Speaking at the SMSF Adviser Strategy Day in Sydney this week, Heffron’s head of customer Meg Heffron suggested institutions have brought greater financial resources to the SMSF industry.
“What I like about these new players is they have really deep pockets,” she said.
This willingness to spend has extended to SMSF ad campaigns, which benefit the industry by raising awareness among consumers, she suggested.
As an example, Ms Heffron pointed to AMP’s ad campaign during the Bledisloe Cup.
“They give us consumer recognition,” she said. “The next time you want to raise an SMSF with a client who is brand new to this space, they will have seen the ad.”
Ms Heffron also explained that these companies give the SMSF sector greater political influence.
“With their power comes some protection. They lobby governments, they are influential in the direction our tax and compliance legislation takes,” she said.
Institutions are also driving innovation in customer service, setting a new standard for SMSF professionals, Ms Heffron suggested.
“They are used to dealing with a retail audience. They want to provide SMSFs the way you provide wraps or the way you provide other financial products,” she said.
“What the big end of town does is change the expectations which will effectively force us to lift our game.”
Ms Heffron said large corporations use the same services as other SMSF professionals, meaning more money is being poured into these products.
“They're effectively paying for some of the product development on that end that we ultimately benefit from,” she said.
When institutions initially entered into SMSF advice, Ms Heffron admitted to being concerned.
“I thought, 'what hope does my business have competing with one of the biggest companies in the land if they're getting serious about my space?'" she said. “I worried about that for a while.”
“Then I thought, actually there are some positives.”