SMSF trustees not that interested in advice from accountants
/Recent research shows self-managed superannuation fund (SMSF) clients aren’t that interested in financial advice even if their accountant is qualified.
Apricot Actuaries looked into 322 accountants, discovering that the group had only established 655 SMSFs between them in the past year. This equates to about two SMSFs per accountant. The accountants reported that many of their clients weren’t interested in full financial advice, with 35 per cent of the SMSF set-up group not receiving further advice. Additionally, 55 per cent of pension clients (949 pension set-ups overall, about three per accountant) did not go on to get further advice.
Apricot Actuaries chief executive, Jim Hennington, said the lack of advice amongst this clientele was a surprise, making it difficult for an accountant to see the value in getting licensed.
Hennington said: “The average number of transactions per accountant is low ... at this rate, it would take years to acquire sufficient practical experience in the application of the new laws and even longer to amortise the cost of acquiring and maintaining technical proficiency.”
Other key findings of the research include:
Accountants said that where clients didn’t get licensed advice, 66 per cent said it was because the client didn’t want the extra fees; 53 per cent said the cost of advice was too high, and 51 per cent said the client did not trust advisers.
Eighty-three per cent of accountants say they provide tax advice and factual information to help their clients in some cases where a client didn’t have a statement of advice.
Limited licensing, says Hennington, isn’t working as intended, adding: “When the accountants exemption was repealed in 2016, it appears that ASIC (the Australian Securities and Investments Commission) was labouring under a bizarre belief that SMSF trustees would trust and voluntarily choose to pay for licensed advice under a framework riven with scandal and, in relation to which, the holding of a licence provided no impediment to unethical conduct.”
“If ASIC removed the exemption to improve the quality of advice received by SMSF trustees it has failed. In fact, it has increased the risk that trustees will not receive any advice other than tax advice.”
