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
The financial services technology firm has officially launched its digital advice and education solution for superannuation funds and other industry players.
The ETF provider has flagged a number of developments as it formally enters the superannuation space through a major acquisition.
While all MySuper products successfully passed the latest performance test, trustee-directed products encountered difficulties.
Iress has appointed Insignia Financial’s former general manager of master trust and insurance products as its newest CEO of superannuation, who will take over from Paul Giles.
