The financial planning industry's fees from servicing self-managed superannuation funds (SMSF) surged 19 per cent to $890 million in fiscal 2010 as more trustees sought advice and annual costs rose, a new study has found.
The Investment Trends 2010 SMSF Planners Report revealed 235,000 SMSFs had received advice from a planner as at June 2010, compared to 213,000 at June 2009.
Annual fees charged per SMSF on average increased to $3800 from $3500 during the 12 months.
"As a result, SMSFs are becoming an increasingly important part of planning practices, with planners earning more than a quarter of their revenue from SMSFs," Investment Trends analyst Recep Peker said.
The report said planners collectively derived 27 per cent of their revenue from advice to SMSF clients, up from 23 per cent in June 2009.
"Planners expect this growth to continue, predicting that advice to SMSF clients will make up 38 per cent of their revenue in three years' time," Peker said.
"If those expectations are fulfilled we could soon see SMSF advice becoming a billion-dollar industry for Australia's financial planners."
Despite the increasing importance of SMSFs to their practices, planners still faced significant challenges in servicing the SMSF market, the report said.
When asked to name the greatest challenges they faced, 44 per cent nominated compliance, 39 per cent said administration and 38 per cent picked educating clients about their responsibilities as trustees.
"That suggests there are still significant opportunities for service providers to step in and relieve planners of some of the compliance burden," Peker said.
The report said although 73 per cent of planners currently advised SMSFs, only 37 per cent of those used an SMSF administration service for their clients, although that was up from 29 per cent in June 2009.
Investment Trends surveyed 470 planners in May and June 2010 for the report.
