Demand for SMSF planning expertise growing

While self-managed superannuation funds (SMSFs) have been decreasing their use of financial planners over the last decade, SMSF investors have signalled that they are growing more open to using planners, according to Investment Trends.

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As per Hannah Wootton, Investment Trends’ 2017 SMSF Investor Report showed that although SMSF use of planners stayed fairly steady over the last decade, the strong growth of the SMSF sector meant that proportionately far less funds were seeking advice from planners.

Thirty-eight per cent of SMSFs used financial planners in 2017, as opposed to 62 per cent in 2007.

SMSF investors have expressed interest in utilising planners more though, reporting that they had a total of 277,000 unmet advice needs in 2017. The focus of their needs related to optimising SMSFs in terms of tax and super, preparing for retirement and investment advice.

Approximately half of the investors surveyed said that they would turn to a planner for this advice, with the remainder saying they would go to an accountant.

Investment Trends’ 2017 Accountant study reflected this growth, with four per cent of revenue from their SMSF clients coming from the provision of financial advice services. This number was expected to almost double to seven per cent by 2020.

While some accountants were becoming licenced to meet this advice need, most were providing financial advice by either hiring financial planners in-house or through joint ventures, or by developing external relationships with planners.

Financial planners and advisers with specialist expertise in SMSFs would be especially sought after to meet unmet advice needs going forward. Investment Trends found that SMSF investors’ main priority when seeking advice is SMSF expertise, which they ranked as more important than tax knowledge, fees and accessibility.