Speaking at the Chartered Accountants Australia and New Zealand National SMSF Conference last week, Smithink 2020 founding director David Smith said he believes complete machine automation of transaction processing will wipe out the bookkeeping profession in the next 10 to 15 years and drastically alter the accounting profession.
Mr Smith predicted a time when technology is able to calculate judgement by applying algorithms to data. He said it will be this that will have the most drastic implications for accountants.
“If you’ve automated all of the admin and you’ve automated the judgement around the year-end compliance work, what is your role?”
Mr Smith described this as the “quantum shift” that will force the accounting profession to accept the changing environment sooner rather than later.
In the SMSF space, Mr Smith said he expects funds could actually become “self-managing” with no need for intermediaries such as the accountant to get involved.
He said the SMSF space is particularly susceptible to advancements in technology given how data feeds work.
“If we don’t accept that automation is happening, we will have the AMPs of the world and others who will drive the price down to the extent that you’ll have to accept it,” Mr Smith said.
“Bean counters”, how offensive is that term to accountants, but those who do not change their role from processing to real advice will suffer. I think most accountants are presently giving proper advice. The computer age should not affect our livelihood and I predict that our fees will increase.
The issue of Trustees finally able to “self manage” came up at the conference, because i asked David this question.
I am aware that there are complexities in self managing a smsf, but if i had couple of millions in it and not working, i think i will put in an effort and go and learn to put the figures together. If there is a machine which will help me to do 80% to 95% of this work, i would prefer to do this work myself instead of asking a bean counter. For strategies, i will have a guy who can log in for couple of hours in a year on my online platform, just to check that I and the machine has done the job correctly.
The bean counter will be eradicated and if you look around, we have very few advisers perse’ and that is what the whole game is about… that, unfortunately is the future…number crunching, software or banks software or trustees will be able to do better.
The banks are desperate to get the Accountant away from the SMSFs so that they could sell them all the crap they are selling to their customers. They do not realise that the customers are aware of this push and are being careful not to get caught
That is for sure.Technology is moving fast and it will get there sooner than anyone thinks. The answer to that is, get proactive and get ahead before you are caught out just arguing the un-arguible. If that was me, I know what I will do. Be the one who leads the pack in providing sound strategic advice step by step as my clients move on and up in the ladder of managing their SMSF. After all it is not too hard It just that no one bothers in giving clean and clear solutions but talking as hard jakka. I will put this way.
step 1.- how much money in super the client has.
2.-How much money the client pays in tax .
3.-What is the clients savings.
So on.
Finally. out of this analysis clients soon realiaze what is the best strategy. for the future. Is that hard.
I think a few people have their heads in the sand. 3 years from now, 95% + of transactions into SMSFs will be automated. In some funds 100%. Don’t under estimation what can be automated or what data sources will be available in future. Build your business plan to reduce reliance on compliance and provide the strategic and compliance advice SMSF trustees really need
Elaine, I agree that the Tax and SIS acts are too complex for most people to understand and that automation will not remove that complexity.
I also think you should get a mechanic to work on your car and that if the work a mechanic does is not up to scratch you have a safety net to have that remedied (Trades Practices Act).
As a SMSF trustee you do not have that safety net. If there is shoddy work from the hired help (I’m not suggesting yours is) it is still the trustees own responsibility. Some people should not have a SMSF. That is all I am saying
TS, I also know nothing about cars. But I own one. It does the job of getting me from A to B and I really couldn’t care less how it works. I take it to a mechanic on a regular basis to ensure it keeps going for me. Are you suggesting I shouldn’t have a car because I’m not a mechanic? I’m assuming you’re not. Being a tax expert is not a pre-requisite to having a SMSF. My clients hire me because I do have this knowledge. The SMSF is the vehicle that provides clients with what they want, namely the ability to invest in assets of their own choosing. The fact is that the Tax and SIS acts are far too complex for most people to understand without doing a degree! No amount of automation will remove that complexity. So they hire someone else to do it for them. Just like a car.
“This statement makes the assumption that trustees are super savvy which many are not” and “Most of my trustee clients would not have the appropriate knowledge, skills or desire to do this themselves.”
The above two quotes highlight a massive problem. Who advised these people to start a SMSF? If they are not super savvy nor have the appropriate knowledge, skills or desire then they shouldn’t have a SMSF but then the trusted accountant wouldn’t be able to charge fees.
There will always be intermediaries, but what they do not say is that they are hoping that it is them, not an independent accountant who could question. It is a position that is no more likely tomorrow than it is today. The accountants welcome the automation as much as anyone, but “we will not be out of a job”.
Phabulous, mate, we were talking about a paperless office in the early 1970’s and we are further away now than we were then.
Unlikely – remember the paperless office of the 1980’s
I agree with Karen. There will always be transactions that won’t be able to be automated. And besides, someone has to set up the rules guiding the automation. Most of my trustee clients would not have the appropriate knowledge, skills or desire to do this themselves.
No doubt about that. It is not only going to be technological advancement that will drive accountants out of the ripp off business. But SMSF trustees weak up and updated with rules. It would be great to catch them by their tales.
Great news.
I agree the SMSF space will change but there will always be the need for the accountant. Automation will continue to make completing a year end more efficient from a time cost perspective but what about all the strategy discussions during the year? Many trustees are looking for this service such as TRIS and turn to their accountant to find out more about them. In addition, they want someone to be able to handle, on an ongoing basis, the day to day activities so they can enjoy their retirement and not be bogged down with compliance and paperwork! This statement makes the assumption that trustees are super savvy which many are not and rely heavily on their accountant/administrator to monitor this aspect for them. Looking after a SMSF is and should not be just about preparing a set of financial statements otherwise we are doing our clients a disservice!