How to build the best SMSF advice practice

Smart practice

Monday 12 September 2016

Providing advice to the cohort of people with SMSFs is a challenging task

Delivering advice to self-managed super fund (SMSF) members requires a special skill set. Advisers working in this area must have specialised knowledge of financial markets and the opportunities within them; and a strong understanding of tax rules and other regulations that govern SMSFs.

Greg Einfeld, director of specialist SMSF advisory business Lime Super, talks about what a typical day looks like for him.

"As in any small business, I arrive at work each morning not knowing what to expect. The diary might show a client meeting, a team meeting, a meeting with our web developers and lots of free time. But the free time soon disappears. In a typical day I will receive 200 emails, have a few client conversations, read five to 10 articles relating to superannuation, the economy, investments and technology, and spend one to two hours testing our websites to ensure they are working correctly," he says.


Practice parameters

To put some context around Einfeld’s comments, it’s worth understanding the scope of his business.

"We run three businesses out of our office. In the first, Lime Super, we provide SMSF advice services. We have around 50 clients, most of whom have assets ranging between $1 million and $30 million. We are extremely selective about taking on new clients. In the past 12 months we have only taken on two new clients so that we can focus on delivering excellent service to our existing clients," says Einfeld.

His second business, Lime Actuarial, provides actuarial certificates for SMSFs. “We provide an automated, online service. Most of our clients are accountants, and we have a few hundred accounting firms who regularly order their certificates from us. Because the service is automated we can deliver the certificates faster and at a lower cost than other actuaries.”  

Einfeld’s third business, CapitalU, is launching soon. “We will be providing holistic robo-advice. As with Lime Actuarial, the advice will be delivered immediately and at a low cost.” 

It is also helpful to have a great network of specialists who are always willing to offer their views.

In total, across the three businesses there are seven staff plus four external web developers. “Technology is a big focus for us. We recognise that over time more processes are being automated and we would like to be at the forefront of those developments. The result is spending a large amount of our time on building sophisticated web sites that deliver scalable businesses and affordable, fast and consistent customer outcomes,” he says.


Commercial realities

Developing a point of difference in the market is something all businesses must achieve to effectively compete. It allows the practice to distinguish what it offers from what other similar businesses provide.

"In the Lime Super business our points of difference are expertise in SMSFs, access to investment solutions that aren’t available to most investors, and personal service. I have come to realise that personal service is difficult to scale, hence our preference to grow our other business models, that are more scalable," explains Einfeld.

In contrast, Lime Actuarial and CapitalU offer services that are easy, fast, convenient and, most importantly, affordable.


Addressing challenges

In terms of some of the daily common challenges Einfeld faces, he says the biggest one is time.

"Everyone faces this challenge, and being involved in three businesses doesn’t make it any easier. Lime Super clients often want to talk to me, even if I’m not the best person to help them with their query. I have found that the best way to overcome this is to transfer them to one of my staff members.  

"While it is tempting to help them there and then, the reality is that my staff members are often better able to do so because they are closer to the detail. Eventually our clients start calling the right person first up," he says.

So Einfeld stresses that having good staff who know what is expected of them is essential. “Getting to that point isn’t easy – it requires good employee selection and ongoing coaching."

When it comes to providing advice for SMSF members, the first challenge is keeping up with the latest developments. Says Einfeld: “SMSF rules and regulations are constantly changing. Fortunately today there are numerous articles, resources and CPD events to help with this. It’s a matter of scheduling time to stay on top of what’s happening. It is also helpful to have a great network of specialists who are always willing to offer their views.”

The next challenge is compliance. “We need to ensure that all advice is documented in the right format, and appropriate records are kept. This is a time consuming but necessary exercise. The key is to ensure our staff are aware of our obligations in this respect,” he adds.


Streamlining processes

Ensuring the practice is as efficient as it can be is one of the most important aspects of running an SMSF. This involves appropriate use of technology, and constant vigilance to ensure the business is using the tools it has available to it effectively.  

"We don’t use financial planning software. I have found we can operate just as efficiently without it. We use word processing software for statements of advice, spreadsheets for forecasting, and Workflow Max for CRM and workflow management. The workflow management component is key, to ensure that we always know what tasks need to be done, when, and by whom," says Einfeld.

Better use of technology will reduce your costs and create a better customer experience. If you don’t know where to start then just start somewhere.

"No doubt there are tools that could make us more efficient in our back office. But rather than invest in these tools, we are investing in building a new business model where a computer produces the advice rather than a person. This is how I believe we can produce the most scalable and affordable advice model," he explains.


Achieving potential

The right business model will be different for every practice. But there are some general principles to which all advice practices should adhere.

First, says Einfeld, be really clear about the services you offer, your ideal clients and your value proposition.

"This will help you on so many levels. In the early stages it is tempting to generate revenue in any way you can. But this creates a complex business where the owner becomes involved in everything. If you do a smaller number of things and do them really well then it is much easier to scale. Your employees can become experts in the narrow range of services you offer, and you will become known as having expertise in that field," he advises.

His second piece of advice is to embrace technology. This can be for online meetings, client portals, digital signatures, social media, cloud applications, workflow management, CRM, robo-advice, document management, outbound email and video – the list is endless.  

"Better use of technology will reduce your costs and create a better customer experience. If you don’t know where to start then just start somewhere. While technology can feel daunting, it gets easier and easier once you have started. And it doesn’t have to be expensive; in fact many of these tools are free."

The idea is to explore all avenues to introduce efficiencies into your practice and consistently look objectively at what you can be doing better. It’s also essential to keep abreast of regulatory changes and across developments in the macro economic landscape.

SMSF advice practices that do this will put themselves at an advantage compared to other firms. Businesses that don’t explore these options risk losing competitive advantage to those who do. Which camp will you be in?

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