Technology removes SMSF restraints
The self-managed super fund (SMSF) sector has been fairly restricted in its use of underlying technology, according to Darren Stevens, director of strategy for Bravura Solutions.
"The last 18 months have seen marked improvement," he said. "But until recently, they've been very, very focused on pure compliance, pure admin, get your return in.
"That's now changing to being a race to have online views of your holdings with daily balances, the ability to transact and so on," Stevens continued. "And that's what's suddenly come to the fore in the self-managed super fund space."
Broadly speaking, Stevens said that SMSF technology had shifted from a focus on compliance and accounting to solutions that were far more akin to a full service wrap.
"And that's going to continue to evolve," he said. "However, one of the problems with the self-managed super fund space is that it's so disparate and fragmented.
"You don't have many large scale administration organisations, you have lots of smaller trustee funds with their suburban accountant, and they tend to opt for different solutions."
Yet in an evolving superannuation marketplace for not only SMSFs but also industry and retail funds, Stevens said that there were plenty of opportunities for SMSF technology providers to step up.
"So there's still quite a lot of activity happening around the consolidation of the self-managed super fund space and technology for that," he said.
"But what's also happening is that the major super funds are looking to retain the client base, looking to make offerings that look like self-managed super funds, and that's this member direct investing that we see popping up everywhere.
"And that's what's putting strain on solutions that were put in place for typically a managed fund style, master trust type superannuation fund," Stevens continued.
"It's throwing in direct equities and being able to handle the individual tax treatments of that and not pollute other members with that tax treatment.
"Clearly, the challenge is combining compliance, taxation, administration and direct investment into that one solution - it's adding that layer of complexity to a business that's trying at the same time to push efficiency through."
Originally published on SMSF Essentials.
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