Refine client offering or risk your bottom line, says Dunn
With the dynamics of the SMSF industry shifting significantly, SMSF practices will need to refine what SMSF trustees they target and the services they offer to ensure success, according to the SMSF Academy’s Aaron Dunn.
Speaking at a debate on disruption at the SMSF Association’s national conference last week, Mr Dunn said those within the SMSF sector need to understand they are “living in a significantly changed world”.
“For those that may have read the 2012/13 SMSF statistical report, the median age or the average age of a member, now for the first time is under the age of 50, against an ageing population,” he said.
Mr Dunn said this is having an impact on the way in which trustees are being engaged with by the SMSF community.
“What we’re also seeing is the fact that about four in every ten trustees are now under the age of 45,” he said.
While the average member balance within the SMSF industry is around $524 000, Mr Dunn said a pensioner member in this industry, has an account balance of over $922,000.
SMSF practices, he said, need to determine if they want to provide services to a younger demographic or an older demographic.
“The reality in my view is that you will not have the ability to run a single model that will successfully be able to deliver services to these two types of people,” said Mr Dunn.
“People in my age bracket, are looking at SMSFs earlier than ever before [and] at balances of less than, I guess, this notional $200,000 minimum balance that has been derived.”
The SMSF industry, he said, also needs to understand that at the same time members are becoming “more tech-savvy than ever before” and “more financially literate than ever before”.
Mr Dunn said he is seeing significant shifts in the way practitioners deliver services to their clients, whether in a business context or in respect of how they engage with trustees.
“The way in which you will deliver services to your SMSF trustees in the future, needs to be given appropriate consideration today because the make-up of the industry is changing quite substantially,” he said.