Key findings of the Investment Trends 2016 SMSF Accountant Report

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  • SMSF accountants struggle to meet 30 June Australian Financial Services License deadline

  • Newly licensed accountants have strong appetite for education. Fund Managers and brokers have an opportunity to step up and address this

  • Accountants rate cloud-based SMSF solutions highly. Class Super and BGL score best

King Loong Cho

King Loong Cho

The Investment Trends 2016 SMSF Accountant Report is an in-depth study examining the role of public practice accountants in servicing SMSF trustees and their interactions with related SMSF service providers. The study is based on a survey of 1,182 accountants in public practice concluded in February 2016. This study highlights a number of interesting trends:

SMSF accountants struggle to meet 30 June Australian Financial Services License deadline

Despite the looming deadline that requires accountants to be licensed to provide advice to SMSFs by 30 June this year, only 1,000 accountants have successfully obtained either a full or limited AFS licence during the last 12 months. This means there are 5,500 accountants who now meet this licensing requirement.

“Despite the deadline being only a month away, there are still 12,500 accountants who want to operate under a full or limited AFS licence but who haven’t completed the qualification process,” said Investment Trends Senior Analyst King Loong Choi. “It is typically the sole practitioners and those working in small accounting firms who are yet to make the move. If they don’t get licensed, or set up referral networks in the next 30 days they will have to send clients elsewhere for SMSF advice.”

“More accountants are turning away from the route of applying for their own AFSL, with costs and compliance obligations growing as barriers,” said Choi. “Dealer groups such as Count and AMP’s SMSF Advice are offering to support accountants as the deadline for removal of the accountants’ licensing exemption looms. These dealer groups can provide access to an AFSL, as well as practice management support, professional indemnity insurance and technical support.”

As accountants move to operate under a full/limited licence, more will be involved in providing investment advice to their SMSF clients. “There is a huge opportunity for accountants to grow their SMSF revenues and broaden their proposition to SMSF clients by making the move to provide investment advice,” said Choi. There are 9,000 accountants who have made the decision to not become licensed, and will instead refer their SMSF clients to someone else to provide the advice. Many accountants, planners and dealer groups are already taking the initiative to form referral arrangements with one another.

Newly licensed accountants have strong appetite for education. Fund Managers and brokers have an opportunity to step up and address this

SMSF accountants believe their understanding of investment products is low. Fund managers and brokers have an opportunity to help by providing accountants with the right set of tools, support and education.

“Accountants want to understand the tax advantages of individual investment products and two in three want comparisons between investment products, and strategies for using them within clients’ portfolios,” said Choi.

Annuities, direct shares, managed funds and ETFs are the top products where accountants want to receive more information and education before recommending them to their SMSF clients.

Accountants rate cloud-based SMSF solutions highly. Class Super and BGL score best

At an industry level, accountants’ satisfaction with their SMSF software has remained high over the last 12 months. Cloud-based solutions – Class Super and BGL Simple Fund 360 – are rated the highest in terms of overall user satisfaction.

“With the level of time and effort needed to service and administer SMSFs, accountants are attracted to the ease and efficiency benefits of cloud-based solutions,” said Choi. “One in four accountants intend to start using a new SMSF software provider in the next 12 months, with over half intending to use a cloud-based solution.”

The top three SMSF software providers by user satisfaction are:

  1. Class Super
  2. BGL Simple Fund 360
  3. BGL Simple Fund

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