Number of SMSF service providers set to decline
The SMSF sector is expected to see a general decline in the number of service providers, as specialist knowledge and scale become increasingly sought after, according to one SMSF business specialist.
Speaking to SMSF Adviser, The SMSF Academy’s Aaron Dunn said he expects to see a “natural decline” in the service providers or accountancy businesses servicing less than 20 funds.
“They’ll realise there are skill sets [required for servicing SMSFs] that don’t suit them and they are bringing greater risk to their business than opportunity,” he said.
“If you look at the ATO statistical report and look at the number of tax agents that do less than five funds, it’s scary. But more importantly those numbers are declining.”
Mr Dunn said the businesses or service providers servicing larger numbers of SMSF funds between 100 to 500 are, on the other hand, increasing.
SMSF businesses servicing more than 500 funds, he said, saw a slight dip in 2013, but this was mainly due to industry consolidation and has remained fairly steady generally.
“We will get to a point where we’ll have big super administrators looking after between 20,000 to 40,000 [SMSF] funds,” he said.
However, Mr Dunn said specialist SMSF knowledge in terms of understanding complex superannuation and taxation rules will still be highly valued by clients, with some of the smaller local practitioners continuing to add value.
He said he also expects more and more individuals to create specialist divisions in their businesses.
“But I think we will see the average number of funds per staff member continue to grow in the SMSF space and I think technology and efficiency will really be driving that,” he said.
“Those with the low numbers won’t be able to compete with the scale or with real specialist knowledge so I think there’ll be some contraction.”
Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.
Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates. Miranda has also directed SMSF Adviser's print publication for several years.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.