More advisers helping establish SMSFs

Almost two-thirds of advisers are assisting with establishment of self-managed superannuation funds (SMSFs), up from 54% in 2021.

The research firm found establishments of SMSFs had reached a three-year high and advisers were seeking to work closely with accountants, who were the traditional port-of-call for new trustees.

They also welcomed new regulatory measures for SMSFs which included a reduction to the downsizer contribution age limit and the work test exemption as they expected these would alleviate a lot of the operational challenges they faced.

SMSF assets had increased by 15% to $877 billion, a three-year high.

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Dougal Guild, research director at Investment Trends, said: “The positive business outlook is consistently shared by most accountants, with nearly half expecting SMSF revenue to increase in the next three years. Interestingly, both SMSF advisers and accountants are looking to strengthen relationships with each other this year to enhance their client value proposition for prospective clients”.

However, SMSF advisers had seen a slight decrease in the share of revenue contributed by SMSFs at 24% down from 27% in 2021 which the firm attributed to rising administration and compliance costs.

Client education and knowledge of SMSFs was also a concern as advisers felt clients was not always aware of their benefits.

“The ability to comprehensively demonstrate a SMSF is in the client’s best interest is a key pain point that advisers felt are holding them back from setting up more SMSFs. Advisers want to feel better equipped to educate current and prospective clients and are calling for content that can help their clients evaluate their own suitability,” said Guild.

Last week, research by Wealth Data found the net SMSF assets per adviser had doubled in three years from $22 million in 2019 to $51 million in 2022.