Tuesday 01 July 2014
What SMSF professionals can expect for 2015
Tuesday 01 July 2014
The 2014 SMSF Service Model Report from Macquarie and the Self Managed Super Fund Association (then the SMSF Professionals’ Association of Australia - SPAA) provides a unique insight into self managed super fund (SMSF) service providers and their business models.
With the vast majority of businesses optimistic about the future, many are looking for new growth opportunities.
Most businesses were highly optimistic about the outlook for both their own business and the SMSF professional services industry as a whole. An overwhelming 84% said they felt positive about their business, with a similar proportion confident in the future of the SMSF professional services industry, despite the uncertainty surrounding industry reforms.
Most businesses also saw sustainable growth as a key priority for the future, while highly profitable businesses were focused on driving efficiency through structured processes, to manage higher volumes of clients across a wide range of service areas.
Estate planning is seen by many as a key area for growth and is an obvious value-added area for all ages, but particularly aging SMSF clients.
Nonetheless, each business’ professional origins shapes its views on future growth, with accountants and estate planners most likely to seek opportunities in SMSF administration, while financial planners and asset managers are attracted to life insurance, share trading and financial planning.
Similarly, financial planners believe referrals from existing clients are the key to growing profit, while accountants are more focused on efficiency and SMSF administrators concentrate on referral partnerships.
However, higher profit businesses (those with annual profits over $200,000) are most likely to see staff retention as critical. This reflects the value of in-house specialist expertise in an industry where people are the largest expense and highlights the key person risks affecting smaller practices with fewer senior staff.
While the vast majority of SMSF businesses are profitable - with most achieving increased revenue even during periods of subdued asset growth - there are also large variations between the typical practice and the best performers, suggesting that most still have significant growth potential.