SMSF specialists spend a significant amount of time seeking, storing, collating, checking and matching data and documents to meet client’s needs and the requirements of external auditors.

However, resource constraints and sustained demand for SMSFs is putting pressure on accountants’ ability to scale and service new clients.

Latest data from the ATO (Australian Taxation Office) shows SMSF net establishments continue to increase – in December 2023 quarter, 6895 SMSF funds were established, growing to 7099 SMSFs in the March 2024 quarter.

With more than 616,400 SMSFs in existence, there is a growing number of Australians relying on accurate and timely SMSF administration to help them achieve their retirement goals.¹

The profile of SMSF trustees is also changing, fuelling further growth in SMSFs from new client segments. Last financial year, 23.7% of new Class SMSFs were established by Millennials, a growing cohort of SMSF trustees who are likely to need professional advice.²

To meet this demand, SMSF specialists must become more efficient. While manual processes are often used for SMSF administration, accountants will increasingly need to ensure they have the right technology to enable the growth and scalability of their business.

Capacity constraints and efficiency

According to Investment Trends research, accountants currently spend 7.3 hours annually managing each SMSF client and it is estimated they could on average save 3.2 hours annually per SMSF client, almost halving the time required, if all their manual tasks are automated.

Further, SMSF specialists who are open to switching SMSF software providers overwhelmingly mention automation as the catalyst to do so (41%) followed by improvements to data feeds (35%). ³

Automation can provide an effective solution to deliver efficiency and growth. By automating manual processes and leveraging data and technology solutions, SMSF specialists particularly those servicing many SMSF clients, can more efficiently meet their obligations, enabling them to build scale and service their customer needs.

Choosing an effective software solution can also help manage capacity constraints such as market conditions, resource availability, labour shortages and recruitment challenges.

Despite these benefits, it can be easier to stick to the systems and processes currently used (accountants love Excel!), and to continue to demonstrate value to their clients as they have always done.

However, this approach does not solve capacity challenges and as the industry becomes more complex, this reliance on manual processes further limits business growth.

Class will shortly release the Annual Benchmark Report, highlighting the strength of the SMSF sector and the opportunities for future growth. Given the ongoing growth and importance of the SMSF sector, it is critical we solve the challenges around ongoing productivity to ensure professional advice can support Australians meet their retirement objectives.

Real-time automation

Automation delivered through innovative software solutions can help reduce costs by streamlining processes, making it easier to access information and complete compliance tasks, reducing the time it takes to manage SMSFs.

By choosing the right software solution, SMSF specialists can already automate bulk transaction processing, tax statement and corporate action automation and get access to data feeds that are accurate and reliable.

However, there is more to be done and soon automation will enable real-time ‘compliance as you go' facilitating timely advice and fostering improved outcomes for clients.

Enhanced features such as registry connections and direct-connect document feeds with institutions will provide automation of repetitive tasks to deliver all the necessary data directly from the source, ensuring accuracy, reducing manual handling, and enhancing the efficiency of the compliance workflow.

This will also enhance effective risk management, reducing the risk posed by human error in terms of entering and managing data, as well as inefficiencies. Risk is minimised by directly obtaining data and documents from the source of truth, removing external handling, and providing peace of mind and enhanced security.

Conclusion

Leading-edge SMSF administration solutions will leverage advanced automation capabilities to deliver real-time data which can be relied upon to deliver timely advice for clients.

By utilising registry connections and direct connect document feeds, accountants who service SMSFs can reduce manual handling and ensure timely and accurate data retrieval.

This enhanced efficiency drives productivity and seamless engagement, facilitating informed decisions and better client outcomes.

With these capabilities available, standing still is not an option. Choosing an SMSF administration software solution is a big decision for financial professionals. Ensuring these solutions are appropriately resourced and that there is a continued commitment to investing and delivering enhancements while maintaining a customer focus, are critical.

Class Ignite Conference will be held at the Hilton Hotel in Sydney on 18th and 19th September 2024. Early-bird $560 tickets available – register now.

Written by Tim Steele, CEO of Class which is part of the HUB24 Group.

_{¹ATO SMSF Quarterly Statistical Report March 2024
²Class Benchmark Report 2023
³Investment Trends March 2024 SMSF Adviser and Accountant Report Industry Analysis}