SMSF adviser revenue climbs as more planners specialise

Financial planners who specialise in providing self-managed superannuation funds (SMSF) advice are deriving nearly half of their practice revenue from this advice, while those who do not specialise in it derive only a fifth of revenue from SMSF clients. 

According to research conducted by Investment Trends and Vanguard, the number of planners specialising in SMSFs has grown, with 25 per cent of planners responding to the research survey identifying themselves as specialists in this area. 

This number has increased marginally from 23 per cent in 2012, but these planners also state that 49 per cent of practice revenue comes from SMSF advice, up from 44 per cent in 2011. Planners who do not specialise in SMSF advice reported that the practice revenue from the provision of this advice remained steady at 19 per cent. 

Those planners who did not specialise in SMSFs said the area of most concern with this advice was building relationships with accounting firms and finding clients. Specialist SMSF advisers indicated that falls in concessional contribution caps and keeping fees competitive were the most pressing issues for them. 

The SMSF specialist advisers reported that while they worked closely with accounting firms, two in five had issues with accountants where SMSFs were being established for clients inappropriately. 

Almost half of the advisers responding to the survey (48 per cent) stated that regulatory reform on limited licensing for accountants would have a positive impact on their overall business income, while a third expected the reforms would increase their SMSF client base. 

The survey also found that satisfaction with advisers had improved across the board. Eighty-three per cent of SMSF clients now rate their main adviser as good or very good overall, up from 76 per cent in 2012. At the same time the survey confirmed that many SMSF clients use financial advice to complement their investment decision-making rather than delegating the full process to the adviser. 

The Vanguard and Investment Trends Self Managed Super Fund Planner Report surveyed more than 400 advisers and grouped their feedback into two groups - SMSF specialists who service 20 or more SMSF clients and SMSF generalists who service fewer than 20 SMSF clients.  

Vanguard Head of Adviser Distribution Michael Lovett said there was a growing opportunity for advisers servicing the SMSF space. Those advisers who had specialised their businesses were well ahead in this space. 

“There is a strong message for advisers who want to excel in this sector to safeguard their practice and add immense value to investors by spending more of their time looking at areas of unmet advice to their clients,” he said. 

“Our studies show that for advisers, creating this point of difference in their practice value proposition can ensure they present a more enduring model, particularly in this new fee-for-service world which the Future of Financial Advice reforms have introduced”.

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