Companies capture SMSFs with admin solution
Large companies are likely to soak up books of self-managed super fund (SMSF) clients by providing outsourced administration services, according to Bravura Solutions' Garradin manager Darren Speirs.
Speirs said that although the SMSF market had grown, consolidation would create the need for scalable administration and resources that were interchangeable and less specialised.
"Large companies will soak up books of business by actually establishing relationships with the accountant and providing outsourced administration services, that's where my gut's telling me things will go," he said.
The "sophisticated" administration services WRAP players and super funds used made them likely candidates for the future provision of mass administration services, according to Speirs.
"They already do that on mass so I wouldn't be surprised if they start stepping into this in a big way and start offering that," he said.
Andrew Bloore from IQ, speaking at a Bravura roundtable, said SMSFs would kick in when members had a reasonable account balance and became 'emotionally invested'. Speirs said it was usually when members were between 30 and 50, although after they retired they may return to their super fund because it required less attention.
"A SMSF is not separate to the super industry, it's really another aspect of someone's superannuation lifecycle, if you like," he said.
Speirs said superannuation funds should be looking beyond their existing products to deliver innovations to the SMSF industry.
"It really sounds like these organisations should actually embrace SMSFs and find something that's a little bit more innovative rather than sticking to their existing products and try and address the problem," he said.
Class Super and BGL were two large companies Bravura had partnered with to deliver SMSF administrative services, Speirs said.
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