Number of SMSFs with unmet advice needs at a record high, new research shows

More SMSFs are experiencing challenges in managing their fund, with their top advice needs relating to estate planning, tax and income strategies, post-retirement planning, portfolio strategy and investment selection, the latest Vanguard/Investment Trends SMSF Report has revealed.

According to the report, which collates responses from almost 5,000 SMSF trustees and close to 300 financial planners, investment selection is cited this year by trustees as the hardest aspect of managing an SMSF.

The number of SMSFs who use a financial planner has remained steady throughout most of the past decade but overall satisfaction with financial planners has declined to a seven-year low.

The report revealed that a lack of confidence in the expertise of advisers is now the number one barrier for SMSFs seeking advice on their unmet needs sitting at 32 per cent, with adviser fees the second biggest barrier at 30 per cent.

Despite this, over a third of financial planners expect their SMSF business to increase over the next three years (36 per cent) compared to 15 per cent who expect it to decline.

Vanguard Australia head of intermediary, Rebecca Pope, commented on the value this research can provide financial advisers in uncovering the key advice needs of the sector.

“This year's report showed the ongoing challenge for advisers to find and retain new SMSF clients. This research has for year's highlighted areas of unmet advice for SMSF trustees, with the top needs almost always focused on areas such as estate and tax planning, providing valuable insight for those seeking to build up their SMSF business,” she said.

“The report also provided some insights for advisers into SMSF trustees' attitude to alternative forms advice, with more than half saying they would consider over the phone or advice via web chat if it would reduce the cost of the advice service.”

The SMSF sector represented around $747 billion in retirement savings as at March 2019, growing at a slower pace than the preceding 12 months following the impacts of recent industry events, compared with $1.8 trillion invested with APRA-regulated super funds. 

Accountants should be able to provide SMSF advice

Late in May, the CEO of the Institute of Public Accountants (IPA), Andrew Conway, urged the Morrison government to focus on increasing access to financial advice for all Australians. 

The current financial services law is depriving Australians from getting the financial advice they need, Mr Conway said at the time.

“Accountants should be able to provide advice in relation to self-managed superannuation funds,” he noted. 

"It is nonsensical that if you have a client come to your practice today and ask for advice in relation to investing in plant machinery in their business, for millions of dollars, you can provide advice on that. But the minute the client mentions that they are going to use part of their super, the roller door has to come down.

“We need to review the way financial advice is provided in this country and ensure the playing field is level.”