The report stated that a “vast majority” of SMSF businesses are profitable, with most achieving increased revenue in spite of periods of subdued asset growth.

“However, there are also large variations between the typical practice and the best performers, suggesting that most still have significant growth potential,” the report stated.

“Our analysis revealed a range of key differences between high and low profit SMSF businesses – both in what they do and what they choose not to do.”

In profiling the characteristics of high-profit practices, the report found high-profit practices took care of 200 SMSFs and 1,354 clients. By comparison, low-profit practices took care of 100 SMSFs and 624 clients.

High-profit practices also offer an average of 5.2 SMSF services, compared to low-profit practices’ offering of 4.7 SMSF services, according to the report.

The research also found 64 per cent of high-profit practices use a website for client acquisition, compared with 40 per cent of low-profit practices. Twenty-three per cent of high-profit practices also use social media, compared with 13 per cent of low-profit firms.

High-profit practices have a stronger focus on staff retention than low-profit firms, according to the report, and aspire to “sustainable growth and a strong reputation”.

For most businesses, networking and client referrals remain the key to client acquisition, the report found. Word of mouth remains the dominant source of new clients, cited by 92 per cent of businesses.

“Yet, firms are increasingly using a wide variety of marketing techniques to acquire new SMSF business, with social media in particular becoming increasingly important,” the report stated.

Many businesses are looking to grow their client base through mergers or acquisitions, it said, with 85 per cent of businesses saying they are looking to acquire a business, buy a client book, or take new partners.

“As a result, it remains very much a seller’s market, suggesting that potential buyers need to actively pursue opportunities for profitable growth if they are to succeed.”

The report also suggested that SMSF service providers who originated as accountants tend to be larger, more established and more profitable than those who began as financial planners or administrators, with an average of more than 17 staff and almost three offices each.

Commenting on the findings, SPAA chief executive Andrea Slattery said the report indicates the SMSF professional services industry extends beyond the traditional services of accounting and financial planning.

“They now offer a range of services such as general insurance, estate planning and legal advice, administration and mortgage and broking advice,” Ms Slattery said.

“It demonstrates that the primary profession is centred on SMSF advice and the secondary profession is the traditional professions, such as accounting and financial planning, which provide the supporting services.”

Macquarie banking and financial services group's executive director, Peter Shepherd, said that to maximise opportunities in the sector, SMSF service providers have had to adapt their business model and service offering to the changing needs of clients.

“It is clear that SMSF practice owners and principals benefit from regularly reviewing their business model to determine how they can be driving new efficiencies and achieving greater success within the industry,” Mr Shepherd said.

“Providing more service offerings to clients helps SMSF practices capture a larger share of business, which can ultimately help to increase revenues and profits.

“Firms are using a variety of tools, some of which require manual processing, with almost half of respondents still using Excel for client management. This shows there are opportunities for these SMSF practices to achieve greater efficiencies through improving technology and process automation.”

This research follows the inaugural SMSF Awards, an initiative of SMSF Adviser, which recognises the top-performing SMSF service providers in Australia. For a full list of winners, click here.