Approach SMSF outsourcing with caution: Multiport
The emergence of an Indian self-managed superannuation fund (SMSF) administration outsourcing service has been greeted with caution by Multiport technical services director Philip La Greca.
The company, Sundaram Business Services, pointed to a "surge in newly-created SMSFs" that is "having a knock-on effect to accountants and superannuation administrators, who may be stretched by the additional processing demands".
If SMSF service providers in Australia outsource some of their administration, Sundaram argued that processing staff could be moved on to "higher value accounting activities which bring in more business".
But for La Greca, outsourcing SMSF administration overseas should only be attempted if the compliance and accounting work can be completely separated - something that is complicated by the fact that compliance 'red flags' are often raised during the accounting process.
"You have to understand the basis of the Australian superannuation rules to be able to run compliance … you have to understand not just what the law says, but what it means," he said.
"One of the things you get to do as an administrator is you get to talk to the Australian Taxation Office. I don't quite know how you do that from India," he said.
While he accepted the "rationale" behind Sundaram's argument, La Greca said the most important factor was who gets the benefit from the outsourcing arrangement.
"If all it means is the practice now has fatter margins because it can outsource and still charge the client the same fee, the client won't really benefit from [the arrangement]," he said.
Recommended for you
AMP is to launch a digital advice service to provide retirement advice to members of its AMP Super Fund, in partnership with Bravura Solutions.
Unveiling its performance for the calendar year 2024, AMP has noted a “careful” investment in bitcoin futures proved beneficial for its superannuation members.
SuperRatings has shared the median estimated return for balanced superannuation funds for the calendar year 2024, finding the year achieved “strong and consistent positive” returns.
The second tranche of DBFO reforms has received strong support from superannuation funds and insurers, with a new class of advisers aimed to support Australians with their retirement planning.
