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Accountants ‘bypassed’ in SMSF establishment

Katarina Taurian
31 July 2014 — 1 minute read

New research from Vanguard and Investment Trends shows a significant drop in the proportion of SMSF investors who use an accountant to set up an SMSF, while the use of administrators has jumped.

According to the 2014 Self Managed Super Fund report, 31 per cent of investors used an accountant between 2012 and 2014 to set up their SMSF, compared with 53 per cent between 2009 and 2011.

However, the use of administrators to set up an SMSF has increased from 16 per cent between 2009 and 2011 to 24 per cent between 2012 and 2014.



“The professional vetting mechanisms that accountants provided are being bypassed by more people going online or to administration firms to set up their SMSF,” said Investment Trends senior analyst Recep III Peker at a media briefing yesterday.

Investment Trends also estimates that 150,000 SMSFs are administered via specialist SMSF administration services, up “significantly” from 115,000 in 2013.

By comparison, Investment Trends estimates 265,000 SMSFs are administered by accountants within their firm – a number which is unchanged since 2013.

The report also found 38 per cent per cent of those looking to set up an SMSF cited property investment as a reason for establishment, up from 34 per cent at the same time last year.

Twenty-one per cent of those planning to set up an SMSF also cited access to borrowing within superannuation as a driver for SMSF establishment.

“Among the next wave of people, so those who want to have an SMSF sometime in the future, we’re seeing property as a key reason,” Mr Peker said.

SMSF investors’ appetite for international exposure is growing, with the intention to invest in international shares by SMSFs almost doubling in the last 12 months to 22 per cent, according to the report.

“The increased focus on international investing is valuable in a diversification sense,” said Robin Bowerman, Vanguard’s head of market strategy and communications.

“However, we are cautious when key international markets like the US sharemarket have had such strong performance in the past year and hope that advisers and investors are taking a long-term view because too often we see investors disappointed when chasing future returns based on recent past performance.”

The report also found that in 2013, attitudes to financial advisers improved, and this trend has “accelerated” in 2014.

Mr Peker noted there is an opportunity for planners, with 286,000 SMSF investors having “unmet” needs for advice for which they are willing to pay, with most of those needs relating to retirement advice.

Accountants ‘bypassed’ in SMSF establishment
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