSF revenues to increase as a percentage of their practice revenue in 3 years – from the current 21% to 30%.

The benefit to planners in terms of revenue is clear. While planners currently derive less of their total revenue from SMSFs (21 per cent, down from 24 per cent in 2011), those practices deemed more profitable are three times more likely to have most recently seen an SMSF client than less profitable practices.

Commenting on the report, Michael Lovett, Head of Intermediary Distribution for Vanguard said:  “In what is a challenging environment for advisers, with 468,000 SMSFs in existence at the end of March 2012, there are clear opportunities that exist for planners who choose to adapt to the specific needs of this sector.”

“We know from an investor report into this sector that SMSF trustees feel they have unmet advice needs in areas such as protecting assets against market falls, investment strategy and income generation,” said Mr Lovett.

“Important to note also is the fact that this recent investor report showed that SMSF clients are clearly looking for a new kind of modular service from their adviser and are now prepared to pay up to $2,000 for additional advice.”

The research also provides an insight into the barriers that planners see in achieving growth in their SMSF client base, including administration, compliance and the grey areas that exist between planners and accountants of SMSF investors.

“The recent Future of Financial Advice announcement of changes to the exemption on limited advice and SMSF specific trustee duties may serve to provide more clarity for planners and accountants in this sector,” said Mr Lovett.

The Vanguard/Investment Trends Self Managed Super Fund Planner Report is the second in a series of research that looks at the growing SMSF sector, with a report released last month that examined the sentiment and motivations of SMSF investors. The findings represent the views of more than 500 financial planners including those who are classified as ‘Specialist SMSF planners’ (defined in the report as planners with 20 or more SMSF clients) and those who either service fewer than ten (‘SMSF Generalists’) or no SMSF clients.

16 July 2012

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