Olivia Long

SMSF clients now have access to a range of new options for portfolio diversification, thanks to a recent alliance between specialist, low-cost SMSF administrator Xpress Super and cryptocurrency brokerage Bitcoin Trader.

The exciting new partnership will allow Xpress Super to expand its range of services, offering investment options in the revolutionary new asset class in the form of five, top-tier cryptocurrencies: Bitcoin, Ethereum, Bitcoin Cash, DASH, and Ripple

Xpress Super CEO Olivia Long said the partnership with Bitcoin Trader was a positive step towards meeting growing levels of investor demand for cryptocurrency.

“We are being inundated with inquiries from SMSF trustees wanting to jump on board the crypto- currency bandwagon,” she said.

“Our role as SMSF compliance specialists isn’t to give advice to self-directed investors on whether this is the right investment option for their fund, but to ensure they are compliant if they do invest.”

Ms Long said the company needed to service an evolving investment scene, which had undergone substantial change thanks to new and emerging products and platforms, while committing to full regulatory compliance.

“One of the most difficult aspects of accounting for crypto-currency in an SMSF portfolio is meeting the audit requirements,” she said.

“We’ve overcome that problem by partnering with a cryptocurrency provider that specialises in SMSF services, and offers easy access to trade.

“Just as importantly, Bitcoin Trader provides SMSF accountants with a comprehensive package for year-end compliance to meet the rigorous audit requirements.”

Bitcoin Trader CEO Nathan van den Bosch said he was very excited about partnering with a company that shared his own business values.

“Xpress Super is an innovative company, making them a leader in their field,” he said.

“We’re dealing with industry experts who have a great deal of experience, and who care about their customers.”

Mr van den Bosch explained that Bitcoin Trader was dedicated to maintaining a hands-on approach to client service, focussing on good relationships and open channels of communication.

“In fact, Xpress Super’s level of approachability follows the same ethos that we operate under here at Bitcoin Trader,” he said.

“It’s not like other places that only give you a website and an email address to handle your questions or problems: At Xpress there’s somebody to reach out to, who can hold your hand through the process.

“You can visit their office and have the kind face-to-face contact that helps to foster good trust in your service provider.”

The new cryptocurrency initiative by Xpress Super comes hot on the heels of a partnership agreement with Guardian Gold/Guardian Vaults, to provide trading and storage facility for precious metals – another area in demand by self-directed investors.

Ms Long said Guardian Vaults is Australia’s leading safe deposit box facility, providing unparalleled levels of security.

“Its services provide physical asset protection of precious metals, diamonds, and cold wallet storage for crypto-currency,” she said.

“Clients can transfer their cryptocurrency investment to an offline, ‘cold wallet’ device, such as a Ledger Blue, which can then be stored in a fully-secure, safe deposit box.

“Cold wallet storage allows investors to have peace of mind about the digital security of their cryptocurrency investments, by keeping them completely offline and under their personal control.

“Our role as a low-cost SMSF administrator is to provide the tools that allow self-directed investors the confidence to know they are trading in these investments in a secure and compliant manner.

“This is what Xpress offers as one of the expert providers in this field.”

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Olivia Long

SuperGuardian, Australia’s most innovative specialist administrator for self-managed super funds, was named “SMSF Administrator of the Year, Advisor and Trustee” at the CoreData Self-Managed Super Fund (SMSF) Service Provider Awards ceremony held last night in Sydney.

The award, rated by SMSF trustees and SMSF-advising financial planners and accountants and presented by Self-Managed Super Magazine, recognised Super Guardian’s high quality service and efficiency.

SuperGuardian CEO Olivia Long says: “We’re delighted to be acknowledged by our industry peers and clients. Our business objectives are strongly focused on exceeding client expectations and supporting their evolving administration needs, so it is excellent to see that our efforts are being recognised by the industry.”

All the awards presented were decided using results from CoreData’s SMSF Service Provider Study 2017, which consulted more than 1,100 SMSF trustees, financial planners and accountants who advise on SMSFs.

Long says: “Given the increasing complexity and compliance around accounting for SMSFs, we’re seeing strong demand from smaller accounting practices looking to outsource their SMSF clients’ administrative needs.

“To remain ahead of the market, we consistently work to deliver innovative solutions to make SMSF administration simple and efficient for clients. For instance, we’ve recently launched our own App to give SuperGuardian clients easier access to important updates via their mobile phones or tablets.”

SuperGuardian has grown its client base by 25 per cent over the 2016-2017 financial year, attributing this growth to its ability to meet clients’ requirements quickly and accurately.

“Being fully independent, we can make decisions quickly and implement change easily as we don’t have the bureaucracy of a large institution slowing us down. This means that our clients benefit from flexibility and fast adaptation to market change.”

Long adds a wonderful night was capped when SuperGuardian’s auditor, the Sydney-based firm Evolv, won “Auditor of the Year” in both the trustee and advisor categories

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Olivia Long

The low-cost SMSF administrator, Xpress Super, enjoyed 100% organic growth in the 2016-17 financial year, highlighting the growing demand by SMSF trustees to minimise their funds’ administrative fees.

Xpress Super is part of the SuperGuardian administration group that saw an overall growth of nearly 25 per cent in its client base in the 2016-17 financial year.

Olivia Long, CEO of Xpress Super and SuperGuardian, said the group’s decision to grow organically was proving a successful strategy for both administrators, and certainly gave a lie to suggestions by some industry participants that SMSF administration was a sunset business. [SuperGuardian provides a full administration service for more complex SMSFs and non-superannuation portfolios.]

“We expect our growth to continue this financial year (2017-18) as we’re seeing strong demand from smaller accounting practices looking to outsource their SMSF clients given the increasing complexity and compliance around accounting for SMSFs.

“SuperGuardian, which boasts 15 years in the administrator market, is also benefiting from its decision to obtain its own AFSL following the removal of the accountants’ exemption. The timing couldn’t be better as we have been inundated with requests for strategic advice due to the superannuation changes.

“Technology, too, is an area where we’re determined to remain ahead of the market. We’ve recently launched our own App to give Xpress Super and SuperGuardian clients easier access to important updates via their mobile phones or tablets.

“The fact we have live data enables us to be proactive with our client advice, as any information we need to make regarding strategic recommendations is easily available. Certainly, it allowed us to handle the extensive changes to superannuation last year without a hiccup.”

“Apart from our focus on technology, a key benefit of the SuperGuardian and Xpress Super administrative packages is the flexibility that comes from us being fully independent. We can make decisions quickly and implement change easily as we don’t have the bureaucracy of a large institution slowing us down.”.

Long said SuperGuardian was also getting efficiency gains via its relationship with superannuation software provider Class Super.

“Class’s innovation and technology upgrades have underpinned significant improvements in efficiency over the past few years. Our clients love the fact that they can see their daily superannuation information via the Class Investor APP with a fingerprint technology.”

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Olivia Long

RateSetter, Australia’s largest retail peer-to-peer lender, has announced a partnership with innovative self-managed super fund (SMSF) administration provider, Xpress Super.

The integration provides investors with direct access to their RateSetter account on the Xpress Super platform, making it easier for SMSF investors to earn attractive returns by lending to creditworthy borrowers via RateSetter’s award-winning platform.

Olivia Long, CEO of Xpress Super, says: ““Two of the key benefits of running an SMSF is the ability to select your own investments as well as invest in financial products not accessible with other superannuation vehicles. This is exactly what RateSetter allows SMSF trustees to do.”

Since RateSetter was established in Australia in 2014, the company has facilitated more than $130 million in loans through its platform with SMSFs providing the funds for more than 20% of those loans.

Daniel Foggo, CEO of RateSetter Australia, says: “Given the historical low cash rates and uncertainty in property and equity markets, there is a real shift in where SMSFs are looking to invest. With returns of up to 9.2% a year and our exceptional track record both here and in the UK, we expect to see continued growth from SMSF investors seeking stable, attractive returns.

“Until now, investing in consumer and small business credit has been an option only available to a privileged few, including large wholesale investors and the banks.

“By working with partners such as Xpress Super, we’re giving SMSF investors an easy, simple-to-manage option to access this attractive, established asset class.”

Long says that there is a natural fit between RateSetter and Xpress Super. “RateSetter and Xpress Super have a shared belief in the importance of transparency, control and delivering value to investors.

“Xpress Super’s automated, paperless platform gives investors live, up-to-date information, helping them make informed decisions about their superannuation investments and simplifying their year-end accounting, and this service extends to new investment classes, such as peer-to-peer lending.”

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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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Olivia Long

The election result has sent a clear message to all political parties – keep changing superannuation policy at your electoral peril, says Olivia Long, CEO of SMSF administrators Xpress Super and SuperGuardian.

“Although it was the Coalition Government that felt a backlash from voters in the wake of the Budget measures around superannuation that caused so much public angst, the reality is both the major parties were culpable as Labor included these savings in its fiscal estimates.

“What the electorate has rightly discerned is that superannuation is increasingly being seen by all the political parties as a cash cow that can be milked for fiscal reasons.

“However, what we have seen in the election is that many of the people have said ‘enough is enough’, and that there will be an electoral cost if you continue to change the policy settings by which people plan their retirement income strategies.”

Long says it has to be remembered why compulsory superannuation was introduced in the first place – to give people the opportunity to be self-sufficient after leaving the workforce.

“In the SMSF space, in particular, trustees assume the responsibility to be financially independent in retirement, and all they ask of their elected representatives is to determine the policy settings and then leave the system alone.

“Right now it is a difficult time for trustees with volatile investment markets around the globe the order of the day and interest rates at historical lows.

“To compound these market-related issues they have to continually second guess what the government of the day will do with superannuation policy, especially as it relates to its tax treatment. But after last Saturday, it seems doing so might come at a high political cost.”

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Olivia Long

Suggestions that new entry and licensing requirements for SMSF auditors and accountants from 1 July would see many SMSF trustees wind up their funds because of rising costs are far-fetched, says Olivia Long, chief executive officer of the SMSF administrators Xpress Super and SuperGuardian.

“Scale administration businesses can absorb licencing costs and additional workload. It may see a small increase in fees, but certainly nothing so drastic as to force trustees to wind-up their funds.

“What I believe will happen is that accountants wanting to continue servicing SMSF trustees post 1 July will focus on only servicing a smaller number of clients, but in a more strategic way.

“For administration and daily online reporting, I suspect they will offload those services to specialist SMSF administrators where they can be delivered at a fraction of the cost – and in a professional way.

“In this scenario, accountants can attract higher fees for offering strategic advice and administrators can do the legwork at a competitive price.”

Long says the removal of the accountants’ exemption should be viewed as a “positive move” for the profession as it will make them re-think their value proposition.

“Accountants have to realise their future role in SMSFs is offering strategic advice that allows SMSF trustees to plan long-term; it’s not the day-to-day minutia that can be competently handled by administrators,” she says.

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Olivia Long

Arguments that the margins of large SMSF administration firms “may take a significant hit” as more trustees do their own accounting, or opt for traditional accountancy services, have been dismissed as “nonsense” by Olivia Long, chief executive officer of the SMSF administrators Xpress Super and SuperGuardian.

“Every time I hear these arguments my blood boils. The simple fact of the matter is that there are several reasons why administrators will continue to flourish, even as the world becomes more automated.

“To my mind three stand out – lack of time, the value people place on advice and their genuine need for the service they get.

“From my long experience in this industry, many SMSF trustees lack the time to handle their own administration.

“A large portion of an administrator’s client base are professionals who prefer to outsource this function rather than assume the burden of dealing with volumes of paperwork associated with share transactions and running an SMSF.

“Automation may mean transactional data is available in software. But trustees still need to keep copies of all source documents to meet the requirements of an SMSF audit – a task many prefer to delegate.

“People value advice. The age-old saying ‘you don’t know what you don’t know’ applies in all industries, but especially with SMSFs.

“If trustees handled their own administration, they could end up missing out on taking advantage of some of the better strategies available to SMSFs (e.g. re-contributions and withdrawal) because they are simply unaware of all their options.

“Some in the industry might be surprised, but people value good old-fashioned service. Many like dealing with an SMSF specialist to leverage off their expertise to give them peace of mind about their superannuation.

“After all, for many superannuation forms their second largest asset after the family home, and they have no intention of taking the risk of being non-compliant.”

Long says the demise of the SMSF administrator is one of those hoary old chestnuts that gets dragged out every now and again – and the merits of the argument don’t improve with time.

“After all, bank branches have well and truly survived online banking, and I am confident specialist financial advisers will survive the introduction of robo advice. And why? The same reasons cited above as to why administrators will not only survive but flourish – time, quality advice and service.”

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Olivia Long

There are significant misconceptions in the market about the role of SMSF accountants and administrators in the superannuation sector, says Olivia Long, CEO of the SMSF administrator platforms SuperGuardian/Xpress Super.

“Technology still has a long way to go before it can put pressure on the pricing for the services provided by accountants and administrators on the basis of ‘automation’. It’s just not that simple,” she says.

Long was responding to a recent comment in the media by MGD Wealth chief executive John Barton who argued that technology “is going to continue to commoditise and simplify the back office”.

She says this argument, which is gaining a growing number of adherents, downplays the skills, expertise and cost of the technology that accountants and administrators offer SMSF trustees, and will continue to do so into the future.

For example:

• The cost of using software to achieve automation has moved from $8 per fund to $250 per fund. Making the decision to utilise the more expensive software has to achieve efficiencies to pay for the increase in expense alone before we can start passing any savings on by way of fee reductions;
• Providing daily online reporting and ongoing reconciliation during the month as opposed to the year-end is a better, more frequent service that trustees demand – but it comes at a cost;
• Accountants are facing new licensing requirements and the costs this entails will need to be passed on to clients.

Long says SuperGuardian/Xpress Super, which uses cutting edge SMSF technology, recently did an audit of all data feeds and discovered that half were still unsupported.

“This essentially means we are still manually processing 50% of transactions off the source documents.

“To achieve 100% automation at this stage of the game would involve limiting the platforms and products trustees use in order to achieve 100% data feeds. Given one of the appealing factors of SMSFs is the flexibility of products/platform/investment, I don’t think we’re going to achieve the perfect automated model anytime soon.

“So although other industry practitioners may be keen to apply the pricing pressure, they might be unpleasantly surprised about how far we have to go before this can be truly achieved,” said Long.

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Olivia Long

The Federal Government’s response to the Financial System Inquiry (FSI) report is a strong endorsement of the SMSF sector, says Olivia Long, CEO of the SMSF administrators Xpress Super and SuperGuardian.

“The simple fact that the only full recommendation made by the FSI that was rejected out of hand by the Government – to ban limited recourse borrowings arrangements (LRBAs) – suggests the Government and its regulatory advisers believe the SMSF sector is in healthy shape.

“What is really reassuring is that the Government did not listen to all the hype in the market about LRBAs, but instead took the time to get the facts and reach the logical conclusion that they don’t pose a systemic risk to the financial system.

“In the Government’s response to the FSI, it did draw attention to some ‘anecdotal concerns’ with LRBAs, but rightly ruled out acting on those ‘concerns’ because there was no concrete evidence that demanded a change in policy.”

Long says LRBAs now comprise about 2.5% of all SMSF assets, and at that level no one can logically argue it represents a systemic threat to the system and some commentators would gave us believe.

“When you add the facts that financial institutions are hardly falling over themselves to get into the LRBA market (some major lenders have either left or wound down their activity), that the banks are setting conservative loan-to-value ratios, and the housing market, more generally, is slowing down, then it’s hard to argue with the Government’s decision.”

Long says that the Government’s recommendation for the Council of Financial Regulators and the ATO to monitor LRBA activity and report back in three years was “prudent”.

“It’s worth remembering that the Cooper Inquiry made a similar recommendation in 2010, and the upshot was that LRBAs were largely found to performing in the right manner.

“There has been a lot of media speculation around property spruikers and SMSFs, and how the unwary are being preyed upon. No doubt there is an element of that, but not to the degree we have been lead to believe, and, where it has been occurring, ASIC has been cracking down hard – just as it should do.”

Long also praised the decision by the Government to give a legislative framework to superannuation.

“As the primary vehicle for people’s retirement income goals, the more certainty we build into the system, the more confidence people will have in it. This country has devised a superannuation system that actually works, and having its goals set in legislation will simply enhance that.”

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