SMSFs seeking ‘discounter’ advice
There are a growing number of self-managed super fund (SMSF) ‘discounters' with advertisements offering cheap over-the-phone, online advice for SMSF members and trustees, but this is no substitute for professional financial advice, an industry consultant believes.
Such is the opinion of industry consultant John Wiseman from John Wiseman Consulting, who said the motivation behind this trend was SMSF trustees seeking low fees and charges, but warned that while it may appear to be a cost-effective solution, it came with its own dangers.
"I can only see an ocean of trouble for those that have elected the cheap offering over professional qualified advice that is provided by specialist financial planners," Wiseman said.
"There is absolutely no substitute for quality for anyone acting as the trustee for one of the two largest and most important assets of an individual's life."
With SMSFs accounting for nearly 30 per cent of the $2 trillion held in assets in superannuation accounts of around 550,000 as at December 2015 as more trustees desire control of their retirement savings/investments, Wiseman said this sheer size demanded professional financial advice as the era of the amateur do-it-yourself SMSF was almost obsolete.
"The winners in the new era will be specialist financial planners and professional accounting practices that have reengineered their business and service offerings. But in the end, the real winners will be the Australian consumers and national economy," Wiseman said.
Some accountants, trustees, and members have already abandoned their DIY approach and sought out a specialist SMSF financial planner, while accepting that costs would increase when seeking professional expertise, he said.
AUTHOR
Malavika Santhebennur
Recommended for you
The strategic partnership with Oaktree Capital and AZ NGA is likely to pave the way for overseas players looking to enter the Australian financial advice market, according to experts.
ASIC has cancelled a Sydney AFSL for failing to pay a $64,000 AFCA determination related to inappropriate advice, which then had to be paid by the CSLR.
Increasing revenue per client is a strategic priority for over half of financial advice businesses, a new report has found, with documented processes being a key way to achieving this.
The education provider has encouraged all financial advisers to avoid a “last-minute scramble” in meeting education requirements prior to the 31 December 2025 deadline.
