Accountants want to expand their role in the SMSF space: 2020 SMSF Accountant Report

King Loong Choi

Investment Trends has released its 2020 SMSF Accountant Report, an in-depth survey of Australian accountants in public practice who service the Self-Managed Super Fund (SMSF) sector.

Key highlights:

• Accountants want to expand their role in the SMSF space
• There is a significant pool of potential SMSFs
• BGL leads satisfaction ratings

Accountants want to expand their role in the SMSF space

The SMSF sector remains a substantial component of the superannuation industry, comprising a quarter of the $3 trillion in total super assets nationwide (based on the latest APRA data from December 2019).

However, growth in the SMSF market has declined to a decade-low, with the annual establishment of new SMSFs falling from a high of 40,000 in 2012 to only 20,000 in 2019. Despite this weakness, the latest research from Investment Trends shows that accountants want to grow their role with SMSF Trustees.

“Accountants already play an influential role in the SMSF space, with accounting firms serving 129 SMSF clients each, on average. But given the choice, accountants would ideally like to grow their firm’s SMSF client base by 35% from 129 to 174 clients,” said King Loong Choi, Senior Analyst at Investment Trends.

“In their quest to serve more SMSF Trustees, accountants say their top challenges are regulatory in nature, ranging from licensing restrictions on providing financial advice (49% say so), heightened regulation in setting up SMSFs (34%) to compliance obligations (31%).”

“However, many accountants also face issues on the client-facing side, such as competitive pricing/fee recovery (38%) and attracting new SMSF clients (29%),” explained Choi.

There is a significant pool of potential SMSFs

Despite the decline in the establishment of new SMSFs in recent years, accountants say that many of their existing clients show interest in setting up their own SMSF.

“SMSF Trustees already comprise a large segment of accountants’ total client base (36%, on average). Still, accountants estimate a further one in eight of their clients are suitable for an SMSF, and half of this cohort has expressed an interest in establishing one,” said Choi.

“Given the large pool of potential SMSFs, there is a clear opportunity for service providers to help accountants better serve this segment. To help educate clients and facilitate SMSF set up, accountants want to be better equipped to explain the suitability of SMSFs (52%), and the roles and responsibilities of Trustees (49%),” said Choi.

BGL leads satisfaction ratings

Looking at the specialist software used by accountants to service SMSFs, BGL Simple Fund 360 leads in satisfaction ratings, with 35% of users rating it as ‘very good’ overall, ahead of Class Super (29%) and SuperMate (17%).

“Industry wide, SMSF software providers continue to serve accountants well, and not many satisfaction gaps remain across 16 key satisfaction areas measured. But recently, ease of use has grown significantly in importance as a driver of overall satisfaction, so providers must pay close attention to usability – an area that is at risk of becoming a satisfaction gap.”

“To further stand out, software providers can differentiate through their ongoing training support, client portal and perceived value for money,” said Choi.

About the report

The results are drawn from the Investment Trends 2020 SMSF Accountant Report, released to Investment Trends’ clients in May. The report, now in its fourteenth year, is based on a survey of 715 accountants in public practice that was concluded in March 2020.