Technology driving SMSF industry consolidation
Technology improvements and a consequent drop in prices has worked to reduce the number of middle-men in the self-managed superannuation funds (SMSFs) arena, according to Superfund Wholesale's national distribution manager, Peter Hilditch.
In an analysis of the evolving SMSF landscape, Hilditch said that, in the past, clients perceived SMSF administration as an accounting function and were happy to pay for a bespoke, limited and generally manual service that took a lot of time, money and paperwork.
However, Hilditch said the emergence in recent years of sophisticated SMSF administration systems such as Class Super, with automated processing and integration with product provider systems and financial markets, had dramatically increased administrator capabilities and efficiencies.
Hilditch said that as a result of the increased efficiency, the cost of service had fallen dramatically so that it was no longer viable, from a service level and cost perspective, for the small local accountant to provide the service of SMSF administration.
He said technology and specialist services at lower prices had meant that trustees and advisers were increasingly bypassing the local accountant in favour of SMSF administrators.
Further, Hilditch said the shift towards specialist SMSF administrators made the consequent consolidation in the administration market inevitable.
Originally published on SMSF Essentials.
AUTHOR
Staff Writer
Recommended for you
Underestimating the cost of insurance by almost $75,000 in a Statement of Advice is among multiple reasons that a relevant provider has faced action from the FSCP.
Financial Services Council chief executive, Blake Briggs, is urging Minister for Financial Services, Stephen Jones, to take advantage of the QAR opportunity to reduce regulatory duplication and ensure advice is affordable.
Former chair of the House of Representatives’ Standing Economics Committee, Tim Wilson, is planning a return to politics after losing his seat in the 2022 federal election.
Morningstar is going to offer research ratings of funds in the $3.5 trillion superannuation sector for the first time in response to demand from financial advisers.
