By Mark Ellem
With the total number of SMSFs in Australia now over 560,000, and the number of members exceeding 1,000,000, the administration of SMSFs is becoming a large revenue source for accounting firms. Helped by the new licensing rules for accountants, there is an opportunity to expand this revenue stream even further. And having the right tools, resources and processes are a crucial part.
Increasingly, members are seeking technology-reliant services, dovetailing with a demographic shift to an increasingly younger member base. For example, for the year ending June 2014, 25 to 34 year olds made up 11.1% of all SMSF members, compared to just 4% in the previous year*.
This age group has grown up with the internet and the expectation of access to timely information. For those providing services to SMSFs there will be, if not already, an increasing demand from clients for up-to-date information about their fund, investments, balances, performance and compliance issues.
On the topic of compliance, the SMSF penalty regime, which took effect from 1 July 2014, adds to the imperative for accountants to pay attention to their clients’ transactions. With penalties as high as $10,800 per trustee, practitioners need to ensure that they are not exposed to client claims that they contributed to a compliance breach.
With all of this in mind, the traditional ‘annual’ approach to SMSF compliance will not provide accountants with the ability to expand their SMSF business – as it will either not be in demand from information-hungry clients, or it will expose them to potential penalties from breaches discovered too late.
The opportunity for accountants is to review their approach to the SMSF market – and to consider innovative tools that are available to help them grow their business.
Stay tuned for a longer form article on this topic that I’ll be posting in the coming days.
* Core Data ‘Trends in SMSFs June 2014’
