SMSF trustees need more financial advice

The number of self-managed superannuation fund (SMSF) trustees who reported to have unmet financial advice needs has grown in 2017 to 277,000, up from 255,000 in 2016, according to a joint report by Vanguard and Investment Trends.

At the same time, the percentage of trustees who admitted they were using a financial planner marginally increased to 38 per cent, from 37 per cent last year, while the number of SMSFs who used an accountant for investment advice went up to 86,000, up from 73,000.

The 2017 Vanguard/Investment Trends SMSF Report, which surveyed around 3,000 SMSF trustees, 470 financial planners and 900 accountants, also found that planning for tax and contributions strategies and retirement planning continued to be areas of high demand for advice.

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However, for the first time, the report also proved that SMSFs were ready to pay more to financial planners if they would offer admin services as well.

Investment Trends’ research director, Recep III Peker said: “[Financial planners] struggle with this right now but if they can find a way to incorporate admin into their business, they can create significant revenue stream from these clients”.

“What is really fascinating is we asked a new question this year and said: if your financial planner started providing SMSF admin services would you pay more for this and half of SMSFs said yes ‘I would get admin services from my planner and I would pay more for this.”

According to the report, only a third of SMSF trustees said it was important that they could access all their financial needs through a single adviser, while 40 per cent of accountants servicing SMSF clients said restrictions around the ability to give financial advice was an issue.

Peker also stressed that although the number of SMSFs continued to grow each year, the rate of growth slowed over the last four years.

“This could have partly been in response to uncertainty around changes to superannuation contribution and pension caps, which would be of particular concern to many trustees, given their typically higher than average balances,” he said.

The report also found that despite SMSFs becoming more focused this year on growing their nest eggs, the number of trustees who adopted a more aggressive stance grew strongly to 57,000 from only 37,000 last year.

At the same time, the number of trustees who shifted their asset allocation to a more defensive position grew to 114,000 in 2017 from 107,000 in the previous year.


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