There are significant compliance failures among SMSF trustees currently not receiving services from an accountant, with a third estimated to be significant compliance issues, according to Investment Trends data.
Speaking at the Chartered Accountants Australia and New Zealand conference last week, Investment Trends research analyst Recep III Peker said accountants are finding a large number of contraventions within the SMSFs of new clients.
“We asked accountants of the new SMSF clients they’ve had in the past 12 months, how many were compliant in relation to regulations and requirements and the average accountant said only 68 per cent were compliant,” Mr Peker said.
“This means a third of the SMSFs without any accounting relationships are non-compliant - that’s a huge statistic.”
Mr Peker said the main potential contraventions related to administration, failure to document the investment policy, report keeping and in-house assets.
The research also demonstrates the importance of referrals, with word of mouth playing a significantly greater role in the decision to set up an SMSF than recommendations from accountants.
Mr Peker said that in the 1990s, around 60 per cent said they set up an SMSF because their accountant told them to do so.
“Nowadays, that’s no longer [the case]; only about 16 per cent of those who set up an SMSF between 2012 and 2014 said they had [done so] because their accountant had told them to do so,” he said.
Twenty-four per cent of those who intend to set up an SMSF in the future said they want to do so because a friend recommended it, Mr Peker said.
“It’s really important for you to encourage your existing clients to get their friends to go to you when they decide they want to set up an SMSF,” he added.
“The top [financial services] areas people are willing to pay for are all around retirement: if you look at the biggest cluster it tends to be around the age pension and estate planning and succession planning. It’s a huge area of unmet advice, it’s a huge opportunity,” Mr Peker said.
SUBSCRIBE TO THE SMSF ADVISER BULLETIN
21 Jul 2017Lawyer pinpoints estate planning concerns with TRISsBy Miranda Brownlee
20 Jul 2017Judges revealed for inaugural awards programBy Staff Reporter
20 Jul 2017Audit software firm joins forces with BGLBy Staff Reporter
20 Jul 2017Class upgrades data feeds for real-time reportingBy Staff Reporter
20 Jul 2017Adviser banned over dodgy super withdrawalsBy Staff Reporter
20 Jul 2017Auditor flags ECPI concerns with events-based reportingBy Miranda Brownlee
- view all
Lawyer pinpoints estate planning concerns with TRISs
Draft guidance from the ATO has cast doubt over whether a TRIS that is in retirement phase will remain in retirement phase if it automatical...read more
- view all