Olivia Long
The likelihood of SMSF administrators being made redundant by technology is as likely as Donald Trump not tweeting, says Olivia Long, the Chief Executive Officer of the SMSF administrators SuperGuardian and Xpress Super.
“Automation will continue to create significant efficiencies into the future, but the notion that it can and will take our role is a misreading of what is happening in the market – despite much media commentary to the contrary.
“The fact is technology surrounding SMFS is still in its infancy. SMSF software relies on data feeds from investment providers, and data feeds drop out. Put bluntly, they’re unreliable. We’ve seen data feeds stop from the Big Four banks, and for service providers that offer daily online reporting it has an enormous impact.
“It effectively means we need a team of accountants manually entering the transactions to keep the data up to date during these periods, interrupting the efficiency gains we’re trying to obtain for audit purposes. Ultimately, we still need human interaction at the back end reconciling transactions to ensure they are all captured.”
Long says setting up a data feed needs human interaction. “Every time there is a new investment acquired by a fund there is a manual process involved in establishing the data feed in the first place. One of the primary reasons people establish SMSFs is for the flexibility and range of investments and the service providers they can select.
“If you have a custodial platform, or an offering where trustees are required to use imbedded platforms where data feeds will flow throw once established, this can help minimise human interaction, but the reality is trustees want flexibility – and no platform is close to catering to the variety of investment products available to SMSFs.”
Long says a number of financial institutions simply don’t provide data feeds. “Take ING as an example. A very popular cash product because of their rates, yet we’re still manually chasing information from them. A significant number of SMSFs hold unlisted assets in their fund. Where there’s an unlisted asset, there’s a human manually processing the transaction.
“And property is a long way off automation. Property investments require human interaction to process the acquisition, review it from a compliance perspective, ensure ongoing compliance, and handling the bookkeeping.”
She says asset segregation is a strategy likely to become more common post 1 July, and in this event an accountant will be needed to manually set up the asset pool and reconcile the segregation to the actual member account.
“Insurance, too, remains aloof from automation. Insurance providers simply don’t provide data feeds so human interaction is required to review the documentation for its compliance and update SMSF software with the appropriate information,” she says.
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