John Maroney

The SMSF sector will benefit from technology advances, but it will be evolutionary, not revolutionary, SMSF Association CEO John Maroney told the ‘Thought Leadership Breakfast’ that kick started the Association’s 2022 National Conference at the Adelaide Convention Centre yesterday.

“We have seen the advances that technology have delivered to the SMSF, accounting and financial planning sectors, and it will continue, but in doing so we must remember that any change must benefit the SMSF trustee.

“Other industries have managed to use technological change for the benefit of the end consumer, and I can see no reason why this cannot happen in our sector.

“The building blocks for a strong integration between technological change – I include Artificial Intelligence (AI) in this – the advice community and trustees are in place, and now we must focus of maximising the benefits for both the industry and trustees.

“This is particularly the case where it applies to legislation and regulation, where change is influenced by government policy priorities, and we have to accept that sometimes our sector will not be the first priority.”

The ‘Thought Leadership Breakfast’, sponsored by Act2 Solutions, saw Maroney as part of a five-member panel examine in depth the broad trends in technology, such as remote client servicing, cloud collaboration, and big data analytics, in a discussion that generated keen audience participation.

The Managing Director of BGL Corporate Solutions, Ron Lesh, says the benefits of technological change are self-evident with the efficiencies they have delivered saving practitioners hundreds of hours a year chasing things such as e-signatures and tax statements.

“In the future, I believe open banking will help improve efficiencies in the sector, and it’s encouraging to see the banking system now being more cooperative in allowing this to happen to the benefit of the SMSF sector.”

Head of Research at Investment Trends, Dr Irene Guiamatsia, cautioned that SMSF trustees must be front and centre of any technological change. “The pandemic created a unique opportunity for all to experience first-hand the best-of-breed benefits of technology, and to become more adaptable and supportive of change. SMSF trustees are no different. It is therefore incumbent on the industry and SMSF providers to continue to ensure future technological evolution responds to these heightened expectations.”

The Director of Smithink, David Smith, who moderated the panel, noted that the Quality Advice Review, headed by Michelle Levy, had the opportunity to examine how digital advice could benefit some consumers.

“In addition, could AI be used to determine whether an SMSF has broken any of the major SIS rules. We are seeing auditors starting to use AI to improve efficiencies, so it will be interesting to see how audit processes develop.”

Co-Founder and CEO of OpenInvest, Andrew Varlamos, stressed that technological change provided a genuine opportunity for the industry to improve the investment performance of the 70% of SMSFs where trustees make their own investment decisions.

“There is a plethora of investment information available to trustees from myriad sources, but much of it is of questionable value. And it’s extremely difficult to sift through all this and make sound investment decisions. What technology like OpenInvest enables is for trustees to find a trusted and expert portfolio manager who will manage their portfolio for them, and keep them informed, all through the technology.”

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Andrew Landman

OpenInvest has welcomed BlackRock joining the OpenInvest online marketplace, giving self-directed Australian investors access to transparent and cost effective multi-asset solutions built with iShares ETFs.

OpenInvest offers Australia’s self-directed investors access to some of the world’s best and most highly credentialed asset managers in an open, transparent and conflict-free environment. Investors can engage with different asset managers, and get to know and understand their respective investment approaches, and the fees they charge. When they feel ready, they can choose the asset manager they feel is right for them to manage their portfolio, with trading and administration undertaken by OpenInvest.

Co-founder and CEO of OpenInvest, Andrew Varlamos, welcomes BlackRock to the platform, saying it was an important validation of the OpenInvest goal of giving more Australians access to the best investment managers in the world.

“BlackRock manages more assets on behalf of investors than any other firm in the world. Via OpenInvest, Australian investors of all sizes, are now able to access portfolios managed utilising BlackRock’s extensive and global resources, expertise and experience”, Mr Varlamos said.

Andrew Landman, Head of Australasia at BlackRock, said the firm is excited about joining the OpenInvest marketplace.

“BlackRock is committed to helping investors around the world plan for their financial future. We are pleased to bring our iShares Enhanced Strategic Model Portfolios to the wider Australian market, providing investors with transparent, cost efficient building blocks to manage their individual portfolios and achieve their desired investment objectives,” said Mr Landman.

Post the Hayne Royal Commission many Australians are understandably uncertain as to where they can obtain the trusted and professional assistance they need. Self Managed Super Fund trustees in particular are seeking professional help with their portfolio; they understand the importance of having a properly diversified portfolio, but often lack the expertise and confidence to do this on their own.

All of the available asset managers on OpenInvest offer diversified portfolios across the spectrum of risk/return categories.

Mr Varlamos explained: “Every piece of research over many decades confirms the truism that the safest and most appropriate way to invest is with a properly diversified portfolio, giving an investor access to a broad range of asset classes. This is best undertaken by professional experts, and via OpenInvest we make it easy and affordable for Australians to access these experts”.

John Maroney, CEO of the SMSF Association, speaking at the Association’s annual conference on the Gold Coast, welcomed the news that BlackRock was joining the OpenInvest marketplace. “Australia’s 1.1m SMSF trustees have chosen to use an SMSF to plan for their retirement because they value the control it gives them.  And most SMSF trustees understand that professional expertise is essential to ensuring they get the best possible outcomes. We welcome increased investment choice for SMSF trustees to help ensure their portfolios are well diversified and managed.”

OpenInvest has been designed from the ground up to meet the needs of self-directed investors: investment managers explain themselves and their investment approaches in plain English, fees are clearly explained and there are no hidden extras or conflicted payments. And the investor is kept informed and is always in control.

BlackRock will soon make their products available to the OpenInvest online marketplace, alongside other tier one asset managers including Schroders and Macquarie. Mr Varlamos added that OpenInvest had a strong pipeline of Australian and global asset managers who will be joining in the months ahead, offering investors even more choice.

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Ms Allen is a highly experienced executive and non-executive director who spent 16 years in various senior executive roles at the RACV and oversaw the launch of new businesses and products in insurance and home services.

She has extensive governance experience as a director of companies in financial services, consumer services, logistics and distribution, as well as a wide range of skills accumulated at large organisations across those industries, infrastructure, and the public sector.

“It’s an exciting time to be joining the board of OpenInvest,” Ms Allen says.

“In the post-Financial Services Royal Commission world, the way Australian investors access professional assistance is set to change dramatically. As OpenInvest has been designed with investors’ needs in mind, I believe it’s poised to play a significant part in this change.”

Data suggests that 85% of Australians do not receive financial advice, while a recent SMSF Association report shows that more than 250,000 SMSF trustees have unmet advice needs. A significant proportion of these SMSF trustees say in surveys they want professional help with their investment portfolios.

“I believe my experience in financial services, in particular, as well as a strong focus on the use of new technologies to solve consumer problems, equips me to provide valuable input to the OpenInvest board,” Ms Allen adds.

OpenInvest, which was launched last November with SMSF trustees the primary target, offers investors a menu of highly-credible and experienced investment managers from which to choose.

Other non-executive directors are former Schroders Australia CEO Greg Cooper, former director of Countplus and principal of the accounting industry consultancy Smithink, David Smith, and the founding Managing Director of CommSec, Paul Rickard.

Co-founder and CEO of OpenInvest, Andrew Varlamos, says: “We’re delighted to have Susan join the board. Her varied experiences, especially at the RACV where she was involved in the launching of new products and services, as well as her various director roles, is exactly the skill set we need as we grow the business.”

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Andrew Varlamos

OpenInvest, the online marketplace and platform giving investors access to a diverse range of Australian and international investment managers, has added an important string to its bow with the decision by Macquarie Investment Management to join up and add its portfolios to the menu.

OpenInvest, which was launched last November with SMSF trustees the primary target, gives investors a platform from which to choose from a range of highly credible and experienced investment managers. As well as Macquarie, other managers include Schroders, Shaw and Partners, SG Hiscock and JBWere.

Co-founder and CEO of OpenInvest, Andrew Varlamos, welcomed Macquarie to the platform, saying: “The investment management industry has the expertise and experience to assist self- directed investors, and we are very happy Macquarie has joined in this exciting industry initiative.”

Greg Cooper, former CEO of Schroders Australia, who has recently joined the board of OpenInvest, adds: “The significance of OpenInvest is that it gives investors much simpler access to professional investment management assistance. Through OpenInvest, investors can get to know the investment managers, their investment processes and how they’re investing, before making a decision”.

Varlamos says: “In a post Royal Commission environment, there are even more investors who want help with their investments, but don’t know who they can trust or where they can go to find the professional assistance they need.

“In particular, SMSF trustees are very clear in saying they want professional help, but they want to remain in control, and highly value transparency and engagement.

“We have designed and built OpenInvest for these investors: we are independent and conflict-free, and offer content, engagement and choice.”

Data suggests that 85% of Australians do not receive financial advice, while a recent SMSF Association report shows that over 250,000 SMSF trustees have unmet advice needs. A significant proportion of these SMSF trustees say in surveys they want professional help with their portfolios.

For self-directed investors, the process on OpenInvest is very simple. Investors choose their preferred investment manager only when they feel ready. OpenInvest then keeps their portfolio aligned with the guidance provided by their chosen manager, whilst the manager keeps the investor fully informed and up-to-date.

Each investment manager sets their own investment fee. OpenInvest then adds its administration fee to arrive at a total management fee. There are no hidden extras for investors.

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The role of technology was a focus of the SMSF Week panel discussion.

The adoption of new technology and more education will be critical for the future of SMSF sector, according to an industry expert panel held as part of SMSF Week.

The thought leadership panel, hosted by the SMSF Association and the Australian Taxation Office (ATO), was part of the inaugural SMSF Week and regulators and included industry leaders from the ATO, the Australian Securities and Investment Commission (ASIC), Investment Trends, SuperConcepts, and OpenInvest.

John Maroney, CEO, SMSF Association led the discussion and highlighted the need for SMSF investors to seek more information, new technology and expert assistance in a climate of regulatory uncertainty.

“There is little point working hard throughout your life to maximise your retirement income through an SMSF, only to put it at risk because you don’t have an appropriate investment strategy or the right advice to manage longevity risk. Seeking expert assistance during all phases of your SMSF journey is important, especially during the transition to retirement and estate planning phases.”

The role of technology in the SMSF sector and superannuation landscape more broadly was a focus of the panel discussion.

James O’Halloran, Deputy Commissioner, Superannuation, Australian Taxation Office said, “It’s important for SMSF investors to accept technology as a useful part of their toolkit. Evolving technology will be able to provide real-time and event based information to SMSFs and lead to better decisions, but technology will never replace human judgement.”

Michael Blomfield, CEO, Investment Trends, said, “Technology will make it more convenient and cheaper to invest in an SMSF and that’s what we hope and expect to see in the future.”

Andrew Varlamos, Co-founder/CEO, OpenInvest, said, “New technology solutions are going to bring top tier investment management capabilities directly to investors, including SMSF trustees, in a user- friendly and engaging way.

“New solutions will provide ready access to diversified, multi-asset class portfolios managed by the word’s best investment managers, enabling trustees to obtain portfolio diversification that is appropriate to their circumstances, thereby providing them with the best chance of meeting their retirement goals.” said Mr Varlamos.

The panel also had a healthy debate around the future of advice within the SMSF sector. Unmet advice needs in the SMSF sector continue, with the ongoing challenge to encourage more SMSFs to leverage the wealth of information available.

Michael Blomfield said, “A lot of SMSFs think advice is too expensive and they don’t know who to trust to get it from. This is a challenge that goes beyond the current trust deficit in the financial services sector and we should be able to overcome it. “

Kate Metz, Acting Senior Executive Leader, ASIC, said, “There is a wealth of information available that is not advice, people can access information and insights on ASIC’s MoneySmart or ATO websites. We have no doubt that we will see more digital advice solutions relevant to SMSFs and we’re already seeing new ideas coming through ASIC’s innovation hub.”

James O’Halloran said, “People need to remember that the decisions you make today will impact you in 10, 20, 30 years-time. You need the right support and advice as early as possible.

“Creating an SMSF is not just an investment decision, there are serious trustee obligations. The seriousness of the decision for your future means it is critical to have advice. Due diligence and well- informed appropriate advice can protect SMSFs and their future, their family and retirement lifestyle.

“We understand that building trust and confidence in both the tax and super system is vital to the future of the SMSF sector,” said Mr O’Halloran.

Graeme Colley, Executive Manager, SMSF Technical and Private Wealth, SuperConcepts, said, “Accountants will continue to play a critical role in helping SMSFs navigate their path. Accountants should be directing investors where to seek advice and educating them on what insights they need.”

Regulatory Uncertainty

The panel also discussed the future of Limited Recourse Borrowing Arrangements (LRBA) and proposed changes to franking credits as examples of regulatory uncertainty for the SMSF sector. The discussion followed the revelation from a new report released this week from the SMSF Association, based on Investment Trends data that regulatory uncertainty is now the top cited challenge in managing an SMSF.

Kate Metz said, “We will be looking closely at one-stop-shops for property investment via SMSFs. We’re concerned that there is little to no discussion about how you use a property investment in retirement. Will it need to be sold and if so what if property market drops?”

Graeme Colley, said, “The majority of SMSFs are being discriminated against with the proposed changes to franking credits removal – we think it’s inequitable.”

Longevity Risk

With an ageing population and a generation of SMSFs maturing the panel also raised longevity risk within Australians’ retirement savings as a major challenge for the industry.

Michael Blomfield said, “There is not enough conversation about the need for liquidity in SMSFs approaching retirement. We have to find a way in a regulatory or policy sense to ensure liquidity sensibility to the way people can protect their retirement savings.”

“We need to look at SMSFs as a whole-of-life and intergenerational investment tool.”

Today’s panel event provided valuable insights into the future challenges and opportunities facing the SMSF sector and Australia’s retirement savings landscape more broadly.

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Andrew Varlamos

Praemium and Zurich Life & Investments are pleased to announce a partnership that will see Zurich’s suite of life insurance solutions offered as an option on Praemium SuperSMA, the retail super version of its award-winning SMA platform technology.

Advisers using the Praemium platform will be able to recommend and offer Zurich’s comprehensive range of protection options, structured both inside and outside of super, to allow advisers to set up a life insurance framework for clients, which provides them the optimum level of protection to their needs whilst still also balancing affordability and tax treatment.

Praemium Commercial Director Andrew Varlamos said the inclusion of Zurich on the Praemium platform provided more choice and flexibility for advisers.

“As an independent ‘open architecture’ platform we know that advisers value a choice of insurance options to help them look after the best interests of all their clients,” he said.

Commenting on the development, Infocus Group Managing Director Rod Bristow said he was pleased about the addition of Zurich to the Praemium platform.  “As a high quality insurance provider, Zurich will offer another dimension and great flexibility in offerings for financial advisers and their clients. Through our two dealer groups, Infocus and Patron, we place a lot of value in Praemium’s independence and we know they can act quickly to help provide freedom for our advisers and their clients through wider choice of insurance providers on the platform,” he said.

Zurich’s Head of Distribution, Kristine Brooks, said Zurich was very proud to now be associated with the award-winning platform.

“Naturally we are delighted we have the opportunity to expand our footprint through the association with Praemium.  Our agreement is opportune given Praemium’s reputation and growing popularity – we have had many calls from our core licensee partners to be able to write Zurich through the Praemium platform.

“We are confident that our Wealth Protection suite of life risk insurances, which include regular product updates and automatic benefit upgrades for clients, not only provide a great option for using advisers but also complements the spirit of innovation and service for a modern investor, which is inherent in Praemium’s philosophy,” she said.

The inclusion of Zurich’s products will see it sit alongside the current choices of TAL and AIA on the Praemium SuperSMA site.

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