Small accounting practices least suited to SMSF advice
Small scale accountancy practices are the least suited to provide advice on self-managed superannuation funds (SMSF) often failing to be compliant in their administration of the funds according to Xpress Super and Super Guardian chief executive Olivia Long.
Long questioned the level of experience with SMSFs of many accountants providing advice in the sector and said there needs to be higher levels of compliance in the area of fund administration.
"We often see problems created by smaller accounting firms when we are transitioning SMSFs to our business and they don't know what they don't know," Long said.
"We have seen cases where the fund has not been registered for goods and services tax (GST) which ended up costing the SMSF trustees thousands of dollars in lost returns."
Long said standards and qualifications around SMSF advice provided by accountants have been inconsistent and should be ramped up as it was for SMSF auditors.
She also stated that about 20 per cent of funds examined by Xpress Super and Super Guardian have administration problems, which were attributable to the actions of accountants.
Long said financial planners working with accountants have tolerated these issues as they have not wished to jeopardise the relationship with the accountant or with mutual clients but are reportedly frustrated with inadequate systems and processes.
She said planners have reported working with accountants still using manual paper based systems to manage SMSFs and predicted that technology will replace these accountants and their work.
"We have reduced our own accounting staff by a third due to the use of technology and expect that low level accounting functions will be continue to be replaced across the industry," Long said.
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