The strong year-on-year growth of self-managed superannuation funds (SMSF) will require adviser education on SMSFs to remain at the highest standard, as industry bodies emphasise the importance of further developing knowledge and technical skills.
“With over $400 billion currently in SMSFs and 36,000 new SMSFs established last year, it is critical to ensure that advisers are technically capable of giving advice in this space,” FPA chief executive Mark Rantall told InvestorDaily.
“When you look at the average assets in an SMSF [being] nearly $1 million, consumers are going to need help particularly around asset allocation, together with the technicalities of establishing and running a fund.”
Many advisers were looking to enhance and maintain their SMSF knowledge, Rantall said, adding the demand for education would be an increasing trend.
“This is one of those areas where we see advisers increasingly building their expertise in this area,” he said.
The FPA offers a number of programs to increase advisers’ technical ability in SMSFs and will continue to provide education in the area, in addition to working closely with industry organisations, including the Self-Managed Superannuation Fund Professionals’ Association of Australia (SPAA), and the Australian Taxation Office.
Institute of Chartered Accountants in Australia (ICAA) head of superannuation Liz Westover said there was no doubt SMSF trustees were looking to use their trusted adviser as a primary source of information, therefore advisers in the space had to be able to demonstrate their expertise.
“It is a complex area, so you need to be appropriately educated and if you don’t feel that you have the requisite expertise to give advice, that’s when you need to make sure you’ve got strong referral networks in place,” Westover said.
“That gives trustees a level of certainty about the people that they’re dealing with; that they’re genuine specialists in this area.”
The ICAA had built robust criteria to support its members in the SMSF specialist field, involving extensive educational programs and three-hour practical assessments to ensure the level of knowledge within the industry remained at the highest standard, she said.
She said many advice firms were setting up specialist divisions and were educating their staff to cater to the growing number of SMSF investors.
Vanguard Investments corporate affairs and market development principal Robin Bowerman said as SMSFs were the “sweet spot” for high net wealth advisers, provided they satisfied their client value proposition, he was observing more adviser activity in specialist accreditation and training.
“We’re seeing more advisers getting their skills up to be able to work in the SMSF area, [because they acknowledge that] it’s more technical so they need to get better qualifications,” Bowerman said.
However, advisers must understand there was a different adviser-client relationship in SMSFs compared to the traditional financial planning model, Bowerman, also a member of the SPAA board, said.
“When you get into the SMSF world, the relationship between the client and the adviser is different as clients are looking for someone who will validate and coach, not someone to delegate the decisions to,” he said.
“That’s a relationship that I think some advisers are going to struggle with [as] clients are going to be more demanding, sophisticated and will really hammer advisers on fees.”
The FPA will be running an SMSF education workshop in November in conjunction with Cavendish Superannuation.
